According to the Mandate entered on July 28, 2000, the Ninth Circuit Court Appeals dismissed the appeal.
As reported by the Company’s Form 10-K for the fiscal year ended December 31, 1999, on February 23, 2000, the Court entered its Order Granting Defendant's Motion to Dismiss With Prejudice, effectively terminating the action before the District Court. The Plaintiff's filed a Notice of Appeal, appealing the Order dismissing the case to the U.S. Court of Appeals for the Ninth Circuit.
Previously, as summarized by the same SEC filing, on September 20, 1999, the Court entered an order consolidating the three lawsuits into one and appointing the lead plaintiff and lead counsel for the consolidated lawsuit (the "Consolidation Order"). Pursuant to the Consolidation Order, on or about October 8, 1999, a single consolidated amended class action complaint (the "Amended Complaint") was filed by the plaintiffs in the consolidated putative class action under Case No. 99-5060R. The Defendants believe the claims to be without merit, have vigorously contested the lawsuit, and successfully moved to dismiss the Amended Complaint, which Complaint was dismissed by the Court on December 20, 1999. On January 11, 2000, Plaintiffs filed their second consolidated amended class action complaint (the "2nd Amended Complaint"), to which the Defendants again responded with a motion to dismiss.
The original complaint names as defendants Hitsgalore and its CEO and president, and alleges that the company knew and failed to disclose that its founder along with two other individuals, had been ordered to pay over $600,000 to 100 customers for "false claims made by Internet Business Broadcasting, a failed online advertising company they worked for." The complaint further alleges that as a result of this disclosure, the company's stock price, which had recently skyrocketed from $1.88 a share to a high of $20.69, tumbled to $9.38 a share, for a loss of over 50% of its value in one day. On Wednesday, its founders tendered his resignation as a director of the company.
