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Microcap & Penny Stocks : HITSGALORE.COM (HITT) -- Ignore unavailable to you. Want to Upgrade?

To: bob sims who wrote (3644)	8/24/1999 11:22:00 AM
From: Q.	Read Replies (2) \| Respond to of 7056

Here's today's Bloomberg Story: Hitsgalore.com's Largest Customer Hasn't Paid Bills (Update1) (Adds opening stock price, background in 3rd paragraph, details on expenses in 6th.) Rancho Cucamonga, California, Aug. 24 (Bloomberg) -- Hitsgalore.com Inc.'s largest customer, responsible for 87 percent of second-quarter revenue, hasn't paid what it owes to the Internet advertising company, according to a filing. The company told the Securities and Exchange Commission revenue tripled in the second quarter from the first to $1.4 million. It had no comparable operations last year. However, $1.25 million of the sales were to the non-paying customer, Life Foundation Trust, and were uncollected. Excluding those sales, revenue slumped 60 percent from the first quarter to $186,200. Stock of the Rancho Cucamonga, California-based company has fallen 84 percent since May 10, after it was reported that its founder, Dorian Reed, was found to have defrauded customers at another Internet company and had served a prison sentence. The company's outside auditor quit last month, citing Reed's past. ''We are pleased with our growth and profitability,'' Reed said in a statement today. He didn't respond to telephone or e-mailed questions. Hitsgalore.com said profit rose 6 percent in the quarter to $136,803 even as cash flow fell to negative $868,564 from $92,834 in the first quarter. Cash on hand slipped 53 percent to $272,955 on June 30 from $581,234 three months earlier. The company said expenses increased nearly six-fold as it spent on technology, nearly doubled its sales and administrative staff to 30, conducted a national radio advertising campaign and bought Web site advertising from other Internet companies. Stock Sales The company said it expects to fund operations with $110 million of stock sales to the Life Foundation Trust. The trust hasn't paid $10 million it owes Hitsgalore.com for 2 million shares it bought in April. It said four months ago it was buying 5 million more shares for $100 million. That sale hasn't closed. Scottsdale, Arizona-based Life Foundation Trust says it has charitable goals, including feeding the hungry, providing clothing and shelter to the needy, educating the uneducated and ministering to people's spiritual needs. Its trustee, Jeanette Wilcher, has declined requests for interviews. Hitsgalore.com shares were unchanged at 3 7/32 in early trading, giving the company a market value of $158 million. It's fallen from $1 billion in value on May 10, when the stock peaked at 20 11/16. Hitsgalore.com's shares began to drop after Bloomberg News reported Reed and his wife, Audrey, were ordered to pay $613,110 to 100 customers they defrauded at another Internet company two years ago. The fine was a result of a suit against the Reeds by the Federal Trade Commission. Later, the company said Reed, its majority shareholder, spent 10 months in a federal prison after being convicted of wire fraud in 1992. Last month, the company's outside auditor quit. Moore Stephens Lovelace PA of Orlando, Florida, cited Reed's past as the reason. Hitsgalore.com said it's still seeking a new auditor. quote.bloomberg.com