Status as of 02/04/2000:
Planet City announced today in a corporate Press Release that we intend to rescind the 12/3/99 agreement to acquire Topology Systems, Inc. (TSI) of Chicago, Illinois. This was a big disappointment to all of us at Planet City. A lot of time and effort was expended in this process, with nothing to show for it.
We spent several weeks selecting TSI from several companies that were presented to us as acquisition candidates, then spent several more weeks in the negotiation stage arriving at a fair value for their company. After the Letter Of Intent (LOI) was signed in early October of 1999, much time was spent in short term and long term planning for the combined companies' resource usage.
However, misrepresentations that had been made during the entire acquisition process became evident shortly after the acquisition agreement was completed. And, an internal dispute among the TSI senior management erupted a few days after the completion. That dispute is still ongoing, and is likely to result in legal action being taken against TSI's CEO by certain members of TSI's Board Of Directors, senior staff, and investors.
Great effort was put forth to try to salvage the deal, even after the dispute broke out. We finally decided that TSI's originally perceived value to Planet City would never be realized. We would never get what we bargained for. Thus, we are rescinding the acquisition agreement, and will now work to mend any business relationships harmed by the failed association. Note: with the exception of TSI's CEO, their senior management understands the situation, and concurs with our decision. They, too, are very disappointed.
Planet City will seek restitution for monies advanced to TSI in connection with the acquisition agreement, and will take legal action if necessary to recover those funds.
Unfortunately, we now have to set aside the plans for our new aggressive marketing campaign. It was to have been funded by the projected positive cash flow from TSI. For our sales efforts to be as successful as we'd like, we must support them with a quality marketing effort. Until we can provide funding for that campaign, our marketing efforts will be severely restrained.
Our plans for rapid corporate expansion include the acquisition of existing technology and personnel resources to fuel our growth, so we must now begin the search for acquisition targets all over again. We will review any company that is presented to us that fits our long term goal of delivering quality software and services.
Regarding our efforts to become a fully reporting company: We have been trying to file our Form 10-SB with the SEC. The one remaining item the lawyers need before they can file is a set of audited financials from our accountants. As of my last report on 01/21/00, the auditors had projected they would complete the audit and deliver the results to our lawyers on or before Friday, 1/28/00. As of this date, the auditors have still not delivered the audited financials. Thus, we have been unable to file our Form 10-SB. The lawyers estimate that they should be able to file electronically within three days of receiving the audit. At this particular time, there is nothing we can do but wait for the auditors to complete their task. Their internal review process is quite thorough.
The stock symbol "PINC" will have an "E" appended to it on Friday, 2/11/00, in accordance with the OTCBB Eligibility Implementation Schedule, assuming our SEC filings have not been submitted, reviewed, and approved by that time.
Some investors have called us to ask what this all means. The best source for an answer is the NASD itself. The NASD Press Release regarding the new eligibility rule is posted at: otcbb.com .
For an example of the ongoing eligibility implementation phase in process, you may review the status of companies that must comply with the rule as of 2/25/00. That list is posted at: otcbb.com
In that list, a "PASS" means the company has satisfied the eligibility requirements, and a "FAIL" means they have not yet done so. If a company in that list fails to "PASS" by 2/25/00, they will be relegated to the "Pink Sheets" (meaning their stock prices cannot be quoted on the OTCBB) until they can successfully pass the requirements.
Being "on the Pinks" does not mean that a stock cannot be traded. A discussion on "Pink Sheets" and the new NQB trading system can be found at: otcbbinfo.com . Quoting from the NQB site, "In response to the 'de-listing' of several thousand OTC Bulletin Board© companies, the National Quotation Bureau has gone real-time with the introduction of the Electronic Quotation Service."
If we do end up "on the Pinks" we will do whatever we can to be re-listed on the OTCBB as quickly as possible. That would entail working closely with the lawyers to resolve the questions, if any, that come out of the SEC review of our Form 10-SB filing. According to the OTCBB site, it takes a minimum of three days for "listing processing time" to be re-listed once the filing gets a "PASS".
On the business front ?
The Planet City Software, Inc. (PCSI) Web Services Division has four active projects, with more in the wings. We were hoping to land a project for the creation of an e-Commerce web site for a popular cultural event, but they chose instead to go with a company that donated 100% of their time. While we do try to support non-profit organizations when possible, we're not to the stage yet where we can work for free. Even the generous non-profit discount we offered wasn't good enough to compete with free.
Computer Associates and PCSI's Software Sales Division will co-host a CA Regional User's Group meeting in March, where CA's Security Products for e-Commerce will be the main focus. We expect to make several high level contacts at that meeting, which is being held at our suggestion. CA's new Regional Manager of Channel Sales is doing a good job of presenting us with sales opportunities.
We received several positive comments on our new corporate web site. The Web Services Division portfolio is being used very effectively as a sales aid. The web site samples on the site, complete with textual descriptions of their unique attributes and marketing power, have been well received whenever we have presented them.
We continue to search out re-seller relationships with vendors having products that fit within our game plan. We are also exploring additional alliance opportunities. A joint venture possibility mentioned in an earlier status report is looking more promising. This could result in a cooperative marketing and sales agreement with large revenue potential.
None of these activities happen overnight. But, we are making progress.
We appreciate our shareholders, and hope that these periodic status reports help keep you up to date with what we're doing within the company. Hopefully, you share our long term vision, and will continue to support us as we grow. Without you, our company would not exist.
A disclaimer statement follows my sign off.
Regards,
Terry E. Dennis, President & CEO
Planet City Corp (OTC BB: PINC)
Certain of the statements contained herein which are not historical facts are forward-looking statements with respect to events, the occurrence of which involve risks and uncertainties. Any such forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. In addition to the general difficulties inherent in forecasting future operating results, particularly in a rapidly changing global economy, other factors can affect performance. Those factors include, but are not limited to, competitive forces, fluctuations in operating results, reliance on industry standards, dependence on new products, risks associated with acquisitions, intellectual property protection and disputes, economic fluctuations, staff turnover, and naturally occurring phenomena. |
