UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 20, 2000
HITSGALORE.COM, INC.
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(Exact name of Registrant as specified in its charter)
FLORIDA 000-26668 65-0036344
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(State or other jurisdiction (Commission (I.R.S Employer
of incorporation or organization) file Number) Identification No.)
10134 6th Street, Suite J, Rancho Cucamonga, CA 91730
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(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code (909) 481-8821
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HITSGALORE.COM, INC.
Item 5. Other Events
On November 20, 2000, the Company was informed that the United States District
Court in and for the Southern District of Iowa (the "Court") filed Findings of
Fact, Conclusions of Law and Judgment (the "Order") in Civil No. 3-97-CV-60085,
Jeffery M. Good, Plaintiff, vs. Systems Communications, Inc.("SCMI") and Comstar
Network Services, Inc, an SCMI subsidiary, Defendants. The Company was informed
of the Order, via unregistered mail, by the Plaintiff's counsel in a letter to
the Company dated as of November 20, 2000, which included a copy of the Order.
The Company is a Defendant by virtue of its Merger with SCMI.
This action arose from the termination of Mr. Good's employment prior to the
Hitsgalore.com Merger. Pursuant to the Order, the Court awarded approximately
$810,000 for breach of contract, attorney's fees and costs and liquidated and
punitive damages plus interest (the "Judgement"). The Order was entered
September 22, 2000.
The Company believes that its current financial position and cash flows make it
impossible for the Company to satisfy the Judgment.
Nevertheless, the Company expects to enter into discussions with Mr. Good and
other pre-merger creditors to resolve outstanding disputes and pre-existing
conditions the Company assumed in its Merger with SCMI. The Company also plans
to seek all available remedies against Mr. Edwin B. Salmon, Jr., the Company's
former Chairman of the Board, for restitution and for monetary damages from
misrepresentations made in connection with the Merger.
The Company has not made a final determination of the courses of action
available to it. As of September 30, 2000, the Company has recorded a liability
of approximately $450,000 for the Jeff Good action. The Company will record an
additional liability as a charge to income of approximately $360,000 in the
forth quarter of 2000 to reflect the Order entered by the Court.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
None
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SIGNATURES
Pursuant to 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.
HITSGALORE.COM, INC. Date: December 19, 2000
By: /s/ Robert A. Thompson
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Robert A. Thompson
Principal Accounting Officer
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