|
·
|
read
this whole document, the Letter of Transmittal, Form of Notice of
Withdrawal, Tax Payment Election Form, the 2005 Plan and the Form
of
Restricted Stock Agreement because they contain important
information;
|
|
·
|
review
your Individual Statement of
Options;
|
|
·
|
consider
the questions and answers in the Summary Term Sheet which starts
on page
5; and
|
|
·
|
call
Miguel A. Martinez, Jr. at (773) 272-5000 or send an e-mail to
mikem@ubid.com if you have questions about our offer or need another
copy
of this document or any of the other documents listed
above.
|
|
TABLE
OF CONTENTS
|
|
|
Page
|
|
|
I
Summary Term Sheet
|
5
|
|
How
the Option Exchange Program Works
|
5
|
|
Background
and Purpose of the Offer
|
10
|
|
Duration
of the Offer
|
12
|
|
How
to Elect to Participate
|
12
|
|
Federal
Income Tax Considerations
|
13
|
|
How
to Get More Information
|
16
|
|
II
Certain Risks of Participating in the Offer
|
16
|
|
Economic
Risks
|
16
|
|
Tax-Related
Risks
|
18
|
|
Business-Related
Risks
|
19
|
|
|
|
|
III
The Offer
|
19
|
|
1.
Eligibility
|
19
|
|
2.
Number of Restricted Stock Rights; Expiration Date
|
19
|
|
3.
Purpose of the Offer
|
21
|
|
4.
Procedures for Tendering Options
|
22
|
|
5.
Withdrawal Rights and Change of Election
|
23
|
|
6.
Acceptance of Options for Exchange and Issuance of Restricted Stock
Rights
|
24
|
|
7.
Conditions of the Offer
|
25
|
|
8.
Price Range of Our Common Stock
|
27
|
|
9.
Source and Amount of Consideration; Terms of Restricted Stock
Rights
|
27
|
|
10.
Information Concerning uBid.com Holdings, Inc..
|
30
|
|
11.
Interests of Officers; Transactions and Arrangements Concerning
the
Options
|
32
|
|
12.
Accounting Consequences of the Offer
|
32
|
|
13.
Legal Matters; Regulatory Approvals
|
33
|
|
14.
Material Federal Income Tax Consequences
|
33
|
|
15.
Extension of Offer; Termination; Amendment
|
35
|
|
16.
Fees and Expenses
|
36
|
|
17.
Additional Information
|
36
|
|
18.
Forward-Looking Statements
|
37
|
|
Appendix
A Schedule
of Option Exchanges
|
40
|
|
Appendix
B
Information About the Executive Officers of uBid.com Holdings,
Inc..
|
41
|
|
·
|
How
the Option Exchange Program Works
|
|
·
|
Background
and Purpose of the Offer
|
|
·
|
Duration
of the Offer
|
|
·
|
How
to Elect to Participate
|
|
·
|
Federal
Income Tax Considerations
|
|
·
|
How
to Get More Information
|
|
·
|
You
may elect to sell a portion of your vested shares on each vesting
date in
an amount at least sufficient to provide for the required minimum
income
and employment withholding taxes. If you make this election, we will
automatically sell on the vesting date (or on the next business day
if the
vesting date is not a day on which the markets are open for trading)
the
required number of shares and withhold from the sale proceeds, net
of sale
commissions and fees, the required minimum income and employment
withholding taxes and remit them directly to
us.
|
|
·
|
You
may elect to pay us, on or before the third business day following
each
vesting date (unless we notify you prior to the vesting date in question
that you must deliver your check on an earlier date), the required
minimum
income and employment withholding taxes by delivering a personal
check to
us. You will be prevented from transferring or selling the vested
shares
until we have received your check. However, if you have elected to
pay
withholding taxes by check but fail to deliver your check in the
correct
amount on or before the required date, we will be authorized to sell
on
your behalf a number of shares as described in the first alternative
above
sufficient to satisfy your income and employment tax
obligation.
|
|
·
|
Stock
price: the closing stock price of our common stock on February 15,
2008,
or $0.64 per share.
|
|
·
|
Exercise
price: the exercise price of the eligible
option.
|
|
·
|
Expected
remaining term of the option: the remaining contractual life of the
eligible option as of February 19,
2008.
|
|
·
|
Volatility:
68%.
|
|
·
|
Risk-free
interest rate: 5%.
|
|
·
|
Expected
dividend yield: zero.
|
|
·
|
there
has been threatened or instituted or is pending any action or proceeding
by any government or governmental, regulatory or administrative agency,
authority or tribunal or any other person, domestic or foreign, before
any
court, authority, agency or tribunal that directly or indirectly
challenges the making of the offer, the acquisition of some or all
of the
tendered options pursuant to the offer, the issuance of restricted
stock
rights in exchange for options, or otherwise relates in any manner
to the
offer; or that, in our reasonable judgment, could materially affect
the
business, condition (financial or other), income, operations or prospects
of us and our subsidiaries, or otherwise materially impair in any
way the
contemplated future conduct of our business or the business of any
of our
subsidiaries or materially impair (such as by increasing the accounting
or
other costs of the offer to us) the contemplated benefits of the
offer to
us;
|
|
·
|
there
has been any action threatened, pending or taken, or approval withheld,
or
any statute, rule, regulation, judgment, order or injunction threatened,
proposed, sought, promulgated, enacted, entered, amended, enforced
or
deemed to be applicable to the offer or us or any of our subsidiaries,
by
any court or any authority, agency or tribunal that, in our reasonable
judgment, would or might directly or
indirectly:
|
|
−
|
make
the acceptance for exchange of, or the issuance of restricted stock
rights
for, some or all of the options illegal or otherwise restrict or
prohibit
consummation of the offer or otherwise relates in any manner to the
offer;
|
|
−
|
delay
or restrict our ability, or render us unable, to accept for exchange,
or
issue restricted stock rights for, some or all of the tendered
options;
|
|
−
|
materially
impair (such as by increasing the accounting or other costs of the
offer
to us) the contemplated benefits of the offer to us;
or
|
|
−
|
materially
affect the business, condition (financial or other), income, operations
or
prospects of us and our subsidiaries, taken as whole, or otherwise
materially impair in any way the contemplated future conduct of our
business or the business of any of our subsidiaries;
|
|
·
|
there
has occurred:
|
|
−
|
any
general suspension of trading in, or limitation on prices for, securities
on any national securities exchange or in the over-the-counter
market;
|
|
−
|
the
declaration of a banking moratorium or any suspension of payments
in
respect of banks (whether or not mandatory); the commencement of
a war,
armed hostilities or other international or national crisis directly
or
indirectly involving the United
States;
|
|
−
|
any
limitation (whether or not mandatory) by any governmental, regulatory
or
administrative agency or authority on, or any event that, in our
reasonable judgment, might affect the extension of credit by banks
or
other lending institutions;
|
|
−
|
any
significant change in the market price of our shares of common stock
or
any change in the general political, market, economic or financial
conditions in the United States or abroad that could, in our reasonable
judgment, have a material effect on our business, condition (financial
or
other), operations or prospects or on the trading in our common
stock;
|
|
−
|
any
change in the general political, market, economic or financial conditions
that could have a material effect on our business, condition (financial
or
other), operations or prospects that, in our reasonable judgment,
makes it
inadvisable to proceed with this
offer;
|
|
−
|
in
the case of any of the foregoing existing at the time of the commencement
of the offer, a material acceleration or worsening thereof;
or
|
|
−
|
any
change in generally accepted accounting principles or interpretations
of
generally accepted accounting principles which could or would materially
and adversely affect the manner in which we are required for financial
accounting purposes to account for the
offer.
|
|
·
|
a
tender offer with respect to some or all of our common stock, or
a merger
or acquisition proposal for us, has been proposed, announced or made
by
another person or entity or has been publicly disclosed, or we have
learned that:
|
|
−
|
any
person, entity or “group” (within the meaning of Section 13(d)(3) of the
Securities Exchange Act) shall have acquired or proposed to acquire
beneficial ownership of more than 5% of the outstanding shares of
our
common stock, or any new group has been formed that beneficially
owns more
than 5% of the outstanding shares of our common stock (other than
any such
person, entity or group who has filed a Schedule 13D or Schedule
13G with
the Securities and Exchange Commission on or before the commencement
date
of the offer);
|
|
−
|
any
person, entity or group who has filed a Schedule 13D or Schedule
13G with
the Securities and Exchange Commission on or before the commencement
date
of the offer has acquired or proposed to acquire beneficial ownership
of
an additional 2% or more of the outstanding shares of our common
stock;
or
|
|
−
|
any
person, entity or group has filed a Notification and Report Form
under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 or made a public
announcement reflecting an intent to acquire us or any of our subsidiaries
or any of their respective assets or securities;
|
|
·
|
any
change or changes shall have occurred in our business, condition
(financial or other), assets, income, operations, prospects or stock
ownership or that of our subsidiaries that, in our reasonable judgment,
has or may have a material adverse effect on us and our subsidiaries,
taken as a whole.
|
|
High
|
Low
|
|
|
2006
|
||
|
First
Quarter
|
$7.20
|
$6.15
|
|
Second
Quarter
|
$6.70
|
$6.25
|
|
Third
Quarter
|
$6.80
|
$4.99
|
|
Fourth
Quarter
|
$3.65
|
$2.15
|
|
2007
|
||
|
First
Quarter
|
$2.70
|
$1.12
|
|
Second
Quarter
|
$2.00
|
$0.86
|
|
Third
Quarter
|
$1.47
|
$1.00
|
|
Fourth
Quarter
|
$1.33
|
$0.55
|
|
2008
|
||
|
First
Quarter (through February 15, 2008)
|
$1.15
|
$0.64
|
|
·
|
General.
The 2005 Plan was adopted by our Board of Directors and our stockholders
on December 15, 2005. The 2005 Plan permits the Compensation Committee
of
our Board of Directors to grant a variety of equity-based awards,
including the restricted stock rights to be granted in this offer
to
exchange.
|
|
·
|
Purpose.
The
purpose of the 2005 Plan is to advance the interests of uBid and
its
stockholders by providing an incentive to attract, retain and reward
persons performing services for uBid and by motivating them to contribute
to our growth and profitability.
|
|
·
|
Administration.
The
2005 Plan is administered by the Compensation Committee of our Board
of
Directors. Subject to the provisions of the 2005 Plan, the Committee
selects the individuals eligible to be granted awards under the 2005
Plan,
the types of awards granted, the time(s) at which awards may be granted,
the number of shares, units or rights subject to each award and all
of the
terms and conditions of each award. The Committee has the authority
to
interpret the 2005 Plan and to make all other determinations relating
to
the 2005 Plan.
|
|
·
|
Nature
of Restricted Stock.
Each restricted stock award consists of shares of uBid common stock
that
are issued to the participant at the time the award is granted. The
2005
Plan permits, and the applicable award agreement will provide, that
we may
issue shares to a participant by delivering evidence of book entry
shares
credited to the participant’s account. Between the date on which a
restricted stock award is granted and the date on which shares subject
to
the award vest, the value of the award will fluctuate based on the
market
price of our common stock, although you will have no right to sell
or
otherwise transfer such shares until they have vested. No monetary
payment
(other than
applicable tax withholding, if any) will be required as a condition
of
being granted shares of restricted
stock.
|
|
·
|
Vesting.
All restricted stock rights received in exchange for eligible options
will
be subject to a vesting schedule identical to the exchanged option.
We
will grant restricted stock rights awards promptly following the
expiration of the offer in exchange for properly tendered options.
|
|
·
|
Delivery
of Common Shares.
Upon vesting of restricted stock, the shares of vested stock will
be
transferred to you.
|
|
·
|
Termination
of Employment.
If
you cease to be an employee of uBid or any of our subsidiaries at
any time
prior to the vesting of your restricted stock rights, all unvested
restricted stock rights at the time of termination of employment
will be
forfeited.
|
|
·
|
Transfer
Restrictions. Until
they have vested, your restricted stock rights may not be sold, assigned,
transferred, pledged or otherwise disposed of or encumbered, other
than by
will or the laws of descent and
distribution.
|
|
·
|
Voting
and Dividend Rights.
If
you are granted shares of restricted stock, you will have the right
to
vote and to receive any dividends we may pay with respect to such
shares.
|
|
·
|
Adjustments
Upon Certain Events. Subject
to any required action by our stockholders, in the event of any change
in
our common stock effected without receipt of consideration by uBid,
whether through recapitalization, reclassification, stock dividend,
stock
split, reverse stock split, split-up, split-off, spin-off, combination
of
shares, exchange of shares, or similar change in our capital structure,
or
in the event of payment of a dividend or distribution to our stockholders
in a form other than shares of our common stock (excepting normal
cash
dividends) that has a material effect on the fair market value of
shares
of common stock, appropriate adjustments will be made in the number
and
kind of shares subject to restricted stock rights awards, as determined
by
the Compensation Committee of our Board of Directors in its
discretion.
|
|
·
|
Amendment
or Termination of the 2005 Plan. The
Compensation Committee of our Board of Directors has the authority
to
amend, suspend or terminate the 2005 Plan at any time, provided that
no
such amendment, suspension or termination may materially and adversely
affect any then outstanding restricted stock rights or other awards
under
the 2005 Plan without the consent of the
participant.
|
|
·
|
Registration
of Shares.
The shares of uBid common stock underlying the restricted stock rights
issuable in connection with the exchange have been registered under
the
Securities Act of 1933 on a registration statement on Form S-8 filed
with
the Securities and Exchange Commission. Unless you are considered
an
“affiliate” of uBid, and subject to insider trading laws, you will
generally be able to sell the vested shares you receive pursuant
to your
restricted stock rights free of any transfer restrictions under applicable
United States securities laws.
|
|
·
|
Tax
Consequences.
If
you are an employee, you should refer to Section 14 for a discussion
of
the material federal income tax consequences of the acquisition,
holding
and vesting of shares of restricted stock under this offer. We
strongly urge you to consult with your tax advisor to determine the
tax
and social insurance consequences of this transaction under the laws
of
the country in which you live and
work.
|
|
·
|
an
extraordinary corporate transaction, such as a merger, reorganization
or
liquidation, involving us or any of our subsidiaries;
|
|
·
|
any
purchase, sale or transfer of a material amount of our assets or
the
assets of any of our subsidiaries;
|
|
·
|
any
material change in our present dividend rate or policy, our indebtedness
or capitalization;
|
|
·
|
any
other material change in our corporate structure or
business;
|
|
·
|
our
common shares being delisted from the NASD over-the-counter bulletin
board;
|
|
·
|
our
common shares becoming eligible for termination of registration pursuant
to Section 12(g)(4) of the Securities Exchange Act of
1934;
|
|
·
|
the
suspension of our obligation to file reports pursuant to Section
15(d) of
the Securities Exchange Act of
1934;
|
|
·
|
the
acquisition or disposition of more than 10% of shares of our common
stock
(or securities convertible into or exercisable for such number of
shares
of our common stock) by any person;
or
|
|
·
|
any
change in our certificate of incorporation or bylaws, or any actions
which
may impede the acquisition of control of us by any person.
|
|
Year
Ended December 31,
|
Three
Months
Ended
September 30,
|
||||||||||||||||||
|
2006
|
2005
|
2004
|
2003(1)
|
2007
|
2006
|
||||||||||||||
|
(In
Thousands, Except Per Share Data)
|
|||||||||||||||||||
|
Net
Revenues
|
$
|
66,559
|
$
|
84,592
|
$
|
87,002
|
$
|
65,656
|
$
|
9,720
|
$
|
14,366
|
|||||||
|
Cost
of Revenues
|
56,421
|
73,062
|
75,837
|
54,491
|
7,533
|
12,425
|
|||||||||||||
|
Gross
Profit
|
10,138
|
11,530
|
11,165
|
11,165
|
2,187
|
1.941
|
|||||||||||||
|
Operating
Expenses
|
|||||||||||||||||||
|
General and administrative (2)(3)
|
12,973
|
13,045
|
12,112
|
9,021
|
3,313
|
3,454
|
|||||||||||||
|
Sales and marketing
|
4,987
|
4,996
|
4,260
|
2,484
|
1,117
|
1,160
|
|||||||||||||
|
Total
operating expenses
|
17,960
|
18,041
|
16,372
|
11,505
|
4,430
|
4,614
|
|||||||||||||
|
Loss
From Operations
|
(7,822
|
)
|
(6,511
|
)
|
(5,207
|
)
|
(340
|
)
|
(2,243
|
)
|
(2,673
|
)
|
|||||||
|
Miscellaneous
Income
|
----
|
----
|
----
|
21
|
----
|
----
|
|||||||||||||
|
Interest
Income (Expense), net
|
267
|
(2,538
|
)
|
(1,102
|
)
|
(651
|
)
|
(83
|
)
|
(110
|
)
|
||||||||
|
Net
Loss
|
(7,555
|
)
|
(9,049
|
)
|
(6,309
|
)
|
(970
|
)
|
(2,193
|
)
|
(2,661
|
)
|
|||||||
|
Preferred
Stock Dividends
|
----
|
(1,216
|
)
|
(60
|
)
|
(60
|
)
|
----
|
----
|
||||||||||
|
Net
Loss Available to Common Shareholders
|
$
|
(7,555
|
)
|
$
|
(10,265
|
)
|
$
|
(6,369
|
)
|
$
|
(1,030
|
)
|
$
|
(2,193
|
)
|
$
|
(2,661
|
)
|
|
|
Net
Loss per share - Basic and Diluted
|
$
|
(0.37
|
)
|
$
|
(3.88
|
)
|
$
|
(2.56
|
)
|
$
|
(0.41
|
)
|
$
|
(0.12
|
)
|
$
|
(0.13
|
)
|
|
|
Weighted
Average Shares - Basic and Diluted (4)(5)
|
20,260,689
|
2,643,936
|
2,487,107
|
2,487,107
|
18,197,783
|
20,333,333
|
|||||||||||||
|
Total
current assets
|
$
|
22,052
|
$
|
36,120
|
$
|
11,817
|
$
|
11,257
|
$
|
17,308
|
$
|
22,165
|
|||||||
|
Total
assets
|
23,578
|
36,644
|
12,146
|
11,653
|
18,350
|
23,723
|
|||||||||||||
|
Total
current liabilities, excluding debt
|
3,843
|
9,652
|
7,030
|
7,562
|
5,638
|
3,860
|
|||||||||||||
|
Long-term
debt including current maturities
|
----
|
410
|
11,320
|
3,986
|
----
|
102
|
|||||||||||||
|
Redeemable
Common Stock (6)
|
----
|
12,000
|
----
|
----
|
----
|
----
|
|||||||||||||
|
Total
shareholders equity (deficit)
|
19,735
|
14,582
|
(6,204
|
)
|
105
|
12,712
|
19,863
|
||||||||||||
|
(1)
|
Predecessor
financials for the year ended July 31, 2002 and the eight months
ended
March 31, 2003 were derived solely from the accounting records of
CMGI,
the sole shareholder of our predecessor (which acquired our business
in
April 2000), and using historical results of operations, and historical
basis of assets and liabilities of such predecessor's business. The
statements of operations include fees charged for certain corporate
functions historically provided to us by CMGI, including administrative
services (accounting, human resources, tax services, legal and treasury),
inventory management and order fulfillment, information systems operations
and administration, and advertising services. These fees were allocated
on
a specifically identifiable basis or using the relative percentages,
as
compared to CMGI's other business, net of revenues, payroll, net
cost of
goods sold, square footage, headcount, or other.
|
|
(2)
|
Includes
$30, $360, $264 and $148 of management fees charged to uBid by Petters
Group for the periods ended December 31, 2006, 2005, 2004 and 2003.
|
|
(3)
|
In
April 2000, CMGI acquired uBid and recorded $367.0 million in goodwill
which was amortized over a three year period prior to the impairment
of
all remaining goodwill of $89.4 million (as well as the impairment
of the
$3.9 million of property and equipment) during the period ended March
31,
2003. Pro forma net loss for the fiscal years ended July 31, 2002
was
$70.4 million had uBid not amortized goodwill during these
periods.
|
|
(4)
|
Computation
for periods ended prior to April 2003 is not meaningful (N/M) because
there was no common stock outstanding during those periods.
|
|
(5)
|
Reflects
the retroactive effects of the impact of the Company's December 2005
merger with Cape Coastal and the resulting exchange of the Company's
1,072
shares of common stock outstanding for the stock of Cape Coastal.
|
|
(6)
|
At
December 31, 2005, represents 2,666,668 shares of common stock subject
to
redemption after the merger with Cape Coastal Trading Corporation
and the
first private offering. Such shares were redeemed in February
2006.
|
|
·
|
Following
approval by the Compensation Committee, on January 2, 2008 uBid granted
a
stock option under uBid’s 2005 Equity Incentive Plan for the purchase of
200,000 shares of uBid Common Stock at an exercise price of $0.80
per
share to Lee Olsen, as an inducement for Mr. Olsen becoming the Chief
Operating Officer of uBid. On February 6, 2008, Mr. Olsen resigned
from
his position as uBid’s Chief Operating Officer. None of the options
granted to Mr. Olsen have, or will vest and therefore no Common Stock
will
be granted pursuant to this stock
option.
|
|
·
|
You
may elect to sell a portion of the vested shares on each quarterly
vesting
date in an amount at least sufficient to provide for the required
minimum
income and employment withholding taxes. If you make this election,
you
must sell on the vesting date (or on the next business day if the
vesting
date is not a day on which the markets are open for trading) the
required
number of shares and withhold from the sale proceeds, net of sale
commissions and fees, the required minimum income and employment
withholding taxes and remit them directly to
us.
|
|
·
|
You
may elect to pay us, on or before the third business day following
each
quarterly vesting date (unless we notify prior to the vesting date
in
question that you must deliver your check on an earlier date), the
required minimum income and employment withholding taxes by delivering
a
personal check to us. You will be prevented from transferring or
selling
the vested shares until we have received your check. However, if
you have
elected to pay withholding taxes by check but fail to deliver your
check
in the correct amount on or before the required date, we will be
authorized to sell on your behalf a number of shares as described
in the
first alternative above sufficient to satisfy your income and employment
tax obligation.
|
|
·
|
we
increase or decrease the per share exchange value of the options
(i.e.,
increase or decrease what we will give you in exchange for your
options);
|
|
·
|
we
change the type of options eligible to be tendered for exchange in
the
offer; or
|
|
·
|
we
increase the number of options eligible to be tendered for exchange
in the
offer such that the common shares underlying the increased options
exceed
10% of the common shares issuable upon exercise of the options that
are
subject to the offer immediately prior to the
increase.
|
|
·
|
uBid.com
Holdings, Inc. Annual Report on Form 10-K for its fiscal year ended
December 31, 2006, filed with the Commission on March 30, 2007, which
is
incorporated herein by reference;
|
|
·
|
uBid.com
Holdings, Inc. Quarterly Report on Form 10-Q for its fiscal quarter
ended
September 30, 2007, filed with the Commission on November 14, 2007,
which
is incorporated herein by
reference;
|
|
·
|
Ubid.com
Holdings, Inc. Current Reports on Form 8-K filed with the Commission
on
February 2, 2007, March 12, 2007, March 22, 2007, March 30, 2007,
April
27, 2007, May 16, 2007, September 25, 2007, September 26, 2007, January
2,
2008, January 3, 2008, January 8, 2008, January 9, 2008 and February
7,
2008, which are incorporated herein by reference; and
|
|
·
|
the
description of our common stock contained in the uBid.com Holdings,
Inc.
Registration Statement on Form 8-A filed with the Commission on October
21, 2004, which is incorporated herein by
reference.
|
|
●
|
revenue
growth in prior periods may not be indicative of our future
growth;
|
|
●
|
we
have a history of operating losses which may continue;
|
|
●
|
our
financial results fluctuate and may be difficult to
predict;
|
|
●
|
losing
key personnel could affect our ability to successfully grow our
business;
|
|
●
|
our
business may suffer if we do not attract and retain additional
highly
skilled personnel;
|
|
●
|
we
are a holding company that depends on cash flow from uBid, Inc.,
our
wholly-owned subsidiary to meet our obligations;
|
|
●
|
if
we fail to maintain an effective system of internal controls, we
may not
be able to accurately report our financial results or detect fraud.
Consequently, investors could lose confidence in our financial
reporting
and this may decrease the trading price of our stock;
|
|
●
|
regulatory
requirements may materially adversely affect us;
|
|
●
|
we
may not be successful in developing brand awareness, and the failure
to do
so could significantly harm our business and financial
condition;
|
|
●
|
our
failure to remain competitive may significantly hinder our
growth;
|
|
●
|
we
may need to raise additional capital to meet our business requirements
in
the future and such capital raising may be costly or difficult
to obtain
and could dilute certain stockholders’ ownership
interests;
|
|
●
|
if
the products that we offer do not reflect our customers’ tastes and
preferences, our revenues and profit margins could
decrease;
|
|
●
|
our
growth and future success depends on our ability to generate traffic
to
our website and we may not be able to effectively do
so;
|
|
●
|
we
rely on third parties to maintain our critical systems and, if
these third
parties fail to perform their services adequately, we could experience
disruptions in our operations;
|
|
●
|
our
business may suffer from capacity constraints or system
interruptions;
|
|
●
|
if
the facility where substantially all of our computer and communications
hardware is located fails, this may harm our business, results
of
operations and financial condition;
|
|
●
|
we
may not be able to sustain or grow our business unless we keep
up with
rapid technology changes;
|
|
●
|
we
may suffer disruption in our business because of changes in our
systems,
facilities and fulfillment activities;
|
|
●
|
technological
or other assaults on our service could harm our
business;
|
|
●
|
our
inability to adequately protect our proprietary technology could
adversely
affect our business;
|
|
●
|
we
may infringe on third party intellectual property rights and could
become
involved in costly intellectual property litigation;
|
|
●
|
we
may experience unexpected expenses or delays in service enhancements
if we
are unable to license third party technology on commercially reasonable
terms;
|
|
●
|
the
listing or sale of pirated, counterfeit or illegal items by third
parties
may harm our business and reputation;
|
|
●
|
we
may be liable if third parties misappropriate our customers’ personal
information;
|
|
●
|
we
may be subject to product liability claims that could be costly
and time
consuming;
|
|
●
|
we
may encounter barriers to international expansion, which could
limit our
future growth and adversely affect our business and financial
condition;
|
|
●
|
credit
card fraud could adversely affect our business;
|
|
●
|
if
one or more states successfully assert that we should collect sales
or
other taxes on the sale of our merchandise or the merchandise of
third
parties that we offer for sale on our website, our business could
be
harmed;
|
|
●
|
failure
to maintain satisfactory relationships with our suppliers, or the
inability to obtain sufficient quantities of merchandise, could
increase
merchandise costs and/or availability;
|
|
●
|
we
may be not be able to attract traditional consumers of goods at
reasonable
costs;
|
|
●
|
anything
that causes our website users to spend less time on their computers,
including seasonal factors and national events, may impact
profitability;
|
|
●
|
increasing
governmental regulation of the internet could harm our
business;
|
|
●
|
current
and future laws could affect our auctions business;
|
|
●
|
the
security risks of e-commerce may discourage customers from purchasing
goods from us;
|
|
●
|
laws
or regulations relating to privacy and data protection may adversely
affect the growth of our internet business or marketing efforts;
and
|
|
●
|
more
individuals are using non-PC devices to access the internet and
versions
of our service developed or optimized for these devices may not
gain
widespread adoption by users of such
devices.
|
| February 19, 2008 |
uBid.com
Holdings, Inc.
|
|
Optionee
Name
|
Grant
Date
|
Exercise
Price
|
Number
Outstanding
|
Exchange
Ratio
|
New
Awards Issued Upon Exchange
|
|
Abrams,
Jason
|
12/29/05
|
$4.50
|
10,000
|
3
to 1
|
3,333
|
||
|
Abrams,
Jason
|
10/16/06
|
$3.55
|
10,000
|
|
3
to 1
|
3,333
|
|
|
Apura,
Caesar
|
09/15/06
|
$3.65
|
1,000
|
3
to 1
|
333
|
||
|
Barrowman,
James
|
12/29/05
|
$4.50
|
5,000
|
3
to 1
|
1,667
|
||
|
Brar,
Parmpaul
|
01/03/06
|
$6.15
|
1,000
|
3
to 1
|
333
|
||
|
Brasch,
Theo
|
12/29/05
|
$4.50
|
15,000
|
3
to 1
|
5,000
|
||
|
Cook,
Christopher
|
12/29/05
|
$4.50
|
1,000
|
3
to 1
|
333
|
||
|
Dahl,
Sally
|
12/29/05
|
$4.50
|
25,000
|
3
to 1
|
8,333
|
||
|
Dahl,
Sally
|
01/01/06
|
$6.15
|
50,000
|
3
to 1
|
16,667
|
||
|
Feczko,
Norman
|
12/29/05
|
$4.50
|
10,000
|
3
to 1
|
3,333
|
||
|
Garvin,
Jennifer
|
12/29/05
|
$4.50
|
5,000
|
3
to 1
|
1,667
|
||
|
Gonzalez,
Elsa
|
12/29/05
|
$4.50
|
5,000
|
3
to 1
|
1,667
|
||
|
Greenblatt-Cohen,
Sharon
|
06/26/06
|
$6.50
|
10,000
|
3
to 1
|
3,333
|
||
|
Griffith,
Matthew
|
12/29/05
|
$4.50
|
10,000
|
3
to 1
|
3,333
|
||
|
Kinsinger,
Brock
|
12/18/06
|
$2.90
|
1,000
|
3
to 1
|
333
|
||
|
Klugger,
Richard
|
12/29/05
|
$4.50
|
5,000
|
3
to 1
|
1,667
|
||
|
Leiran,
Heather
|
12/29/05
|
$4.50
|
5,000
|
3
to 1
|
1,667
|
||
|
Maiman,
Michael
|
07/17/06
|
$6.49
|
1,000
|
3
to 1
|
333
|
||
|
Martinez,
Miguel
|
12/29/05
|
$4.50
|
75,000
|
3
to 1
|
25,000
|
||
|
McPhee,
Tracey
|
12/29/05
|
$4.50
|
5,000
|
3
to 1
|
1,667
|
||
|
Owens,
Jeanice
|
12/29/05
|
$4.50
|
5,000
|
3
to 1
|
1,667
|
||
|
Pflibsen,
Allen
|
12/29/05
|
$4.50
|
10,000
|
3
to 1
|
3,333
|
||
|
Powers,
Amy
|
12/29/05
|
$4.50
|
10,000
|
3
to 1
|
3,333
|
||
|
Powers,
Amy
|
10/16/06
|
$3.55
|
10,000
|
3
to 1
|
3,333
|
||
|
Schrempf,
David
|
12/29/05
|
$4.50
|
5,000
|
3
to 1
|
1,667
|
||
|
Smith,
Angela
|
03/06/06
|
$6.74
|
5,000
|
3
to 1
|
1,667
|
||
|
Takesue,
Timothy
|
12/29/05
|
$4.50
|
500,000
|
3
to 1
|
166,667
|
||
|
Washam,
John
|
12/29/05
|
$4.50
|
10,000
|
3
to 1
|
3,333
|
||
|
Totals:
|
805,000
|
268,332
|
|
Name
|
Positions
and Offices Held
|
|
Jeffrey
D. Hoffman
|
Chief
Executive Officer
|
|
Timothy
E. Takesue
|
Executive
Vice President, Merchandising
|
|
Miguel
A. Martinez, Jr.
|
Chief
Financial Officer
|
|
Amy
Powers
|
Vice
President,
Technology
|