LEGAL PROCEEDINGS.
−Removed: On February 9, 2010 Mr.
−Removed: Thomas Davis and the Davis Group (“Davis”) filed a complaint against us in the United States District Court for the Southern District of New York.
−Removed: This suit alleges three causes of action for payment due under certain promissory notes issued, and four causes of action for breach of contract.
−Removed: Complaint claims that we failed to make payments as they became due under a number of promissory notes issued by us to Davis and under other loans made by Davis to Flint.
−Removed: Davis seeks damages in the total amount of $1,325,000 plus interest, attorney’s fees and costs.
−Removed: We have not responded to this complaint and expect summary judgment to be entered.
−Removed: Davis is in active discussions with management to restructure the amounts due to him and management is confident that a successful resolution
−Removed: will come from these discussions.
A judgment was entered against us on October 26, 2009 in the amount of $72,852, plus accruing interest from that date at the rate of $20 per day and post judgment costs incurred in enforcing the judgment.
A stipulation for judgment was filed by Carmel Solutions, Inc.
−Removed: (Carmel) in the Superior Court of California, Orange County, in
−Removed: accordance with, and upon our default of, a settlement agreement we entered into with Carmel on May 5, 2009.
−Removed: We are also a defendant in a pending legal proceeding filed by AT&T on December 11, 2009 in the U.S District Court of the District of Connecticut.
+Added: (Carmel) in the Superior Court of California, Orange County, in accordance with, and upon our default of, a settlement agreement we entered into with Carmel on May 5, 2009.
+Added: We are a defendant in a pending legal proceeding filed by AT&T on December 11, 2009 in the U.S District Court of the District of Connecticut.
This suit alleges one cause of action for breach of contract.
−Removed: The Complaint claims that we owe money for services rendered, that we subsequently entered into a settlement
−Removed: agreement with AT&T to settle the amount owed to AT&T, and that we failed to make any payments due under such settlement agreement.
+Added: The Complaint claims that we owe money for services rendered, that we subsequently entered into a settlement agreement with AT&T to settle the amount owed to AT&T, and that we failed to make any payments due under such settlement agreement.
AT&T seeks an automatic entry of judgment against us in the amount of $440,672 plus interest, attorney’s fees and costs.
−Removed: However, because Thermocredit has a first priority secured interest against all of Flint’s assets, Flint expects that Thermocredit will stop the actual collection on any of these judgments, and management hopes to be able to negotiate with these plaintiffs and come to a reasonable settlement.
+Added: We are also one of a number of defendants in a pending legal proceeding filed by First Citizens Bank & Trust, Inc.
+Added: on June 17, 2010 in the Superior Court of Fulton County, Georgia.
+Added: This suit alleges five causes of action, three of which relate to the breach of Flint’s loan agreement entered into with the Georgian Bank in the principal amount of $199,000 plus interest, attorney’s fees and costs.
+Added: We did not respond within the time period allowed.
+Added: Bill Burbank, our previous President and COO, filed a lawsuit against us in the 15 th Judicial Circuit in Palm Beach County, Florida on September 22, 2010.
+Added: This suit alleges one cause of action for breach of agreement.
+Added: The Complaint claims that we entered into a settlement agreement with Bill Burbank to settle the amount owed to him, and that we failed to make the first payment due under such settlement agreement.
+Added: Burbank seeks a judgment for damages in the amount of $190,000 plus interest, attorney’s fees and costs.
+Added: Because Thermocredit has a first priority secured interest against all of our assets, we expect that Thermocredit will stop the actual collection on this judgment, and management hopes to be able to negotiate further with Mr.
+Added: Burbank and come to a reasonable settlement.
+Added: Because Thermocredit has a first priority secured interest against all of Flint’s assets, Flint expects that Thermocredit will stop the actual collection on any of these judgments, and management hopes to be able to negotiate further with these plaintiffs and come to a reasonable settlement.
We are also a party to other legal proceedings in the normal course of business.
Based on evaluation of these matters and discussions with counsel, we believe that liabilities arising from these matters will not have a material adverse effect on the consolidated results of our operations or financial position.
+Added: Due to the regulatory nature of the industry, the Company periodically receives and responds to various correspondence and inquiries from state and federal regulatory agencies.
+Added: Management does not expect the outcome on these inquiries to have a material impact on our operations or financial condition.
RISK FACTORS.
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