UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE EXCHANGE ACT
Commission file number: 0-22242
BOUNCEBACKTECHNOLOGIES.COM, Inc.
(Name of the Small Business Issuer in its Charter)
Minnesota 41-0950482
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
707 Bienville Boulevard
Ocean Springs, Mississippi 39564
(Address of principal executive officers)
Issuer's telephone number: (228) 872-5558
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. [X] Yes [ ] No
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. [ ] Yes [ ] No
As of February 9, 2000, 12,161,258 Shares of Common Stock of the Company were
outstanding.
<PAGE>
INDEX TO QUARTERLY REPORT
ON FORM 10-QSB
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
BOUNCEBACKTECHNOLOGIES.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
December 31, 1999 September 30, 1999
Assets:
Current Assets:
Cash and cash equivalents $ 1,253,998 $ 957,253
Accounts receivable - trade and other 100,260 182,860
Prepaid expenses 71,054 70,055
Net assets held for sale - gaming 1,289,248 1,471,234
Net assets held for sale - entertainment 835,821 1,044,951
--------------------------------------------------------
Total Current Assets 3,550,381 3,726,353
Property and Equipment, Net 284,960 279,012
--------------------------------------------------------
Noncurrent Assets
Notes and advances receivable-related parties,
net of allowance for uncollectibles 368,124 410,472
Other assets - net 24,201 74,207
--------------------------------------------------------
Total Noncurrent Assets 392,325 484,679
TOTAL ASSETS $ 4,227,666 $ 4,490,044
========================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable 443,624 274,942
Subordinated convertible debentures - 121,325
Current maturities of long-term debt 741,398 842,826
Accrued expenses and other liabilities 403,823 579,896
--------------------------------------------------------
Total Current Liabilities 1,588,845 1,818,989
Long-Term Liabilities
Long-term debt, less current maturities 825,025 1,424,378
Deferred revenue 2,000,000 2,000,000
--------------------------------------------------------
Total Long-Term Liabilities 2,825,025 3,424,378
Total Liabilities 4,413,870 5,243,367
Stockholders' Equity
Preferred stock, 8% cumulative; $.01 par value;
authorized 5,000,000 shares; none issued
Common stock, $.01 par value; authorized 30,000,000
shares; 10,431,880 shares issued and
outstanding as of 12/31/99 and 9/30/99 104,319 104,319
Additional paid-in capital 22,953,761 22,953,761
Deficit (23,244,284) (23,811,409)
--------------------------------------------------------
Total Stockholders' (Deficit) Equity (186,204) (753,329)
TOTAL LIABILITY AND STOCKHOLDERS' EQUITY $ 4,227,666 $ 4,490,038
========================================================
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
BOUNCEBACKTECHNOLOGIES.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
1999 1998
----- ----
REVENUE
Continuing Operations - -
Cost and Expenses
General and administrative 578,204 648,365
Interest expense-net of interest income of $13,443
and $16,378 in 1999 and 1998 respectively 15,423 34,730
------------------------------------------------
Total Cost and Expenses 593,627 683,095
Loss from continuing operations (593,627) (683,095)
Income from discontinued operations - entertainment 929,766 862,110
Loss from discontinued operations-gaming (159,840) (340,348)
Extraordinary gain on early extinquishment of debt & refinancing 390,826 -
Net Income (Loss) 567,125 (161,333)
- --------------------------------------------------------------------------------------------------------------
Basic & Fully diluted Income (Loss)per Common Share
Continuing operations (0.06) (0.11)
Discontinued operations 0.07 0.09
Extraordinary gain 0.04
Net Income (Loss) 0.05 (0.02)
Weighted Average Number of Common Shares
Outstanding 10,431,880 9,616,155
================================================
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
BOUNCEBACKTECHNOLOGIES.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE MONTHS ENDING DECEMBER 31, 1999
(unaudited)
<TABLE>
<CAPTION>
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Loss from continuing operations (593,627) (683,095)
Adjustments to reconcile loss to net cash
Depreciation 8,260 9,746
Minority interest income of a consolidated subsidiary - 18,804
Discount upon conversion of convertible debentures 369,501 13,946
Early extinguishment of subordinated debentures 21,325 -
Accretion of note receivable interest - (5,423)
Change in Assets and Liabilities
Account receivable 82,600 69,245
Prepaid expense (999) (48,024)
Other assets 50,000 (100,000)
Accounts payable 168,682 56,385
Accrued expense and other liabilities (176,073) (192,227)
--------------------------------------------------
Net Cash used in Operating Activities (70,331) (860,643)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (14,208) (3,079)
Decrease (Increase) in due from related parties 42,348 (21,078)
--------------------------------------------------
Net cash provided by (used in) investing activities 28,140 (24,157)
CASH FLOW FROM FINANCING ACTIVITIES
Reduction of long-term debt (822,106) (62,857)
--------------------------------------------------
Net cash provided by (used in) financing activities (822,106) (62,857)
Cash provided by (used in)
Discontinued Operations-Gaming 49,290 (393,093)
--------------------------------------------------
Cash provided by
Discontinued operations-entertainment 1,111,752 1,235,034
--------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents 296,745 (105,716)
Cash and Cash Equivalents, at beginning of period 957,253 761,508
Cash and Cash Equivalents, at end of period 1,253,998 655,792
==================================================
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE>
BOUNCEBACKTECHNOLOGIES.COM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Business
BounceBackTechnologies.com, Inc. and Subsidiaries (the "Company") was formerly
known as Casino Resource Corporation. The name change, effective January 5,
2000, reflects the Company's intent to focus on marketing and sales applications
in the e-commerce industry. It is the Company's intent to utilize its marketing
and sales expertise by providing services to a new media marketplace which is
experiencing strong growth. The Company's new ticker symbol for its common stock
is "BBTC" and the stock is traded on the NASDAQ Bulletin Board.
To strengthen its position and bolster its efforts in penetrating the e-commerce
industry, the Company acquired all of the assets of Raw Data, Inc., on December
31, 1999. Raw Data, Inc. is focused on the development, sales and distribution
of e-commerce business solutions through direct advertising of mini-CDs used by
consumers and businesses to link potential customers to web sites and e-commerce
centers. Upon acquisition, the Company changed the name of its new subsidiary to
BounceBackMedia.com, Inc.
BounceBackMedia.com, Inc. is a Nevada corporation, which will be headquartered
in Las Vegas to more easily take advantage of convention and trade show traffic
so that the Company may promote various marketing and sales applications of its
mini-CD technology to diverse business interests. In addition to sales and
marketing support services, the Company's corporate offices, located in Ocean
Springs, Mississippi, will provide administrative and accounting support
services to BounceBackMedia.com, Inc.
The Company entered into a letter of intent to purchase the assets of
Go2Technologies, Inc., a company in the business of distributing CD-ROM
technology on mini-CDs, so as to derive a competitive edge in the development
and distribution of its mini-CD technology, the "BounceBackCard(TM)". The
acquisition of Go2Technologies will allow the Company to secure strategic
distribution rights, corresponding patents and competitive pricing advantages
and to enlist the expertise of two key employees. Contingent upon the
satisfactory outcome of its due diligence, the Company hopes to execute
definitive agreements by March 2000.
The Company is currently in negotiations to sell its Tunisian Casino, located in
Tunisia, North Africa, and Country Tonite Enterprises, which produces a country
and western variety show in Branson, Missouri and Pigeon Forge, Tennessee. By
doing so, the Company believes it will raise capital for its marketing and sales
efforts with respect to the applications of the mini-CD technology.
Basis of Presentation
The accompanying condensed consolidated financial statements of
BounceBackTechnologies.com, Inc. and its majority and wholly owned subsidiaries
are unaudited. However, this information reflects all normal and recurring
adjustments, which, in the opinion of management, are necessary for a fair
presentation of results for the three months ended December 31, 1999.
6
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Certain reclassifications of prior period amounts have been made to conform to
current period presentation. The Company's entertainment and gaming segments are
reported in the financial statements as "discontinued operations." The results
of operations and related assets and liabilities of the discontinued operations
for the prior period have been restated in conformity with current period
presentation.
The results of operations for the three months ending December 31, 1999 are not
necessarily indicative of the results expected for the full fiscal year.
NOTE 1 Prepaid Expenses
As of December 31, 1999 prepaid expenses consist primarily of insurance
payments, rent and other contractual payments. These payments will be recorded
as expense or applied against outstanding obligations in the next quarter.
NOTE 2 Net Assets Held for Sale
Entertainment
In conjunction with the Company's decision to focus its business efforts on
marketing and sales applications in the e-commerce industry, it is offering its
entertainment segment for sale. The entertainment segment is comprised of the
Company's wholly owned subsidiaries, Country Tonite Enterprises, Inc. and CRC of
Branson, which leases and operates the Country Tonite Theatre in Branson,
Missouri and is under contract to perform at the Country Tonite Theatre in
Pigeon Forge, Tennessee.
Assets and liabilities of the entertainment segment at December 31, 1999 and
September 30, 1999 were as follows;
December 31, September 30,
Current Assets $ 286,594 $ 934,448
Fixed Assets 688,698 761,975
Current Liabilities 189,149 651,472
---------- ----------
Net assets held for sale $ 835,821 $1,044,951
========== ==========
Gaming
The Company has adopted a formal plan to sell its 85% interest in CRC of Tunisia
S.A to Samara, the lessor of the Casino Caraibe property. The Company
anticipates negotiations to be finalized by June 2000. The Company expects to
generate a gain on the proposed sale of this transaction.
Assets and liabilities for the gaming segment at December 31, 1999 and September
30, 1999 were as follows:
7
<PAGE>
December 31, September 30,
Current Assets $ 686,586 $ 694,317
Net Property & Equipment 1,402,858 1,584,491
Current Liabilities 800,196 807,574
---------- ----------
Net assets held for sale $1,289,248 $1,471,234
========== ==========
NOTE 3 Supplemental Disclosure of Cash Flow Information
Cash expended during the three months ended December 31, 1999 and 1998 for
interest was $27,866 and $51,108, respectively.
NOTE 4 Long-Term Liabilities
Subordinated Convertible Debentures
The remaining balance of the $800,000, 13% subordinated convertible debenture as
of September 30, 1999 in the amount of $121,325 was settled in full by a cash
payment of $100,000 in October 1999. This transaction resulted in an
extraordinary gain of $21,325, which was recognized during the three month
period ending December 31, 1999.
Long-Term Debt
On December 31, 1999, the Company and Roy Anderson Holding Corp agreed to amend
and restate the 6%, $1,530,000 (face amount) debenture agreement which had an
outstanding principal balance as of September 30, 1999 in the amount of
$1,195,729. In connection with the transaction, Roy Anderson Holding Corp was
granted an option to purchase 300,000 shares of the common stock of the Company
at an exercise price of $0.17 per share. The remaining balance of the debenture,
as of December 31, 1999, in the amount of $1,028,553 was separated into two
debentures. The first debenture, in the amount of $342,655, is payable in
monthly installments with simple interest fixed at 6% per annum. Monthly
payments of $44,326 begin in April 2000 with the last payment due in November
2000. The second debenture, in the amount of $685,898, with simple interest
fixed at 6% per annum is payable in one lump sum at its maturity on December 31,
2002. The second debenture provides for mandatory prepayments if certain
conditions arise. These most notably relate to the Company's completion of the
sale of its discontinued operations, sale or other disposition of its existing
business or assets, collection of any proceeds from litigation or any payments
from the Lakes Gaming agreement. Currently, 1,100,000 shares of the Company's
common stock are held in escrow as collateral. Upon the Company's satisfaction
in full of all outstanding amounts due under these debentures, the common stock
held in escrow shall be cancelled.
8
<PAGE>
In October 1999, the Company entered into an agreement to retire the $1,000,000,
10% note payable due August 2022. The note was discounted to an effective rate
of 9.5% and retired in consideration for a cash payment of $150,000 and a
non-interest bearing note in the amount of $512,500. The new note is payable in
18 equal monthly installments of $28,472 beginning on December 1, 1999. An
extraordinary gain on this transaction in the amount of $369,501 was recognized
as a result of this transaction.
The Company has a line of credit of $200,000 of which zero balance was due
December 31, 1999.
NOTE 5 Deferred Revenue
During 1999, the Company received a $2 million cash down payment as a result of
its Revised Conditional Release Agreement and Termination Agreement with Lakes
Gaming. The terms of the agreement calls for the payment of up to $16.1 million,
including the cash down payment mentioned above. The $2 million cash down
payment is recorded as deferred revenue until such time as a casino is opened in
Michigan by the Pokagon Band of Potawatomi Indians (the "Pokagons"). The balance
of $14.1 million is payable if certain events unfold relative to the actual
opening of the casino, Lakes Gaming is the manager when the casino opens, and
Lakes Gaming continues to manage the casino during the five year term of its
management agreement with the Pokagons, other than a buy-out by the Pokagons of
the remainder of Lakes management term. The remaining balance of $2.5 million is
only due if the Pokagons build a casino in Indiana and Lakes Gaming is the
manager. The agreement also calls for the Company to repay the $2 million cash
down payment if after five years there is no casino open in either Michigan or
Indiana.
9
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following is management's discussion and analysis of certain factors which
have affected the Company's financial position and operating results during the
period included in the accompanying condensed consolidated financial statements.
THREE MONTHS ENDED DECEMBER 31, 1999 COMPARED TO THREE MONTHS
ENDED DECEMBER 31, 1998.
The Company is holding its entertainment and gaming segments for sale in order
to focus the Company's resources on promotional and marketing opportunities in
the e-commerce industry. As a result, the entertainment and gaming segments are
reported as discontinued operations. Consequently, there were no revenues from
continuing operations reported for the three months ended December 31, 1999 and
1998, respectively.
The Company's general and administrative expenses aggregated $578,204 in the
three months ended December 31, 1999. This was a decrease of $70,161 or 10.8%,
from the $648,365 incurred in the same period in 1998. The decrease was due
primarily to a reduction in a variety of expenses including professional fees,
public relation costs and new venture costs, which were offset by increases in
wages and bad debt expense.
Interest expense totaled $28,886 for the three months ended December 31, 1999
compared to $51,108 for the same period in fiscal 1999. The reduction was
primarily due to the refinancing and early extinguishment of debt.
The Company recognized a gain on the early extinguishment of debt on the
subordinated convertible debenture in the amount of $21,325 in October 1999. In
addition, a gain of $369,501 was recognized on the refinancing of the $1 million
10% note payable originally due August 2022. The negotiated discount was granted
as consideration for the Company's $150,000 payment and agreement to pay down
the $512,500 balance in 18 monthly interest free payments of $28,472 beginning
December 1, 1999.
No federal income tax expense was recorded for the three months ended December
31, 1999 or December 31, 1998 as a result of available federal net operating
loss carryforwards. At December 31, 1999, the Company had loss carryforwards
available to offset future taxable income of approximately $9,000,000 that
expires in various years through 2019.
Operating results of the entertainment segment being held for sale, exclusive of
corporate charges, for the three month periods ended December 31, 1999 and 1998
were as follows:
1999 1998
---- ----
Revenues $2,449,289 $2,675,491
Net Income $ 929,766 $ 862,110
=========== ==========
10
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Operating results of the gaming segment being held for sale, exclusive of
corporate charges, for the three month periods ended December 31, 1999 and 1998
were as follows:
1999 1998
Revenues $ 663,349 $ 561,022
Net Loss $(159,840) $(340,348)
========= =========
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents increased from $957,253 as of September 30, 1999 to
$1,253,998 as of December 31, 1999. Cash and cash equivalents do not reflect any
cash balances from the entertainment or gaming segments being held for sale. Nor
do these balances reflect any funds from the anticipated sale from either
discontinued segment.
The Company anticipates using the proceeds from the sale of its discontinued
operations to provide capital for its marketing and sales applications relative
to mini-CD technology.
Under the Revised Conditional Release and Termination Agreement with Lakes
Gaming, the Company could receive up to $16.1 million over the life of the
management contract Lakes Gaming has with the Pokagon Band of Potawatomi
Indians. A $2 million down payment was received in fiscal 1999. The agreement
also calls for the Company to repay the $2 million cash down payment if after 5
years a Pokagon casino is not opened. The Company will not receive any further
payments under the agreement until a Michigan or Indiana casino opens.
Until such time the discontinued segments are sold, the Company anticipates that
cash on hand and cash from future operations will be sufficient to meet the
working capital and debt service requirements of its existing business for the
next fiscal year.
BounceBackMedia.com will require a minimum amount of working capital through
December 31, 2000 of $500,000. The Company hopes to fund these requirements by
offering for sale its entertainment segment.
Capital Expenditures by the Company were $14,208 for the three months ended
December 31, 1999, compared to $3,079 for the same period in 1998. These
expenditures were primarily due to year 2000 compliance issues and accounting
software costs associated with the new computer system upgrade.
SEASONALITY
The theatre operations of the discontinued entertainment segment are affected by
seasonal factors. The Country Tonite Theatre in Branson, Missouri, will be
closed from mid-December 1999 through the first week in March 2000. The Country
Tonite Theatre in Pigeon Forge, Tennessee, will be closed from January 2, 2000
through mid-March 2000. These closing coincide with the historical closing of
similar theatres in the Branson, Missouri, and Pigeon Forge, Tennessee areas.
11
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The casino operations of the discontinued gaming segment is also subject to
seasonal factors. Primarily the slow tourist season occurs from October through
April each year.
IMPACT OF INFLATION
Management of the Company does not believe inflation has had any significant
effect on the Company's financial condition or results of operations for the
periods presented. However, an increase in the rate of inflation could adversely
affect the Company's future operations and expansion plans.
FOREIGN CURRENCY TRANSACTIONS
The Company's transactions with respect to its discontinued gaming segment in
Tunisia is in dinars. As such, there are risks that pertain to fluctuations in
foreign exchange rates and potential restrictions or costs associated with the
transfer of funds to the United States.
RECENT ACCOUNTING PRONOUNCEMENTS
In April 1998, the Accounting Standards Executive Committee issued Statement of
Position ("SOP") 98-5 "Reporting on the Costs of Start-up Activities." The SOP
requires all costs of start-up activities should be expensed as incurred. The
SOP is effective for years beginning after December 15, 1998. When the Company
adopts this SOP, it is not expected to have a material impact on the Company's
financial statements.
In June 1998, the Accounting Standards Board issued SFAS No. 133, "Accounting
for Derivative Instruments and Hedging Activities." This standard establishes
accounting and reporting standards for derivative instruments and for hedging
contracts. This standard is effective for all fiscal quarters of all fiscal
years beginning after June 15, 2000. When the Company adopts this statement, it
is not expected to have a material impact on the Company's financial statements
or their presentation.
PRIVATE SECURITIES LITIGATION ACT OF 1995
All statements contained herein that are not historical facts are based on
current expectations. These statements are forward looking in nature and involve
a number of risks and uncertainties. Actual results may differ materially. Among
the factors that could cause actual results to differ materially are the
following: changes in travel patterns which could affect demand for the
Company's theatres or casino; changes in development and operating cost,
including labor, construction, land, equipment, and capital cost; general
business and economic conditions; political unrest in Tunisia or the region; and
other risk factors described from time to time in the Company's reports filed
with the Securities and Exchange Commission. The Company wishes to caution
readers not to place undue reliance on any such forward looking statements,
which statements are made pursuant to the Private Securities Litigation Reform
Act of 1995, and as such, speak only as to due the date made.
12
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In 1995, James Barnes and Prudence Barnes, two former officers of a subsidiary
of the Company, have brought suit in State District Court, Clark County, Nevada,
against the Company in connection with their employment termination in June
1995. The Barnes have alleged the Company breached their contracts based on the
termination of the Barnes employment; intentional misrepresentation; and breach
of contract based on the untimely registration of their stock. No specific
amount of damages has been claimed, however the plaintiffs have informally
indicated that they would entertain a settlement offer between $250,000 and
$350,000. A trial date has been rescheduled for May 2000. The Company intends to
vigorously defend itself in this matter. The mater is still pending.
On December 31, 1997, the Company's former chairman, Kevin Kean, defaulted on
repaying the $1,232,000 principal of notes receivable due the Company. The
Company held 150,000 shares of the Company's stock as collateral. On January 15,
1998, the Company signed a subsequent agreement with Mr. Kean. Under this
agreement, 220,000 additional shares of the Company's stock owned by Mr. Kean
were canceled along with the 150,000 collateral shares held (valued at the
market price of $1.19 per share). Additionally, the Company and Mr. Kean entered
into a new note agreement. The new 7% interest bearing note of $1,196,885,
including approximately $143,000 of previously reserved interest is scheduled to
mature on January 15, 2001. The note is collateralized by Mr. Kean's 5% interest
in the Company's Pokagon management fee. Solely at the Company's discretion, at
any time prior to maturity, the Company can take the collateral as payment in
full for the note. Generally accepted accounting principles do not permit the
recording of contingent assets until realized and as Mr. Kean's ability to pay
the note is not known, the Company at September 30, 1998 provided an impairment
reserve for the $791,900 which represents the notes remaining principal balance
after stock cancellations. Under the terms of the Loan and Settlement Agreement,
". . .In the event that CRC shall sell, assign or transfer its interest in the
Pokagon Project, in whole or in part, to any other party, by way of sale, loan,
settlement, fee, or otherwise for consideration in an amount in excess of $1
million, Kean's obligation under the Renewal Note shall be fully discharged and
satisfied and CRC shall mark the Renewal Note "Paid" and return it to Kean. . ."
The Company initiated a civil suit against Harrah's on September 4, 1998 in
United States District Court for District of Minnesota. The Company alleges that
Harrah's breached the Technical Assistance and Consulting Agreement and
tortuously interfered with the Company's contractual and prospective economic
advantage associated with the Pokagon Band of Potawatomi Indians' Management
Agreement. The suit further alleges that Harrah's withheld vital business
information from the Company. The Court granted Harrah's motion for Summary
Judgment and the Company's complaint was dismissed with prejudice on May 24,
1999. The Company filed an appeal in the Eighth Circuit United States Court of
Appeals on September 16, 1999. The Company asserts that it has the right to
resolve the dispute with Harrah's in some forum and the trial court erred by
dismissing the Company's complaint without granting the Company leave to file an
amended complaint which would include a claim for an accounting and damages
under the Uniform
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Partnership Act. The Company plans to vigorously pursue the claim and seeks a
judgment against Harrah's plus interest and legal fees.
The Company initiated a civil suit against Willard Smith and Monarch Casinos,
Inc. on December 19, 1998 in the Circuit Court of Jackson, Mississippi. The
Company alleges that Mr. Smith and Monarch Casinos, Inc. have breached the terms
of the Memorandum of Understanding, Amendment and Modification Agreement, and
Consulting Agreement by failing to provide the services required under the terms
of the agreements, breaching their obligations of good faith to the Company and
by attempting to secure the termination of the Company's interest in the Pokagon
project. The suit further alleges Mr. Smith has defaulted on his obligations to
pay rent and maintain the up-keep of the Company residential property located at
303 LaSalle Street, Ocean Springs, Mississippi and defaulted on repayment of
loans from the Company in excess of $300,000.
The Company seeks a judgment against Monarch Casinos, Inc. and Willard Smith
plus interest and attorneys fees for notes due and material breach of
agreements; removal of Smith from the rental property and punitive damages. Mr.
Willard Smith filed a counter claim on February 16, 1999, alleging breach of
contract; breach of duty of fair dealing; tortuous interference with prospective
business advantage; specific performance of contract to purchase real property
and fraud. The Company plans to vigorously defend itself in this counterclaim
and is asking the court to dismiss the matter.
Norm D. Holm, and N.D. H. Inc., ("NDH"), a Minnesota corporation, brought suit
in the Tenth Judicial District Court, county of Sherburne, Minnesota, against
the Company on August 11, 1998. NHD alleges that the Company entered into an
indemnification and hold harmless agreement to indemnify and hold NDH harmless
from loss of claims, etc., incurred as a result of services provided to real
property known as "Pintail Woods", which claim purportedly totals $158,000.
These claims were brought before the American Arbitration Association ("AAA") in
December 1992, which originally ruled that the arbitration was not appropriate
at that time. On July 7, 1999, the Tenth Judicial District Court, county of
Sherburne, Minnesota, ordered this matter be submitted to arbitration. The
arbitration hearing is scheduled for April 2000. The Company plans to vigorously
defend itself in this matter and is asking the court to dismiss the suit based
on a statue of limitations defense because the event at issue took place over
eight years ago.
The Company initiated suit against Mark McKinney and Mana Corporation, on March
12, 1999, in the Circuit Court of Benton County, Arkansas. The Company alleges
that Mr. McKinney and Mana Corporation breached the terms of the Letter of
Intent and the Extension Agreement dated December 4, 1998, by prematurely
terminating the agreement before April 30, 1999, and failure to repay a short
term loan made to Mark McKinney, personally. The Company seeks a judgment
against Mark McKinney and Mana Corporation in the amount of $150,000 plus
interest and attorney's fees. Due to the uncertainty of Mr. McKinney's ability
to make payment, $75,000 of this receivable has been reserved. Mr. McKinney and
Mana Corporation filed a counterclaim April 5, 1999, alleging Mana Corporation
incurred additional expenses associated with the due diligence with the Company
and is asking for a judgment against the Company for $51,997 in addition to
prejudgment and post judgment interest and attorney's fees.
14
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In November 1999, Mana Corporation petitioned an Arkansas Court for
reorganization under Chapter 11 of the Bankruptcy Code; therefore the balance of
the receivable was reserved in November 1999. A trail date has been schedule for
March 2000. The Company plans to vigorously pursue its claim and seeks a
judgement against Mr.
McKinney.
Item 2. Exhibits and Reports on Form 8-K
a) Exhibits
b) No current reports on Form 8-K have been filed during the three
months ended December 31, 1999.
15
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SIGNATURES
In accordance with requirements of the Exchange Act, the registrant
caused this report to be signed on behalf by the undersigned, hereunto duly
authorized.
BOUNCBACKTECHNOLOGIES.COM, INC.
Date: February 11, 2000 By: s/ John J. Pilger
-----------------------------------------
John J. Pilger, President & CEO
Date: February 11, 2000 By: s/ John J. Pilger
----------------------------------------
John J. Pilger, Chief Financial Officer
16
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