SECURITIES AND EXCHANGE
COMMISSION WASHINGTON, D.C. 20549
--------------------
FORM 10-QSB
(MARK ONE)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
FOR THE TRANSACTION PERIOD FROM ______________ TO ______________
COMMISSION FILE NUMBER:
000-21235
BarPoint.com, Inc.
DELAWARE 11-2780723
(STATE OR JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
One East Broward Boulevard
Suite 410
Fort Lauderdale, FL 33301
(Address of Principal Executive Offices)
(954) 745-7500
(Issuer's Telephone Number, Including Area Code)
N/A
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
State the number of shares outstanding of each of issuer's classes of common
equity, as of May 12, 2000:
Title of Class Number of Shares
-------------- ----------------
Common Stock, par value $.001 16,982,577
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
1
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
BARPOINT.COM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
MARCH 31, 2000
<TABLE>
<CAPTION>
ASSETS
<S> <C>
CURRENT ASSETS
Cash and cash equivalents $ 27,122,552
Marketable securities 7,181,221
Account receivable 57,908
Inventory 46,076
Mortgage receivable 60,000
Other assets 158,045
------------
Total Current Assets 34,625,802
------------
Equipment - net of accumlated
depreciation of $21,611 205,686
------------
205,686
------------
OTHER ASSETS
Deposit in escrow 190,000
Goodwill 490,285
Software development - net 232,066
------------
912,351
------------
TOTAL ASSETS $ 35,743,839
============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 1,059,029
Income tax payable 5,934,000
------------
Total Current Liabilities 6,993,029
------------
OTHER LIABILITIES
Deferred taxes 2,246,894
------------
2,246,894
------------
TOTAL LIABILITIES 9,239,923
------------
STOCKHOLDERS' EQUITY
Preferred stock -
Common stock 15,430
Paid in capital 12,953,728
Accumulated Earnings in Development Stage 11,826,474
Accumulated Comprehensive Income 1,708,284
------------
Total Stockholders' Equity 26,503,916
------------
Total Liabilities and Stockholders' Equity $ 35,743,839
============
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
BARPOINT.COM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
Three Months Six Months From Inception
Ended Ended October 1998 through
March 31, 2000 March 31, 2000 March 31, 2000
-------------------------------------------------------------------
<S> <C> <C> <C>
Revenues:
Total revenues $169,965 $220,290 $220,290
Cost of Sales 14,158 15,925 15,925
----------------------------------------------------------------
Gross Profit 155,807 204,365 204,365
Operating Expenses:
Selling, General and Administration 3,220,944 4,897,532 5,729,802
Research and Development 354,943 609,147 687,059
----------------------------------------------------------------
Total Operating Expenses 3,545,887 5,506,679 6,416,861
----------------------------------------------------------------
Loss from Operations (3,420,080) (5,302,314) (6,212,496)
----------------------------------------------------------------
Other Income:
Interest Income 220,794 286,700 350,507
Gain on Sale of Marketable Securities 23,052,216 23,422,663 23,422,663
and Other Assets ----------------------------------------------------------------
Total Other Income 23,273,010 23,709,363 23,772,970
Income before Income Tax 19,852,930 18,407,049 17,560,474
Income Tax Expense (6,750,000) (6,155,000) (5,734,000)
----------------------------------------------------------------
Net Income $13,102,930 $12,252,049 $11,826,474
================================================================
Net Income per Common Share--
Basic: $0.85 $0.81 $.99
================================================================
Diluted: $0.75 $0.71 $.88
================================================================
Weighted Average Common Shares
Shares Outstanding--Basic 15,409,478 15,144,561 11,854,828
================================================================
Weighted Average Common Shares
Shares Outstanding--Diluted 17,488,947 17,119,446 13,371,160
================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
BARPOINT.COM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
From Inception
Six Months October 1998
Ended through
March 31, 2000 March 31, 2000
--------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $12,252,049 $11,826,474
Adjustments to reconcile net income to net cash (used
for) operating activities:
Gain on sale of marketable securities (23,422,663) (23,422,663)
Depreciation and Amortization 54,886 70,564
Non-Cash administration, marketing & development expenses 580,000 600,500
Non-Cash acquisition costs 9,997 9,997
--------------------------------------
(10,525,731) (10,915,128)
Increase (decrease) in cash flows due to changes
in operating assets and liabilities:
Change in liabilities 6,794,108 6,540,670
Change in assets (131,090) (167,549)
--------------------------------------
Total Adjustments 6,663,018 6,373,121
--------------------------------------
Net Cash (Used) by Operating Activities (3,862,713) (4,542,007)
--------------------------------------
INVESTING ACTIVITIES:
Cash received on acquisition 628,227
Acquisition costs (189,000)
Acquisition of Synergy Solutions, Inc.* (100,000) (100,000)
Sale of land held for sale 149,750 149,750
Sales of marketable securities 24,683,232 24,683,232
Software development costs (53,019)
Purchase of marketable securities (671,704) (671,704)
Equipment (188,970) (213,629)
--------------------------------------
Net Cash Provided by Investing Activities 23,872,308 24,233,857
--------------------------------------
FINANCING ACTIVITIES:
Payment on subscription receivable 750,000 750,000
Private placements - net of commissions 6,273,170
Exercise of stock options and warrants 389,002 407,532
--------------------------------------
Net Cash Provided by Financing Activities 1,139,002 7,430,702
--------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 21,148,597 27,122,552
CASH AND CASH EQUIVALENTS - beginning of period
5,973,955 -
--------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
From Inception
Six Months October 1998
Ended through
March 31, 2000 March 31, 2000
--------------------------------------
<S> <C> <C>
CASH AND CASH EQUIVALENTS - end of period $27,122,552 $27,122,552
=====================================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Taxes $0 $591
=====================================
Interest $0 $-
=====================================
SUPPLEMENTAL DISCLOSURE OF NONCASH
TRANSACTIONS:
Software Development Costs for Services Rendered
by Certain Stockholders $0 $220,000
=====================================
Non-Cash Administrative, Marketing
& Development Expenses $580,000 $600,500
=====================================
Finders fee applied to stockholders loan
receivable $0 $218,655
=====================================
Common stock dividend of 878,770 shares $879 $879
=====================================
*Acquisition of Synergy Solutions, Inc.
75,000 common shares $408,207 $408,207
======================================
Acquisition of BarPoint- Note A
Cashless exercise of warrants $195,372 $195,372
======== =========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
BARPOINT.COM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
# of Common Stock
Shares
of Additional
Preferred Paid-In
Stock Shares Par Value Capital
<S> <C> <C> <C> <C>
Balance-September 30, 1998 0 2,612,500 $2,612 $4,253,604
Contribution of 250,000 shares of Financial
Web stock and 60,000 warrants of Socket
Communications, Inc. 108,956
Stock Options, Net Loss and Unrealized Gain
on Marketable Securities (Net of Income
Taxes) October 1,1998 - June 3, 1999 775,000
Executive Compensation to Board of Directors 50,000 50 24,950
-----------------------------------------------------
Balance June 3, 1999 0 2,662,500 2,662 5,162,510
Acquisition of The Harmat Organization (447,842)
BarPoint.com, Inc. Equity at June 3, 1999 100 100 241,400
Recapitalization of BarPoint.com, Inc. 6,633,942 6,534 (6,534)
Acquisition Costs (189,000)
<CAPTION>
Note
Receivable
from Accumulated Comprehensive
Stockholder (Deficit) Income Total
<S> <C> <C> <C> <C>
Balance-September 30, 1998 (1,666,869) $0 $2,589,347
Contribution of 250,000 shares of Financial
Web stock and 60,000 warrants of Socket
Communications, Inc. 108,956
Stock Options, Net Loss and Unrealized Gain
on Marketable Securities (Net of Income Taxes)
October 1,1998 - June 3, 1999 (1,161,558) 2,380,585 1,994,027
Executive Compensation to Board of Directors 25,000
---------------------------------------------------------------
Balance June 3, 1999 (2,828,427) 2,380,585 4,717,330
Acquisition of The Harmat Organization 2,828,427 (2,380,585)
BarPoint.com, Inc. Equity at June 3, 1999 (89,602) 151,898
Recapitalization of BarPoint.com, Inc. 0
Acquisition Costs (189,000)
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
# of Common Stock
Shares
of Additional
Preferred Paid-In
Stock Shares Par Value Capital
<S> <C> <C> <C> <C>
Private Placements 4,499,868 4500 6,800,015
Exercise of Stock Options 50,000 50 17,450
Issuance of Preferred Stock 3 - 30
Net Loss and Unrealized Gain on Marketable
Securities (Net of Income Taxes)
----------------------------------------------------
Balance - September 30, 1999 3 13,846,410 $13,846 $11,578,029
----------------------------------------------------
Common Stock Dividend to Shareholders
of record June 2, 1999 878,770 879 (879)
Acquisition of Synergy Solutions, Inc. 75,000 75 408,207
Exercise of Stock Options 11,600 12 3,468
Cancellation of all Class A Warrants
and Class B Warrants, plus $50,000 325,000 325 (50,325)
Cashless exercise of Warrants 195,372 195 (195)
Exercise of Warrants 17,391 18 78,362
Net Loss and Unrealized Gain on Marketable
<CAPTION>
Note
Receivable
from Accumulated Comprehensive
Stockholder (Deficit) Income Total
<S> <C> <C> <C> <C>
Private Placements (750,000) 6,054,515
Exercise of Stock Options 17,500
Issuance of Preferred Stock 30
Net Loss and Unrealized Gain on Marketable
Securities (Net of Income Taxes) (348,993) (1,015,665) (1,364,658)
--------------------------------------------------------------
Balance - September 30, 1999 ($750,000) ($438,595) ($1,015,665) $9,387,615
--------------------------------------------------------------
Common Stock Dividend to Shareholders
of record June 2, 1999 -
Acquisition of Synergy Solutions, Inc. 408,283
Exercise of Stock Options 3,480
Cancellation of all Class A Warrants
and Class B Warrants, plus $50,000 (50,000)
Cashless exercise of Warrants -
Exercise of Warrants 78,380
Net Loss and Unrealized Gain on Marketable
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
# of Common Stock
Shares
of Additional
Preferred Paid-In
Stock Shares Par Value Capital
<S> <C> <C> <C> <C>
Securities (Net of Income Taxes)
Reclassification adjustment of Unrealized
Gain on Marketable Securities Sold
----------------------------------------------------
Balance - December 31, 1999 3 15,349,543 15,350 12,016,668
----------------------------------------------------
Payment of subscription note receivable
Exercise of Stock Options 586 1 1,113
Exercise of Warrants 79,948 79 355,947
Issue of stock options below market 220,000
Issue of warrants to a vendor 360,000
Net Income and Unrealized Gain on Marketable
Securities (Net of Income Taxes)
Reclassification adjustment of Unrealized
Gain on Marketable Securities Sold
----------------------------------------------------
Balance - March 31, 2000 3 15,430,077 15,430 12,953,728
----------------------------------------------------
<CAPTION>
Note
Receivable
from Accumulated Comprehensive
Stockholder (Deficit) Income Total
<S> <C> <C> <C> <C>
Securities (Net of Income Taxes) (837,880) 4,205,918 3,368,038
Reclassification adjustment of Unrealized
Gain on Marketable Securities Sold (39,089) (39,089)
--------------------------------------------------------------
Balance - December 31, 1999 (750,000) (1,276,456) 3,151,164 13,119,726
--------------------------------------------------------------
Payment of subscription note receivable 750,000 750,000
Exercise of Stock Options 1,114
Exercise of Warrants 356,026
Issue of stock options below market 220,000
Issue of warrants to a vendor 360,000
Net Income and Unrealized Gain on Marketable
Securities (Net of Income Taxes) 13,102,930 3,165,274 16,268,204
Reclassification adjustment of Unrealized
Gain on Marketable Securities Sold (4,608,154) (4,608,154)
--------------------------------------------------------------
Balance - March 31, 2000 - 11,826,474 1,708,284 26,503,916
--------------------------------------------------------------
</TABLE>
8
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE A PRINCIPLES OF CONSOLIDATION AND BUSINESS
The company was incorporated in Delaware on December 19, 1995 under the name The
Harmat Organization, Inc. ("Harmat") and began operations as a construction,
architectural landscape design and real estate development firm. Beginning in
1997, Harmat believed that it was in the best interests of the shareholders of
the Company to change its direction away from the real estate business. The real
estate market in which Harmat concentrated changed, and management felt that
there were fewer prospects for significant profit in the future. The Company
began making strategic investments in technologically oriented companies.
On June 3, 1999, Harmat acquired all issued and outstanding shares of
BarPoint.com, Inc., a Florida corporation ("Florida BarPoint"), more fully
described in Note F below. The transaction was accounted for as a reverse
acquisition, as if BarPoint acquired Harmat, because the former shareholders of
Florida BarPoint owned a majority of Harmat common stock after the transaction.
The consolidated financial statements presented herein for the periods prior to
the effective date of the acquisition only include the accounts of Florida
BarPoint since its inception. The consolidated statement of stockholders' equity
has been converted from Florida BarPoint's capital structure to Harmat's capital
structure to reflect the exchange of shares pursuant to the acquisition. The
consolidated group of companies is collectively referred to herein as the
"Company". Comparative financial statements are not included as a result of this
reverse acquisition.
The financial statements reflect the financial position and results of
operations of BarPoint.com, Inc., a Delaware corporation, and its subsidiaries
on a consolidated basis. The Company's policy is to consolidate all
majority-owned subsidiaries. All inter-company amounts have been eliminated in
consolidation and necessary adjustments have been made to financial statements.
The Company "soft launched" its preview website in December 1999 and frequently
updates it. We intend to launch a more complete version of the web site and
service by October 2000. The website, www.barpoint.com, features a
patent-pending reverse search engine and software technology that allows
businesses and consumers to use the standard UPC barcode that appears on
approximately 100 million retail items to search for product specific
information from the internet. The web site provides businesses and consumers
easy efficient access to meaningful product specific information.
NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents.
The Company considers all highly liquid instruments purchased with a maturity of
six months or less to be cash equivalents.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to concentrations of
credit risk are cash and cash equivalents. The Company places its cash and cash
equivalents with high credit quality financial institutions. The amount of
deposit in any one institution that exceeds federally insured limits is subject
to credit risk. Such amount was approximately $25,450,000 at March 31, 2000.
Marketable Securities
The Company accounts for its investments pursuant to Statement of Financial
Accounting Standards ("SFAS") No.115, "Accounting for Certain Investments in
Debt and Equity Securities". SFAS No.115 addresses the accounting and reporting
for investments in equity securities that have readily determinable fair values
and for all investments in debt securities. Those investments are to be
classified into the following three categories: held-to-maturity debt
securities, trade securities, and available-for-sale securities.
Management determines the appropriate classification of its investments in debt
and equity securities at the time of purchase and reevaluates such determination
at each balance sheet date. At March 31, 2000 investments were classified as
available-for-sale securities. Unrealized gains and losses for
available-for-sale securities are excluded from earnings and reported as a net
amount as a separate component of stockholders' equity as comprehensive income
until realized. The Company uses the average cost method for gains and losses on
the sales of marketable securities. (See Note C)
9
<PAGE>
Equipment
Equipment is stated at cost. Depreciation is provided using the straight-line
method over the estimated useful lives of the assets ranging from five to ten
years for furniture, fixtures and office equipment and three to five years for
computer equipment.
Earnings (Loss) Per Share
The Company has adopted Statement of Financial Accounting Standards No.128,
Earnings Per Share, (SFAS 128) requires the presentation of two earnings per
share (EPS) amounts, basic and diluted. Basic EPS is calculated on the weighted
average number of shares outstanding and diluted EPS includes the effect of
outstanding options and warrants.
The reconciliation of the basic and diluted earning per common share is as
follows:
<TABLE>
<CAPTION>
Three months ended Six months ended From Inception Oct. 98
March 31, 2000 March 31, 2000 to March 31, 2000
<S> <C> <C> <C>
Weighted average common shares outstanding 15,409,478 15,144,561 11,854,828
Diluted effect of:
Employee stock options 1,997,006 1,892,422 1,488,265
Warrants 82,463 82,463 28,047
---------- ---------- ----------
Weighted average common shares
Outstanding, assuming dilution 17,488,947 17,119,446 13,371,160
</TABLE>
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Goodwill
The goodwill related to the acquisition of Synergy Solutions, Inc. is being
amortized over 15 years on a straight line basis.
Software Development Costs
Costs relative to the initial software development related to the Company's
underlying technology are capitalized and carried at book value and include
$220,000 for services rendered by certain stockholders. Such costs are being
amortized over 5 years, subject to periodic evaluation for impairment. Costs to
maintain such technology going forward, and ongoing web development costs have
been expensed.
Income Taxes
The Company recognizes deferred tax assets and liabilities based on differences
between the financial reporting and tax bases of assets and liabilities using
the enacted tax rates and laws that are expected to be in effect when the
differences are expected to be recovered.
Advertising
The Company recognizes advertising expense in accordance with Statement of
Position ("SOP") 93- 7 "Reporting on Advertising Costs". As such, the Company
expenses the costs of advertising when incurred. For the three months ended
March 31, 2000advertising expense was $715,452 and for the six months ended
March 31, 2000 the Company incurred advertising expense of $923,252. These
amounts are included in selling, general and administration expenses.
Stock-Based Compensation
The Company has elected to follow Accounting Principles Board Opinion No.25,
Accounting for Stock Issued to Employees ("APB No.25"), and related
interpretations, in accounting for its employee stock options rather than the
alternative fair value accounting allowed by SFAS No.123, Accounting for
Stock-Based Compensation. APB No.25 provides that the compensation expense
relative to the Company's employee stock options is measured based on the
intrinsic value of the stock option. SFAS No.123 requires companies that
continue to follow APB No.25 to provide a pro forma disclosure of the impact of
applying the fair value method of SFAS No.123.
Comprehensive Income (Loss)
The Company adopted SFAS No.130, Reporting Comprehensive Income, which
establishes standards for the reporting and display of comprehensive income and
its components in the financial statements. The only item of comprehensive
income (loss) that the Company currently reports is unrealized gain (loss) on
marketable securities.
10
<PAGE>
NOTE C MARKETABLE SECURITIES
Marketable securities consist of investments in equity securities at discounted
market value, since they are unregistered or constrained securities. The
unrealized gain, net of deferred federal income tax, at acquisition date was
$2,380,585. For the period ended March 31, 2000 the unrealized gain, net of
deferred federal income tax, was $4,088,869.
NOTE D SUBSCRIPTION AND LOANS RECEIVABLE
A subscription note receivable in the amount of $750,000 bears interest at 8%
per annum and maturing on February 12, 2000. The note was secured by 394,737
shares of common stock of the Company. The subscription note receivable for
$750,000 plus accrued interest of $35,178 was paid in full on February 11, 2000.
Other
Harmat loaned $175,000 to Axxess, Inc. now known as Financial Web.Com, Inc., an
unaffiliated third party. The loan is evidenced by a $175,000 Promissory Note
dated August 15, 1997 which bears interest at 2% above the prime rate and unpaid
interest and principal were due August 15, 1998. Axxess, Inc. pledged 600,000
shares of its common stock as collateral and authorized warrants to purchase its
common stock for a price of $.25 per share (as amended) expiring August 14,
2000. On December 15, 1998 Harmat notified Axxess, Inc. that it was exercising
its warrants to purchase 175,000 shares of Axxess, Inc. for an aggregate
subscription price of $43,750. The subscription price was applied against the
loan balance. A new promissory note was issued for $150,436 (the remaining
principal balance plus accrued interest). The new note bears interest at 9.75%
per annum and matured December 15, 1999. The Company granted an extension on
this loan to February 15, 2000. The promissory note for $150,436 plus accrued
interest of $16,012 was paid in full on January 21, 2000.
In connection with the sale of property in Quogue, New York, the buyer mortgaged
$60,000 of the purchase price to Harmat. The mortgage is payable monthly
(interest only) at an interest rate of 12% per annum and matures May 7, 2000. As
of May 15, 2000 this mortgage receivable note had not been paid..
In March 2000 an escrow deposit of $190,000 was made in connection with the
PriceBee merger and acquisition. See "Legal Proceeding"
NOTE E FAIR VALUE OF FINANCIAL INSTRUMENTS
Effective December 31, 1995, the Company adopted SFAS No.107, "Disclosure about
Fair Value Financial Instruments", which requires disclosing fair value to the
extent practicable for financial instruments which are recognized or
unrecognized in the balance sheet. The fair value of the financial instruments
disclosed herein is not necessarily representative of the amount that could be
realized or settled, nor does the fair value amount consider the tax
consequences of realization or settlement. The Company's financial instruments
include cash and cash equivalents, payables and short-term loans. It is
estimated that the carrying amount approximated fair value because of the near
term maturities of such obligations.
NOTE F ACQUISITION OF ASSETS OF BARPOINT .COM, INC.
On June 3, 1999, Harmat acquired all of the issued and outstanding shares of
Florida BarPoint (a company which commenced business in October 1998) pursuant
to an Acquisition Agreement dated May 20, 1999. The transaction was accounted
for as a reverse acquisition, as if the Florida BarPoint acquired Harmat, due to
the fact that the former shareholders of Florida BarPoint owned a majority of
Harmat common stock after the transaction.
The consideration for the acquisition was 6,634,042 shares of the Company's
common stock (the "Common Stock") based upon a negotiated value of $1.90 per
share. The purchase price was subject to adjustment depending upon the value of
certain of the Company's assets at the date of closing and over a 45-day period
following the closing.
In connection with the acquisition, a shareholder of Harmat made a capital
contribution to the Company of 250,000 shares of FinancialWeb.com, Inc. (the
"Fweb Stock") and certain other assets. The Company declared a stock dividend to
the shareholders of record as of June 2, 1999 calculated subsequent to the
45-day period following closing and payable on October 20, 1999. The dividend
declared consisted of an aggregate of 878,770 shares of common stock.
11
<PAGE>
As part of the acquisition the Company authorized five (5) year options to
purchase 800,000 shares of the Company's common stock at an exercise price of
$1.90 per share. BarPoint's management is authorized to determine the
distribution of such options. Such options vest as follows: one-third (1/3)
immediately after one year from the date of Closing, one-third (1/3) after the
second year from the date of Closing, in the event BarPoint achieves revenues of
at least $24,500,000 in such second year, and the balance of one-third (1/3)
after the third year from the date of Closing, in the event BarPoint achieves
revenues of at least $89,500,000 in such third year.
As part of the transaction, the Company sold to Leigh Rothschild, the Chairman
of the Company, three (3) shares of the Company's Series A Preferred Stock, one
Class I share, one Class II share and one Class III share, for an aggregate
purchase price of $10. All of the shares of Series A Preferred Stock vote on a
pari passu basis with the Company's Common Stock. On December 16, 1999, pursuant
to a stock exchange agreement, voting rights were allocated to the Class I and
II shares due to the cancellation of the Company's Class A and Class B warrants.
In connection with the cancellation of these warrants the Company issued an
aggregate of 325,000 shares of common stock. The Class I share of Series A
Preferred Stock has 216,667 votes, the Class II share of Series A Preferred
Stock has 108,333 votes and the Class III share of Series A Preferred Stock has
346,766 votes. None of the shares of Series A Preferred Stock are entitled to
any dividends. All voting rights for these preferred shares end on June 7, 2004
In connection with services rendered, the new consulting agreement and
guarantees issued by Matthew Schilowitz relating to collectability of certain
assets of Harmat, Mr. Schilowitz was awarded options to purchase the aggregate
of 190,615 shares at $1.90 per share, exercisable over a five (5) year period.
David W. Sass, a director of the Company, is the father of Jeffrey W. Sass, a
founder, shareholder, and director of BarPoint. McLaughlin & Stern, LLP, general
counsel to the Company, was a shareholder of BarPoint and received shares in the
Company as part of the transaction. David W. Sass is a member of said firm and
also a director of the Company.
NOTE G COMMITMENTS AND CONTINGENCIES
Consulting Agreement
In February 1998, Harmat entered into a one year consulting agreement with
Spencer Trask to advise the Harmat on financial matters in connection with the
operation of the business including acquisitions, mergers and other similar
business combinations. The agreement was extended to February 2000. The Harmat
paid Spencer Trask an initial $10,000 retainer and an additional $3,500 per
month. In addition, Spencer Trask is to receive a transaction fee for any
transactions consummated by Harmat during the term of the agreement or within
two years after the end of the term. In connection with this agreement Spencer
Trask was granted five year warrants to purchase 200,000 shares of Harmat's
common stock at $.35 per share. In connection with the acquisition (see Note F),
Spencer Trask was paid a fee of $189,000. On November 5, 1999 the Company and
Spencer Trask terminated the consulting agreement, however, the Company shall
continue to make payments of the retainer fee through January 2000 and the
warrants remain in full force. As part of this agreement the holder of the
warrants has agreed not to sell more than 28,500 shares per month commencing
January 1, 2000. On December 23,1999 Spencer Trask purchased 195,372 common
shares on a cashless exercise of the 200,000 warrants.
Properties
The Company currently rents over 10,000 square feet of office space Ft.
Lauderdale, Florida under a new five-year lease commencing in January 2000.
Annual future lease payments:
Year Amount
---- ------
2001 $207,544
2002 $299,525
2003 $311,506
2004 $323,487
2005 $335,468
Product Supply and Technology License Agreement
The Company issued 1,315,789 shares of common stock to Symbol Technologies, Inc,
for (a) delivery of $1,000,000 in cash, (b) a Product Supply and Technology
License Agreement, and (c) the agreement by the Company to sell up to 10,000
Symbol SPT 1500 machines at a discount.
Employment Agreements
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On March 24, 2000, the Company entered into a two-year employment agreement with
John C. Macatee, a director and chief executive officer, with a base salary of
$400,000 in the first year and increasing to $450,000 for the second year.
On March 27, 2000 the Company entered into a new two-year employment agreement,
which supersedes his prior employment agreement, with Leigh M. Rothschild, a
stockholder, director and chairman of the board. The new employment agreement
provides that Mr. Rothschild shall serve as the Chairman of the Board and not as
the Chief Executive Officer, with a base salary of $300,000 in the first year
increasing to $350,000 for the second year.
On March 27, 2000 the Company entered into a new two-year employment agreement,
which supersedes his prior employment agreement, with Jeffery W. Sass, a
stockholder, director and chief operating officer. The new employment agreement
provides for a base salary of $250,000 in the first year increasing to $300,000
for the second year.
On June 3, 1999, the Company entered into a three year consulting agreement with
Matthew Schilowitz, who is a stockholder, for an annual base of $150,000 with
increases of $25,000 each year thereafter.
NOTE H RELATED PARTY TRANSACTIONS
The Company paid a finders fee in June 1999 to Mr. Schilowitz, a stockholder and
former director of the Company, in the amount of $246,455 in connection with the
private placements. The fee was offset against Mr. Schilowitz's loan balance of
$218,655 as payment in full plus Harmat's expenses of approximately $27,800. In
addition the Company repaid an advance to Leigh Rothschild in the amount of
$110,000.
The law firm of McLaughlin & Stern, LLP of which Mr. David Sass, a stockholder
and director, is a principal, received legal fees of approximately $51,000 for
the three months ending March 31, 2000 and $120,000 for the six months ending
March 31, 2000.
NOTE I YEAR 2000 ISSUES
We did not experience any significant effects of the Year 2000 issue on January
1, 2000. We will continue to address this issue and the impact it might have on
operations and financial reporting. We believe that by modifying or replacing
systems, and by monitoring the Year 2000 readiness of key external parties, we
are mitigating the Year 2000 risks. However, we cannot assure our stockholders
that the uncertainties surrounding the Year 2000 issue will not materially and
adversely affect us.
NOTE J STOCK OPTION PLANS AND WARRANTS
The Company has four stock-based compensation plans, which are described below.
The Company applies APB Opinion No.25 and related interpretations in accounting
for its plans.
a) The Plan for Incentive Compensation of Matthew Schilowitz (the "Schilowitz
Incentive Plan"), who was the principal stockholder, was adopted by the Board of
Directors and approved by Harmat's sole stockholder on March 1, 1996 and amended
August 3, 1996. Pursuant to such plan, Mr. Schilowitz has been granted an option
to purchase up to an aggregate of 500,000 shares of common stock at an exercise
price of $.35, (as amended). The exercise price and number of options have been
amended to $.30 and 576,748 respectively due to the dilutive effect of the
acquisition. In conjunction with the acquisition all such options have become
fully vested resulting in the accrual of compensation expense in the amount of
$775,000, which has been reflected in the operations of Harmat prior to June 3,
1999.
b) In February 1996, the Board of Directors adopted the 1996 Joint Incentive and
Non-Qualified Stock Option Plan (the "Plan") providing for the granting of up to
400,000 shares of Harmat's common stock. In January 1997, Harmat granted
five-year options under the Plan providing for 10,000 shares at a price of
$2.125 per share ($.35 (as amended) to four directors and two key employees of
the Harmat. During 1998, 10,000 of these options were forfeited with the
termination of employment of a key employee. In March 1998, the Harmat's chief
executive officer and principal shareholder was granted 300,000 shares at an
exercise price of $2.337 per share $.35, (as amended). The exercise price and
number of options have been amended to $.30 and 346,049 respectively due to the
dilutive effect of the acquisition. As of March 31, 2000, 50,000 options have
been exercised.
c) As part of the acquisition the Company authorized five-year options to
purchase 800,000 shares of the Company's common stock at an exercise price of
$1.90 per share. Such options vest as follows: one-third after June 3, 2000;
one-third after June 3, 2001 in the event the Company achieves revenues of at
lease $24,500,000 in the second year and one third
13
<PAGE>
after June 3, 2002 in the event the Company revenues of $89,500,000 in the third
year. As of March 31, 2000, an aggregate of 800,000 options have been granted.
d) The 1999 Equity Incentive Plan was adopted by the Board of Directors on
September 17, 1999 and was approved at the annual meeting of shareholders on
April 4, 2000, authorizing the Company to grant five-year options to purchase
1,500,000 shares of the Company's common stock at fair market value at date of
grant or 85% of fair market value. As of March 31, 2000, an aggregate of
1,405,200 options have been granted. The Company issued 180,000 stock options
to Mr. Schilowitz at a 15% discount to market resulting in a $220,000
compensation expense.
In August 1999 the Company issued 60,000 warrants to a vendor at an exercise
price of $4.04, the warrants expire in three years. This resulted in a marketing
expense of $360,000 which has been reflected in financials for the six months
ended March 31, 2000.
A summary of the status of the Company's stock options as of March 31, 2000, and
the changes during the six months ended March 31, 2000 is presented below:
Weighted-Averaged
FIXED OPTIONS Shares Exercise Price
- ----------------------------------------------------------------------------
September 30, 1999 1,505,078 $1.27
Granted 284,700 6.44
Exercised 0 -
Forfeited (8,700) 7.42
December 31, 1999 1,781,078 2.07
Granted 995,500 7.89
Exercised 586 1.90
Forfeited 0 -
March 31, 2000 2,776,579 4.16
Exercisable at March 31, 2000 2,776,579
Weighted-average fair value of
options granted during the year $7.57
On April 4, 2000 the Board of Directors amended the 1999 Equity Incentive Plan,
subject to stockholder approval, authorizing the Company to grant an additional
1,500,000 five-year options to purchase shares of the Company's common stock at
fair market value at date of grant or 85% of fair market value.
NOTE K INCOME TAXES
The income tax expense for the six months ended March 31, 2000 consists of the
following:
Three Months Ended Six Months Ended
March 31, 2000 March 31, 2000
------------------ -----------------
Income $19,852,930 $18,407,049
Federal income tax at 34% 6,750,000 6,258,000
Prior NOL allowable under
IRC Section 382 0 (103,000)
----------- -----------
Income tax provision $ 6,750,000 $ 6,155,000
Current provision $ 6,529,000 $ 5,934,000
Deferred provision $ 221,000 $ 221,000
----------- -----------
$ 6,750,000 $ 6,155,000
=========== ===========
The Company for the fiscal year ended September 30, 1999 had federal net
operating loss carryforwards (NOL) of approximately $1,680,000 and expects these
NOL to be available in the future to reduce the federal income tax liability of
the Company. However, due to the ownership change, the Company's ability to
utilize the NOL's are restricted under Section 382 of the Internal Revenue Code
(IRC). Therefore, a tax benefit has been reflected only to the extent allowable
in the current year.
Deferred income taxes reflect the tax effects of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. The components of the net deferred
tax liability is as follows:
Deferred tax assets:
NOL prior to acquisition based $398,800
Stock based compensation (prior to acquisition) 279,000
Stock based compensation and marketing expense 200,000
Valuation allowance (398,800)
--------
Balance March 31, 2000 $479,000
Unrealized gain on marketable securities $2,725,894
----------
$2,246,894
==========
14
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NOTE L ACQUISITION
On November 5,1999 pursuant to an Agreement for Merger and Reorganization,
BarPoint.com, Inc. through a newly organized, wholly owned subsidiary ("Sub")
acquired all of the issued and outstanding shares of Synergy Solutions, Inc. The
purchase price for the acquisition consisting of the following:
(A) 75,000 shares of common stock, par value $.001 per share, of the Company
(the "BarPoint Common Stock"); (B) cash totaling $100,000; and (C) in the event
Sub achieves at least Four Hundred Thousand Dollars ($400,000) in earnings,
before interest, taxes, depreciation and amortization ("EBITDA") no later than
twelve (12) months from the date of the closing, 75,000 shares of BarPoint
Common Stock, par value $.001 per share, which shares shall be held in escrow
pursuant to an escrow agreement.
BarPoint shall pay the former Stockholders of Synergy Solution, Inc. additional
consideration in proportion to their respective ownership of Synergy equal to
(x) thirty percent (30%) of Sub's EBITDA attributable to operations ending as of
the first anniversary of the closing; (y) twenty-five percent (25%) of Sub's
EBITDA attributable to operations between the first and second anniversaries of
the closing; and (z) twenty percent (20%) of Sub's EBITDA attributable to
operations between the second and third anniversaries of the closing,
(collectively the "Earn Out"). BarPoint shall deliver the Earn Out for each Earn
Out period within ninety (90) days of the first, second and third anniversary
dates of the Closing. Any such Earn Out shall be paid in cash until the EBITDA
equals eight hundred thousand dollars ($800,000) and thereafter, in BarPoint
common stock, valued at the closing bid price three (3) business days prior to
payment.
Synergy Solutions, Inc. provides computer-consulting services with expertise in
developing computer programs for the Palm OS devices and other Pentium based
computer devices and developing web server applications with various software,
including, but not limited to, Oracle Unix/Linux Systems.
Employment agreements were entered into with various executives of Synergy
Solutions, Inc. as well as the granting of options under the Company's Equity
Incentive Plan.
The business combination was accounted for as follows:
Current Assets 78,651
Furniture and equipment-net 13,668
------
Total Assets $92,319
Less: Total Current Liabilities $82,322
-------
Net book value 9,997
Goodwill 498,285
-------
Total consideration on acquisition $508,282
========
Goodwill from the acquisition is being amortized over 15 years.
NOTE M SUBSEQUENT EVENTS
On April 4, 2000 the Board of Directors approved an employee benefits program
including a 401(k) Retirement Plan and an employee Stock Purchase Plan. The
401(k) Plan provides for the Company to match 25% of the first six percent of
employee contributions and an additional 25% of the first six percent of
employee contributions if certain annual Company goals are achieved. The
employee Stock Purchase Plan provides for the Company to contribute up to 15% of
the common stock purchased by the employee.
15
<PAGE>
On April 5, 2000 the Company completed a private offering of common stock at a
price of $12 per share by the Company and selling stockholders. The Company
received gross proceeds of approximately $17.7 million for the sale of 1,477,600
shares of BarPoint Common Stock.
16
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 2000
OVERVIEW
On June 3, 1999, we acquired all issued and outstanding shares of BarPoint.com,
Inc., a Florida Corporation ("Florida BarPoint") in exchange for 6,634,042
shares of our common stock. The transaction was accounted for as a reverse
acquisition, as if Florida BarPoint acquired us, because the former shareholders
of Florida BarPoint owned a majority of our common stock after the transaction.
As a result of a post-closing adjustment provision we issued a stock dividend to
owners of shares of Harmat common stock as of June 2, 1999 of a total of 878,770
shares of our common stock. The consolidated financial statements presented
herein for the periods prior to the effective date of the acquisition only
include the accounts of Florida BarPoint, because of the reverse acquisition
accounting. The consolidated statement of shareholders' equity has been
converted from Florida BarPoint's capital structure to Harmat's capital
structure to reflect the exchange of shares pursuant to the merger agreement.
Comparative financial statements are not included as a result of this reverse
acquisition.
The financial statements reflect the financial position and results of
operations of BarPoint and our subsidiaries on a consolidated basis, which
reflects our current organizational structure. Our policy is to consolidate all
majority-owned subsidiaries. All inter-company amounts have been eliminated in
consolidation.
On November 4, 1999, we converted 750,000 shares of our Socket Communications,
Inc. Preferred Series D holdings into 1,307,190 of Socket Communications common
shares that are registered by a prospectus filed August 3, 1999 and amended
November 8, 1999. On February 7, 2000 we exercised warrants to purchase 578,836
Socket Communications common shares for a total exercise price of $671,703.
During the six months ended March 31, 2000 we sold 1,675,254 Socket
Communications common shares totaling approximately $24.6 million in cash and
cash equivalents.
On November 5, 1999, BarPoint acquired Synergy Solutions, Inc., which creates
commercial applications for Palm Computing devices, for 75,000 shares of
BarPoint common stock, $100,000 and 75,000 shares of BarPoint common shares held
in escrow pursuant to additional earn out payments. Synergy Solutions products
are currently sold at major on-line, retail, and catalog software vendors.
Employment Agreements were entered into with various executives of Synergy
Solutions, Inc. as well as the granting of options under the Company Incentive
Option Plan
The Company "soft launched" its preview website in December 1999 and frequently
updates it. We intend to launch a more complete version of the web site and
service by October 2000. The website, www.barpoint.com, features a
patent-pending reverse search engine and software technology that allows
businesses and consumers to use the standard UPC barcode that appears on
approximately 100 million retail items to search for product specific
information from the internet. The web site provides businesses and consumers
easy efficient access to meaningful product specific information.
On June 3, 1999, we issued three shares of preferred stock, one Class I share,
one Class II share and one Class III share. On December 16, 1999, pursuant to a
stock exchange agreement, voting rights were allocated to the Class I and II
shares due to the cancellation of our company's Class A and B warrants. In
connection with the cancellation of all Class A Warrants and Class B Warrants
the Company issued 325,000 shares of common stock. The Class I share shall vote
with the common stock and shall have 216,667 votes. The Class II share shall
vote with the common stock and shall have 108,333 votes. The Class III share
shall vote with the common stock and shall have 346,766 votes. None of these
shares of preferred stock are entitled to any dividends. All voting rights for
these preferred shares end on June 7, 2004. All three shares of preferred stock
were issued to Leigh Rothschild, our Chairman.
On December 18, 1999 we closed on the sale of land held for sale for $175,000.
We recognized income of approximately $25,000, before commissions and other
selling expenses.
In February 2000, BarPoint entered into an agreement to acquire PriceBee.com, a
price comparison "shopbot", through a merger of PriceBee.com with and into
Synergy Solutions, Inc., a wholly-owned subsidiary of BarPoint. On March 31,
2000, BarPoint gave ten days notice of termination of the agreement and plan of
merger with PriceBee.com. PriceBee.com is disputing BarPoint's termination of
the agreement and the dispute is in arbitration. See "Legal Proceedings."
17
<PAGE>
In March 2000, Matthew Schilowitz, a director and consultant of BarPoint,
entered into an agreement with the Company whereby Mr. Schilowitz: (i) resigned
from his position as a director upon the appointment of a new Chief Executive
Officer, (ii) sold 100,000 shares of common stock in the private placement
completed by the Company in April 2000, (iii) agreed to lock-up the shares he
owns and the shares underlying his options until the later of (x) 180 days from
the date of the first closing of the private placement and (y) the effective
date of the registration statement relating to this offering and (iv) entered
into an agreement with the placement agent for the private placement which
provides that Mr. Schilowitz's lock-up shall expire with regard to 100,000 of
his shares upon his resignation as a director of BarPoint. The 87,600 shares
held by the ARS Revocable Family Trust, a family trust established by Mr.
Schilowitz's wife and of which Mr. Schilowitz disclaims beneficial ownership,
are not be subject to lock-up restrictions. Mr. Schilowitz's consulting
agreement with BarPoint will remain in effect. The remainder of his shares and
options will be locked up for the longer of 180 days and registration statement
effectiveness. (See Subsequent Event)
Results of Operations
Net income was $13,102,930 or $.75 per common share diluted for the
three months ended March 31, 2000 and $12,252,049 or $.71 per common share
diluted for the six months ended March 31 2000. Net income was primarily due
to gain on the sale of marketable securities. As of March 31, 2000, we had no
significant revenue stream; however with our December 6, 1999 launch of our
preview website, and our more complete launch later in 2000, we expect to begin
to book revenues by the end of year 2000. We also expect that near term
operational losses will continue for the foreseeable future because of
advertising, research and development and administrative expenses. We intend to
generate future revenues from commissions, advertising and other sources.
Selling, general and administration expenses were $3,220,944 for the three
months ended March 31, 2000 and $4,897,532 for the six months ended March 31,
2000. Selling, general and administration expenses consist primarily of
salaries, marketing, professional fees, hiring of personnel, travel and
entertainment.
Research and development expenses were $354,943 for the three months ended March
31, 2000 and $609,147 for the six months ended March 31, 2000. Research and
development spending was primarily due to the development of our product
database, content and technology infrastructure. We anticipate research and
development expenses will increase significantly in the upcoming year as we
continue to build and develop our database and technology infrastructure.
Advertising expenses were $715,452 for the three months ended March 31, 2000 and
$923,252 for the six months ended March 31, 2000. Advertising expenses were
primarily related to developing brand recognition and the launch of our preview
website. These amounts are included in selling, general and administration
expenses.
Interest income was $220,794 for the three months ended March 31, 2000 and
$286,700 for the six months ended March 31, 2000. Interest income was primarily
due to interest earned form our money market account.
Gain on sale of marketable securities was $23,052,216 for the three months ended
March 31, 2000 and $23,422,663 for the six months ended March 31, 2000. The gain
was primarily the result of selling approximately 1,675,000 common shares of
Socket Communication at a gain on sale of marketable securities of approximately
$23.4 million.
LIQUIDITY AND CAPITAL RESOURCES
On November 4, 1999, we converted 750,000 shares of our Socket Communications,
Inc. Preferred Series D holdings into 1,307,190 of Socket Communications common
shares that are registered by a prospectus filed August 3, 1999 and amended
November 8, 1999. On February 7, 2000 we exercised warrants of 578,836 Socket
Communications common shares at a total exercised price of $671,703. During the
six months ended March 31, 2000 we sold 1,675,254 Socket Communications common
shares totaling approximately $24.6 million in cash and cash equivalents.
As of March 31, 2000, we had approximately $27.1 million in cash and cash
equivalents and $7.1 million in marketable securities. These marketable
securities consisted of 278,836 shares of common stock of Socket Communications,
Inc. and 425,000 shares of common stock of FinancialWeb.Com, Inc. The shares of
FinancialWeb are under a lock-up agreement and are not saleable until January
31, 2001.
For the six months ended March 31, 2000, we had cash flow used by operations of
($3,862,713). The negative cash flow was primarily due to the net loss from
operations.
18
<PAGE>
For the six months ended March 31, 2000, net cash provided by investing
activities of $23,872,308 was primarily the result of the sale of land held for
sale and sale of marketable securities.
For the six months ended March 31, 2000, net cash provided by financing
activities of $1,139,002 was primarily the result of proceeds from the
exercising of stock options and warrants. From June through August 1999, we
issued a total of 4,499,868 shares of our common stock in private placements to
accredited investors for gross proceeds of approximately $7,195,000, which
includes a subscription note receivable of $750,000. The subscription note
receivable was paid in full February 11, 2000.
The Company for the fiscal year ended September 30, 1999 had federal net
operating loss carryforwards (NOL) of approximately $1,680,000 and expects these
NOL to be available in the future to reduce the federal income tax liability of
the Company. However, due to the ownership change, the Company's ability to
utilize the NOL's are restricted under Section 382 of the Internal Revenue Code
(IRC). Therefore, a tax benefit has been reflected only to the extent allowable
in the current year.
We believe that cash, cash equivalents and marketable securities, together with
projected cash flow from operations, will be sufficient to meet our liquidity
and capital requirements for the next year, although no assurance exists that we
will not require additional capital prior to the end of such period.
Subsequent Events
On April 4, 2000 the annual meeting of shareholders was held and the
shareholders approved the election of directors, adopting the 1999 Equity
Incentive Plan, ratified the granting of certain options to officers and
directors and adopting an amendment to the Company's Certificate Incorporation
increasing the authorized shares of common stock to 100,000,000 shares.
On April 4, 2000 the Board of Directors approved an employee benefits program
including a 401(k) Retirement Plan and an employee Stock Purchase Plan. The
401(k) Plan provides for the Company to match 25% of the first six percent of
employee contributions and an additional 25% of the first six percent of
employee contributions if certain annual Company goals are achieved. The
employee Stock Purchase Plan provides for the Company to contribute up to 15% of
the common stock purchased by the employee.
On April 5, 2000 the Company completed a private equity offering selling
1,848,333 common shares at a price of $12 per share by the Company and selling
stockholders. Included in the total number of shares was 370,833 shares sold by
two shareholders. Matthew Schilowitz, a former director and founder of the
Company sold 100,000 shares and the Irrevocable Trust III, of which Jay Linn, a
director, serves as trustee and the beneficiaries of which are family members of
Leigh Rothschild, the Company's chairman, sold 270,833 shares. The Company
received gross proceeds of approximately $17.7 million for the sale of 1,477,600
shares of BarPoint Common Stock.
YEAR 2000 ISSUES
We did not experience any significant effects of the Year 2000 issue on January
1, 2000. We will continue to address this issue and the impact it might have on
operations and financial reporting. We believe that by modifying or replacing
systems, and by monitoring the Year 2000 readiness of key external parties, we
are mitigating the Year 2000 risks. However, we cannot assure our stockholders
that the uncertainties surrounding the Year 2000 issue will not materially and
adversely affect us.
CAUTIONARY STATEMENT RELATING TO FORWARD LOOKING STATEMENTS
This Form 10-QSB contains certain "forward looking statements" which
represent the Company's expectations or beliefs, including, but not limited to,
statements concerning industry performance and the Company's operations,
performance, financial condition, growth and strategies. For this purpose, any
statements contained in this Form 10-QSB that are not statements of historical
fact may be deemed to be forward looking statements. Without limiting the
generality of the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "intend," "could," "estimate" or "continue" or the negative or
other variations thereof or comparable terminology are intended to identify
certain forward-looking statements. These statements by their nature involve
substantial risks and
19
<PAGE>
uncertainties, certain of which are beyond the Company's control, and actual
results may differ materially depending on a variety of important factors which
are noted herein, including but not limited to the potential impact of
competition, changes in local or regional economic conditions, the ability of
the Company to continue its growth strategy, dependence on management and key
personnel, supervision and regulation issues and an inability to find financing
on terms suitable to the company.
20
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PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
On April 4, 2000, PriceBee.com, Inc. submitted a claim for arbitration to
the American Arbitration Association with respect to the Company's termination
of an agreement and plan of merger, whereby the Company had agreed to acquire
PriceBee. PriceBee alleges that the Company's termination of the agreement and
plan of merger was wrongful and seeks specific performance and/or $5.0 million
in damages. The Company has submitted a counterclaim against PriceBee alleging
breach of the agreement and plan of merger on the part of PriceBee and is
seeking $7.0 million in damages. Each of the Company and PriceBee have selected
an arbitrator and a third independent arbitrator will be selected shortly.
ITEM 2 - CHANGES IN SECURITIES
On April 5, 2000 the Company completed a private placement of 1,477,600
common shares to institutional accredited investors at a price of $12 per share.
Jefferies & Company acted as the placement agent and received a commission of 5%
of the gross proceeds and warrants to purchase 250,000 shares of BarPoint common
stock at an exercise price of $7.38 per share, expiring December 7, 2004. The
Company believes the private placement is exempt from registration under 4(2) of
the Securities Act of 1933, as amended, and under Rule 506 promulgated under the
Securities Act.
ITEM 3- DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 4, 2000, at the annual meeting of stockholders of the Company, the
following persons were elected as directors of the Company for a term of one
year or until a successor has been elected and qualified: Leigh M. Rothschild,
Seymour G. Siegel, David W. Sass, Jeffrey W. Sass, John C. Macatee, Jay Howard
Linn and Kenneth Jaeggi.
Name Votes in Favor Votes Withheld
Leigh M. Rothschild 12,775,080 11,800
Seymour G. Siegel 12,775,080 11,800
David W. Sass 11,916,070 870,810
Jeffrey W. Sass 12,775,080 11,800
John C. Macatee 12,775,080 11,800
Jay Howard Linn 12,775,080 11,800
Kenneth Jaeggi 12,773,596 13,284
In addition the following proposals were passed:
1. Adoption of the Company's 1999 Equity Incentive Plan
Votes in Favor Votes Withheld Against
-------------- -------------- -------
10,290,278 5,425 66,232
2. Ratification of the granting of options to certain key employees
and directors of the Company
Votes in Favor Votes Withheld Against
-------------- -------------- -------
10,290,508 4,645 67,232
21
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3. Adoption of amendment of the Certificate of Incorporation of the
Company to increase the number of shares of common stock that the Company may
issue.
Votes in Favor Votes Withheld Against
-------------- -------------- -------
12,738,042 2,625 46,213
ITEM 5 - OTHER INFORMATION
On March 24, 2000, John Macatee became a director, the new President
and Chief Executive Officer of BarPoint. His employment agreement provides for a
term of two years, with automatic one-year renewals unless either party gives
written notice. Mr. Macatee's base salary will be $400,000 in the first year and
$450,000 in the second year and is eligible for bonuses under a bonus plan to be
established by BarPoint and he shall receive a monthly car allowance of $750.00
plus insurance and maintenance. On April 4, 2000 the Board of Directors amended
Mr. Macatee's employment agreement, and he was granted options to purchase
300,000 shares of BarPoint common stock at an exercise price of $12.75 per
share. These options vest 100,000 each year for three years beginning on the
first anniversary of his employment and expiring after five years. The
employment agreement also includes non-competition and confidentiality
provisions
On March 27, 2000 the Company entered into a new two-year employment
agreement, which supersedes his prior employment agreement, with Leigh M.
Rothschild, a stockholder, director and chairman of the board. The new
employment agreement provides that Mr. Rothschild shall serve as the Chairman of
the Board and not as the Chief Executive Officer, with a base salary of $300,000
in the first year increasing to $350,000 for the second year.
On March 27, 2000 the Company entered into a new two-year employment
agreement, which supersedes his prior employment agreement, with Jeffery W.
Sass, a stockholder, director and chief operating officer. The new employment
agreement provides for a base salary of $250,000 in the first year increasing to
$300,000 for the second year.
ITEM 6 - EXHIBITS
(a) Exhibits
10.1 Amended and Restated Employment Agreement, dated as of
April 4, 2000 between the Company and John C. Macatee.
10.2 Employment Agreement, dated as of March 27, 2000, between the
Company and Leigh Rothschild.
10.3 Employment Agreement, dated as of March 27, 2000, between the
Company and Jeffrey Sass.
27 Financial Data Schedule.
(b) Reports on Form 8-K
Form 8-K filed for April 5, 2000
22
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Pursuant to the requirements of the Securities and exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
duly authorized
Dated: May 15, 2000
BarPoint.com, Inc.
By: /s/ John Macatee
--------------------------
John Macatee
President and Chief Executive Officer
(Principal Executive Officer)
By: /s/ Gene Cochran
--------------------------
Gene Cochran
Controller
(Principal Accounting Officer)
23
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
10.1 Amended and Restated Employment Agreement, dated as of
April 4, 2000 between the Company and John C. Macatee.
10.2 Employment Agreement, dated as of March 27, 2000, between the
Company and Leigh Rothschild.
10.3 Employment Agreement, dated as of March 27, 2000, between the
Company and Jeffrey Sass.
27 Financial Data Schedule
EXHIBIT 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the
"Agreement"), dated as of the 12th day of May, 2000, by and between
BarPoint.com, Inc. (the "Company") with an address at One East Broward
Boulevard, Suite 410, Ft. Lauderdale, Fl. 33301 and John C. Macatee ("Macatee")
residing at 18800 Long Lake Drive, Boca Raton, Florida 33496. WHEREAS, Macatee
and the Company have agreed that Macatee shall continue to render services to
the Company in the capacity of President and Chief Executive Officer pursuant to
the terms of that certain Employment Agreement, dated as of the 24th day of
March 2000; and
WHEREAS, the Board of Directors of the Company amended the
terms of that certain Employment Agreement, as of the 4th day of April 2000; and
NOW THEREFORE, in consideration of the premises and of the
mutual agreements herein set forth, the parties hereto have agreed and do hereby
mutually agree as follows:
1. EMPLOYMENT TERM: The term of this Agreement shall commence
on the date hereof and shall expire two years thereafter (the "Employment
Period"), subject to the provisions
1
<PAGE>
of Section 5;however, the employment term shall automatically be extended for an
additional year on each anniversary date unless Macatee or the Company delivers
written notice of their intent not to renew the Employment Agreement . Macatee
or the Company shall deliver to the other written notice of their intent not to
renew the Employment Agreement within 30 days prior to the end of each one year
term.
2. DUTIES OF EXECUTIVE: Macatee shall serve as President and
Chief Executive Officer of the Company and shall be required to perform such
duties as may from time to time be required by the Board of Directors of the
Company. Macatee shall also serve on the Board of Directors of the Company, if
so elected, at no additional compensation. Macatee hereby agrees that, during
the term of his employment hereunder, he shall devote such time as is reasonably
necessary to perform his duties pursuant to the terms of this Agreement.
3. COMPENSATION:
(a) As compensation for his services hereunder, the Company
shall pay Macatee, during the Employment Period, a base salary ("Base Salary")
payable as follows:
(i) Four Hundred Thousand Dollars ($400,000.00) for the
first year;
(ii) Four Hundred Fifty Thousand Dollars ($450,000.00)
for the second year;
The foregoing compensation shall be payable in installments according
to the Company's regular payroll practices and subject to such deductions as may
be required by law.
(b) Macatee shall also receive a bonus based upon a bonus plan
to be established
2
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for executive officers of the Company, in each fiscal year during the Employment
Period, payable as determined in the bonus plan.
(c) In each fiscal year during the Employment Period, the
Company may contribute to an annuity or pension plan of Macatee, which annuity
or pension plan shall be designated by Macatee.
(d) The Company may withhold from payments of Macatee salary
amounts required to be withheld by the Company from time to time such salary
under applicable Federal, State, and local laws and regulations then in effect.
(e) Upon submission of written statements and bills in
accordance with the then regular procedures of the Company, Macatee shall be
entitled to reimbursement for reasonable out-of-pocket expenses necessarily
incurred in the performance of his duties hereunder, including, but not limited
to, reimbursement for travel and car expenses. A Company credit card will also
be made available to Macatee. In addition, Macatee shall also be entitled to a
monthly car allowance of $750.00, plus cost of insurance and maintenance.
4. EMPLOYEE BENEFITS:
(a) Macatee shall be included to the extent eligible there
under (at the expense of the Company, if appropriate) in any and all existing
plans (and any plans which may be adopted in the future) providing benefits for
the Company's employees generally, including, but not limited to, group life and
disability insurance, hospitalization, medical, vacation, retirement,
3
<PAGE>
stock option plans and any and all similar or comparable benefits.
(b) Due to the fact that the Company's success is dependent
upon the activities of Macatee, the Company will provide keyman insurance on the
life of Mr. Macatee in the amount of $1,000,000.00 and Macatee will cooperate in
obtaining and maintaining such policy.
(c) Macatee shall be awarded options to purchase 300,000
shares of the Company Common Stock, exercisable at $12.75 per share. Such
options shall be for a five year term and shall vest as follows: (i) 100,000
shares after the first year of employment; and (ii) 100,000 shares after the
second year of employment; and (iii) 100,000 shares after the third year of
employment if Macatee is still employed by the Company.
5. TERMINATION:
(a) The Company may terminate Macatee's employment hereunder
at any time for cause only by written notice but only after a decision by the
Board of Directors of the Company which is communicated to Macatee in writing
thirty (30) days prior to the effective date of termination; PROVIDED HOWEVER,
that the Company pays to Macatee a severance payment equal to the aggregate Base
Salary otherwise owed to him over the remaining term of the Employment Period
and allow Macatee to retain any options granted under any option plan granted to
him notwithstanding the fact that such options may not be vested and/or
exercisable at the time of termination under this Section 5(a).
4
<PAGE>
(b) For purposes of this Agreement "For Cause" shall mean:
(i) Deliberate misappropriating any funds or
properties of the Company;
(ii) Gross mismanagement of the Company;
(iii) Material fraud or willful and material misconduct
with respect to performance of his duties under
this Agreement; or
(iv) Material breach of any material fiduciary duty to
the Company; or material breach of his
obligations under this Agreement; or chronic
neglect of his duties or chronic failure to act
with respect to his duties as determined by the
Board of Directors.
(c) In the event Macatee is not nominated or re-elected to
serve as a member of the Board of Directors during the Employment Period, either
party may terminate this Agreement and Macatee shall be entitled to continue to
receive his Base Salary as set forth in Section 3(a) above for the remainder of
the Employment Period and retain any options granted under any option plan
notwithstanding the fact that such options may not be vested and/or exercisable
at the time of termination under this Section 5(c).
(d) In the event that Macatee dies or becomes disabled so as
not to be able to perform his duties as set forth herein for a period exceeding
twelve (12) months, this Agreement shall terminate (as permissible under the
Americans with Disabilities Act) and no further compensation shall be payable to
Macatee, except as may otherwise be provided under any insurance policy,
employee benefit plan, or similar instrument; PROVIDED HOWEVER, that during any
such period of disability, Macatee shall be entitled to his base salary as
provided
5
<PAGE>
under Section 3(a) for a period not to exceed twelve (12) months.
<PAGE>
6. COVENANT NOT TO COMPETE: Macatee represents himself as
having non Non-Compete Agreement(s) or restrictive covenant(s) with any current
or former employer(s) and no conflict(s) of interest, which would preclude
Macatee from entering into this Agreement with the Company.
The parties agree that the Company has a legitimate business
interest, including, but not limited to: (1) trade secrets, which include but
are not limited to, intellectual properties, client lists, customer lists,
vendor lists, and marketing programs developed by and unique to the Company; (2)
valuable confidential business or professional information that otherwise does
not qualify as trade secrets: (3) substantial relationship with specific
prospective or existing clients and vendors or suppliers; (4) client, vendor and
supplier goodwill associated with an ongoing business by way of the name
BarPoint.com, Inc. located throughout the United States, five (5) extraordinary
or specialized training in the technology, computer technical science field, and
(6) the assets, corporate shares, investments and equity interests of the
Company.
6
<PAGE>
The parties further agree that the Company has a reasonable
legitimate business interest and a protectable interest in the right to prevent
direct and indirect solicitation of existing clients and business relationships
and investment in extraordinary training of its current employees.
In view of the foregoing, Macatee's employment by the Company in a very
skilled highly valued position within its highly specialized organization and
the payment of compensation listed herein and other valuable consideration, it
is further mutually agreed as follows:
(a) Macatee recognizes and acknowledges, as aforesaid, that
the Company has made a substantial investment in time and expense in its highly
specialized business and that the very nature of Macatee's position will enable
Macatee to obtain and become familiar with certain trade secrets, confidential
information concerning business techniques, methodologies, marketing efforts,
highly specialized employee training, intellectual properties vendor lists other
lists and client relationships of the Company.
(b) Because of the competitive environment in which the
Company must conduct its business, Macatee agrees and understands that material
and irreparable injury would be done
7
<PAGE>
to the Company if Macatee should violate the said legitimate business interest
and protectable interest, or assist competitors, or engage in solicitation of
existing clients or business relationships.
(c) Macatee will not, during his employment with the Company
or any time thereafter, use, offer, disclose or divulge by any means, directly
or indirectly, any of the trade secrets, confidential information, vendor lists
or client lists of the Company. Macatee further agrees that during his
employment with the Company or prior to the later of: (i) termination of his
employment with the Company; or (ii) the due date of his final payment of salary
due hereunder, he will not engage in solicitation of existing client lists and
vendor lists of the Company, which are the property of the Company and which
Macatee acquired knowledge of in the course of and by virtue of his employment
with the Company, to any corporation, firm, person, partnership, associations or
other business entity, or use such information in any manner contrary to this
Agreement.
The parties agree that the foregoing is reasonable.
8
<PAGE>
(d) Macatee agrees that, commencing the date hereof and
continuing until the later of: (i) one year after the termination of his
employment with the Company; or (ii) the due date of his final payment of salary
due hereunder, he will not, except on behalf of the Company or with the written
consent of the Company (i) engage in any business activity in the United States,
directly or indirectly, on his own behalf or as partner, stockholder (except by
ownership of less than ten percent (10%) of the outstanding stock of a
publicly-held corporation), director, trustee, principal, agent, employee,
consultant or otherwise of any person, firm or corporation which then is
competitive with an activity in which the Company or any parent or subsidiary of
the Company is then engaged at the time; (ii) allow the use of his name by or in
connection with any business activity which then is principally competitive with
any activity in which the Company or any of its parents or subsidiaries is then
engaged; or (iii) offer employment to or employ, for himself or on behalf of any
then competitor of the Company or any of its parents or subsidiaries, any
persons who at any time within the prior six (6) months shall have been employed
by the Company or any parent or subsidiary of the Company.
9
<PAGE>
(e) Macatee agrees that he shall offer in writing to the
Company all business deals that concern computer science and/or internet
technology and shall not participate in those deals personally or through any
agent, trust, family member, or other vehicle without the express written
permission of the Company with the understanding that the Company shall have the
right to participate.
7. DEFAULT - REMEDIES: In the event of proof of breach by
Macatee, of any provisions of this Agreement or any duty Macatee may owe to the
Company, the Company shall be entitled to pursue any remedy at law or equity,
and shall specifically at any time have the right to terminate any further
payments of any kind or nature to be made under this Agreement.
Macatee acknowledges and agrees that, in the event of his
breach of any of the provisions of this Agreement, the Company will be
irreparably injured and that damages will be difficult if not impossible to
measure and, accordingly, the Company shall be entitled to injunctive relief and
to any other remedies available in equity or law, including court costs and
expenses, taxable or otherwise, reasonably necessary in preparing for, seeking
or obtaining abatement of or an injunction against such action or proceeding, or
in enforcing this Agreement,
10
<PAGE>
or in establishing or maintaining the applicability
of, or validity of, this Agreement, or any provision thereof, and in prosecuting
any counterclaim or cross-complaint based thereon, or any other matter as
ordered by a court of competent jurisdiction to enforce the provisions of this
Agreement.
8. CONFIDENTIAL INFORMATION: Except as otherwise required by
law, Macatee shall not disclose or use at any time, except as part of his
employment by the Company, either during or subsequent to such employment, any
secret or confidential information or knowledge obtained by Macatee while
employed by the Company. Without limiting the generality of the foregoing,
Macatee shall not disclose or use any information pertaining to the business of
the Company or any parent or subsidiary of the Company, including, but not
limited to, profit figures, names of or relationships with customers or
advertisers, or the terms of any contracts to which it or they may be a party.
The obligation imposed by this Section 8 shall survive the expiration or other
termination of this Agreement.
9. SURRENDER OF DOCUMENTS: If Macatee voluntarily resigns or
is terminated
11
<PAGE>
with or without cause or due to the sale of the Company, or at any
time prior thereto, Macatee agrees that he will cooperate fully with the Company
on any or all of the following matters:
(a) promptly return and surrender to the Company or its
nominee, all books, records, documents, or other
property belonging to the Company and/or its
affiliates;
(b) promptly return and surrender to the Company or its
nominee, any document, memorandum, record, letter,
specification or other paper in his possession or
under his control relating to the operations,
business, customers, or affairs of the Company or its
affiliates; and
(c) provide the Company with all necessary information
related to the completion and/or orderly transfer of
work in progress.
10. WAIVER OF BREACH: This Agreement supersedes any and all
prior agreements, understandings, and negotiations relating to the subject
matter herein and constitutes the entire agreement between the parties relating
to such subject matter. No term or condition of this Agreement may be waived,
changed, modified, extended or discharged unless in writing and signed by all
parties to this Agreement. The waiver by either the Company or Macatee of any
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach by either the Company or Macatee.
12
<PAGE>
11. SEVERABILITY: The invalidity or unenforceability of any
provision of this Agreement, whether in whole or in part, shall not in any way
affect the validity or enforceability of any other part of such provision or of
any provision herein contained, and any invalid or unenforceable provision or
part thereof shall be deemed severable to the extent of any such invalidity or
unenforceability. If such invalidity or unenforceability is due to the
unreasonableness of the time or geographical area covered by the covenants or
restrictions of such provision, such covenants and restrictions shall
nevertheless be effective for such period of time and for such area as may be
determined to be reasonable by a court of competent jurisdiction.
12. INTERPRETATION: No provision of this Agreement is to be
interpreted for or against any party because that party or that party's legal
representative drafted such provision.
13. ASSIGNMENT; BINDING EFFECT: This Agreement is for personal
services of Macatee and shall not be assignable by the Company. This Agreement
shall not be assignable in whole or in part by Macatee, except that Macatee may
assign the Agreement to any successor in interest to the Company's business. The
rights and obligations of the parties shall inure to the
13
<PAGE>
benefit of, and be binding upon, their respective heirs, personal
representatives, successors and assigns.
14. NOTICES:
(a) All notices, requests, demands, and other communications
hereunder must be in writing and shall be deemed to have been given if delivered
by hand or mailed within the continental United States by first class, certified
mail, return receipt requested, postage and registry fees prepaid, or sent by
telecopier (with receipt confirmation), to the applicable party and addressed as
follows:
(i) if to the Company at the address set forth above.
(ii) if to Macatee at the address set forth above.
(b) Any notice or other communication given by certified mail
shall be deemed given at the time of certification thereof, except for a notice
changing a party's address which shall be deemed given at the time of receipt
thereof. Any notice or other communication sent by telecopier transmission shall
be deemed given at the time of written confirmation of receipt.
15. BACKGROUND INVESTIGATION. This Agreement shall become
effective immediately but is subject to a thorough and timely background
investigation on Macatee. Timely shall mean that said background check shall be
completed within 15 business days from the date of execution of Agreement. In
the event that the background check reveals anything
14
<PAGE>
materially adverse about Macatee, the company shall have the right to deem the
Agreement as null and void.
16. CHANGE OF CONTROL. In the event the Company enters into a
"change of control" agreement with its senior executives, Macatee shall be
included in said "change of control" agreement.
17. ENTIRE AGREEMENT OF THE PARTIES: This Agreement expresses
the entire agreement of the parties, and all promises, representations,
understandings, arrangements and prior agreements are merged herein and
superseded hereby. No person, other than pursuant to a resolution of the Board,
shall have any authority on behalf of the Company to agree to modify or change
this Agreement or anything in reference thereto, and any such modification or
change must be in writing and signed by both parties hereto.
18. LAWS GOVERNING: This Agreement has been entered into in
the State of Florida and shall be construed, interpreted and governed in
accordance with the laws of the State
15
<PAGE>
of Florida without regard to the choice of laws provisions thereof.
19. COUNTERPARTS: This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one document.
16
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and Macatee has hereunto set his hand
as of the day and year first above written.
BarPoint.com, Inc.
By: /S/ LEIGH M. ROTHSCHILD
------------------------
Name: Leigh M. Rothschild
Title: Chairman
Date:
Accepted and Agreed
By: /S/ JOHN C. MACATEE
-------------------
Name: John C. Macatee
Date:
17
EXHIBIT 10.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "AGREEMENT"), dated as of the 27th day of
March 2000 by and between BarPoint.com, Inc. (the "COMPANY") with an address at
1540 N.E. Quayside Terrace, Miami, Florida 33138 and Leigh M. Rothschild
("ROTHSCHILD") residing at 12864 Biscayne Boulevard, Unit 262, North Miami,
Florida 33181.
WHEREAS, Rothschild and the Company have agreed that Rothschild shall
render services to the Company in the capacity of Chairman of Board of Directors
of the Company pursuant to the terms of this Agreement.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein set forth, the parties hereto have agreed and do hereby
mutually agree as follows:
1. EMPLOYMENT TERM: The term of this Agreement shall commence on the
date hereof and shall expire two years thereafter (the "EMPLOYMENT PERIOD")
subject to the provisions of Section 5, however, the Employment Period shall
automatically be extended for an additional year unless, within 30 days prior to
the end or the initial Employment Period and on each anniversary date
thereafter, Rothschild or the Company shall deliver to the other, written notice
of their intent not to renew this Agreement. In the event the term of Jeffrey
Sass' Employment Agreement dated March 27, 2000 is extended, then this
Employment Agreement shall be extended for the same term.
2. DUTIES OF EXECUTIVE: Rothschild shall serve as Chairman of the
Company and shall be required to perform such duties as may from time to time be
required by the Board of Directors of the Company. Employment shall be on a full
time basis except that Rothschild may act as a consultant to Ambergen, Inc.
Rothschild hereby agrees that, during the term of his
<PAGE>
employment hereunder, he shall devote such time as is reasonably necessary to
perform his duties pursuant to the terms of this Agreement. The Company agrees
to indemnify Rothschild as an officer or director of the Company to the fullest
extent permitted by law.
3. COMPENSATION:
(a) As compensation for his services hereunder, the Company
shall pay Rothschild, during the Employment Period, a base salary ("BASE
SALARY") payable as follows:
(i) Three Hundred Thousand Dollars ($300,000.00) for
the first year;
(ii) Three Hundred Fifty Thousand Dollars
($350,000.00) for the second year;
The foregoing compensation shall be payable in
installments according to the Company's regular payroll practices and subject to
such deductions as may be required by law.
(b) Rothschild shall also receive a bonus based upon a bonus
plan to be established for executive officers of the Company, in each fiscal
year during the Employment Period, payable as determined in the bonus plan.
(c) In each fiscal year during the Employment Period, the
Company may contribute to an annuity or pension plan of Rothschild, which
annuity or pension plan shall be designated by Rothschild.
(d) The Company may withhold from payments of Employee's
salary amounts required to be withheld by the Company from time to time from
such salary under applicable Federal, State, and local laws and regulations then
in effect.
2
<PAGE>
(e) Upon submission of written statements and bills in
accordance with the then regular procedures of the Company, Rothschild shall be
entitled to reimbursement for reasonable out-of-pocket expenses necessarily
incurred in the performance of his duties hereunder, including, but not limited
to, reimbursement for travel and car expenses. A Company credit card will also
be made available to Rothschild. In addition, the Company agrees to lease for
Rothschild a company automobile that it shall pay for in the amount of $750 per
month plus tax, cost of insurance, maintenance and gasoline. (If the car lease
is more than $750.00, Rothschild shall make up the difference on his own.)
4. EMPLOYEE BENEFITS:
(a) Rothschild shall be included to the extent eligible
thereunder (at the expense of the Company, if appropriate) in any and all
existing plans (and any plans which may be adopted in the future) providing
benefits for the Company's employees generally, including, but not limited to,
group life and disability insurance, hospitalization, medical, vacation,
retirement, stock option plans and any and all similar or comparable benefits.
(b) Due to the fact that the Company's success is dependent
upon the activities of Rothschild, the Company will provide keyman insurance on
the life of Mr. Rothschild in the amount of $1,000,000.00 and Rothschild will
cooperate in obtaining and maintaining such policy. This policy shall be a whole
life insurance policy (the "POLICY"). At the termination of this Agreement, for
any reason, the Company shall, at Rothschild's sole option, assign Rothschild
all of its right, title and interest in the Policy. At that time, Rothschild
may, at his expense, cause the Policy to continue in full force and effect and
shall have the option to designate a beneficiary of his choice.
3
<PAGE>
5. TERMINATION:
(a) The Company may terminate Rothschild's employment
hereunder at any time for cause only by written notice but only after a decision
by the Board of Directors of the Company which is communicated to Rothschild in
writing thirty (30) days prior to the effective date of termination; PROVIDED
HOWEVER, that the Company pays to Rothschild a severance payment equal to the
aggregate Base Salary otherwise owed to him over the remaining term of the
Employment Period, said remaining term not to include any extensions (as
detailed in Section 1, herein) that have not commenced as of the date of
termination, and allow Rothschild to retain any options granted under any option
plan granted to him notwithstanding the fact that such options may not be vested
and/or exercisable at the time of termination under this Section 5(a).
(b) For purposes of this Agreement "For Cause" shall mean:
(i) Deliberate misappropriating any funds or
properties of the Company;
(ii) Gross mismanagement of the Company;
(c) In the event that Rothschild dies or becomes disabled so
as not to be able to perform his duties as set forth herein for a period
exceeding twelve (12) months, this Agreement shall terminate (as permissible
under the Americans with Disabilities Act) and no further compensation shall be
payable to Rothschild, except as may otherwise be provided under any insurance
policy, employee benefit plan, or similar instrument; PROVIDED HOWEVER, that
during any such period of disability, Rothschild shall be entitled to his base
salary as provided under Section 3(a) for a period not to exceed twelve (12)
months.
(d) CHANGE OF CONTROL: In the event Rothschild shall no longer
be a director or Chairman of the Company, then Rothschild may terminate this
Agreement and Rothschild shall
4
<PAGE>
be entitled to continue to receive his Base Salary as set forth in Section 3(a)
above for the remainder of the Employment Period, said remainder not to include
any extensions (as detailed in Section 1, herein) that have not commenced as of
the date of Rothschild's termination and shall be entitled to retain any options
granted under any option plan notwithstanding the fact that such options may not
be vested and/or exercisable at the time of termination under this Section 5(d).
6. COVENANT NOT TO COMPETE: The parties agree that the Company has a
legitimate business interest, including, but not limited to: (1) trade secrets,
which include but are not limited to, intellectual properties, client lists,
customer lists, vendor lists, and marketing programs developed by and unique to
the Company; (2) valuable confidential business or professional information that
otherwise does not qualify as trade secrets; (3) substantial relationship with
specific prospective or existing clients and vendors or suppliers; (4) client,
vendor and supplier goodwill associated with an ongoing business by way of the
name BarPoint.com, Inc. located throughout the United States; (5) extraordinary
or specialized training in the technology and computer science technology field;
and (6) the assets, corporate shares, investments and equity interests of the
Company.
The parties further agree that the Company has a reasonable
legitimate business interest and a protectable interest in the right to prevent
direct and indirect solicitation of existing clients and business relationships
and investment in extraordinary training of its current employees.
In view of the foregoing, Rothschild's employment by the
Company in a very skilled, highly valued position within its highly specialized
organization and the payment of
5
<PAGE>
compensation listed herein and other valuable consideration, it is further
mutually agreed as follows:
(a) Rothschild recognizes and acknowledges, as aforesaid, that
the Company has made a substantial investment in time and expense in its highly
specialized business and that the very nature of Rothschild's position will
enable Rothschild to obtain and become familiar with certain trade secrets,
confidential information concerning business techniques, methodologies,
marketing efforts, highly specialized employee training, intellectual properties
vendor lists, other lists and client relationships of the Company.
(b) Because of the competitive environment in which the
Company must conduct its business, Rothschild agrees and understands that
material and irreparable injury would be done to the Company if Rothschild
should violate the said legitimate business interest and protectable interest,
or assist competitors, or engage in solicitation of existing clients or business
relationships.
(c) Rothschild will not, during his employment with the
Company or any time thereafter, use, offer, disclose or divulge by any means,
directly or indirectly, any of the trade secrets, confidential information,
vendor lists or client lists of the Company. Rothschild further agrees that
during his employment with the Company and prior to the later of: (i)
termination of his employment with the Company; or (ii) the due date of his
final payment of salary due hereunder, he will not engage in solicitation of
existing client lists and vendor lists of the Company, which are the property of
the Company and which Rothschild acquired knowledge of in the course of and by
virtue of his employment with the Company, to any corporation, firm, person,
partnership, associations or other business entity, or use such information in
any manner contrary to this Agreement.
6
<PAGE>
The parties agree that the foregoing is reasonable.
Rothschild agrees that, commencing the date hereof and
continuing until the due date of his final payment of salary due hereunder, he
will not, except on behalf of the Company or with the written consent of the
Company: (i) engage in any business activity in the United States, directly or
indirectly, on his own behalf or as a partner, stockholder (except by ownership
of less than ten percent (10%) of the outstanding stock of a publicly-held
corporation), director, trustee, principal, agent, employee, consultant or
otherwise of any person, firm or corporation which then is competitive with an
activity in which the Company or any parent or subsidiary of the Company is then
engaged at the time; (ii) allow the use of his name by or in connection with any
business activity which then is principally competitive with any activity in
which the Company or any of its parents or subsidiaries is then engaged; or
(iii) offer employment to or employ, for himself or on behalf of any then
competitor of the Company or any of its parents or subsidiaries, any persons who
at any time within the prior six (6) months shall have been employed by the
Company or any parent or subsidiary of the Company.
Rothschild recognizes that as an officer and/or director of
the Company, he has a fiduciary duty to reveal to the Company all business
opportunities that he may discover if said opportunities concern technology,
products or business which is related, either directly or indirectly, to the
Company's type of technology, products or business, either at the present or in
the anticipated future. In that event, the Company shall have the first right to
participate in said business opportunity. For the purpose of this section, a
business opportunity shall include but shall not be limited to, the purchase of
any interest in any business entity which is related to the type of technology
products or business of the Company, by either Rothschild, any agent of
Rothschild, or any entity controlled by Rothschild, its officers, directors,
agents, attorneys,
7
<PAGE>
employees, subsidiaries, parents, affiliates, joint venturers, partners,
division, predecessors, and all other persons acting for, purporting to act for
or subject to the control of Rothschild.
7. DEFAULT - REMEDIES: In the event of proof of breach by Rothschild,
the Company shall be entitled to pursue any remedy at law or equity, and shall
specifically have the right to terminate any further payments of any kind or
nature to be made under this Agreement.
8. CONFIDENTIAL INFORMATION: Except as otherwise required by law,
Rothschild shall not disclose or use at any time, except as part of his
employment by the Company, either during or subsequent to such employment, any
secret or confidential information or knowledge obtained by Rothschild while
employed by the Company. Without limiting the generality of the foregoing,
Rothschild shall not disclose or use any information pertaining to the business
of the Company or any parent or subsidiary of the Company, including, but not
limited to, profit figures, names of or relationships with customers or
advertisers, or the terms of any contracts to which it or they may be a party.
The obligation imposed by this Section 8 shall survive the expiration or other
termination of this Agreement.
9. SURRENDER OF DOCUMENTS: Rothschild shall, at the request of the
Company, promptly surrender to the Company or its nominee, upon any termination
of his employment hereunder, or at any time prior thereto, any document,
memorandum, record, letter, specification or other paper in his possession or
under his control relating to the operations, business, customers, or affairs of
the Company or its affiliates.
10. WAIVER OF BREACH: The waiver by either the Company or Rothschild of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by either the Company or Rothschild.
8
<PAGE>
11. SEVERABILITY: The invalidity or unenforceability of any provision
of this Agreement, whether in whole or in part, shall not in any way affect the
validity or enforceability of any other part of such provision or of any
provision herein contained, and any invalid or unenforceable provision or part
thereof shall be deemed severable to the extent of any such invalidity or
unenforceability. If such invalidity or unenforceability is due to the
unreasonableness of the time or geographical area covered by the covenants or
restrictions of such provision, such covenants and restrictions shall
nevertheless be effective for such period of time and for such area as may be
determined to be reasonable by a court of competent jurisdiction.
12. INTERPRETATION: No provision of this Agreement is to be interpreted
for or against any party because that party or that party's legal representative
drafted such provision.
13. ASSIGNMENT; BINDING EFFECT: This Agreement is for personal services
of Rothschild and shall not be assignable by the Company. This Agreement shall
not be assignable in whole or in part by Rothschild, except that Rothschild may
assign the Agreement to any successor in interest to the Company's business. The
rights and obligations of the parties shall inure to the benefit of, and be
binding upon, their respective heirs, personal representatives, successors and
assigns.
14. NOTICES:
(a) All notices, requests, demands, and other communications
hereunder must be in writing and shall be deemed to have been given if delivered
by hand or mailed within the continental United States by first class, certified
mail, return receipt requested, postage and
9
<PAGE>
registry fees prepaid, or sent by telecopier (with receipt confirmation), to the
applicable party and addressed as follows:
(i) if to the Company at the address set forth above.
(ii) if to Rothschild at the address set forth above.
(b) Any notice or other communication given by certified mail
shall be deemed given at the time of certification thereof, except for a notice
changing a party's address which shall be deemed given at the time of receipt
thereof. Any notice or other communication sent by telecopier transmission shall
be deemed given at the time of written confirmation of receipt.
15. ENTIRE AGREEMENT OF THE PARTIES: This Agreement expresses the
entire agreement of the parties, and all promises, representations,
understandings, arrangements and prior agreements are merged herein and
superseded hereby. No person, other than pursuant to a resolution of the
Company's Board of Directors, shall have any authority on behalf of the Company
to agree to modify or change this Agreement or anything in reference thereto,
and any such modification or change must be in writing and signed by both
parties hereto.
16. LAWS GOVERNING: This Agreement has been entered into in the State
of Florida and shall be construed, interpreted and governed in accordance with
the laws of the State of Florida without regard to the choice of laws provisions
thereof.
17. COUNTERPARTS: This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one document.
18. PRIOR AGREEMENTS: The Employment Agreement dated June 3, 1999
between the parties hereto is hereby terminated and superceded by this
Agreement. This Agreement
10
<PAGE>
supercedes any and all prior agreements, understandings, and negotiations
relating to the subject matter herein and constitutes the entire agreement
between the parties relating to such subject matter.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and Rothschild has hereunto set his
hand as of the day and year first above written.
BARPOINT.COM, INC. LEIGH M. ROTHSCHILD
By: /S/ JEFFREY W. SASS /S/ LEIGH M. ROTHSCHILD
------------------------------------ -----------------------
Name: Jeffrey W. Sass
Title: Executive Vice-President
11
EXHIBIT 10.13
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "AGREEMENT"), dated as of the 27th day of
March, 2000, by and between BarPoint.com, Inc. (the "COMPANY") with an address
at One East Broward Boulevard, Suite 410, Ft. Lauderdale, Florida 33301 and
Jeffrey W. Sass ("SASS") residing at 4901 S.W. 167th Avenue Ft. Lauderdale,
Florida 33331.
WHEREAS, Sass and the Company have agreed that Sass shall render
services to the Company in the capacity of Executive Vice-President pursuant to
the terms of this Agreement.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein set forth, the parties hereto have agreed and do hereby
mutually agree as follows:
1. EMPLOYMENT TERM: The term of this Agreement shall commence on the
date hereof and shall expire two years thereafter (the "EMPLOYMENT PERIOD")
subject to the provisions of Section 5, however, the Employment Period shall
automatically be extended for an additional year unless, within 30 days prior to
the end or the initial Employment Period and on each anniversary date
thereafter, Sass or the Company shall deliver to the other, written notice of
their intent not to renew this Agreement. In the event Leigh Rothschild's
Employment Agreement dated March 27, 2000 is extended, then this Agreement shall
be extended for the same term.
2. DUTIES OF EXECUTIVE: Sass shall serve as Executive Vice-President of
the Company and shall be required to perform such duties as may from time to
time be required by the Board of Directors of the Company. Sass hereby agrees
that, during the term of his employment hereunder, he shall devote such time as
is reasonably necessary to perform his
<PAGE>
duties pursuant to the terms of this Agreement. The Company agrees to indemnify
Sass as an officer of the Company to the fullest extent permitted by law.
3. COMPENSATION:
(a) As compensation for his services hereunder, the Company shall
pay Sass, during the Employment Period, a base salary ("BASE SALARY") payable as
follows:
(i) Two Hundred Fifty Thousand Dollars ($250,000.00) for
the first year;
(ii) Three Hundred Thousand Dollars ($300,000.00) for the
second year;
The foregoing compensation shall be payable in installments
according to the Company's regular payroll practices and subject to such
deductions as may be required by law.
(b) The Company may withhold from payments of Employee's salary
amounts required to be withheld by the Company from time to time from such
salary under applicable Federal, State, and local laws and regulations then in
effect.
(c) Sass shall also receive a bonus based upon a bonus plan to be
established for executive officers of the Company, in each fiscal year during
the Employment Period, payable as determined in the bonus plan.
(d) In each fiscal year during the Employment Period, the Company
may contribute to an annuity or pension plan of Sass, which annuity or pension
plan shall be designated by Sass.
(e) Upon submission of written statements and bills in accordance
with the then regular procedures of the Company, Sass shall be entitled to
reimbursement for reasonable out-of-pocket expenses necessarily incurred in the
performance of his duties hereunder,
2
<PAGE>
including, but not limited to, reimbursement for travel and car expenses. A
Company credit card will also be made available to Sass. In addition, Sass shall
also be entitled to a car allowance of $750 per month, plus cost of insurance
and maintenance.
(f) During the term of his employment, no other employee of equal or
lesser position/title shall receive greater compensation than Sass, not
including performance based commissions to sales staff.
4. EMPLOYEE BENEFITS:
(a) Sass shall be included to the extent eligible thereunder (at the
expense of the Company, if appropriate) in any and all existing plans (and any
plans which may be adopted in the future) providing benefits for the Company's
employees generally, including, but not limited to, group life and disability
insurance, hospitalization, medical, vacation, retirement, stock option plans
and any and all similar or comparable benefits. Any hospitalization or medical
insurance coverage shall be for Sass and his spouse and children.
(b) Due to the fact that the Company's success is dependent upon the
activities of Sass, the Company will provide keyman insurance on the life of Mr.
Sass in the amount of $1,000,000.00 and Sass will cooperate in obtaining and
maintaining such policy. This policy shall be a whole life insurance policy (the
"POLICY"). At the termination of this Agreement, for any reason, the Company
shall, at Sass' sole option, assign Sass all of its right, title and interest in
the Policy. At that time, Sass may, at his expense, cause the Policy to continue
in full force and effect and shall have the option to designate a beneficiary of
his choice.
5. TERMINATION:
(a) The Company may terminate Sass's employment hereunder at any
time for cause only by written notice but only after a decision by the Board of
Directors of the Company
3
<PAGE>
which is communicated to Sass in writing thirty (30) days prior to the effective
date of termination; PROVIDED HOWEVER, that the Company pays to Sass a severance
payment equal to the aggregate Base Salary otherwise owed to him over the
remaining term of the Employment Period, said remaining term not to include any
extensions (as detailed in Section 1, herein) that have not commenced as of the
date of termination, and allow Sass to retain any options granted under any
option plan granted to him notwithstanding the fact that such options may not be
vested and/or exercisable at the time of termination under this Section 5(a).
(b) For purposes of this Agreement "For Cause" shall mean:
(i) Deliberate misappropriating any funds or properties
of the Company;
(ii) Gross mismanagement of the Company;
(c) In the event Sass dies or becomes disabled so as not to be able
to perform his duties as set forth herein for a period exceeding twelve (12)
moths, this Agreement shall terminate (as permissible under the Americans with
Disabilities Act) and no further compensation shall be payable to Sass, except
as may otherwise be provided under any insurance policy, employee benefit plan,
or similar instrument; PROVIDED HOWEVER , that during any such period of
disability, Sass shall be entitled to his base salary as provided under Section
3(a) for a period not to exceed twelve (12) months.
(d) CHANGE OF CONTROL: In the event Sass shall no longer be a
director or Executive Vice President of the Company, then Sass may terminate
this Agreement and Sass shall be entitled to continue to receive his Base Salary
as set forth in Section 3(a) above for the remainder of the Employment Period,
said remainder not to include any extensions (as detailed in Section 1, herein)
that have not commenced as of the date of Sass's termination and shall be
4
<PAGE>
entitled to retain any options granted under any option plan notwithstanding the
fact that such options may not be vested and/or exercisable at the time of
termination under this Section 5(d).
6. COVENANT NOT TO COMPETE: The parties agree that the Company has a
legitimate business interest, including, but not limited to: (1) trade secrets,
which include but are not limited to, intellectual properties, client lists,
customer lists, vendor lists, and marketing programs developed by and unique to
the Company; (2) valuable confidential business or professional information that
otherwise does not qualify as trade secrets; (3) substantial relationship with
specific prospective or existing clients and vendors or suppliers; (4) client,
vendor and supplier goodwill associated with an ongoing business by way of the
name BarPoint.com, Inc. located throughout the United States; (5) extraordinary
or specialized training in the technology and computer science technology field;
and (6) the assets, corporate shares, investments and equity interests of the
Company.
The parties further agree that the Company has a reasonable
legitimate business interest and a protectable interest in the right to prevent
direct and indirect solicitation of existing clients and business relationships
and investment in extraordinary training of its current employees.
In view of the foregoing, Sass's employment by the Company in a very
skilled, highly valued position within its highly specialized organization and
the payment of compensation listed herein and other valuable consideration, it
is further mutually agreed as follows:
(a) Sass recognizes and acknowledges, as aforesaid, that the Company
has made a substantial investment in time and expense in its highly specialized
business and that the very nature of Sass's position will enable Sass to obtain
and become familiar with certain trade
5
<PAGE>
secrets, confidential information concerning business techniques, methodologies,
marketing efforts, highly specialized employee training, intellectual properties
vendor lists, other lists and client relationships of the Company.
(b) Because of the competitive environment in which the Company must
conduct its business, Sass agrees and understands that material and irreparable
injury would be done to the Company if Sass should violate the said legitimate
business interest and protectable interest, or assist competitors, or engage in
solicitation of existing clients or business relationships.
(c) Sass will not, during his employment with the Company or any
time thereafter, use, offer, disclose or divulge by any means, directly or
indirectly, any of the trade secrets, confidential information, vendor lists or
client lists of the Company. Sass further agrees that during his employment with
the Company and prior to the later of: (i) termination of his employment with
the Company; or (ii) the due date of his final payment of salary due hereunder,
he will not engage in solicitation of existing client lists and vendor lists of
the Company, which are the property of the Company and which Sass acquired
knowledge of in the course of and by virtue of his employment with the Company,
to any corporation, firm, person, partnership, associations or other business
entity, or use such information in any manner contrary to this Agreement.
The parties agree that the foregoing is reasonable.
Sass agrees that, commencing the date hereof and continuing until
the due date of his final payment of salary due hereunder, he will not, except
on behalf of the Company or with the written consent of the Company: (i) engage
in any business activity in the United States, directly or indirectly, on his
own behalf or as a partner, stockholder (except by ownership of less
6
<PAGE>
than ten percent (10%) of the outstanding stock of a publicly-held corporation),
director, trustee, principal, agent, employee, consultant or otherwise of any
person, firm or corporation which then is competitive with an activity in which
the Company or any parent or subsidiary of the Company is then engaged at the
time; (ii) allow the use of his name by or in connection with any business
activity which then is principally competitive with any activity in which the
Company or any of its parents or subsidiaries is then engaged; or (iii) offer
employment to or employ, for himself or on behalf of any then competitor of the
Company or any of its parents or subsidiaries, any persons who at any time
within the prior six (6) months shall have been employed by the Company or any
parent or subsidiary of the Company.
Sass recognizes that as an officer and/or director of the Company,
he has a fiduciary duty to reveal to the Company all business opportunities that
he may discover if said opportunities concern technology, products or business
which is related, either directly or indirectly, to the Company's type of
technology, products or business, either at the present or in the anticipated
future. In that event, the Company shall have the first right to participate in
said business opportunity. For the purpose of this section, "business
opportunity" shall include but shall not be limited to, the purchase of any
interest in any business entity which is related to the type of technology
products or business of the Company, by either Sass, any agent of Sass, or any
entity controlled by Sass, its officers, directors, agents, attorneys,
employees, subsidiaries, parents, affiliates, joint venturers, partners,
division, predecessors, and all other persons acting for, purporting to act for,
or subject to, the control of Sass.
7. DEFAULT - REMEDIES: In the event of proof of breach by Sass, the
Company shall be entitled to pursue any remedy at law or equity, and shall
specifically have the right to terminate any further payments of any kind or
nature to be made under this Agreement.
7
<PAGE>
8. CONFIDENTIAL INFORMATION: Except as otherwise required by law, Sass
shall not disclose or use at any time, except as part of his employment by the
Company, either during or subsequent to such employment, any secret or
confidential information or knowledge obtained by Sass while employed by the
Company. Without limiting the generality of the foregoing, Sass shall not
disclose or use any information pertaining to the business of the Company or any
parent or subsidiary of the Company, including, but not limited to, profit
figures, names of or relationships with customers or advertisers, or the terms
of any contracts to which it or they may be a party. The obligation imposed by
this Section 8 shall survive the expiration or other termination of this
Agreement.
9. SURRENDER OF DOCUMENTS: Sass shall, at the request of the Company,
promptly surrender to the Company or its nominee, upon any termination of his
employment hereunder, or at any time prior thereto, any document, memorandum,
record, letter, specification or other paper in his possession or under his
control relating to the operations, business, customers, or affairs of the
Company or its affiliates.
10. WAIVER OF BREACH: The waiver by either the Company or Sass of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by either the Company or Sass.
11. SEVERABILITY: The invalidity or unenforceability of any provision
of this Agreement, whether in whole or in part, shall not in any way affect the
validity or enforceability of any other part of such provision or of any
provision herein contained, and any invalid or unenforceable provision or part
thereof shall be deemed severable to the extent of any such invalidity or
unenforceability. If such invalidity or unenforceability is due to the
unreasonableness of the time or geographical area covered by the covenants or
restrictions of
8
<PAGE>
such provision, such covenants and restrictions shall nevertheless be effective
for such period of time and for such area as may be determined to be reasonable
by a court of competent jurisdiction.
12. INTERPRETATION: No provision of this Agreement is to be interpreted
for or against any party because that party or that party's legal representative
drafted such provision.
13. ASSIGNMENT; BINDING EFFECT: This Agreement is for personal services
of Rothschild and shall not be assignable by the Company. The obligations of
Sass hereunder may not be assigned or delegated without the prior written
consent of the Company. This Agreement shall not be assignable in whole or in
part by Sass, except that Sass may assign the Agreement to any successor in
interest to the Company's business. The rights and obligations of the parties
shall inure to the benefit of, and be binding upon, their respective heirs,
personal representatives, successors and assigns.
14. NOTICES:
(a) All notices, requests, demands, and other communications
hereunder must be in writing and shall be deemed to have been given if delivered
by hand or mailed within the continental United States by first class, certified
mail, return receipt requested, postage and registry fees prepaid, or sent by
telecopier (with receipt confirmation), to the applicable party and addressed as
follows:
(i) if to the Company at the address set forth above.
(ii) if to Sass at the address set forth above.
9
<PAGE>
(b) Any notice or other communication given by certified mail shall
be deemed given at the time of certification thereof, except for a notice
changing a party's address which shall be deemed given at the time of receipt
thereof. Any notice or other communication sent by telecopier transmission shall
be deemed given at the time of written confirmation of receipt.
15. ENTIRE AGREEMENT OF THE PARTIES: This Agreement expresses the
entire agreement of the parties, and all promises, representations,
understandings, arrangements and prior agreements are merged herein and
superseded hereby. No person, other than pursuant to a resolution of the
Company's Board of Directors, shall have any authority on behalf of the Company
to agree to modify or change this Agreement or anything in reference thereto,
and any such modification or change must be in writing and signed by both
parties hereto.
16. LAWS GOVERNING: This Agreement has been entered into in the State
of Florida and shall be construed, interpreted and governed in accordance with
the laws of the State of Florida without regard to the choice of laws provisions
thereof.
17. COUNTERPARTS: This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one document.
18. PRIOR AGREEMENTS: The Employment Agreement dated June 3, 1999
between the parties hereto is hereby terminated and superceded by this
agreement. This Agreement supercedes any and all prior agreements,
understandings, and negotiations relating to the subject
10
<PAGE>
matter herein and constitutes the entire agreement between the parties relating
to such subject matter.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and Sass has hereunto set his hand as
of the day and year first above written.
BARPOINT.COM, INC. JEFFREY W. SASS
By: /S/ LEIGH M. ROTHSCHILD /S/ JEFFREY W. SASS
------------------------------- ------------------------------
Leigh M. Rothschild
Chairman of Board of Directors
11
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<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> MAR-31-2000
<CASH> 27,122,252
<SECURITIES> 7,181,221
<RECEIVABLES> 57,908
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<CURRENT-ASSETS> 34,625,802
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0
0
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