U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
/X/ Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended June 30, 2000
/ / Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ____________ to
________________
BIDHIT.COM, INC.
(Exact name of small business issuer as specified in its charter)
Commission file number: 000-27685
NEVADA 91-1973193
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
8259 122nd Avenue NE Kirkland, Washington 98033
(Address of principal executive offices)
(425) 889-9500
(Issuer's telephone number)
-------------------
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes / / No /x/
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Not applicable
APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of September 21, 2000 the
Registrant had 18,833,931 shares of Common Stock outstanding.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (check one): Yes / / No /X/
________________________________________________________________________________
BIDHIT.COM, INC.
FORM 10-QSB
FOR THE QUARTER ENDED June 30, 2000
Page
----
PART I FINANCIAL INFORMATION
Item 1. Consolidated Balance Sheets at June 30, 2000 and
And December 31, 1999 ................................................. 2
Consolidated Statements of Operations for the three month and
six month periods ended June 30, 2000 and June 30, 1999 ............... 3
Consolidated Statements of Cash Flows for the six
month periods ended June 30, 2000 and June 30, 1999 ................... 4
Consolidated Statements of Shareholders' Equity ....................... 5
Notes to Unaudited Consolidated Financial Statements................... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.............................................. 15
Item 3. Quantitative and Qualitative Disclosures About Market Risk............. 19
PART II OTHER INFORMATION
Item 1. Legal Proceedings...................................................... 20
Item 2. Changes in Securities and Use of Proceeds.............................. 20
Item 3. Defaults Upon Senior Securities........................................ 20
Item 4. Submission of Matters to a Vote of Security Holders.................... 20
Item 5. Other Information...................................................... 20
Item 6. Exhibits and Reports on Form 8-K....................................... 20
SIGNATURE
EXHIBIT INDEX
________________________________________________________________________________
2
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIDHIT.COM, INC.
(formerly Third Millennium Software Corp.)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
=====================================================================================================================
June 30, December 31,
2000 1999
- ---------------------------------------------------------------------------------------------------------------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 2) $ 1,482,962 2,534,434
Accounts receivable 26,784 12,110
Inventory 155,569 -
Prepaid expenses (Note 3) 2,190,487 350,571
----------- -----------
Total current assets 3,855,802 2,897,115
PREPAID EXPENSES (Note 3) 2,266,548 666,165
FURNITURE & EQUIPMENT, NET (Note 4) 207,327 31,488
INTANGIBLE ASSETS, NET OF ACCUMULATED AMORTIZATION
OF $371,382 and $34,572. 5,319,925 523,778
SOFTWARE DEVELOPMENT COSTS, NET 7,659 11,841
----------- -----------
TOTAL ASSETS $11,657,261 $ 4,130,387
=====================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 204,087 $ 189,094
Note Payable, related party (Note 5) 202,416 -
----------- -----------
TOTAL LIABILITIES 406,503 189,094
STOCKHOLDERS' EQUITY
Common stock
Authorized
50,000,000 common shares with a par value of $0.001
Issued and outstanding
June 30, 2000 - 18,778,931 common shares
December 31, 1999 - 11,658,893 common shares 18,779 11,659
Additional paid-in capital 16,460,093 6,325,101
Deficit accumulated during the development stage (5,145,114) (2,312,467)
Deficit (83,000) (83,000)
----------- -----------
Total stockholders' equity 11,250,758 3,941,293
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $11,657,261 $ 4,130,387
=====================================================================================================================
See accompanying notes to the consolidated financial statements.
________________________________________________________________________________
3
BIDHIT.COM, INC.
(formerly Third Millennium Software Corp.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
==================================================================================================================================
Cumulative
amount for the
period from
Three Months Ended Six Months Ended inception on
----------------------- ----------------------- May 1,1999
June 30, June 30, June 30, June 30, to June 30,
2000 1999 2000 1999 2000
- -------------------------------------------------------------------------------------------------------------------------------
REVENUE
Product sales $ 178,062 $ - $ 178,062 $ - $ 178,062
Sales commissions 823 3,204 4,440 3,204 22,216
----------- ----------- ----------- ----------- -----------
TOTAL REVENUES 178,885 3,204 182,502 3,204 200,278
COST OF REVENUE 161,256 - 161,256 - 161,256
GROSS PROFIT 17,629 3,204 21,246 3,204 39,022
OPERATING EXPENSES
Selling and marketing 239,220 84,849 470,903 84,849 933,636
Bad debt - - - 70,000 -
General and administrative 820,342 68,829 1,845,841 98,329 3,716,730
Engineering and programming 47,086 3,608 142,941 3,608 146,302
Depreciation and amortization 406,225 6,318 424,069 6,318 465,010
----------- ----------- ----------- ----------- -----------
TOTAL OPERATING EXPENSES 1,512,873 163,604 2,883,754 263,104 5,261,678
LOSS FROM OPERATIONS (1,495,244) (160,400) (2,862,508) (259,900) (5,222,656)
INTEREST INCOME 15,192 2,084 32,277 2,084 79,958
INTEREST EXPENSE (2,416) - (2,416) - (2,416)
----------- ----------- ----------- ----------- -----------
LOSS BEFORE INCOME TAXES (1,482,468) (158,316) (2,832,647) (257,816) (5,145,114)
INCOME TAXES - - - - -
----------- ----------- ----------- ----------- -----------
NET LOSS BEFORE EXTRAORDINARY ITEM $(1,482,468) $ (158,316) $(2,832,647) $ (257,816) (5,145,114)
EXTRAORDINARY ITEM
Gain on forgiveness of debt
(net of tax) - - - 44,500 -
----------- ----------- ----------- ----------- -----------
NET LOSS $(1,482,468) $ (158,316) $(2,832,647) $ (213,316) $(5,145,114)
============ =========== =========== =========== ===========
BASIC AND DILUTED LOSS PER SHARE
BEFORE EXTRAORDINARY ITEM $ (0.09) $ (0.04) $ (0.20) $ (0.13) $ -
EXTRAORDINARY ITEM - - - 0.02 -
----------- ----------- ----------- ----------- -----------
BASIC AND DILUTED LOSS PER SHARE $ (0.09) $ (0.04) $ (0.20) $ (0.11) $ -
==================================================================================================================================
WEIGHTED AVERAGE NUMBER OF SHARES 16,031,757 3,776,099 13,852,852 1,960,635 -
==================================================================================================================================
See accompanying notes to the consolidated financial statements.
________________________________________________________________________________
4
BIDHIT.COM, INC.
(formerly Third Millennium Software Corp.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
===========================================================================================================================
Cumulative
amount for the
period from
Six Months Six Months inception on
Ended Ended May 1, 1999
June 30, June 30, to June 30,
2000 1999 2000
- --------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (2,832,647) $ (213,316) $(5,145,114)
Items not affecting cash:
Depreciation and amortization 424,069 6,318 465,010
Common stock issued for financial services 181,355 - 1,161,646
Common stock issued as an employment bonus 56,000 - 112,000
Common stock issued for prepaid contract advertising - - 999,248
Warrants issued for financial advisory services 270,142 - 429,013
Stock options granted for financial advisory services 458,151 - 458,151
Bad debt - 70,000 -
Gain on forgiveness of debt - (44,500) -
Changes in assets and liabilities:
(Increase) Decrease in prepaid expenses 89,160 (16,919) (261,411)
(Increase) Decrease in inventory 24,873 - 24,873
(Increase) Decrease in accounts receivable 26,321 957 17,485
Decrease in due to shareholder - (4,599) (4,599)
Increase (Decrease) in accounts payable and accrued liabilities (212,526) (110) (23,542)
Increase (Decrease) in accrued interest 2,416 - 2,416
------------ ----------- -----------
Net cash used in operating activities (1,512,686) (202,169) (1,764,824)
------------ ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash acquired on acquisition of subsidiary 35,657 1,655 37,312
Capital asset expenditures (74,443) (15,704) (107,091)
Domain name rights - (300,000) (300,000)
Software development costs - (16,023) (16,270)
Prepaid expenses - - (666,165)
------------ ----------- -----------
Net cash used in investing activities (38,786) (330,072) (1,052,214)
------------ ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Due to shareholder - 258 -
Issuance of common stock 300,000 3,855,000 4,100,000
Proceeds from note payable, related party 200,000 (25,500) 200,000
------------ ----------- -----------
Net cash provided by financing activities 500,000 3,829,758 4,300,000
------------ ----------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS FOR THE PERIOD (1,051,472) 3,297,517 1,482,962
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,534,434 - -
------------ ----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,482,962 $ 3,297,517 $ 1,482,962
===========================================================================================================================
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS (Note 8)
See accompanying notes to the consolidated financial statements.
________________________________________________________________________________
5
BIDHIT.COM, INC.
(formerly Third Millennium Software Corp.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY FROM INCEPTION ON MAY 1, 1999 TO
JUNE 30, 2000.
(Unaudited)
===========================================================================================================================
Accumulated
Common Stock Additional During the Total
-------------------------- Paid-in Development Stockholders'
Shares Amount Capital Stage Deficit Equity
- ---------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1997 125,000 125 27,875 - (28,000) -
Loss for the year - - - - - -
---------- -------- ----------- ----------- -------- -----------
BALANCE, DECEMBER 31, 1998 125,000 125 27,875 - (28,000) -
Common stock issued
for cash 137,500 137 54,863 - - 55,000
Common stock issued
for cash 9,000,000 9,000 891,000 - - 900,000
Common stock issued
for cash 600,000 600 2,999,400 - - 3,000,000
Share issuance costs - - (100,000) - - (100,000)
Common stock issued for
acquisition of
subsidiary 926,250 926 258,424 - - 259,350
Common stock issued for
financial advisory and
consulting services 306,780 307 979,984 - - 980,291
Common stock issued as
an employment bonus 200,000 200 55,800 - - 56,000
Common stock issued for
prepaid contract
advertising 363,363 364 998,884 - - 999,248
Warrants issued for
financial advisory
services - - 158,871 - - 158,871
Loss for the year - - - (2,312,467) (55,000) (2,367,467)
---------- -------- ----------- ----------- -------- -----------
BALANCE, DECEMBER 31, 1999 11,658,893 $ 11,659 $ 6,325,101 $(2,312,467) $(83,000) $ 3,941,293
Common stock issued as
an employment bonus 200,000 200 55,800 - - 56,000
Common stock issued for
financial advisory and
consulting services 100,000 100 349,900 - - 350,000
Common stock issued for
prepaid contract
advertising 900,000 900 3,149,100 - - 3,150,000
Common stock issued for
consulting services 85,143 85 181,270 - - 181,355
Warrants issued for
consulting services - - 270,142 - - 270,142
Stock options issued
to non-employees
for services - - 458,151 - - 458,151
Common stock issued for
acquisition of EZBid 5,734,895 5,735 5,370,729 - - 5,376,464
Common stock issued for
cash 100,000 100 299,900 - - 300,000
Loss for the six months
ending June 30, 2000 - - - (2,832,647) - (2,832,647)
---------- -------- ----------- ----------- -------- -----------
Balance June 30, 2000 18,778,931 $ 18,779 $16,460,093 $(5,145,114) $(83,000) $11,250,758
See accompanying notes to the consolidated financial statements
________________________________________________________________________________
6
BIDHIT.COM, INC.
(formerly Third Millennium Software Corp.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 2000
===============================================================================
1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized October 13, 1995, under the laws of the State
of Nevada, as Painted Desert Farms, Inc.
On January 5, 1998, the Company changed its name to Third Millennium
Software Corp.
On May 7, 1999, the Company changed its name to Bidhit.com, Inc.
On May 17, 1999, the Company approved a 20:1 reverse stock split, thus
decreasing the total number of shares from 5,250,000 issued and
outstanding to 262,500 issued and outstanding common shares.
On May 19, 1999, the Company acquired all of the issued and outstanding
shares of Bidhit.com, Inc. (Washington)("BHcW"), a Washington
corporation.
On May 12, 2000, the Company acquired EZBid, Inc.("EZBid"), a
majority owned subsidiary of Systemax, Inc. (NYSE:SYX). EZBid through
its website EZBid.com operated a business-to-consumer interactive
online auction site featuring consumer electronics, computer
products, home and leisure items, and sporting goods. EZBid focused
on high demand products including refurbished and closeout
merchandise.
The Company is an online auction company which also specializes in
auctioning name brand consumer goods from manufacturers to consumers.
INTERIM FINANCIAL STATEMENTS
The accompanying financial statements of Bidhit.com, Inc. which have
been prepared by the Company are unaudited and include in the opinion
of management all normal recurring adjustments necessary to present
fairly the financial position, results of operations, changes in
stockholders' equity and cash flows at June 30, 2000 and the periods
presented. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant
to the rules and regulations of the Securities and Exchange Commission.
These condensed consolidated financial statements should be read in
conjunction with the Company's audited consolidated financial
statements and the related notes thereto included in the Company's
1999 Annual Report on Form 10K as filed with the Securities and
Exchange Commission.
The Company has been in the development stage since its inception. It
will require additional working capital in order to continue its
business plan. In the event the Company is unsuccessful in securing
outside capital, it may be required to curtail or cease operations.
As a result, substantial doubt exists regarding the ability of the
Company to continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
________________________________________________________________________________
7
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
These consolidated financial statements include Bidhit.com, Inc.
(Nevada) and its wholly-owned subsidiary, Bidhit.com, Inc.
(Washington), which was incorporated in the state of Washington on
May 19, 1999. These consolidated financial statements also include the
operations of EZBid from the date of acquisition on May 12, 2000. All
significant inter-company balances and transactions have been
eliminated upon consolidation.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amount of revenues
and expenses during the year. Actual results could differ from these
estimates.
CASH AND CASH EQUIVALENTS
The Company is required to maintain an irrevocable standby letter of
credit with a bank under the terms of a lease agreement. At June 30,
2000, $338,268 of cash is restricted for that purpose.
REVENUE RECOGNITION
The Company sells merchandise purchased from suppliers two ways. The
Company either purchases the merchandise for inventory or purchases
the merchandise at the time of sale under consignment-type
(drop-ship) agreements. For sales of merchandise owned and
warehoused, the Company is responsible for conducting the auction,
billing the customer, shipping the merchandise to the customer,
processing merchandise returns and collecting accounts receivable.
For drop-ship sales, the supplier retains physical possession of the
merchandise until sale. Upon completion of the auction, the Company
purchases the inventory, takes title to the merchandise, charges the
customer's credit card, and arranges for the shipment of the
merchandise to the customer. In both instances, the Company
recognizes revenue when the product has been shipped. The Company
also sells merchandise under sales commission arrangements with
suppliers. For these types of sales, the Company recognizes sales
commission revenues as items are sold on its Internet site and as
collection of these amounts is reasonably assured.
INTANGIBLE ASSETS
Intangible assets include items such as goodwill of purchased
businesses, registered customers and auction site users, and
registered domain name rights. All intangible assets are amortized
to expense on a straight line basis over three years from the date
of acquisition.
Effective April 1, 2000, the Company revised its estimate of the
economic useful life for Domain Name Rights from ten years to three.
The net effect of this change was a charge of $113,242 for the six
month period ended June 30, 2000.
________________________________________________________________________________
8
2. SIGNIFICANT ACCOUNTING POLICIES (cont'd.....)
ADVERTISING
The company expenses advertising costs as it places advertising in the
media.
RECLASSIFICATIONS
Certain prior year balances have been reclassified to conform with
the current year presentation.
EFFECT OF RECENTLY ANNOUNCED ACCOUNTING STANDARDS
The Securities and Exchange Commission ("SEC") has issued Staff
Accounting Bulletin No. 101 ("SAB"), as amended on June 26, 2000,
titled "Revenue Recognition in Financial Statements." SAB 101
provides the SEC staff's views in applying accepted accounting
principles to selected revenue recognition issues. The Company must
implement any applicable provisions of SAB 101 no later than the
fourth quarter of fiscal 2000. The Company believes that adherence
to this SAB will not have a material impact on the Company's
financial statements.
In March 2000 the Emerging Issues Task Force ("EITF") of the
Financial Accounting Standards Board ("FASB") reached a consensus of
EITF Issue 00-2, "Accounting for Web Site Development Costs." This
consensus provides guidance on what types of costs incurred to
develop Web sites should be capitalized or expensed. The consensus
is effective for quarters beginning after June 30, 2000. The Company
does not expect the adoption of this consensus to have a material
impact on its financial position or results of operations.
In March 2000, the FASB issued FASB Interpretation ("FIN") No. 44,
"Accounting for Certain Transactions Involving Stock Compensation."
FIN 44 clarifies the application of Accounting Principles Board
Opinion ("APB") No. 25 for certain issues relating to stock
compensation. FIN 44 is effective July 1, 2000, but certain
conclusions in it cover specific events that occur after either
December 15, 1998, or January 12, 2000, but before the effective
date of July 1, 2000. The effects of applying FIN 44 are recognized
on a prospective basis from July 1, 2000. The Company does not
expect FIN 44 to have a material affect on its financial position or
results of operations.
In July 2000, the EITF reached a consensus on EITF Issue 00-10,
"Accounting for Shipping and Handling Fees and Costs." This
consensus requires that all amounts billed to a customer in a sale
transaction related to shipping and handling, if any, represent
revenue and should be classified as revenue. The Company already
classifies shipping charges to customers as revenue. The EITF did
not reach a consensus with respect to the classification of costs
related to shipping and handling incurred by the seller. The Company
classifies inbound and outbound shipping costs and the cost of
tangible supplies used to package product for shipment to customers
as cost of sales. The Company does not currently impose separate
handling charges on customers and classifies costs incurred in
distribution (including costs attributable to receiving, inspecting
and warehousing inventories as well as picking and packaging and
preparing customer orders for shipment) as cost of sales.
________________________________________________________________________________
9
3. PREPAID EXPENSES
==================================================================================================================
June 30, December 31,
2000 1999
- ------------------------------------------------------------------------------------------------------------------
Prepaid advertising $ 4,061,748 $ 999,248
Prepaid financial advisory services 350,000 -
Prepaid - other 45,287 17,488
--------------- ---------------
4,457,035 1,016,736
Less: current portion (2,190,487) (350,571)
--------------- ---------------
$ 2,266,548 $ 666,165
==================================================================================================================
Pursuant to an agreement during fiscal 1999 with Hollinger
International, Inc. ("Hollinger"), the Company issued 363,363 shares
of common stock in exchange for $1,000,000 in advertising media
availabilities in Hollinger print media. During the first quarter of
fiscal 2000, the Company issued an additional 600,000 shares in
exchange for $2,100,000 in advertising media availabilities. These
costs will be expensed as the Company orders advertising from
Hollinger. This media will be made available to the Company on an as
ordered basis for a period of three years. In addition, the Company
issued 300,000 shares at an estimated value of $1,050,000, in exchange
for a non-exclusive use of content in Hollinger publications and a
pilot project for a one year period.
Pursuant to an agreement with Ravelston Holdings, Inc.
("Ravelston"), during the first quarter of fiscal 2000, the Company
issued 100,000 shares of common stock at an estimated value of
$350,000, in consideration for Ravelston extending the financial
advisory and consulting services it provides to the Company through
January 1, 2002.
4. FURNITURE & EQUIPMENT
====================================================================================================================
Net Book Value
--------------------------
Accumulated June 30, December 31,
Cost Depreciation 2000 1999
- --------------------------------------------------------------------------------------------------------------------
Furniture and equipment $ 224,752 $ 17,425 $ 207,327 $ 31,488
====================================================================================================================
5. NOTE PAYABLE, RELATED PARTY
In connection with the acquisition of EZBid, Systemax, Inc. advanced
$200,000 to the Company evidenced by a promissory note (the "Note")
due May 12, 2001 bearing interest at a rate of 9% per annum, and
which is secured by substantially all the assets of EZBid. Interest
is payable at maturity and the Note may be prepaid at no penalty by
Bidhit at any time.
________________________________________________________________________________
10
5. NOTE PAYABLE, RELATED PARTY (Cont'd....)
The principal and accrued interest under the Note shall be
convertible into common stock of Bidhit at any time at the election
of Systemax. In addition, all principal and accrued interest shall
be automatically converted to common stock of the Company upon the
Company closing a financing of $2,800,000 within six months from the
date of the Note. The accrued interest on the Note, $2,416 as of
June 30, 2000, is included in Note Payable. Any conversion into
common shares of principal and accrued interest shall be at a price
equal to the closing price of Bidhit common stock as quoted on the
NASD over-the-counter bulletin board on the date prior to the
closing of the merger transaction.
In addition, in the event that Bidhit successfully closes on a
financing or series of financings with aggregate gross proceeds of
$5.6 million or more on or prior to May 12, 2001 (and has a
commitment letter therefor prior to November 12, 2000), Systemax
agrees to invest in Bidhit at the time of such closing an additional
$200,000 on terms and conditions as favorable to Systemax as the
most favorable terms offered to investors in such financing or
financings.
6. BUSINESS COMBINATIONS
Pursuant to a share exchange agreement on May 19, 1999, the Company
purchased all of the issued and outstanding shares of BHcW in
consideration for $300,000 in cash and 926,250 common shares of the
Company at a deemed value of $259,350.
The total purchase price of $559,350 has been allocated as follows:
Cash $ 1,655
Accounts receivable 3,274
Capital assets 780
Intangible Assets 558,350
Accounts payable and accrued liabilities (110)
Loan payable, shareholder (4,599)
---------
$ 559,350
=========
The 926,250 common shares were deemed to have a value of $0.28 per
share, based on the closing market value quotation of the shares on the
date of acquisition.
On May 12, 2000, EZ Acquisition Corporation, a Delaware Corporation
("Merger-Sub") and a wholly owned subsidiary of Bidhit.com, Inc., a
Nevada Corporation (the"Company"), merged (the"Merger") with and into
EZBid, Inc., a Delaware Corporation ("EZBid"), pursuant to an
Agreement and Plan of Merger dated April 21, 2000 (the "Merger
Agreement"). EZBid operated a consumer-based online auction site and,
prior to the Merger, was subsidiary of Systemax, Inc. ("Systemax").
Pursuant to the terms of the Merger Agreement, the Company issued
5,734,895 shares of its authorized but unissued common stock to the
former holders of EZBid common stock based on a conversion ration of
14,337.2375 shares of the Company's common stock for each share of
EZBid common stock issued and outstanding as of the effective time of
the Merger. The total shares issued to the former EZBid stockholders
represent approximately 30.7% of the outstanding common stock
following the Merger. Systemax received 5,391,523 of the shares issued
to the former shareholders of EZBid, representing approximately 28.9%
of the outstanding stock of the Company. 573,490 of the shares issued
in connection with the acquisition are subject to the terms of an
Escrow Agreement entered into contemporaneously with the Merger
Agreement and are subject to forfeiture by the former shareholders of
EZBid in the event of breaches of the Merger Agreement.
________________________________________________________________________________
11
6. BUSINESS COMBINATIONS (Cont'd....)
Under the terms of the Merger Agreement, the Company and Systemax
agreed to enter into a co-marketing agreement and Systemax was also
given the right to appoint two designees to the Company's Board of
Directors.
In connection with the Merger, Systemax also advanced $200,000 to the
Company evidenced by a promissory note due May 12, 2001 bearing
interest at a rate of 9% per annum, and which is secured by
substantially all the assets of EZBid. See Note 5.
For financial statement purposes the acquisition was accounted for as
a purchase and, accordingly, EZBid's results are included in the
consolidated financial statements from the date of acquisition. The
Company issued 5,734,895 shares of common stock with a fair value of
$5,376,464 based on the closing price of the Company's common stock on
the NASD over-the-counter bulletin board market on May 12, 2000. The
aggregate consideration has been allocated to the fair value of the
assets acquired and the liabilities assumed as follows:
Cash $ 35,657
Accounts Receivable 40,995
Inventory 180,442
Prepaid Expenses 29,459
Property, Plant & Equipment, net 109,760
Intangible Assets 5,207,670
Accounts Payable and accrued Liabilities (227,519)
-----------
$ 5,376,464
The unaudited pro forma combined historical results, as if EZBid had
been acquired at the beginning of 1998 and 1999 are estimated to be:
1999 1998
----------- -----------
Net Sales $ 5,702,127 $ 506,329
Net Earnings $(7,736,599) $(1,932,404)
Basic and Diluted (Loss) per share $ (0.64) $ (0.33)
The pro forma results include amortization of the intangibles
presented above and the net interest expense on the advance from
Systemax. These pro forma results are not necessarily indicative of
what actually would have occurred if the acquisition had been
completed as of the beginning of each of the fiscal years presented
nor are they necessarily indicative of the future consolidated
results.
________________________________________________________________________________
12
7. INCOME TAXES
The Company's total deferred tax asset is as follows:
===================================================================================================================-
June 30, December 31,
2000 1999
- --------------------------------------------------------------------------------------------------------------------
Tax benefit relating to net operating loss carryforwards $ 1,535,000 $ 714,000
Valuation allowance (1,535,000) (714,000)
------------ -----------
$ - $ -
====================================================================================================================
The Company has a net operating loss carryforward of approximately
$5,150,000 which expires between the years 2002 and 2006. The Company
provided a full valuation allowance on the deferred tax asset because
of the uncertainty regarding realizability.
8. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
================================================================================================================
From Start of
Development
on May 1,
1999
to June 30, June 30, June 30,
2000 2000 1999
- ----------------------------------------------------------------------------------------------------------------
Cash paid for income taxes $ - $ - $ -
Cash paid for interest - - -
================================================================ ================== =============== ==========
The following non-cash investing and financing transactions occurred
during the six month period ended June 30, 2000:
a) In March 2000 the Company issued 900,000 shares of
common stock at an estimated value of $3,150,000 for
prepayment of contract advertising.
b) In March 2000 the Company issued 100,000 shares of common stock
at an estimated value of $350,000 for prepayment of financial
advisory services.
c) In May 2000 the Company issued 5,734,895 shares at a
fair value $5,376,464 for the purchase of all of EZBid,
Inc.'s common shares. See Note 6.
________________________________________________________________________________
13
9. STOCK OPTIONS
The following is a summary of the status of the Company's plan during
the quarter ended June 30, 2000:
==================================================================================
Weighted Average
Number of Shares Exercise Price
---------------- ----------------
Outstanding at March 31, 2000 1,513,750 $3.68
Granted 100,000 2.00
Forfeited - -
Exercised - -
--------- -----
Outstanding June 30, 2000 1,613,750 $3.57
==================================================================================
=======================================================================
Weighted average fair value of options granted in the period: $2.00
=======================================================================
As at June 30, 2000, the following stock options were outstanding:
==================================================================================
Number Exercise
of Shares Price Expiry Date
- ----------------------------------------------------------------------------------
555,750 $4.00 June 1, 2001
300,000 $4.00 June 1, 2002
8,000 $4.00 October 21, 2001
250,000 $2.85 December 1, 2002
200,000 $4.00 December 1, 2002
200,000 $3.00 February 18, 2002
100,000 $2.00 April 23, 2002
==================================================================================
Stock options exercisable and remaining lives at June 30, 2000 were as
follows:
================================================================================
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------ -----------------------
Weighted
Average Weighted Weighted
Range of Remaining Average Average
Exercise Number Contractual Exercise Number Exercise
Prices Outstanding Life Price Exercisable Price
- --------------------------------------------------------------------------------
$4.00 1,063,750 1.03 $4.00 882,752 $4.00
$3.00 200,000 1.64 $3.00 25,000 $3.00
$2.85 250,000 2.42 $2.85 62,500 $2.85
$2.00 100,000 1.81 $2.00 - $2.00
================================================================================
________________________________________________________________________________
14
10. STOCK BASED COMPENSATION EXPENSE
Statement of Financial Accounting Standards ("SFAS")No. 123,
"Accounting for Stock-Based Compensation", encourages but does not
require companies to record compensation cost for stock-based employee
compensation plans at fair value. The Company has chosen to account
for stock-based compensation using APB No. 25 "Accounting for Stock
Issued to Employees". Accordingly, compensation cost for stock options
is measured as the excess, if any, of quoted market price of the
Company's stock at the date of grant over the option price. There was
no compensation cost incurred based on options granted in 1999 and
2000 to employees. Had compensation cost been recognized on the basis
of fair value pursuant to SFAS No. 123, net loss and loss per share
would have been adjusted as follows:
From Start of
Development
Stage on Quarter Ended Two Quarters ended
May 1, -------------------- ------------------------------------
1999
to June 30, June 30, June 30, June 30, June 30,
2000 2000 1999 2000 1999
Net Loss As Reported $(5,145,114) $(1,482,468) $ (158,316) $(2,832,647) $ (213,316)
Pro forma $(5,159,411) $(1,490,347) $ (158,316) $(2,842,665) $ (213,316)
- ----------------------------------------------------------------------------------------------------------------------
BASIC AND DILUTED LOSS
PER SHARE AFTER
EXTRAORDINARY ITEM
As reported $ - $ (0.09) $ (0.04) $ (0.20) $ (0.11)
Pro forma $ - $ (0.09) $ (0.04) $ (0.20) $ (0.11)
The fair value of each option granted is estimated using the Black
Scholes Model. The assumptions used in calculating fair value are as
follows:
================================================================================
2000 1999
- --------------------------------------------------------------------------------
Risk-free interest rate 6.03% -
Expected life of the options 2.0 years -
Expected volatility 280% -
Expected dividend yield - -
================================================================================
11 SUBSEQUENT EVENTS
The following events occurred subsequent to June 30, 2000:
a) Jeff Mendenhall submitted his resignation as a Director of
the Company on July 10, 2000, and his resignation was
accepted by the Board of Directors.
b) On August 8, 2000, the Company issued 55,000 common shares to
Dan Mendenhall, pursuant to his employment agreement dated
March 20, 2000, for services as Vice President of Sales and
Business Development from April 24 to April 23, 2002.
c) On August 15, 2000, the Company announced its intent to adopt
the name EZ Inc.
________________________________________________________________________________
15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
BIDHIT.COM, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
STATEMENT OF FORWARD-LOOKING INFORMATION
This document contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements relate to future events or our future
financial performance. In some cases, you can identify forward-looking
statements by terminology such as "may," "will," "should," "expect," "plan,"
"anticipate," "believe," "estimate," "predict," "potential" or "continue," the
negative of such terms, or other comparable terminology. These statements are
only predictions. Actual events or results may differ materially. Although we
believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. In this regard, our business and operations are subject to
substantial risks which increase the uncertainty inherent in the forward-looking
statements contained in this Form 10-QSB. In evaluating our business, you should
give careful consideration to the information set forth below under the caption
"Risk Factors That May Affect Future Operating Results," in addition to the
other information set forth herein.
The inclusion of the forward-looking statements should not be regarded as a
representation by Bidhit.com, or any other person, that such forward-looking
statements will be achieved. Although we believe that the expectations reflected
in the forward-looking statements are reasonable, we cannot guarantee future
results, levels of activity, performance, or achievements. We undertake no duty
to update any of the forward-looking statements, whether as a result of new
information, future events or otherwise. In light of the foregoing, readers are
cautioned not to place undue reliance on the forward-looking statements
contained in this report.
OVERVIEW
Bidhit.com, Inc. is an Internet auction and e-commerce company. We were
incorporated under the laws of the State of Nevada on October 13, 1995 under the
name "Painted Desert Farms, Inc." and changed our name to "Third Millennium
Software Corp." on January 5, 1998, and then to "Bidhit.com, Inc." on May 7,
1999. We acquired EZBid Inc. on May 12, 2000 and now operate our online auction
business under the name EZbid.com. We provide registered users with the
opportunity to bid on brand name products in the following categories:
computers, camera equipment, sporting goods, household goods, home electronics
and sports memorabilia.
We offer five auctions per week in each category including auctions over
the weekend. New and excess branded merchandise, closeout items, and refurbished
products are offered to consumers and small to mid-sized businesses from
certified vendors and manufacturers. Our Internet auctions feature rotating
product selection typically selling at discounts to prices found at traditional
retailers.
Our strong customer care focus distinguishes us from our competitors. We
believe that we were the first online auction company to introduce "Live Help"
to our customers. "Live Help" allows a customer to begin an online electronic
dialogue with an EZBid.com on-site customer care representative. Certified
vendors, an extended-warranty program, a customer-oriented focus, and an easy to
use website set our website, EZbid.com, apart from other online auction sites.
We use high standards of network security to protect customer information,
including credit card data. Financial information is encrypted on our own secure
servers. We follow all applicable federal and state laws to assure our
customers' names and information are not used without their permission. Our
database reporting Capabilities allow a database driven relational marketing
program to serve the needs and interests of our community and increase our
loyal customer base. We are a member in good standing of the Better Business
Bureau (BBB) and the BBB On Line.
________________________________________________________________________________
16
We have strategic relationships with Systemax, Inc. (NYSE:SYX) and
Hollinger International (NYSE:HLR). Systemax, Inc. sells private label and name
brand PC hardware, related computer products, and industrial products to
businesses and consumers in North America and Europe. Our relationship with
Systemax gives us the opportunity to promote ourselves on the desktop screen of
every PC that is assembled by Systemax and as well as advertising in Systemax's
catalogues and websites. Systemax, Inc. is a Fortune 1000 company.
Hollinger International Inc. is a global newspaper publishing company with
English language newspapers in the United States, United Kingdom, Canada and
Israel. Included among its paid daily newspapers are the Daily Telegraph,
Chicago Sun-Times, The Ottawa Citizen and Canada's Nation Post. In addition,
Hollinger International, Inc. owns non-daily newspapers, as well as magazines
and other leading publications. Our relationship with Hollinger International
allows us to advertise in Hollinger publications and use selected content
published by Hollinger publications on a non-exclusive basis. Hollinger has also
appointed two of its officers to the Company's advisory board.
RESULTS OF OPERATIONS
REVENUE
Revenues of $178,885 for the three months ended June 30, 2000 were derived
primarily from the sale of products through our website and increased $175,681
from the three months ended June 30, 1999. Revenues were $182,502 for the six
months ended June 30, 2000 and increased $179,298 from the six months ended June
30, 1999. This increase was due to our acquisition of EZbid, Inc. on May 12,
2000.
We sell merchandise purchased from suppliers in two ways. We either
purchase merchandise for inventory or purchase the merchandise at the time of
sale (drop ship). For drop ship sales, our supplier retains physical possession
of the merchandise until sale. We then charge the customer and arrange for
shipment to the customer. In both types of sales of inventory purchased from
suppliers, we recognize revenue when the product has been shipped. We also sell
merchandise under sales commission arrangements with suppliers. For this type of
sale, we recognize sales commission revenues as items are sold on our website
and as collection of these commissions is reasonably assured.
Our sales of inventoried product and drop ship sales represented a new
method of sales used by EZbid in its operations. Product sales increased from
none in the comparable quarter and six month period last year to $178,062 in
both the quarter and six month period ended June 30, 2000.
Our commission revenue declined to $823 in the quarter ended June 30, 2000
from $3,204 in last year's quarter ended June 30, 1999 as management's
attentions were primarily focused on implementing new management systems and new
methods of marketing products to the consumer. Our commission revenue increased
to $4,440 in the period ended June 30, 2000 from $3,204 in the six months ended
June 30, 1999.
COST OF REVENUE
Cost of revenue increased from none in the quarter ended June 30, 1999 to
$161,256 or 90.1% of sales in the quarter ended June 30, 2000. Cost of revenue
increased from none in the six months ended June 30, 1999 to $161,256 or 88.4%
of sales in the quarter ended June 30, 2000. This increase was caused by the
expansion of our marketing methods to incorporate revenue from the sale of
inventoried products and drop ship sales. In the comparable quarter last year,
we reported no cost of revenue because our revenue represented sales commissions
on non-inventoried products.
________________________________________________________________________________
17
OPERATING EXPENSES
Our operating expenses consist of selling and marketing, general and
administrative, engineering and programming, depreciation and amortization and
bad debts. These expenses increased $1,349,269 to $1,512,873 in the three months
ending June 30, 2000 from $163,604 in the comparable quarter last year and
increased $2,620,650 to $2,883,754 in the six months ended June 30, 2000 from
$263,104 for the six months ended June 30, 1999. This increase is attributable
to the acquisition of EZbid during the second fiscal quarter of 2000 and the
fact that we were not operational for the full quarter ending June 30, 1999. We
also revised our estimate for the useful life of domain name rights from ten
years to three, which directly caused an increase of $113,342 in amortization
expense in the second quarter of fiscal 2000 and six months ending June 30, 2000
for the domain name acquired in fiscal 1999.
There was no bad debt expense in the quarters ended June 30, 2000 and June
30, 1999. There was no bad debt expense in the six months ended June 30, 2000.
Bad Debt expense totaled $70,000 in the six month period ended June 30, 1999.
INTEREST INCOME
Interest income increased to $15,192 in the three month period ended
June 30, 2000 from $2,084 in the same period last year and to $32,277 in the six
month period ended June 30, 2000 from $2,084 in the same period last year,
reflecting primarily larger invested cash balances in 2000.
INTEREST EXPENSE
Interest expense increased to $2,416 in the second quarter of fiscal 2000
and the first six months of fiscal 2000 from zero in the comparable periods last
year based on the issuance of a Convertible Note to Systemax on May 12, 2000 in
the amount of $200,000 bearing interest at the rate of 9% per annum.
NET LOSS
We generated a loss of $1,482,468 for the second fiscal quarter ended June
30, 2000 compared to a loss of $158,316 in the comparable period last year due
to efforts to expand our marketing, build a management team, and develop our
website. We generated a loss of $2,832,647 for the six months ended June 30,
2000 compared to a loss of $213,316 in the comparable period (net of
extraordinary gain of $44,500 during such period) last year due to the same
reasons.
BASIC AND DILUTED LOSS PER SHARE
Our basic and diluted loss per share was $(0.09) per share for the three
month period ended June 30, 2000 compared to a basic and diluted Loss per share
of $(0.04) in the comparable period last year. The Company's basic and diluted
loss per share was $(0.20) per share for the six month period ended June 30,
2000 compared to a basic and diluted Loss per share of $(0.13) before the
extraordinary gain and $(0.11) after the extraordinary gain last year. The basic
and diluted earnings per share figures are the same because fully diluted shares
that may be issued would be anti-dilutive if used in the calculation covering a
period of net losses.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 2000, we had cash and accounts receivable in the aggregate
amount of $1,509,746. Our primary source of liquidity was cash received through
private placements made in connection with the Company's acquisition of
Bidhit.com, Inc. (Washington) in May 1999. We also sold $300,000 of common stock
to Hollinger during the second quarter ending June 30, 2000 and, in addition,
received $200,000 in debt financing from Systemax Inc. in connection with our
acquisition of EZbid
________________________________________________________________________________
18
Inc. on May 12, 2000. This indebtedness is secured by substantially all of the
assets of EZBid Inc. We intend to raise additional capital through the sale of
equity securities or the incurrence of additional indebtedness. There can be no
assurance that we will successfully raise any equity financing or that other
sources of debt financing will be available to us if and when needed. The
failure to obtain adequate additional capital may require us to postpone some or
all of the expansion of our proposed business operations and, potentially, to
cease operations. Any additional equity financing may involve substantial
dilution to our then-existing shareholders.
RISK FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS
Investment in the shares of our common stock involves a high degree of
risk. Investors should carefully consider the risks described below, together
with all of the other information included in this quarterly report,
before making an investment decision. If any of the following risks actually
occurs, our business, financial condition or operating results could be
materially adversely affected. In such case, the trading price of our common
stock could decline, and investors may lose all or part of their investment.
NEED FOR ADDITIONAL FINANCING
During the next 12 months, our foreseeable cash requirements are expected
to be met by a combination of existing cash, revenue generated by our sales
commissions, and additional equity or debt financing. We are currently devoting
substantial resources to the development of our website and to the establishment
of co-marketing relationships. Substantial additional capital may be required in
the future to fund website development. No assurance can be given that
additional financing will be available or that, if available, such financing
will be obtainable on terms favorable to us or our shareholders. If needed
capital is unavailable, our ability to continue in business will be jeopardized.
To the extent we raise additional capital by issuing equity or securities
convertible into equity, ownership dilution to our shareholders will result.
HISTORY OF LOSSES AND NEGATIVE CASH FLOW; ANTICIPATED CONTINUED LOSSES
Since our inception, we have incurred significant losses and negative cash
flow, and as of June 30, 2000, we had an accumulated deficit of $5,228,114 while
net cash used in operating activities was $1,764,824. We have not achieved
profitability and expect to continue to incur operating losses for the
foreseeable future as we fund operating and capital expenditures in areas such
as establishment and expansion of markets, advertising, brand promotion, sales
and marketing, and operating infrastructure. We cannot assure investors that we
will ever achieve or sustain profitability or that our operating losses will
diminish in the future.
COMPETITION
The market for online auction services is increasingly competitive and
subject to rapid change. Further, the market can be significantly affected by
the introduction of new services and other activities of companies in this
market. Our competitors offer a variety of products and services to address the
needs of the market in which we sell our services. We believe that the principal
competitive factors in this market are:
- brand awareness
- flexibility
- strategic relationships to drive traffic
- service quality
- functionality and service features
- company reputation
Direct and indirect competitors in the online auction industry include eBay
and uBid as well as several other larger entrants into this market. We expect to
face competition in the future from these and other companies. Some of these
competitors and future competitors have an advantage over us because they:
________________________________________________________________________________
19
- have name recognition
- have significantly greater financial, technical, and other resources
- have well-established relationships with our potential customers
As a result, our current and future competitors may be able to devote
greater resources to the development of their products than we can. We cannot
assure you that we will be able to compete successfully against current and
future competition, and the failure to do so would have a materially adverse
effect upon our business, operating results and financial condition.
RELIANCE ON KEY INDIVIDUALS
We depend upon the active participation of Tim Black, President, CEO,
Treasurer and Secretary. We do not currently maintain key employee insurance
policies. We will likely need to recruit additional qualified personnel in order
to expand according to our business plan. Although we are committed to offering
competitive salaries, stock options, benefits and an appealing work environment,
there can be no assurance that we will be able to attract such persons or retain
our key personnel. The failure to attract and retain key personnel could have a
material adverse effect on our ability to continue as a going concern.
RISKS OF LOW-PRICED STOCKS; PENNY STOCK REGULATIONS
Common Stock traded on NASD'S "Over-the Counter Bulletin Board," such as
ours, is subject to Rule 15g-9 under the Exchange Act, which imposes certain
sales practice requirements on broker-dealers that sell such securities to
persons other than established customers and institutional accredited investors.
For transactions covered by this rule, a broker-dealer must make a special
suitability determination for the purchaser and have received the purchaser's
written consent to the transaction prior to sale. Consequently, the rule may
affect the ability of broker-dealers to sell our Common Stock and may affect the
ability of purchasers to sell any of the Common Stock acquired in the secondary
market.
SHARE PRICE VOLATILITY
The trading price of our Common Stock could be subject to wide fluctuations
in response to quarter to quarter variations in operating results, changes in
earnings estimates by analysts, announcements of technological innovations or
new products by us or our competitors, general conditions in the personal
products industries and other events or factors. In addition, in recent years
the stock market in general has experienced extreme price fluctuations. This
volatility has had a substantial effect on the market price of securities issued
by many companies for reasons unrelated to the operating performance of the
specific companies. These broad market fluctuations may adversely affect the
market price of the Common Stock. To date, the Company's Common Stock has not
traded in sufficient volumes, or for a sufficient length of time, to produce any
meaningful evidence of correlation between its price and general market
volatility.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our exposure to market risk for changes in interest rates is related
primarily to our short term investments due to the fixed rate nature of our
borrowings. We have not used derivative financial instruments in our investment
portfolio. Short term investments consist primarily of a money market account
with a commercial bank with funds immediately available. Interest rate
fluctuations do not impact the carry value of the investment. We do not believe
that the future market risks related to the above investment portfolio will have
a material adverse impact on our financial position, results of operations or
liquidity.
________________________________________________________________________________
20
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On May 12, 2000, we issued 5,734,895 shares at a fair market value of
$5,376,464 for the purchase of all of EZBid, Inc.'s common shares.
On June 30, 2000, we issued 100,000 shares of common stock to Jeff
Mendenhall as an employment bonus pursuant to the terms of the Employment and
Services Agreements dated May 20, 1999 between the Company and Jeff Mendenhall
(the "Agreement"). Under the Agreement, Mr. Mendenhall is granted 400,000 shares
of our Common Stock which are to be issued to him at the rate of 100,000 shares
at the end of the third, sixth, ninth and twelfth months of the term of the
agreement.
On June 30, 2000 we issued 100,000 shares of our Common Stock to Hollinger
International, Inc. ("Hollinger") at a fair market value of $300,000 for cash.
The Company claimed exemption for the above transactions pursuant to
Section 4(2) of the Securities Act of 1933.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit No. Description
3.1* Articles of Incorporation filed October 13, 1995, and
amendments thereto filed January 5, 1998 and May 7, 1999, as
filed with the Company's Form 10-SB on October 15, 1999 and
incorporated herein by reference.
3.2* Bylaws (and the amendment thereto dated January 17, 1997) as
filed in the Company's Form 10-SB on October 15, 1999 and
incorporated herein by reference.
10.1* Financial Advisory Agreement dated February 28, 2000 between
Bidhit.com, Inc. and Salman Partners Inc. filed with the
Company's Form 10-QSB on May 22, 2000 and incorporated
herein by reference.
10.2* Advertising Services Agreement dated March 2, 2000 between
Bidhit.com, Inc. and Hollinger International Inc. filed with
the Company's Form 10-QSB on May 22, 2000 and incorporated
herein by reference.
10.3* Supplemental Advisory and Consulting Agreement dated
March 2, 2000 between Bidhit.com, Inc. and The Ravelston
Corporation filed with the Company's Form 10-QSB on May 22,
2000 and incorporated herein by reference.
________________________________________________________________________________
21
10.4* Agreement and Plan of Merger, dated as of May 12, 2000,
between Bidhit.com, Inc., EZ Acquisition Corp., EZBid Inc.,
and the shareholders of EZBid, Systemax Inc., and Paul Mandel
as filed in the Company's Form 8-K on May 26, 2000 and
incorporated herein by reference.
27.1 Financial Data Schedule.
* Incorporated herein by reference.
(b) Reports on Form 8-K.
The following report on Form 8-K was filed during the quarter covered by
this report:
* Disclosure of Acquisition or Disposition of Assets filed on Form 8-K,
May 26, 2000.
________________________________________________________________________________
22
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BIDHIT.COM, INC.
Dated: September 29, 2000 By: /s/ Tim Black
--------------------------------
Tim Black
President, CEO, Treasurer
And Secretary.
(Principal Executive and
Financial Officer)
________________________________________________________________________________