8-K 1 v025274_8-k.txt 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): September 6, 2005 (August 31, 2005) MARKET CENTRAL, INC. Delaware 0-22969 59-3562953 (State or other jurisdiction (Commission File ID No.) (IRS Employer No.) of incorporation) 6701 Carmel Road Suite 205 Charlotte, NC 28226 (Address of principal executive offices) (704) 837-0500 (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 1 - REGISTRANT'S BUSINESS AND OPERATIONS Item 1.01 Entry into a Material Definitive Agreement On August 31, 2005, the Company entered into an agreement to sell all of the outstanding capital stock of E-Commerce Support Centers, Inc., a North Carolina corporation ("E-Commerce") and a wholly-owned subsidiary of the Company to Lion Development Group II, Inc. (the "Agreement"). The transaction was closed on August 31, 2005. The Purchase Price for the assets was the sum of $1,000, and the assumption of all liabilities of E-Commerce. Additionally, the Company and the Purchaser agreed that on or before one year from the date of the closing, they would in good faith complete a reconciliation of claims against E-Commerce and the payment of such claims in order to compute the deferred portion of the purchase price. Such deferred purchase amount is 70% of the amount by which the cash received from a note owned by E-Commerce and the remaining balance of such note exceeds liabilities paid or agreed to be paid from the proceeds of the note. Such amount is due to the Company either in the form of cash or assignment of a portion of such note. At closing, the note had a principal balance of $929,004 and is payable over a remaining term of 40 months together with simple interest at an annual rate of five percent (5%), and is secured by certain assets of the obligor. SECTION 2 - FINANCIAL INFORMATION Item 2.01 Completion of Acquisition or Disposition of Assets On August 31, 2005, the Company completed the sale of all of the capital stock of E-Commerce as described in Item 1.01. E-Commerce was an inactive subsidiary of the Company. SECTION 5 - CORPORATE GOVERNANCE AND MANAGEMENT Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers (a) None. (b) None. (c) None (d) On September 2, 2005, Stuart J. Yarbrough was elected to the Board of Directors to fill a vacancy on the board and was also elected Chairman of the board. It is anticipated that Mr. Yarbrough will be elected to the Audit and Compensation Committees of the board. Mr. Yarbrough, age 54, is currently a principal in CrossHill Financial Group, a private equity funding, mezzanine financing and bridge financing company based in the Washington, D.C. area, which Mr. Yarbrough co-founded in 1994. -2- SECTION 8 - OTHER EVENTS Item 8.01 Other Events On September 6, 2005, Market Central, Inc. issued a press release announcing the foregoing change to its Board of Directors. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K. SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS Item 9.01 Financial Statements, Pro Forma Financial Information and Exhibits (a) Financial Statements of Business Acquired Not applicable. (b) Pro Forma Financial Information The unaudited pro forma condensed financial information of the Company is based on and should be read in conjunction with the audited consolidated financial statements and notes thereto appearing in the Company's Annual Report on Form 10-KSB for the year ended August 31, 2004. The unaudited pro forma condensed consolidated statement of loss for the nine months ended May 31, 2005, and the year ended August 31, 2004 are presented as if the disposition of the stock of E-Commerce referred to in Item 2.01 above had been completed as of September 1, 2003. The unaudited pro forma condensed consolidated balance sheet as of May 31, 2005 is presented as if the disposition had been completed as of September 1, 2004. It is management's belief that the accompanying unaudited pro forma condensed consolidated financial statements include all material adjustments necessary to reflect, on a pro forma basis, the impact of the disposition on the historical information of the Company. The adjustments are set forth in the Pro Forma Adjustments column and further described in the notes to the unaudited pro forma condensed consolidated financial statements. The unaudited pro forma condensed consolidated financial information has been presented for informational purposes only and is not indicative of any future results of operations of the results that would have occurred had the sale actually been completed on the dates indicated above. The transaction will be recorded on the Company's consolidated financial statements as of the actual date of sale and such results may vary from the pro forma condensed consolidated financial information presented herein. -3-

-4- Notes to unaudited Pro Forma Condensed Consolidated Financial Information The pro forma unaudited condensed consolidated balance sheet was prepared assuming the disposition occurred as of September 1, 2004 and include pro forma adjustments as follows: (a) To record transaction with Lion Development Group II, Inc. for purchase of certain assets and assumption of certain liabilities of Ecom Support Centers, Inc. as follows: Cash received $ 1,000 Liabilities assumed 2,211,717 Less: Net book value of assets sold 1,455,069 Pre-tax and after tax gain on sale $ 757,648 -5-

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-7- Notes to Condensed Consolidated Pro Forma Unaudited Financial Statements The pro forma unaudited condensed consolidated statements of operations for the nine months ended May 31, 2005 and for the year ended August 31, 2004 have been presented assuming the disposition occurred as of September 1, 2003 and include pro forma adjustments as follows: (a) To remove the operations of the call center assets that was sold. Note that the discontinued operations shown in the statement of operations for the year ended August 31, 2004 relate to the sale of another subsidiary of the Company. (c) Exhibits 10.1 Stock Purchase Agreement 99.1 Press Release dated September 6, 2005, regarding the election of Stuart J. Yarbrough as a director and Chairman of the board of directors of the Registrant. -8- 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: September 6, 2005 By: /s/ Clifford Clark ---------------------------------------- Clifford Clark, Chief Financial Officer -9-

MARKET CENTRAL INC 8-K