Hitsgalore Warns of Cash Flow, Seeks Payment From Main Customer
Rancho Cucamonga, California, Jan. 13 (Bloomberg) --
Hitsgalore.com Inc. said 95 percent of its $4.2 million revenue
in the second and third quarters of 1999 came from Life
Foundation Trust, its largest outside shareholder.
The Rancho Cucamonga-based Internet advertising company
warned that ``cash flow difficulties could arise' unless Life
Foundation makes a payment soon on $14 million it owes, according
to its third-quarter report filed yesterday with the Securities
and Exchange Commission.
Scottsdale, Arizona-based Life Foundation has until April 15
to pay for $4 million in advertising. It also owes $10 million
for its 2 million shares in Hitsgalore.
Hitsgalore fell 1/16 to 1 23/32, valuing its 50 million
shares at about $86 million.
The company, whose cash on hand Sept. 30 fell to $90,771
from $272,955 on June 30, said it's attempting to negotiate full
or partial payment this month from Life Foundation.
Hitsgalore reported earnings of $1.2 million, or 2 cents a
share in the third quarter of 1999, on sales of $2.9 million.
Its cash flow from operations in the quarter was negative. It
paid out $341,902 more than it took in.
Life Foundation Trust, which is not a charity, says it has
charitable goals that include ``the provision of food to the
hungry, clothes and shelter to the needy, education to the
unlearned and to minister to the spiritual needs of all people.'
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