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): October 26, 2004
(October 20, 2004)
Market Central, Inc.
Delaware 0-22969 59-3562953
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(State or other jurisdiction (Commission File ID No.) (IRS Employer No.)
of incorporation)
1650A Gum Branch Road
Jacksonville, NC 28540
(Address of principal executive offices)
(910) 478-0097
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
SECTION 3 - SECURITIES AND TRADING MARKETS
Item 3.02 Unregistered Sales of Equity Securities
Since October 15, 2004, the Company has issued 119,323 shares of its Series A
Preferred Stock at a price of $1.3325 per share. The Company's principal broker
for such sales is paid a 10% commission on such shares, plus the receipt of one
warrant to purchase one share of the Company's Common Stock per 3.3712 shares of
Series A Preferred Stock sold. Each share of such Preferred Stock is convertible
on a one-for-one basis into the Company's Common Stock.
The shares of Preferred Stock are being issued pursuant to Section 4(2) of the
Securities Act of 1933, as amended.
SECTION 8 - OTHER EVENTS
Item 8.01 Other Events
As described in the Company's Quarterly Report on Form 10-QSB for the quarter
ended May 31, 2004, Tweddle Litho Company ("Tweddle") in October 2003 filed a
complaint against the Company and Gibralter Publishing, Inc. in the United
States District Court, Eastern District of North Carolina. As a result of issues
discussed below with respect to the mishandling by the Company's counsel of such
litigation, the Company settled the litigation by agreeing to pay the sum of
$400,000to Tweddle in six installments with a final installment due on January
3, 2005. The Company is performing under the terms of this settlement. The
Company had fully accrued for such liability in the quarter ended May 31, 2004.
Notwithstanding the settlement of the litigation, the matter was referred to the
U.S. Attorney's office for the Eastern District of North Carolina to investigate
whether the Company had engaged in conduct that constituted criminal contempt of
court. After a thorough investigation in which the Company cooperated fully, on
October 20, 2004, the Company entered into a plea agreement pursuant to which it
agreed to plead guilty to criminal contempt and pay a $50,000 fine. The plea
agreement is under advisement and will be considered again by the Court on
December 13, 2004, at which time the Company expects it to be finalized and
resolved.
The Company believes that both the civil and criminal liability issues arose as
a result of the Company's former counsel failing to properly defend the Company
and failing to properly notify management of the Company of either the hearing
or the summary judgment order described in the Company's Quarterly Report
referenced above. As a result of such malfeasance and nonfeasance, the Company
took actions which violated the summary judgment order, resulting in the
settlement of the civil litigation and the subsequent criminal charges. The
actions included the sale of a subsidiary and the sale of preferred stock of the
Company.
The Company intends to vigorously pursue legal action against the Company's
former counsel and his law firm for damages resulting from his and its alleged
malfeasance and nonfeasance .
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
Item 9.01 Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired
N/A
(b) Pro Forma Financial Information
N/A
(c) Exhibits
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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 hereto duly authorized.
Market Central, Inc.
(Registrant)
Dated: October 26, 2004 By: /s/ Clifford Clark
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Clifford Clark, Chief Financial Officer
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