UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended January 31, 2001
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act
of 1934
For the transition period ---------- to -------------
Commission File Number 000-26729
WORLDBID CORPORATION
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(Exact name of small Business Issuer as specified in its charter)
Nevada 88-0427619
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
Suite 1100, 1175 Douglas Street
Victoria, British Columbia, Canada V8W 2E1
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: 250-475-2248
None
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [X] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 16,180,000 Shares of $.001 par value
Common Stock outstanding as of March 14, 2001.
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying unaudited financial statements have been prepared in accordance
with the instructions to Form 10-QSB and Item 310 (b) of Regulation S-B, and,
therefore, do not include all information and footnotes necessary for a complete
presentation of financial position, results of operations, cash flows, and
stockholders' equity in conformity with generally accepted accounting
principles. In the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations and financial position have
been included and all such adjustments are of a normal recurring nature.
Operating results for the nine months ended January 31, 2001 are not necessarily
indicative of the results that can be expected for the Company's fiscal year
ending April 30, 2001.
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Page 1
FINANCIAL STATEMENTS
for the quarter and nine-month period
ended January 31, 2001
-UNAUDITED-
Worldbid Corporation
Consolidated Balance Sheet
January 31 April 30
2001 2000
(unaudited) (audited)
-------------- --------------
Assets
Current Assets
Cash $ 63,449 $ 86,911
Accounts receivable 16,436 39,772
Prepaid expense 13,183
-------------- --------------
Total Current Assets 93,068 126,683
Property and equipment, less accumulated amortization 346,561 264,487
Intangible Assets, less accumulated amortization 39,163 9,865
Deferred Costs 50,000
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Total Assets $ 528,792 $ 401,035
============== ==============
Liabilities & Stockholders' Equity (deficit)
Current Liabilities
Accounts payable and Accrued liabilities $334,747 $ 92,497
Loan Payable 100,000
Due to shareholder 803,450
-------------- --------------
Total current liabilities and accrued liabilities 1,238,197 92,497
Stockholders' equity (deficit)
Common stock 15,800 6,730
Additional Paid in Capital 2,950,200 1,478,020
Share Subscription 5,000
Deficit (3,691,564) (1,176,212)
Accumulated Foreign Exchange Adjustment 11,159
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Total Stockholder's Equity (709,405) 308,538
-------------- --------------
Total Liabilities & Stockholders' Equity $ 528,792 $ 401,035
============== ==============
See Notes to Consolidated Financial Statements
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Worldbid Corporation
Consolidated Statement of Operations and Deficit (Unaudited)
Three Months Ended Nine Months Ended
January 31 January 31 January 31 January 31
2001 2000 2001 2000
------------ ------------ ------------- -------------
Revenue $ 21,360 $ 12,331 $ 65,815 $ 31,161
Operating Expense:
Salaries and Benefits 193,668 26,318 601,842 97,240
Marketing Expense 134,282 114,157 824,372 167,672
Technical Support & Operations 69,278 157,772 205,930 210,699
Professional Fees 245,246 32,876 414,699 76,166
Other Selling, General & Administration 171,771 44,654 391,847 71,665
Depreciation 24,230 1,756 66,236 7,166
------------ ------------ ------------- -------------
$ 838,475 $ 377,533 $ 2,504,926 $ 630,608
Loss from Operations (817,115) (365,202) (2,439,111) (599,447)
Interest & Financing Charges 36,575 536 76,241 772
Net Net Loss (853,690) (365,738) (2,515,352) (600,219)
Deficit, Beginning of Period (2,837,874) (333,286) (1,176,212) (71,572)
------------ ------------ ------------- -------------
Deficit, End of Period $(3,691,564) $ (699,024) $(3,691,564) $ (671,791)
============ ============ ============= =============
Net Loss per Common Share, basic & diluted $ (0.06) $ (0.05) $ (0.17) $ (0.05)
------------ ------------ ------------- -------------
Weighted Average Common Shares O/S, basic
and diluted 15,220,109 12,000,000 14,391,295 11,967,391
============ ============ ============= =============
See Notes to Consolidated Financial Statements
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Worldbid Corporation
Consolidated Statement of Cash Flows (Unaudited)
Nine Months Ended
January 31/01 January 31/00
---------------- ----------------
Cash provided by (used in):
Operations:
Net Loss $ (2,515,352) $ (600,219)
Items not involving cash
Depreciation 66,236 7,166
Foreign exchange on subsidiary operations 11,159 0
Loss on Disposal of Capital Assets 515 0
Professional services paid through issuance of share capital 100,000 0
Changes in Operating Assets and Liabilities
Decrease (Increase) in accounts receivable 23,336 (8,227)
Decrease (Increase) in prepaid expenses (13,183) 0
Decrease (Increase) in accounts payable and accrued liabilities 242,250 16,814
---------------- ----------------
Net Cash used in operating activities (2,085,039) (584,466)
Cash Flows From Investing:
Purchase of capital assets and equipment (148,825) (79,965)
Purchase of other assets (79,298) (54,397)
---------------- ----------------
Net Cash used in investing activities (228,123) (134,362)
Cash Flow from Financing:
Increase in shareholder loans 803,450 0
Increase in short term loans 100,000 0
Issue of Share Capital 8,820 160
Share subscriptions received 5,000 450,000
Increase in Additional Paid In Capital 1,372,430 199,840
---------------- ----------------
Net cash provided by financing activities 2,289,700 650,000
Decrease in Cash (23,462) (68,828)
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Cash, beginning of period 86,911 366,239
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Cash. End of Period $ 63,449 $ 297,411
================ ================
See Notes to Consolidated Financial Statements
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WORLDBID CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
- -------
Worldbid Corporation (the "Company" or "WBC") was originally incorporated on
August 10, 1998 in the state of Nevada as "Tethercam Systems, Inc.". On January
15, 1999 the Company changed its name to Worldbid Corporation.
The Company is engaged in the business of facilitating electronic commerce via
the Internet. The company owns and operates an online business-to-business world
trade web site, which is located on the Internet at "www.Worldbid.com". The
Worldbid web site facilitates business transactions on the Internet by providing
an organized and systematic tool for business to post notices of goods for sale
and notices for the request for tender of goods. The Company uses electronic
e-mail notifications in order to enable businesses to connect and transact
business. The Company's current revenues sources include (a) advertising on
e-mail notifications, which are transmitted to businesses using the worldwide
web site, (b) advertising on its web site, and (c) fees charged to businesses
for services provided via the Worldbid web site.
Basis of Presentation
- ---------------------
The consolidated financial statements as presented include the accounts of
Worldbid Corporation (US) and its subsidiary Worldbid Corporation (Canada). All
intercompany balances have been eliminated.
Use of Estimates
- ----------------
Management uses estimates and assumptions in preparing these financial
statements in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities, and the reported revenues
and expenses.
Pro Forma Compensation Expense
- ------------------------------
WBC accounts for costs of stock-based compensation in accordance with APB No.
25, "Accounting for Stock Based Compensation" instead of the fair value based
method in SFAS No. 123. No pro forma compensation expense is reported in these
financial statements.
Accounts Receivable
- -------------------
No allowance for uncollectable accounts has been provided. Management has
evaluated the accounts and believes they are all collectable.
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WORLDBID CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Depreciation, Amortization and Capitalization
- ---------------------------------------------
The Company records depreciation and amortization when appropriate using both
straight-line and declining balance methods over the estimated useful life of
the assets (five to seven years). Expenditures for maintenance and repairs are
charged to expense as incurred. Additions, major renewals and replacements that
increase the property's useful life are capitalized. Property sold or retired,
together with the related accumulated depreciation, is removed from the
appropriate accounts and the resultant gain or loss is included in net income.
Impairment of Long-Lived Assets
- -------------------------------
The Company evaluates the recoverability of long-lived assets in accordance with
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be disposed of".
SFAS No. 121 requires recognition of impairment of long-lived assets in the
event the net book value of such assets exceeds the future non-discounted cash
flows attributable to such assets.
Income Taxes
- ------------
The Company accounts for its income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes". Under
Statement 109, a liability method is used whereby deferred tax assets and
liabilities are determined based on temporary differences between basis used for
financial reporting and income tax reporting purposes. Income taxes are provided
based on tax rates in effect at the time such temporary differences are expected
to reverse. A valuation allowance is provided for certain deferred tax assets if
it is more likely than not, that the Company will not realize the tax assets
through future operations.
Fair Value of Financial Instruments
- -----------------------------------
Financial accounting Standards Statement No. 107, "Disclosures About Fair Value
of Financial Instruments", requires the Company to disclose, when reasonably
attainable, the fair market values of its assets and liabilities, which are
deemed to be financial instruments. The Company's financial instruments consist
primarily of cash and certain investments.
Earnings Per Share Information
- ------------------------------
The Company computes basic earnings per share information by dividing the net
loss for the period presented by the weighted average number of shares
outstanding during such period. Common share equivalents are not included in
this calculation if the effect of their inclusion is anti-dilutive.
Advertising Expense
- -------------------
The company recognizes advertising expenses when incurred in accordance with SOP
93-7 "Reporting on Advertising Costs." As such, the Company expenses the cost of
producing advertisements at the time the production occurs, and expenses the
costs of communicating advertising in the period in which the advertising space
or airtime is used.
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WORLDBID CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Comprehensive Income
- --------------------
Effective at inception, the Company adopted the provisions of SFAS No. 130,
"Reporting Comprehensive Income." SFAS No. 130 establishes standards for
reporting comprehensive income and its components in financial statements.
Comprehensive income, as defined, includes all changes in equity (net assets)
during a period from non-owner sources. At January 31, 2001 and 2000, the
Company did not have transactions that were required to be reported in
comprehensive income.
NOTE 2 - SHAREHOLDER LOANS
- --------------------------
Shareholder loans are secured by a promissory notes and accrue interest at 10%
per annum. The promissory notes mature on March 31, 2001. There is no monthly
payment made on this loan.
An additional shareholder loan in the amount of $20,000 was issued February 9,
2001.
NOTE 3 - COMMITMENTS AND CONTINGENCIES
- --------------------------------------
Operating Leases
- ----------------
The Company leases office space under various noncancelable-operating leases.
These operating leases terminate July 31, 2003. In connection with the lease
arrangements, the Company is obligated to make payments of approximately $10,000
per month (including operating costs) with scheduled increases in 2002. Future
annual minimum rental commitments are as follows:
Year
2002- $ 118,082
2003- $ 121,426
2004- $ 60,708
Management Consulting Agreement
- -------------------------------
The Company has entered into a consulting agreement, with On-Line Design, a
British Columbia company owned 100% by an officer of the Company, Mr. Scott
Wurtele. This obligation requires payments of $7,500 per month expiring February
16, 2001. In exchange for these payments, On-Line Design provides management and
continued development of the Company's business.
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WORLDBID CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 4 - RELATED PARTY TRANSACTIONS
- -----------------------------------
Global Internet Holdings Ltd., a major stockholder of WBC, is also controlled by
Mr. Scott Wurtele.
NOTE 5 - STOCK OPTION SUMMARY
- -----------------------------
During the three month ended January 31, 2001 the Company set aside 415,000
common shares under its incentive stock plans. The Board of Directors determines
the number of options to be granted, and through the terms of the incentive
stock option plans, the price and conditions for exercise and any vesting
criteria. The option prices are determined based on market prices in accordance
with the terms of the plans.
No options were granted during the three month period ended January 31, 2001.
NOTE 6 - CHANGES IN SECURITIES
- ------------------------------
During the three months ended January 31, 2001, the Company issued the following
unregistered securities:
Number of shares Consideration amount
---------------- --------------------
Issued for cash 1,000,000 $ 700,000
Issued for services provided 250,000 100,000
At the end of the quarter, the Company had total issued share capital of
15,800,000 (April 30, 2000 - 11,400,000 adjusted for 2:1 split in June 2000).
In addition, during the three months ended January 31, 2001, the Company issued
1,300,000 warrants at exercise prices ranging from $.55 to $3.50. These warrants
have an average life of 2.7 years.
At the end of the quarter, the Company had issued a total of 3,800,000 warrants.
(April 30, 2000 - 1,460,000 adjusted for 2:1 split in June 2000.)
NOTE 7 - LIQUIDITY AND FUTURE OPERATIONS
- ----------------------------------------
The Company has sustained net losses and negative cash flows from operations
since its inception. As of January 31, 2001 the Company has negative working
capital of approximately $1,145,129. The Company's ability to meet its
obligations in the ordinary course of business is dependent upon its ability to
establish profitable operations or to obtain additional funding through public
or private equity financing, collaborative or other arrangements with corporate
sources, or other sources. Management is seeking to increase revenues through
continued marketing of its services; nonetheless additional funding will be
required within the third quarter.
Management is working to obtain sufficient working capital from external sources
in order to continue operations. There is however, no assurance that the
aforementioned events, including the receipts of additional funding, will occur
and be successful.
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WORLDBID CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 8 - Subsequent events
- --------------------------
In February 2001, the Company completed an agreement to acquire 100% of Request
America.Com Inc., a company engaged in the business of aggregating qualified
sales leads from governmental and commercial sources across the U.S. The
aggregated purchase price is approximately $ 300,000, comprising initially of
750,000 common shares in the Company. In addition, the Company has agreed to
issue up to an additional 750,000 shares in the future should certain
performance targets be met. The fair value of the stock transferred in the
future will be used to determine any additional purchase price for the
acquisition.
The acquisition will be accounted for using the purchase method of accounting
whereby the underlying assets of Request America will be recorded at their fair
market values at the time of the acquisition. The allocation of the purchase
price will be substantially to purchased goodwill.
Scott Wurtele resigned as CEO, Chairman, and a director of the Company in
February 2001, and the management consulting agreement with Mr. Wurtele's
company On-Line Design has not been renewed.
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Item 2. Management's Discussion and Analysis or Plan of Operations
Forward-Looking Statements
- --------------------------
Statements in this quarterly report about our future results, levels of
activity, performance, goals or achievements or other future events constitute
forward-looking statements. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or events to
differ materially from those anticipated in our forward-looking statements.
These factors include, among others, those described in connection with the
forward-looking statements, and the factors listed in Exhibit 99.1 to this
report, and the Company's annual report on Form 10-KSB for the fiscal year ended
April 30, 2000 as filed with the Securities and Exchange Commission, which is
hereby incorporated by reference in this report.
In some cases, you can identify forward-looking statements by our use of words
such as "may," "will," "should," "could," "expect," "plan," "intend,"
"anticipate," "believe," "estimate," "predict," "potential" or "continue" or the
negative or other variations of these words, or other comparable words or
phrases.
Although we believe that the expectations reflected in our forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements or other future events. Moreover, neither
we nor anyone else assumes responsibility for the accuracy and completeness of
forward-looking statements. We are under no duty to update any of our
forward-looking statements after the date of this report. You should not place
undue reliance on forward-looking statements.
Sales
- -----
The Company uses electronic e-mail notifications to update members on current
trade lead postings, and derives revenues from advertisements attached to these
e-mail trade notifications, advertising on its website, and subscription fees to
members. The Company realized revenues of $21,360 for the quarter ended January
31, 2001 and $65,815 for the nine-months ended January 31, 2001. Revenues in the
quarter and nine-month period ended January 31, 2000 were $12,331 and $31,161
respectively. The Company began generating advertising revenues in August 1999
and only recently began implementing its membership subscription fees revenue
model, with implementation rolled out to date on a limited geographic basis.
The Company is continuing the process of repositioning its revenue model from
one that earns revenues from advertising on e-mail notifications to a revenue
model based on charging fees to businesses for services provided via the
Worldbid web site. As the Company implements this repositioning strategy, it
anticipates that future revenues from advertising will become a smaller
proportion of overall revenues. The Company believes that the on-line
advertising sector will face an increasingly difficult business climate, and
there can be no assurance that the Company will earn revenues from advertising
at levels consistent with past fiscal periods or that its fee-based subscription
revenue model will be commercially successful.
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Worldbid believes that demand for its services will increase if it can
successfully differentiate its products and services from its competitors.
Worldbid has implemented a strategy of pre-qualifying and star-rating companies
that post trade leads on Worldbid.com, a feature that users of Worldbid.com
considered essential based on an extensive survey of users conducted by the
Company. The Company will provide a star rating (between 1 to 5 stars) for each
company posting trade leads on Worldbid.com.
Worldbid's plan is to market its fee-based services to its user base of almost
70,000 companies in an effort to convert them into paying subscribers. In
addition, the Company currently receives more than 60 new memberships a day, and
offers free 30 day trial subscriptions that are designed to educate companies on
the benefits of becoming a Worldbid member. The Company contacts these new
members after the free 30 day trial period to ensure that they are realizing
value from Worldbid.com's multiple services and to market its fee based
subscription services. It is anticipated that members who experience success
with Worldbid.com services will be inclined to subscribe to Worldbid's fee-based
services.
Worldbid has developed software that enables it to invoice businesses and
collect payments electronically through its Worldbid web sites. Members are
given the option of several different methods of registering and paying for
services.
Worldbid is constantly evaluating its revenue sources and new revenue options.
Costs Of Goods Sold/Operating Expenses/Research And Development Expenses
- ------------------------------------------------------------------------
The Company's operating expenses were $838,475 for the quarter ended January 31,
2001, and $2,504,926 for the nine-month period ended January 31, 2001, compared
to operating expenses of $377,533 for the quarter ended January 31, 2000 and
$630,608 for the nine-month period ended January 31, 2000.
The increase in operating expenses during the three- and nine month periods
ended January 31, 2001, compared to the same periods in our previous fiscal
year, was primarily due to the expansion of the Company's business operations
during the current fiscal year. During the nine months ended January 31, 2001,
the Company had substantial increases in marketing costs. Management believes
the increased marketing costs were a substantial impetus of the registration of
the 32,317 new members who signed on during the nine months ended January 31,
2001. Marketing expenses were $134,282, or 16% of total expenses for the quarter
ended January 31, 2001, compared to $114,157 or 30% of total expenses for the
quarter ended January 31, 2000. Marketing expenses were $824,372, or 33% of
total expenses for the nine-month period ended January 31, 2001, compared to
$167,672 or 27% of total expenses for the nine-months ended January 31, 2000.
The Company expects marketing expenses to increase in absolute dollars as the
Company plans to expand into new international and vertical markets, and plans
to implement marketing programs to promote Worldbid and its subscription fee
based services. The Company expects to increase marketing expenditures to
develop and promote its regional and vertical partner sites, and anticipates
that marketing expenditures related to its primary site may decline as a
percentage of the Company's marketing budget.
During the quarter and nine-months ended January 31, 2001, as compared with the
same periods in the Company's last fiscal year, other significant expenses
associated with the growth of the Company's business included increased
compensation
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Page 11
expenses related to hiring new employees, increased professional fees related to
complying with the Company's Securities and Exchange Commission reporting
obligations and financing activities, increased office expenses and increased
cost of managing and developing the Worldbid web sites. Management expects that
operating expenses and research and development costs will increase
substantially as the Company implements its expansion strategy in accordance
with its business plan.
Net Loss
- --------
The Company recorded a net loss of $853,690 for the quarter ended January 31,
2001, compared to a net loss of $365,738 for the quarter ended January 31, 2000.
For the nine-month period ended January 31, 2001, the Company recorded a net
loss of $2,515,352, compared to a net loss of $600,219 for the nine-month period
ended January 31, 2000. This loss reflects the Company's increased marketing and
operating expenses during the periods ended January 31, 2001, compared to the
same periods in 1999 and 2000. The Company anticipates that losses will increase
as operating expenses increase to carry out the Company's business strategy and
plan of operation. The Company anticipates operating expenses will increase due
to the following:
(i) the Company plans a substantial marketing and sales program over the
next twelve months in order to increase Worldbid's paid registered
user base and to develop and promote its regional and vertical partner
sites;
(ii) increased expenses associated with anticipated increased Web site
usage and expansion of the Company's business;
(iii)increased expenses associated with developing programs and software
systems required to handle a larger membership base and increased
outgoing e-mail traffic; and
(iv) additional expenses associated with completing and managing the
Company's plan of operation and expansion efforts.
Liquidity And Capital Resources
- -------------------------------
The Company had cash on hand of $63,449 as at January 31, 2001. The Company's
monthly marketing and operating expenses are approximately $280,000 per month.
The Company had a working capital deficit of $1,145,129 at January 31, 2001.
During the three months ended January 31, 2001, the Company received the
following cash subscriptions (see "Changes in Securities" for further detail):
(i) The Company sold 500,000 units at $1.00 per unit for gross proceeds of
$500,000. Each unit consisted of one share of common stock and one
share purchase warrant exercisable to acquire one additional share of
common stock.
(ii) The Company also sold 500,000 other units, at $0.40 per unit, for
total proceeds of $200,000. In this case each unit was comprised of
one share of our common stock and one-half of a share purchase
warrant. Each whole warrant entitles its holder to purchase one
additional share of our common stock.
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The Company will require additional financing in order to continue as a going
concern and to finance its business operations. The Company is in the process of
negotiating private placements of securities to raise working capital to finance
its operations. The Company anticipates that it will raise additional financing
by issuing equity or debt securities. There can be no assurance that the Company
will successfully raise additional capital on acceptable terms, if at all.
The Company anticipates that it will continue to incur losses for the
foreseeable future, as it expects to incur substantial marketing and operating
expenses in implementing its plan of operation. The Company's future financial
results are uncertain due to a number of factors, many of which are outside of
the Company's control. These factors include, but are not limited to:
(i) the Company's ability to implement subscription fees for the Worldbid
web sites without significantly reducing the number of users of the
Worldbid web sites, the number of trade leads and the number of e-mail
trade notifications;
(ii) the Company's ability to increase revenue from advertisements from
e-mail notifications transmitted via the Worldbid web sites;
(iii)the Company's ability to raise additional capital necessary to
implement its business strategy and plan of operation;
(iv) the Company's ability to compete with existing and new
business-to-business electronic commerce web sites and the success of
any marketing and promotional campaign which the Company conducts for
the Worldbid web sites.
In the event the Company is unable to raise additional financing on acceptable
terms, the Company intends to reduce its marketing and sales efforts and may
implement additional actions to reduce expenditures, including reducing staff,
reducing the level of services, selling assets, disposing of business units or
suspending its operations.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
During the three months ended January 31, 2001, Worldbid issued the following
unregistered securities:
On November 6, 2000, Worldbid sold 500,000 units to Anker Bank of
Switzerland on behalf of its client(s) at a price of $1.00 per unit, for
total proceeds of $500,000. The sale was completed outside the United
States to non-US persons pursuant to Regulation S of the Securities Act of
1933 (the "Act"). No commissions or fees were paid in connection with the
sale. Each unit was comprised of one share of our common stock and one
share purchase warrant. Each warrant expires after three years and entitles
its holder to purchase one share of our common stock at a price of $1.50
during the first year, $1.75 during the second year, and $2.00 during the
third year.
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On November 6, 2000, in exchange for financial advisory services to be
provided by Schneider Securities, Inc., Worldbid issued to Schneider
Securities, Inc. 1) 50,000 shares of Worldbid common stock, and 2) 100,000
share purchase warrants. Each warrant entitles its holder to purchase one
share of our common stock at a price of $1.00 at any time beginning after
the first anniversary date of the certificate representing the warrant up
to and including the third anniversary date of the certificate. Worldbid
relied on the exemption from registration provided by Section 4(2) under
the Act in connection with the issuance of the securities.
On December 7, 2000, in exchange for investment banking services to be
provided by Hampton-Porter, Investment Bankers, LLC ("Hampton"), Worldbid
issued to Hampton 1) 200,000 shares of Worldbid common stock, and 2)
450,000 share purchase warrants. Each warrant entitles its holder to
purchase one share of our common stock for three years from the date of the
certificate representing the warrant at a per share exercise price of (i)
$1.50 in respect of 150,000 shares; (ii) $2.50 in respect of 150,000
shares; and (iii) $3.50 in respect of 150,000 shares. Worldbid relied on
the exemption from registration provided by Section 4(2) under the Act in
connection with the issuance of the securities.
On December 29, 2000, Worldbid sold 500,000 units to Rahn & Bodmer, a bank
located in Switzerland, on behalf of its client(s) at a price of $0.40 per
unit, for total proceeds of $200,000. The sale was completed outside the
United States to non-US persons pursuant to Regulation S of the Act. No
commissions or fees were paid in connection with the sale. Each unit was
comprised of one share of our common stock and one-half of a share purchase
warrant. Each whole warrant entitles its holder to purchase one share of
our common stock for 24 months from its date of issuance at a price of: (a)
US$0.55 per share until December 29, 2001; and (b) US$0.75 per share from
December 30, 2001 through December 30, 2002.
During the period beginning Februay 1, 2001 and ending March 14, 2001, Worldbid
issued the following unregistered securities:
RequestAmerica.com, Inc. Acquistion
The Company entered into an Agreement and Plan of Merger, dated as of
February 2, 2001 (the "Merger Agreement"), by and among the Company,
RequestAmerica.com, Inc., a privately held California corporation
("RequestAmerica") and Worldbid (Acquisition) Corporation, a Nevada
corporation and wholly-owned subsidiary of the Company ("Worldbid
Acquisition").
Pursuant to the Merger Agreement, the Company acquired RequestAmerica by
way of a triangular merger in which Worldbid Acquisition was merged with
and into RequestAmerica, with RequestAmerica continuing as the surviving
corporation (the "Merger"). The Company agreed to issue an aggregate of up
to 750,000 shares of our common stock as follows:
(i) in consideration of all of the issued and outstanding shares of
capital stock of RequestAmerica, which if all RequestAmerica
shareholders comply with the Merger Agreement's process for
exchanging their
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RequestAmerica shares for the Company's shares will amount to an
aggregate issuance of approximately 702, 953 shares; and
(ii) up to approximately 47,045 shares of our common stock are
acquirable at the option of RequestAmerica option holders, as the
Company agreed to assume all of the outstanding options of
RequestAmerica under the RequestAmerica 2000 Stock Option/Stock
Issuance Plan (the "Stock Option Plan").
Each shareholder of RequestAmerica (each, a "RequestAmerica
Shareholder") was entitled to receive 0.0456093 shares of our common
stock for each share of common stock of RequestAmerica (the "Exchange
Ratio"), plus a cash payment for fractional shares. Holders of
RequestAmerica options will be eligible to exercise their stock
options for the Company's common stock, adjusted in accordance with
the Exchange Ratio, under the same terms of their option grants and
the Stock Option Plan.
The Company also agreed to issue an additional 750,000 shares of its
common stock to the RequestAmerica Shareholders as an earn out payment
(the "Earn Out Shares") (i) on or prior to the second anniversary of
the date of the Agreement, subject to the satisfaction of certain earn
out financial performance criteria based on the financial performance
of RequestAmerica or (ii) in the event of a shareholder approved
change of control in the Company in which a third-party obtains 75% of
the Company or upon the sale or transfer of all or substantially all
of the assets of the Company.
RequestAmerica and the RequestAmerica Shareholders agreed to indemnify
the Company for damages resulting from any claim(s) in excess of
$50,000 (in aggregate), which arise out of the breach of the
representations, warranties, covenants and/or agreements under the
Merger Agreement. The representations and warranties expire one year
from the date of the Merger Agreement. The Company's claims for
indemnification are to be satisfied out of the Earn Out Shares, and
the Company's damages are limited to the Earn Out Shares.
On February 22, 2001, the Merger was effected by the filing of (i)
Articles of Merger in the State of Nevada on February 22, 2001, and
(ii) an Agreement of Merger, Certificate of Approval of Agreement of
Merger of Worldbid (Acquisition) Corporation and Certificate of
Approval of Agreement of Merger of RequestAmerica.com, Inc. in the
State of California on February 23, 2001.
After giving effect to the Merger, RequestAmerica became a
wholly-owned subsidiary of the Company.
Issuance of Units
On March 14, 2001, the Company sold an aggregate of 380,000 units to
three subscribers at a price of $0.25 per unit, for total proceeds of
$95,000. The sale was completed outside the United States to non-US
persons pursuant to Regulation S of the Act. No commissions or fees
were paid in connection with the sale. Each unit was comprised of one
share of our
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common stock and one-half of a share purchase warrant. The warrants
expire after two years, and each whole warrant entitles its holder to
purchase one share of our common stock at a price of $0.35 during the
first year and $0.45 during the second year.
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
The Company held an Annual Meeting of Shareholders on November 6, 2000. A total
of 6,870,540 common shares were represented in person or by proxy at the annual
meeting. The following matters were submitted to a vote at the meeting and
unanimously approved by those voting:
1. The following individuals were elected as directors of the Company to hold
office for the ensuing year until the next Annual Meeting:
Scott Wurtele
Logan Anderson
Howard Thomson
Paul Wagorn
Lloyd Baron
2. The Company's 2000 Stock Option Plan, providing for the grant of stock
options to employees, officers, directors, and consultants, was approved
and adopted.
3. An amendment to the Articles of Incorporation was approved, to (i)
eliminate cumulative voting for directors and (ii) establish a new class of
1,000,000 shares of Preferred Stock. The elimination of cumulative voting
allows shareholders to cast one vote per share for each director elected at
a meeting of the shareholders. The Preferred Stock has a par value of
$0.0001, and empowers the Board, with no need for further shareholder
approval, to issue Preferred Stock in one or more series, and with such
dividend rates and rights, liquidation preferences, voting rights,
conversion rights, rights and terms of redemption and other rights,
preferences, and privileges as determined by the Board. (As at December 8,
2000, no Preferred Stock has been issued.)
4. Sarna and Company was approved as the Independent Auditor of the Company
for the fiscal year ending April 30, 2001. (KPMG LLP has since replaced
Sarna and Company as Worldbid's Independent Auditor for the fiscal year
ending April 30, 2001, as reported in a Form 8-K filed by the Company.)
Item 5. Other Information
In Feburary 2001, Lloyd Baron resigned as a director of the Company.
In February 2001, Scott Wurtele resigned as the Company's Chairman and Chief
Executive Officer and as a director of the Company. Under the terms of Mr.
Wurtele's resignation and severance agreement: (a) Mr. Wurtele agreed to resign
as a director and officer of the Company and to terminate all agreements between
him and the Company; (b) a shareholder agreed to provide bridge financing for
the Company in the amount of $200,000, and the Company and its directors agreed
to
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use their best efforts to obtain additional financing to fund the Company's plan
of operation; (c) the Company agreed to pay Mr. Wurtele severance pay in the
amount of $22,500; (d) Mr. Wurtele agreed not to sell or transfer any shares
beneficially owned by him for a period of six months from the date of his
resignation; (e) Mr. Wurtele was allowed to retain a cell phone, personal
computer and related equipment; and (f) Mr. Wurtele agreed not to contact any
Company employee for a period of six months.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit
Number Description
------ -----------
99.1 Risk Factors
(b) Reports on Form 8-K.
The Company filed a Form 8-K related to its acquisition of
RequestAmerica.com, Inc. on March 8, 2001.
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
WORLDBID CORPORATION
Date: March 16, 2000
By: /s/ Logan Anderson
------------------------------
Logan Anderson
Director & President
By: /s/ Howard Thomson
------------------------------
Howard Thomson
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
99.1 Risk Factors