EXHIBIT 99.1
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 - SAFE HARBOR FOR
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a safe-harbor for
forward-looking statements made by public companies. This safe-harbor protects a
company from securities law liability in connection with forward-looking
statements if the company complies with the requirements of the safe-harbor. As
a public company, we have relied and will continue to rely on the protection of
the safe harbor in connection with our written and oral forward-looking
statements.
When evaluating our business, you should consider:
o all of the information in this quarterly report on Form 10-QSB; and
o the risk factors described below.
RISK FACTORS
An investment in the Company's securities is highly speculative and subject to a
high degree of risk. Only those persons who can bear the risk of the entire loss
of their investment should participate. An investor should carefully consider
the risks described below and the other information in this document and any
filings the Company may make with the United States Securities and Exchange
Commission (the "SEC") in the future before investing in the Company's Common
Stock. The risks described below are not the only ones faced. Additional risks
that the Company is aware of or that the Company currently believes are
immaterial may become important factors that affect the Company's business. If
any of the following risks occur, or if others occur, the Company's business,
operating results and financial condition could be seriously harmed and the
investor may lose all of its investment.
The Company's Short Operating History makes its business difficult to evaluate
The Company acquired its current business in February 1999 and its
"worldbid.com" web site (the "Web Site") only began operations on the Internet
in October 1998. Accordingly, the Company has a limited operating history upon
which to base an evaluation of our business and prospects. Accordingly, the
Company's business and prospects must be considered in light of the risks,
expenses and difficulties frequently encountered by companies in their early
stage of development, particularly companies in new and rapidly evolving markets
such as electronic commerce. To address these risks, the Company must
successfully implement its business plan and marketing strategies. The Company
may not successfully implement all or any of its business strategies or
successfully address the risks and uncertainties that it encounters.
The Company has minimal revenues
The Company's business and marketing strategy contemplates that the Company will
earn a substantial portion of its revenues from advertising. There is no
assurance that the Company will
be able to generate revenues from advertising or that the revenues generated
will exceed its operating costs. Advertisers may not accept advertising on
e-mails as an acceptable form of advertising. Rates for advertising on e-mails
may decrease as the growth of the Internet and electronic commerce bring
increased competition. Businesses may not be prepared to pay a fee in order to
post requests for tenders or offers for sales on the Web Site or to receive
e-mails of requests for tenders.
Operating results are difficult to predict
The Company's future financial results are uncertain due to a number of factors,
many of which are outside the Company's control. These factors include:
A. The ability to increase usage of the Web Site;
B. The ability to generate revenue through the Web Site;
C. The timing, cost and availability of advertising on web sites comparable to
the Company's and over other media;
D. The amount and timing of costs relating to expansion of the Company's
operations;
E. The announcement or introduction of competing web sites and products of
competitors; and
F. The general economic conditions and economic conditions specific to the
Internet and electronic commerce.
Additional Financing
The Company may require additional financing in order to complete its business
plan of operations. The Company has no agreements for additional financing and
there can be no assurance that additional funding will be available to the
Company on acceptable terms in order to enable the Company to complete its plan
of operations. The Company may not be able to continue operations if additional
financing is not obtained.
Recognition of the Web Site is essential to growth of the Company's Business
The Company believes that the successful marketing, development and promotion of
the Web Site are critical to its success in attracting businesses and
advertisers. Furthermore, the Company believes that the importance of customer
awareness will increase as low barriers to entry encourage the proliferation of
web sites. If the Company is unsuccessful in continuing to build strong
recognition of the Web Site, then the Company may not be able to achieve
revenues. The marketing and promotion efforts contemplated by the Company may
not be successful in increasing business awareness of the Web Site or in
enabling the Company to achieve revenues.
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The Company depends on third parties for the operation of its business
The Company depends on several third parties in conducting its operations,
including the following:
A. The Company does not own a gateway onto the Internet, but instead relies on
an Internet service provider to connect the Web Site to the Internet; and
B. The Web Site depends on operating system, database, and server software
that has been developed, produced by and licensed from third parties.
The Company has limited control over these third parties and has no long-term
relationships with any of them. If the Company is unable to develop and maintain
satisfactory relationships with such third parties on acceptable commercial
terms, or if the quality of such third parties' products and services falls
below a satisfactory standard, the Company's business could be harmed. Also, the
Company's loss of or inability to maintain or obtain upgrades to certain
technology licenses could result in delays in developing its systems until
equivalent technology could be identified, licensed or developed, and
integrated.
The Company depends on its key employees
Competition for qualified personnel in the Company's industry is intense,
particularly for software development and other technical staff. The Company
believes that its future success will depend in part on its continued ability to
attract, hire and retain qualified personnel. None of the Company's employees
are represented by a labor union, and the Company considers its employee
relations to be good.
Risks of systems failure
Substantially all of the Company's communications hardware and computer hardware
is located at a leased facility in Victoria, British Columbia, Canada. The
Company's systems are vulnerable to damage from earthquake, fire, floods, power
loss, telecommunications failures, break-ins and similar events. Despite the
Company's implementation of network security measures, its servers are also
vulnerable to computer viruses, physical or electronic break-ins, deliberate
attempts by third parties to exceed the capacity of the Company's systems and
similar disruptive problems. The Company's coverage limits on its property and
business interruption insurance may not be adequate to compensate for all losses
that may occur.
The Company may be unable to protect its intellectual property
The Company's performance and ability to compete are dependent to a significant
degree on its ability to protect and enforce its intellectual property rights,
which include the following:
A. Proprietary technology;
B. Trade names; and
C. Domain names, each of which relates to the Company's brand.
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The Company may not be able to protect its proprietary rights, and its inability
or failure to do so could result in loss of competitive and commercial
advantages that the Company holds. Additionally, the Company may choose to
litigate to protect its intellectual property rights, which could result in a
significant cost of resources and money. The Company cannot assure success in
any such litigation that it might undertake.
The Company may in the future receive notices from third parties claiming
infringement by the Company's software, by the use of the name "Worldbid" or
other aspects of the Company's business. The Company is not currently subject to
any such claim that would have a material effect on the Company's business or
financial condition. However, any future claim, with or without merit, could
result in significant litigation costs and diversion of resources, including the
attention of management, that could have a material adverse effect on the
Company's business, results of operations and financial condition. In the
future, the Company may also need to file lawsuits to enforce the Company's
intellectual property rights, to protect the Company's trade secrets or to
determine the validity and scope of the proprietary rights of others. Such
litigation, whether successful or unsuccessful, could result in substantial
costs and diversion of resources, which could have a material adverse effect on
the Company's business, results of operations and financial condition.
User acceptance of the Worldbid Business format is unknown
The success of the Worldbid business will depend on acceptance of the business
format of the Web Site. There is no assurance that businesses will accept the
format of the Web Site as an enhancement to completing trade transactions.
Businesses have a variety of competing means for which to procure tenders for
goods and services, both via the Internet and through traditional commercial
means.
Trading of the Company's Common Stock
The Company's common shares are traded on the NASD OTC Bulletin Board under the
symbol "WBID". Companies traded on the OTC Bulletin Board have traditionally
experienced extreme price and volume fluctuations. The Company's stock price may
be adversely affected by factors that are unrelated or disproportionate to the
operating performance of the Company. The trading prices of many technology
companies' stocks are at or near historical highs and reflect price earnings
ratios substantially above historical levels. These market fluctuations, as well
as general economic, political and market conditions such as recessions,
interest rates or international currency fluctuations may adversely affect the
market price of the Company's common stock.
No Dividends
Payment of dividends on the Common Stock is within the discretion of the Board
of Directors and will depend upon the Company's future earnings, its capital
requirements, financial condition and other relevant factors. The Company has no
plan to declare any dividends in the foreseeable future.
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