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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-KSB
/X/ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act For the Fiscal Year Ended JULY 31, 1999
|_| Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from ____ to ____
Commission File Number 0-3338
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REGENT GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-1558317
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
720 Milton Road, Suite J-3, Rye, New York 10580
(914) 921-6389
(Address and telephone number, including area code,
of registrant's principal executive office)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$.06 2/3 par value
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 month (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
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Indicated by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. |_|
Revenues for the issuer's most recent fiscal year were $3,750.
The aggregate market value of the voting stock held by non-affiliates of the
registrant computed by reference to the average bid and asked price of such
stock as of November 1, 1999 was $3,296,048.
At November 1, 1999, 12,850,577 shares of registrant's Common Stock were
outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No X
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Documents incorporated by reference: None.
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TABLE OF CONTENTS
Item Page
- - ---- ----
Disclosure Regarding Forward-Looking Statements.............................1
PART I
Item 1. Description of Business..........................................2
(a) Business Development......................................2
(b) Business of the Issuer....................................3
Item 2. Description of Property..........................................7
Item 3. Legal Proceedings................................................7
Item 4. Submission of Matters to a Vote of Security Holders..............7
PART II
Item 5. Market for Common Equity and Related
Stockholder Matters..............................................7
Item 6. Management's Discussion and Analysis
of Financial Condition and Results of Operations.................8
Item 7. Financial Statements..........................................F-1*
Item 8. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure........................................10
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a)
of the Exchange Act.............................................11
Item 10. Executive Compensation..........................................13
Item 11. Security Ownership of Certain Beneficial Owners
and Management..................................................13
Item 12. Certain Relationships and Related Transactions..................15
Item 13. Exhibits, List and Reports on Form 8-K..........................16
Signatures.................................................................17
*Page F-1 follows Page 18.
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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-KSB includes forward-looking statements. All statements,
other than statements of historical fact, included in this Form 10-KSB,
including, without limitation, statements under "Description of Business" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" regarding the Company's business strategy and plans and objectives
of management of the Company for future operations, are forward-looking
statements. Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to have been correct. Important factors that could
cause actual results to differ materially from the Company's expectations are
disclosed in this Form 10-KSB, including, without limitation, in conjunction
with the forward-looking statements included in this Form 10-KSB. All subsequent
written and oral forward-looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their entirety by this
section.
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PART I
Item 1. Description of Business.
(a) Business Development
Regent Group, Inc. ("Regent" or the "Company"), formerly known as NMC
Corp., is engaged in the acquisition, design and development of financially
oriented Internet sites. NMC Corp., incorporated in the State of Delaware on
November 28, 1967, changed its name to International Madison Holdings Corp. in
August 1997. In September 1997, International Madison Holdings Corp. changed its
name to Regent Group, Inc.
In February 1997, Regent sold its only operating division, Krystal
Fountain Water Company Limited.
In September 1997, Regent acquired eighty (80%) percent of the capital
stock of United States Lead Testing and Removal Service, Inc. ("U.S. Lead").
During the year ended July 31, 1998, U.S. Lead was the Company's only operating
division. On April 30, 1998, the Company rescinded the agreement with U.S. Lead.
On June 1, 1998, the Company executed a stock purchase agreement
between Regent and Edenfield Enterprises, Inc. to acquire a 450-acre property in
Thomaston, Georgia, known as Hickory Ridge Golf Course and Residential
Community. After due diligence by the Company, Regent terminated the stock
purchase agreement and the acquisition was never consummated.
In October 1998, the Company announced it was acquiring one hundred
(100%) percent of the issued and outstanding stock of New Century Ventures, Inc.
for two million (2,000,000) shares of Regent common stock. On May 20, 1999, the
agreement was rescinded by mutual consent of the parties.
On July 14, 1999, Regent acquired Stock Siren.com, LLC ("Siren"), a New
York limited liability company. Siren is an Internet-based advertising and
publishing entity that owns and operates several financially oriented websites.
Regent issued 11,550,000 shares of its restricted common stock, comprising
approximately 83.4% of its voting shares, in exchange for all of the issued
outstanding membership interests of Siren. The acquisition occurred pursuant to
a Securities Purchase Agreement (the "Purchase Agreement"), dated July 7, 1999,
among Regent and the holders of all of the outstanding membership interests of
Siren.
Pursuant to the Purchase Agreement, all of the members of Regent's
Board of Directors who held office immediately prior to the closing of the
Purchase Agreement resigned, and the members of Siren designated four persons to
Regent's Board of Directors: Anthony L. Escamilla, Robert M. Long, Eric J.
Miller and Anthony C. Vickerson. Regent designated F. Albert Landwehr, Jr. as
the fifth member of the Board of Directors pursuant to the Purchase Agreement.
In addition, Messrs. Escamilla, Miller and Vickerson became executive
officers of Regent.
In connection with the acquisition of Siren, Regent transferred its
assets, subject to its liabilities, to RH Holdings, LLC ("RH"), a New York
limited liability company. The sole member of RH is Marvin E. Greenfield. Mr.
Greenfield is a former director and the former President and Chief Executive
Officer of Regent and remains a principal stockholder of Regent. The
consideration that RH delivered to Regent for the assets was the assumption of
all of Regent's liabilities. In connection with this transfer of assets to Mr.
Greenfield, the holders of all of Regent's existing liabilities discharged
Regent from those liabilities.
Siren is now a wholly-owned subsidiary of Regent and, as of the date of
this report, is the Company's only operating business. The Company expects to
capitalize on the growing use of the Internet by investors and financial
professionals and intends to use Siren's websites to tailor advertising,
editorial products and other financial public relations services for clients
wishing to reach this ever-increasing audience.
Through its subsidiary, the Company currently has four distinct
websites: MarketOwl.com, StockSheet.com, StockSiren.com and StockTarget.com.
MarketOwl.com is currently under development. StockSiren.com and StockSheet.com
were created to be "one-stop" information centers for private and institutional
investors looking for the data necessary to make important investment decisions.
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Since their inception, StockSheet.com and StockSiren.com have evolved into a
no-fee research site and portal, respectively, for individuals interested in
financial markets. The websites have access to over 9,000 financial, news and
economic related links that produce an information database that management
believes rivals the quality and quantity of the finest fee-based systems in
existence. StockTarget.com is primarily focused on providing an enhanced
research tool for stocks and their coverage by industry analysts.
StockTarget.com permits investors to conveniently obtain and/or compare
different analysts' recommendations and their respective stock price targets for
individual stocks.
The principal executive offices of the Company are located at 720
Milton Road, Suite J3, Rye, New York 10580 (tel. no. 914-921-3447). The
Company's common stock (the "Common Stock") is quoted on the NASD's OTC Bulletin
Board (the "Bulletin Board") under the trading symbol "RGII." Unless otherwise
indicated, the term "Company" includes the Company and its subsidiaries.
(b) Business of the Issuer
Regent is engaged in the acquisition, design and development of
financially oriented Internet sites. The Company intends to exploit the trend in
recent years for individuals to take greater control of their investments and
increasingly use the Internet to access information that was once generally
available only to investment professionals. Management expects that this growing
group of self-directed investors will increasingly seek timely and comprehensive
financial news and information that they can use to make informed investment
decisions. The Company intends to become one of the sources to which investors
look to find this news and information.
Siren's Websites
MARKETOWL.COM. Currently under development, management anticipates that
MarketOwl.com will be an interactive, dynamic financial message board. If
completed, management expects that MarketOwl.com will give investors insightful
financial discussion and editorial content.
STOCKSIREN.COM AND STOCKSHEET.COM. Although StockSiren.com and
StockSheet.com require additional development, management believes that the
sites can become "one-stop" information centers for private and institutional
investors looking for the data necessary to make important investment decisions.
Additionally, on these websites Siren provides, for a fee, Featured Company
Editorials ("FCEs") for public companies seeking targeted advertising and
greater visibility among investors. This service creates a targeted audience for
the client company's advertisement. Siren does not and will not promote the
stocks of the companies profiled in its FCEs. Also, Siren adheres to the strict
policy of full disclosure on all financial arrangements for such profiled
companies. Additional services for the targeted advertising of client companies
includes the faxing of news releases to targeted stockbrokers and interested
investors who request such information. This additional service complements the
Internet visibility and is charged for on a fee for service basis.
With the growing number of at home day traders, the demand for complete
and thorough information to make investment decisions has risen dramatically. In
order to accommodate the needs of this quickly growing group of investors, Siren
has entered into fee-based licensing agreements with InvestorLinks.com, LLC and
Media General Financial Services, Inc. ("MGFS") that entitle the Company to
access financial-, news- and economic-related links and data. As a result of
this agreement, on-line consumers are able to access a wide range of content
that includes, but is not limited to, free real time quotes, earnings reports,
featured company profiles, market commentaries, IPO information, U.S. economic
data, financial news, stock charts, message boards, chat and discussion rooms,
various analysis tools, stock and mutual fund information and a wealth of
research data on widely held corporations. Management believes these links
produce an information database that rivals the quality and quantity of the
finest fee-based systems in existence.
STOCKTARGET.COM. Management believes that StockTarget.com requires
further development before it can become a useful tool for investors.
StockTarget.com is primarily focused on being an enhanced research tool for
tracking stock analysts' target prices, projections and recommendations.
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Siren's Products
Siren offers investors the raw data on securities to aid in their
decision making process, as well as information on smaller issues that
management believes offer interesting stories but might normally be overlooked.
Through its databases, Siren offers access to a much larger pool of investors
who make their own investment decisions.
StockSiren.com and StockSheet.com differentiate themselves from other
stock research sites in that they also offer ideas for the purchase of
securities and the stories behind smaller companies that often elude traditional
media coverage.
Siren believes that its business model substantially differentiates
itself from the more than 1,500 financial websites on the Internet. Whereas an
overwhelming majority of the financial Internet sites provide relevant
information, few provide quality editorial content and even fewer provide the
public relations services offered by Siren. Management believes that with the
precipitous growth in the number of financial websites and corresponding
availability of information, subscriptions and licenses may not be adequate
sources of revenue in the future. As a result, in addition to the various links
and other information on Siren's websites, Siren has chosen to offer ancillary
services. At the present time, Siren has several primary revenue generating
products, including the following.
INTERNET VISIBILITY PROGRAM (IVP)
Through its IVP, publicly held clients are offered a visibility package
that includes a professionally written overview of the company and the
ability to be listed on a site as the Featured Company Editorial for a
period of time as well as an archival space on the website with links
to news for a one year period.
FAX VISIBILITY PROGRAM (FVP)
The FVP offers the delivery of information on public companies to
Siren's database of brokers for time sensitive or shorter informational
pieces. Client companies pay on a "per page" basis to disseminate their
news to contacts in Siren's database.
BANNER ADVERTISING
Although the competition for advertising dollars is severe, annual
advertising expenditures continue to grow exponentially. Siren
anticipates the ability to generate modest revenues from advertisers
placing their banners on its websites in exchange for a fee. As Siren
implements its strategy to brand its websites and drive substantial
traffic to them, opportunities for advertising revenues are expected to
increase.
Business Strategy
Management believes that Siren can become one of the Internet's leading
providers of financial information and investment related services. In order to
accomplish this, it must implement strategies in two distinct areas: as a
provider of financial public relations services and as a provider of financial
information to the Internet investment community.
Through its StockSheet.com and StockSiren.com websites, Siren offers
publicly traded companies financial public relations ("Financial PR") services
via the Internet and traditional delivery modes, with an emphasis on its
Internet products. Siren also expects to attract investors to its websites
because of their useful tools, information and insightful content, thus creating
a wide audience for its client companies. Time to market is crucial in
growth-driven areas such as the Internet. By being among the first to offer
distinctive information and presentations (e.g., the FCEs), management expects
these websites to leverage the growth of the Internet by delivering investment
publications, news, information, and related products and services to a rapidly
growing global market.
In order to maintain its advantage over the competition in this quickly
evolving arena, Siren is attempting to develop strategic alliances and
partnerships for content licensing, co-branding, and other related products and
services that its management believes will enhance Siren's operating profit and
market share. To further its co-marketing strategy and increase daily page
views, Siren's management will seek to acquire other financially oriented
websites and companies. Each acquisition candidate will be evaluated on its own
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merits, although Siren's primary strategy will be to acquire with equity those
sites (i) that it deems are value-added but cannot be replicated cost
efficiently, and (ii) that are breakeven or generating positive operating cash
flow.
Market for Siren's Products
Siren has identified two interrelated markets for its products and
services. They are as follows:
FINANCIALLY ORIENTED INTERNET USERS. One of Siren's target markets is
the financially active Internet audience. The Company expects this audience to
continue growing rapidly as home computer use expands and online investment
research, portfolio tracking and transaction executions become more common. In
addition, a subset of this target market is the investment professional needing
access to financial information 24 hours a day.
All of the studies management has reviewed reveal the same basic
projection: Internet use will continue to grow at a very rapid pace over the
next five years. Siren plans to leverage this growth to expand market share for
its branded websites.
COMPANIES SEEKING GREATER VISIBILITY
WITHIN THE INVESTMENT COMMUNITY. Siren's second target market consists
of small companies seeking greater visibility within the investment community.
With approximately 5,000 OTC Bulletin Board companies and more than 2,000 NASDAQ
Small Cap and Amex listed securities, many of which have not yet accessed their
preferred investment audience, Siren offers a dynamic change to the traditional
routes of advertising and financial public relations. Through its websites,
Siren has access to individual investors, the majority of whom are searching for
smaller cap stocks that possess the capability to achieve their full market cap
potential. Additionally, it is through its database of brokers that Siren offers
its clients a unique and targeted advertising approach.
Sales and Marketing Strategy
SALES STRATEGY. The initial focus of Siren's sales efforts is to secure
clients (i.e., public companies) to be profiled on its websites and thereafter
to provide these clients with additional Financial PR services. In order to
achieve this objective, Siren has retained experienced professionals with a
significant network of working relationships, both on Wall Street and among
small cap companies.
Siren's sales and marketing force is primarily comprised of Robert Long
and James Platek. In addition, several of the other professionals that comprise
Siren's management have extensive Wall Street and business experience and can be
expected to supplement the sales effort. It is the opinion of management that
Siren can best gain exposure and clients through leveraging the contacts and
credibility that its personnel have established throughout their professional
lives.
Siren's strategic plan calls for a three-pronged approach to marketing
its website and selling its other products.
First, the sales force will aggressively target companies with which it
has existing relationships. There are dozens of publicly-traded small cap
companies with which members of the marketing team have relationships. Siren
will draw comparisons of its products and services to conventional advertising
vehicles.
Second, the sales team will market Siren's services to Wall Street
professionals who are in close contact with publicly-traded companies.
Third, Siren's sales force will screen available information sources
(i.e., Bloomberg, the Internet, etc.) for companies that fit the general profile
of prospective clients. An approach will be made to the chief financial officer
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or other financial decision-maker through the telephone and/or other
communications media, such as fax and email. An attractive marketing brochure
will present an example of the high quality of work that can be expected from
Siren.
Finally, it is the opinion of management that within a reasonable
period of time, the efficacy of Siren's services will be demonstrated in the
marketplace and word-of-mouth will become a significant source of client
generation.
MARKETING STRATEGY. Siren plans to create brand awareness for its
websites and to cross-promote all of its sites. It will do this by placing its
website banners on selected other websites and cross-promote all of the websites
owned by Siren. Siren will create a uniform brand image for its current and
future websites.
Siren will initially pursue online advertising as its dominant
advertising form. This is due to management's belief that Internet advertising
has the following inherent characteristics:
o Immediately captures attention of consumers;
o Provides consumers with product information;
o Saves the Company time and expenses; and
o Integrates well with other elements of Siren's marketing mix when
Siren implements other non-Internet marketing strategies.
Competition
Due to the relative infancy and rapidly changing character of the
Internet, it is difficult to gauge the competition for Internet publishing and
Financial PR. The best and most useful assumption is that competition exists and
is significant. Whenever possible, Siren plans to evaluate the competition among
publishers of similar or comparable content before committing substantial
resources to developing competitive websites. To the best of Siren's knowledge,
no website has a similar business model whereby there are multiple products
being offered. Siren's basket of services enables it to significantly diversify
its sources of revenue, whereas its competition cannot.
Recent Developments
In October 1999, the Company announced that it signed a letter of
intent to acquire all of the outstanding shares of Microtrek Research
Corporation, a Delaware corporation ("Microtrek"). Microtrek develops high-end
software products for the financial, accounting, legal and web-browser
industries. Formed in 1993, Microtrek has recently completed a strategic
financial/trade-station software package known as Market-Trac v2.01. Market-Trac
v2.01 is a comprehensive financial trading tool that incorporates multiple
disciplines into one platform and that affords users the ability to track and
monitor publicly traded securities and portfolio systems in real-time. In
addition to Market-Trac v2.01, Microtrek also brings custom Internet and general
software development technologies spanning numerous developmental platforms to
Regent. If consummated, Regent's management expects that it could become
competitive in the software retail market within one year of the anticipated
merger. Subject to customary due diligence, Regent agreed to acquire the
privately owned software research and development group in exchange for
approximately 1.5 million shares of its restricted common stock. The Company
hopes to close the transaction by December 1999.
On October 8, 1999, Eric J. Miller, a founding member of Siren and a
former director and the former President of the Company, resigned pursuant to a
Redemption and Resignation Agreement (the "Resignation Agreement") by and among
the Company, Mr. Miller and SRU, Inc., a company primarily owned and controlled
by Mr. Miller. In addition to establishing the terms of Mr. Miller's
resignation, the Resignation Agreement provided for the redemption of the shares
of Common Stock of the Company owned by SRU.
Portfolio Oversight Panel
In exchange for creating Featured Company Editorials for its client
companies, Siren may receive equity (restricted or otherwise) from the client
companies in lieu of, or in addition to, cash compensation. Siren has created a
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panel to monitor the performance of its equity portfolio. As of the date of this
report, the panel is comprised of Robert Long, Chairman of the Board and Spencer
Levy, Vice President of Editorial Content.
Personnel
At this time, the Company employs two people on a full-time basis,
three people on a part-time basis at its offices in New York and elsewhere. The
Company anticipates that additional employees will be hired to assist with the
operation and maintenance of Siren's websites and with additional marketing and
sales activities. None of the Company's present employees is covered by
collective bargaining agreements.
Although no policies are currently in place, in the future the
Company's employees may participate in the customary medical insurance,
vacation, and similar benefits.
Item 2. Description of Property.
The Company's office facilities are located in leased or rented space,
as further described below. The Company believes that its current facilities are
adequate for its present operations.
Rye, New York
The Company currently utilizes approximately 1,000 square feet of space
in the office of Redstone Partners, Inc., a company owned by Anthony Vickerson,
the Company's Chief Operating Officer. The Company is not being charged expenses
in connection with the use of this space. Currently, the Rye office functions as
the Company's headquarters.
New York, New York
The Company currently utilizes approximately 800 square feet of space
in the office of Matrix Venture Group, Inc., a company owned by Anthony
Escamilla, the Company's Chief Executive and Financial Officer. The Company is
not being charged expenses in connection with the use of this space.
Office space will be needed in order to house all of the Company's
management, consultants, message board posters and required computer and
telecommunications equipment. Management estimates its initial space
requirements to be approximately 2,200-square feet. Until management locates a
suitable space to lease, the Company's employees and consultants are working
from their respective offices. Once suitable space is found in New York, New
York, such offices will function as the Company's headquarters.
Item 3. Legal Proceedings.
Neither Regent nor Siren are presently subject to any legal proceedings
that are material to the results of operations or financial condition of the
Company.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market For Common Equity and Related Stockholder Matters.
Regent's Common Stock is traded in the over-the-counter market on the
NASD Non-NASDAQ Electronic Bulletin Board. The following table sets forth, for
the periods indicated, the high and low closing bid and asked prices for one
share of Common Stock. These prices were obtained from the National Quotation
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Bureau, LLC. The quotations represent prices between dealers and do not include
retail markups, markdowns or commissions and do not necessarily represent actual
transactions.
The market for the Common Stock has been sporadic and there have been
long periods during which there were few, if any, transactions in the Common
Stock and no reported quotations. Accordingly, reliance should not be placed on
the quotes listed below, as the trades and depth of the market may be limited,
and therefore, such quotes may not be a true indication of the current market
value of the Company's Common Stock.
<TABLE>
<CAPTION>
Fiscal Year Ended Bid Prices Ask Prices
July 31, 1999 High Low High Low
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<S> <C> <C> <C> <C>
August 1, 1998 through
October 31, 1998 2.125 .71875 2.25 .75
November 1, 1998 through
January 31, 1999 .77 .45 .80 .80
February 1, 1999 through
April 30, 1999 1.6875 .28 1.75 .35
May 1, 1999 through
July 31, 1999 2.125 1.125 2.375 1.375
Fiscal Year Ended
July 31, 1998
August 1, 1997 through
October 31, 1997 2 29/32 1 7/8 3 1/8 2 1/8
November 1, 1997 through
January 31, 1998 3 1/4 1 7/8 3 5/8 2 1/8
February 1, 1998 through
April 30, 1998 2 1/2 1 3/16 2 5/8 2
May 1, 1998 through
July 31, 1998 3 1 7/8 3 7/8 2 1/8
</TABLE>
As of November 1, 1999, there were approximately 1,244 holders of
record of the Company's Common Stock. In addition, there were approximately 10
holders of record of the Company's Series B Convertible Preferred Stock, $1.00
par value, and 68 holders of record of the Company's Series C Preferred Stock,
$1.00 par value.
No cash or stock dividends have been declared or paid during the last
two fiscal years. No cash dividends may be declared or paid on the Company's
Common Stock if, and as long as, the Series B Preferred Stock is outstanding or
there are unpaid dividends on outstanding shares of Series C Preferred Stock. No
dividends may be declared on the Series C Preferred Stock if, and as long as,
the Series B Preferred Stock is outstanding. Accordingly, it is unlikely the
Company will declare any cash dividends in the foreseeable future.
Item 6. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The Company continues to pursue investment opportunities. On July 14,
1999 the Company completed its acquisition of Stock Siren.com, LLC ("Siren"), a
New York limited liability company. Siren is an internet-based advertising and
publishing entity that owns and operates several financially orientated
websites. Regent issued 11,550,000 shares of its restricted common stock in
exchange for all of the issued and outstanding membership interests of Siren.
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In connection with the acquisition of Siren, Regent transferred its
pre-closing assets, subject to its pre-closing liabilities, to RH Holdings, LLC
("RH"), a New York limited liability company. The sole member of RH is Marvin E.
Greenfield. Mr. Greenfield is a former director and the former President and
Chief Executive Officer of Regent and remains a principal stockholder of Regent.
The consideration which RH delivered to Regent for the pre-closing assets was
the assumption of all of Regent's pre-closing liabilities. In connection with
this transfer of assets to Mr. Greenfield, the holders of all of Regent's
existing liabilities discharged Regent from those liabilities.
The Company's ability to continue as a going concern is dependent upon
its ability to obtain needed working capital through additional equity and/or
debt financing. There is no assurance that such financing will be completed or
that Siren will be commercially accepted. If management can reasonably liquidate
restricted securities received in lieu of cash compensation, the Company
believes the cash flow from the Siren acquisition should be sufficient to fund
the operations of the Company over the next twelve months. These uncertainties
raise substantial doubt about the ability of the Company to continue as a going
concern.
Results of Operations
The Company previously operated its business through Krystal Fountain
Water Company Limited ("Krystal"), which the Company acquired in October 1993.
In November 1995, Krystal acquired substantially all the net assets of Water
Express, which reduced the Company's investment to fifty (50%) percent. On
February 21, 1997, Regent sold its investment in Krystal. The consolidated
financial statements for Fiscal 1997 include the accounts of the Company and
Krystal through the sale date.
On September 22, 1997, the Company acquired eighty (80%) percent of the
outstanding common stock of United States Lead Testing and Removal Service, Inc.
("U.S. Lead"). The operating results of U.S. Lead are included in the statement
of operations from the date of acquisition through April 30, 1998, when the
Company rescinded the transaction with U.S. Lead. The consolidated financial
statements for Fiscal 1998 include the accounts of the Company and its
subsidiary through the rescission date.
On July 14, 1999 the Company acquired Stock Siren.com, LLC ("Siren").
The operating results of Siren have been included in the statement of operations
from the date of acquisition. Siren is currently the Company's only operating
entity.
1999 Compared to 1998
SALES. Sales increased from $-0- for the year ended July 31, 1998 to
$3,750 for the year ended July 31, 1999. During the year ended July 31, 1998,
the Company rescinded the transaction with U.S. Lead and all revenue from U.S.
Lead is included in the loss from discontinued operations. Siren, the Company's
recent acquisition, commenced operations in July 1999.
COST OF SALES. Cost of sales increased from $-0- for the year ended
July 31, 1998 to $1,000 for the year ended July 31, 1999. The Company attributes
the increase to the reasons described above. All cost of sales from U.S. Lead
for the year ended July 31, 1998 have been included in the loss from
discontinued operations.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses decreased from $1,426,645 for the year ended July 31,
1998 to $998,021 for the year ended July 31, 1999. The Company attributes the
decrease primarily to decreases in professional fees and consulting fees in
pursuing new acquisitions.
INTEREST EXPENSE. Interest expense decreased from $428,535 for the year
ended July 31, 1998 to $202,240 for the year ended July 31, 1999. During the
year ended July 31, 1998, the Company issued stock as additional consideration
as per various loan agreements. The amounts were recorded as additional interest
expense.
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1998 Compared to 1997
SALES. Sales decreased from $1,079,808 for the year ended July 31, 1997
to $-0- for the year ended July 31, 1998. The Company attributes the decrease
primarily to the sale of Krystal, its only operating subsidiary at the time, in
February 1997.
COST OF SALES. Cost of sales decreased from $413,722 for the year ended
July 31, 1997 to $-0- for the year ended July 31, 1998. The Company attributes
the decrease primarily to the reasons described above.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses remained relatively constant, increasing from $1,404,380
for the year ended July 31, 1997 to $1,426,645 for the year ended July 31, 1998.
INTEREST EXPENSE. Interest expense increased from $228,032 for the year
ended July 31, 1997 to $428,535 for the year ended July 31, 1998. The Company
incurred debt to finance the investment in U.S. Lead and help contribute to
Regent's overhead expenses.
DISCONTINUED OPERATIONS. On April 30, 1998, the Company rescinded its
acquisition of U.S. Lead and recorded all sales, cost of sales and expenses as
Loss from Discontinued Operations of approximately $1,062,000.
GAIN ON RECISSION. On April 30, 1998, the Company rescinded its
acquisition of U.S. Lead. The Company distributed all assets and liabilities to
U.S. Lead as of that date. The Company recognized a gain on rescission of
approximately $1.1 million.
ACCOUNTING STANDARDS. For information regarding certain promulgated
accounting standards, see Note 1 of the Notes to Consolidated Financial
Statements.
Year 2000
The Year 2000 problem is the result of computer programs being written
using two digits (rather than four) to define the applicable years. Any of the
Company's programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000, which could result in
miscalculations or system failures.
The Company has conducted a review to identify, evaluate and implement
changes to computer systems and applications necessary to achieve a year 2000
date conversion with no effect on customers or disruption to business
operations. The Company will also be communicating with suppliers, financial
institutions and others with which it conducts business to coordinate year 2000
conversions. The total cost of compliance and its effect on the Company's future
results of operations will be determined as a part of this project. Based on
initial review, the total cost is not expected to have a material effect on the
Company's results of operation or financial statements. However, there can be no
assurance that the systems of other companies on which the Company may rely will
be timely converted or that such failure to convert by another company would not
have an adverse effect on the Company's systems.
Item 7. Financial Statements.
The financial statements follow Item 13 of this report.
Item 8. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
None.
10
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance With Section 16(a)
of the Exchange Act.
The current executive officers, directors and significant employees of
the Company are as follows:
Name Age Position
- - ---- --- --------
Robert M. Long 40 Chairman of the Board
Anthony L. Escamilla 35 Chief Executive Officer, Chief
Financial Officer, Secretary,
Treasurer, Director
Anthony C. Vickerson 40 Chief Operating Officer, Director
F. Albert Landwehr, Jr. 43 Director
Ajay K. Arora 29 Vice President of Hardware
Spencer R. Levy 42 Vice President of Editorial Content
James E. Platek 32 Vice President of Institutional Marketing
All directors hold office until the next annual meeting of stockholders
and the election and qualification of their successors. Vacancies on the Board
of Directors may be filled by the remaining directors until the next annual
stockholders' meeting. Officers serve at the discretion of the Board.
The Board currently has no committees but it has formed an advisory
panel to oversee the management of the investment portfolio it expects to
develop as a result of accepting equity in lieu of cash compensation for its
Featured Company Editorials. The panel is comprised of both directors and
non-directors. Regent intends to appoint both a compensation committee and an
audit committee. Regent has not determined who will serve as members of these
committees. The Company may appoint non-employee directors to serve as members
of the compensation committee.
Directors who are officers or employees of the Company will not be
compensated for service on the Board of Directors or any committee thereof.
Directors who are non-officers or non-employees may, at the Company's
discretion, receive nominal compensation to cover travel costs.
All members of the Regent Board of Directors who held office
immediately prior to the closing under the Purchase Agreement, have resigned.
Robert M. Long, Chairman of the Board.
Mr. Long is a Founder of Stock Siren.com, LLC. Mr. Long is the Founder
and President of LongView Partners, Inc., an investment banking/financial public
relations firm, which he established in 1995. From 1983-1995, Mr. Long was
self-employed. During this period, he co-managed a venture capital fund in
excess of $5 million consisting primarily of the personal funds of one investor.
He graduated in 1981 with a BA in Economics from the University of the South. In
1983, he earned a Master of Business Administration degree from the College of
William and Mary.
11
<PAGE>
Anthony L. Escamilla, Chief Executive Officer, Chief Financial Officer,
Secretary, Treasurer and Director.
Mr. Escamilla is a Founder of Stock Siren.com, LLC. Mr. Escamilla was
the Secretary and Treasurer of StockSiren.com, LLC. Mr. Escamilla is Founder and
President of Matrix Venture Group, Inc. and has served in this capacity since
July 1999. Mr. Escamilla was the Chief Financial Officer of Motorsports USA,
Inc. and served in that capacity from November 1997 through July 1999. Mr.
Escamilla also has been an Executive Vice President and Director of Independent
Music Group, Inc. since March 1, 1999. From January 1993 through October 1997,
he worked for The Long-Term Credit Bank of Japan, Ltd. in its corporate finance
and cross border mergers and acquisitions departments. He earned MBA and B.S.
degrees from the University of Texas at Austin and the University of
Connecticut, respectively. Mr. Escamilla is a Certified Public Accountant.
Anthony C. Vickerson, Chief Operating Officer and Director.
Mr. Vickerson is a Founder and was the President of Stock Siren.com,
LLC. He is also the General Partner of Redstone Partners, LP an exempt commodity
pool and has served in this capacity since December of 1997. From 1996 to 1997,
Mr. Vickerson served as a Senior Vice President of Roan Capital Partners, LP
Investment Bankers. From 1995 to 1996, Mr. Vickerson served as Senior Vice
President and Sales Manager at Shamus Capital Group Investment Bankers. From
1990 to 1995, Mr. Vickerson served in various capacities at several brokerage
firms, including Common Wealth Associates Investment Bankers, and GKN
Securities, Inc. He earned a degree in Criminal Justice from Mercy College.
F. Albert Landwehr, Jr., Director.
From October 1998 through the present, Mr. Landwehr has been a
principal and is a founder of Sentinel Financial Corp. From March 1996 through
September 1998, he was managing director and president of affiliated companies
at Select Capital Markets of Atlanta, Georgia. From December 1992 until February
1996, he was employed by Lieberman & Lieberman of Memphis, Tennessee.
Ajay K. Arora, Vice President of Hardware.
Mr. Arora is a Founder of Stock Siren.com, LLC. Mr. Arora is the
Founder and President/Chief Executive Officer of Web Design House, Inc. and has
served in this capacity since 1996. Prior to 1996, Mr. Arora served as an
Internet and Business Development Consultant for several Internet Service
Providers and Advertising Agencies. He earned a Bachelors of Science in
Information Systems and Accounting from New York University.
Spencer R. Levy, Vice President of Editorial Content.
Mr. Levy is a Founder of Stock Siren.com, LLC. Mr. Levy has been a
Partner in LongView Partners, Inc. since 1996, where he has performed functions
in various areas of financial public relations. From 1993 to 1996, Mr. Levy
worked for Glaser Capital Management, Inc., where he performed functions in the
areas of securities analysis and portfolio management.
James E. Platek, Vice President of Institutional Marketing.
Mr. Platek is a Founder of Stock Siren.com, LLC. Mr. Platek is a
private investor and has worked in this capacity since October 1998. From July
1997 to September 1998, Mr. Platek worked for Morgan Stanley Dean Witter, New
York as a Retail Broker. From November 1995 to June 1997, he worked for Plymouth
Partners LP specializing in Fund Raising/Marketing. From 1989 to 1995, Mr.
Platek was a professional runner and also functioned as a private investor. He
earned a B.A. in History from Rutgers University in 1989.
Regent has not entered into employment agreements with any of its
directors, officers or key consultants and affiliates but may, at its
discretion, enter into such agreements in the future.
12
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
To the Company's knowledge, based solely on a review of such materials
as are required by the Securities and Exchange Commission, no officer, director
or beneficial holder of more than ten percent of the Company's issued and
outstanding shares of Common Stock failed to file in a timely manner with the
Securities and Exchange Commission any form or report required to be so filed
pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended,
during the fiscal year ended July 31, 1999, with the following exceptions. Ajay
Arora, an officer of the Company, F. Albert Landwehr, a director of the Company,
and Helen Onghai, a beneficial holder of more than ten percent of the Company's
issued and outstanding Common Stock, each failed to file a Form 3. Spencer Levy
and James Platek, officers of the Company, and Robert Platek, a principal
stockholder of the Company, each failed to timely file a Form 3.
Item 10. Executive Compensation.
The following table sets forth the compensation awarded to, earned by
or paid to the Company's Chief Executive Officer and each other executive
officer of the Company whose salary and bonus exceeded $100,000 for the fiscal
years ended July 31, 1999, 1998 and 1997 (collectively, the "Named Executive
Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation Awards
--------------------------------------- ---------------------------------------
Restricted Securities
Stock Underlying
Name and Principal Position Year Salary ($) Bonus ($) Award(s) ($) Options/SARs (#)
- - ------------------------------ ------- ------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C>
Anthony L. Escamilla (1)
Chief Executive Officer, 1999 5,000 - - -
Chief Financial Officer, 1998 - - - -
Secretary and Treasurer 1997 - - - -
Marvin E. Greenfield (2) 1999 240,385 - - -
President and Chief 1998 250,000 - - -
Executive Officer 1997 150,000 100,000 (3) 40,000 (4) 475,000 (5)
</TABLE>
- - -----------
(1) Mr. Escamilla's services are provided to the Company pursuant to an oral
agreement between Regent and Matrix Venture Group, Inc., a company of which
Mr. Escamilla is the principal stockholder.
(2) Mr. Greenfield and the Company entered into an employment agreement through
July 31, 2001. The agreement provides for a base salary of $250,000 per
year. Upon termination of Mr. Greenfield's employment by the Company except
for cause or death or disability, he is to receive the sum of $750,000. Mr.
Greenfield resigned from the Company on July 14, 1999 and all agreements
were terminated.
(3) In July 1997, the Board of Directors approved a $100,000 bonus payable to
Mr. Greenfield, which has not yet been paid. The liability to Mr.
Greenfield has been assumed by RH Holdings Ltd.
(4) On February 25, 1997, Mr. Greenfield received 25,000 shares of the
Company's common stock in connection with the sale of Krystal.
(5) During the year ended July 31, 1997, the Board of Directors approved the
issuance of stock options to Mr. Greenfield to 475,000 shares of the
Company's common stock. A portion of these options (options to purchase
275,000 shares) were issued for his forgiving accrued compensation in the
amount of $350,000 for the period April 1, 1995 to July 31, 1997.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth as of November 1, 1999 the beneficial
ownership of Common Stock of the Company, the Company's only class of voting
securities, by (i) each person who is known to be the beneficial owner of more
13
<PAGE>
than 5% of the Company's Common Stock, (ii) each of the Company's directors and
Named Executive Officers and (iii) all directors and officers as a group. To
Regent's knowledge, each person named has the sole voting and investment power
with respect to the securities listed as owned by him or it.
Only the common stock, which is also known as "Class A Common Stock",
has voting rights. An owner of Series B Convertible Stock has the right to
convert each share of such stock into one share of Class A Common Stock. Until
such conversion, the shares of Series B Preferred Stock may not be voted. None
of the classes of stock vote jointly.
Name and Address of Amount and Nature of Percent of
Beneficial Owner (1) Beneficial Ownership (2) Class (2)
- - -------------------- ------------------------ ------------
Ajay K. Arora........................ 728,376 5.67%
Anthony L. Escamilla................. 1,383,541 10.77%
F. Albert Landwehr, Jr............... - -
Spencer R. Levy...................... 346,847 2.70%
LongView Partners, Inc. (3).......... 693,694 5.40%
James E. Platek...................... 1,383,541 10.77%
Redstone Partners, Inc. (4).......... 1,040,541 8.10%
All Directors and Officers as
a Group (7 persons).............. 5,576,540 43.40%
Marvin E. Greenfield (5) (6)......... 1,070,020 8.33%
Gregory Martini...................... 1,040,541 8.10%
Helen Onghai......................... 3,017,568 23.48%
Robert Platek........................ 1,059,810 8.25%
- - ---------
(1) Unless otherwise noted, address is c/o the Company, 720 Milton Road, Suite
J-3, Rye, NY 10580.
(2) Calculated based on 12,850,577 shares issued and outstanding as of November
1, 1999. Includes shares currently outstanding and, as to each person
named, those shares which are not outstanding but which such person has the
right to acquire within 60 days.
(3) Primarily owned and controlled by Robert M. Long, Chairman of the Board.
(4) Owned and controlled by Anthony C. Vickerson, Chief Operating Officer and a
Director.
(5) Includes 254,375 shares held by Mr. Greenfield's wife, issued in connection
with a financing arrangement, 3,345 shares held of record by National BMF
Corp. ("NBMF"), and 25,000 shares held of record by Profitmargin Limited
("Profitmargin"), a company located in London, England. Mr. Greenfield's
daughter and a trust for which she is sole beneficiary own the outstanding
common stock of NBMF. Mr. Greenfield's wife is the sole trustee of the
trust. Mr. Greenfield is also the President of NBMF. Mr. Greenfield's wife
and NBMF own the outstanding equity interest in Profitmargin equally.
14
<PAGE>
(6) Includes (a) 200,000 shares issuable at a price of $.06 2/3 per share upon
the exercise of options, which are exercisable until October 30, 2006, (b)
200,000 shares issuable at a price of $1.00 per share upon the exercise of
options, which are exercisable until October 30, 2006, and (c) 75,000
shares issuable at a price of $.06 2/3 per share upon the exercise of
options, which are exercisable until October 30, 2007.
Item 12. Certain Relationships and Related Transactions.
Barbara Greenfield, the wife of Marvin E. Greenfield, a former director
and the former President and Chief Executive Officer of the Company,
collateralized the Company's note to Republic National Bank of New York dated
March 20, 1998, in the principal amount of $100,000 with a certificate of
deposit. In addition, unsecured notes, dated July 31, 1997 through July 6, 1998,
in the amount of $432,500, were payable by the Company to Mrs. Greenfield
representing advances made by Mrs. Greenfield to Regent. In connection with
these notes, Mrs. Greenfield received 254,375 shares of Regent common stock as
additional consideration. Subsequent to July 31, 1998, it was determined that
Mrs. Greenfield inadvertently received more shares than she was entitled to per
the loan agreement, and Mrs. Greenfield returned 43,750 shares during the year
ended July 31, 1999. The Company recorded interest expense in the amount of
$56,038 for the year ended July 31, 1999. Pursuant to the Purchase Agreement
dated July 7, 1999, the Company is no longer responsible for any of these
liabilities.
Unsecured notes, dated January and July 1998, in the amount of $55,000
are payable to Mrs. Felicia Rubin, the daughter of Mr. Greenfield, representing
advances made by Mrs. Rubin to Regent. In connection with these notes, Mrs.
Rubin was to receive 19,375 shares of Regent common stock as consideration. The
Company recorded interest expense in the amount of $6,238 for the year ended
July 31, 1999. Pursuant to the Purchase Agreement dated July 7, 1999, the
Company is no longer responsible for any of these liabilities.
Unsecured notes, dated February, April and May 1998, in the amount of
$120,000, are payable to Mrs. Valerie Greenfield, the mother of Mr. Greenfield,
representing advances made by Mrs. Valerie Greenfield to Regent. In connection
with these notes, Mrs. Valerie Greenfield was to receive 27,500 shares of Regent
common stock as additional consideration. The Company recorded interest expense
in the amount of $25,502 for the year ended July 31, 1999. Pursuant to the
Purchase Agreement dated July 7, 1999, the Company is no longer responsible for
any of these liabilities.
The Company borrowed $175,000 from Plymouth Partners, Inc. on January
12, 1998. BSM, Inc., a shareholder of the Company, purchased the note. In
addition, BSM, Inc. advanced the Company an additional $125,000, of which
$50,000 has been repaid. The notes are unsecured with interest varying between
eight and ten percent. Interest expense for the year ending July 31, 1999 in the
amount of $18,685 has been accrued to BSM, Inc. Pursuant to the Purchase
Agreement dated July 7, 1999, the Company is no longer responsible for any of
these liabilities.
In September 1997, the Company borrowed $200,000 from Ira Russack, a
principal shareholder of the Company, of which $100,000 has been repaid. The
Company issued Mr. Russack 25,000 shares of Regent common stock as additional
consideration. The Company recorded interest expense in the amount of $29,183
for the year ended July 31, 1999. Pursuant to the Purchase Agreement dated July
7, 1999, the Company is no longer responsible for any of these liabilities.
The Company received $6,000 in sublease income from Mast for the year
ended July 31, 1999 while Mr. Greenfield was also the President of Mast. The
Company believes the terms of the sublease with Mast are at least as favorable
to the Company as rent which could have been obtained from unaffiliated third
parties. See Note 12 of Notes to Consolidated Financial Statements. Pursuant to
the Purchase Agreement dated July 7, 1999, the Company no longer has any
interest in the subject leasehold or sublease.
In July 1999, the Company issued a convertible note to Robert Platek, a
principal shareholder of the Company, in connection with a $200,000 loan by Mr.
Platek to the Company. The note is convertible into shares of Regent Common
Stock at an exercise price of $1.00 per share. The Company recorded interest
expense in the amount of $333 for the year ended July 31, 1999 in connection
with this advance.
15
<PAGE>
Item 13. Exhibits, List and Reports on Form 8-K.
Exhibit Description
- - ------- -----------
3.1 Certificate of Incorporation and Bylaws of the Company. Incorporated
by reference to Exhibit 3 of the Company's Annual Report on Form 10-K
for the year ended July 31, 1981.
10.1 Stock Purchase Agreement dated September 12, 1997 between
International Madison Holdings Corp. F/K/A NMC Corp. ("Purchaser")
and United States Lead Testing & Removal Service, Inc. ("Seller").
Incorporated by reference to Exhibit A of the Company's Form 8-K
filed on September 26, 1997.
10.2 Rescission Agreement dated April 30, 1998 between Regent Group, Inc.
("Purchaser") and United States Lead Testing and Removal Service,
Inc. ("Seller"). Incorporated by reference to Exhibit 10-10 of the
Company's Annual Report on Form 10-K for the year ended July 31,
1998.
10.3 Securities Purchase Agreement dated July 7, 1999 among Regent Group,
Inc. and the members of Stock Siren.com, LLC. Incorporated by
reference to Exhibit 10 of the Company's Current Report on Form 8-K
filed on July 28, 1999.
10.4 Distributor Agreement dated June 11, 1999, between Stock Siren.com,
LLC and Media General Financial Services, Inc.
10.5 Letter Agreement dated July 29, 1999 between Regent Group, Inc. and
Investorlinks.com, LLC.
10.6 Redemption and Resignation Agreement dated October 8, 1999 among
Regent Group, Inc., Stock Siren.com, LLC, Eric J. Miller and SRU,
Inc.
21.1 Subsidiaries of the Small Business Issuer.
27.1 Financial Data Schedule.
Reports on Form 8-K
On July 21, 1999, the Company filed a report on Form 8-K describing
(under Items 1,2 and 7) the acquisition of Stock Siren.com, LLC for
11,550,000 of the Company's common stock.
On September 29, 1999, the Company filed a report on Form 8-K/A
amending Item 7 on Form 8-K dated July 21, 1999 to file certain
historical and pro forma financial statements.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
REGENT GROUP INC.
By: /s/ Anthony L. Escamilla
---------------------------------------------
Anthony L. Escamilla, Chief Financial Officer
Date: November 12, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
/s/ Robert M. Long November 12, 1999
- - ---------------------------------
Robert M. Long
Chairman of the Board
/s/ Anthony L. Escamilla November 12, 1999
- - ---------------------------------
Anthony L. Escamilla
Chief Executive Officer, Chief
Financial Officer and Director
/s/ Anthony C. Vickerson November 12, 1999
- - ---------------------------------
Anthony C. Vickerson
Chief Operating Officer
and Director
/s/ F. Albert Landwehr, Jr. November 12, 1999
- - ---------------------------------
F. Albert Landwehr, Jr.
Director
17
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Page
----
Independent Auditor's Report...................................... F-1
Consolidated Balance Sheets as of
July 31, 1999 and 1998................................... F-3
Consolidated Statements of Operations
for the Years Ended July 31, 1999, 1998 and 1997......... F-5
Consolidated Statements of Stockholders' Equity (Deficiency)
for the Years Ended July 31, 1999, 1998 and 1997......... F-6
Consolidated Statements of Cash Flows
for the Years Ended July 31, 1999, 1998 and 1997......... F-9
Notes to Consolidated Financial Statements....................... F-12
18
<PAGE>
Item 7. Financial Statements and Supplementary Data
Index to Financial Statements and Supplementary Financial Data
Page
Independent Auditors' Report F-1 - F-2
Financial Statements:
Consolidated Balance Sheets as of July 31,
1999 and 1998 F-3 - F-4
Consolidated Statements of Operations, Years
Ended July 31, 1999, 1998 and 1997 F-5
Consolidated Statements of Stockholders'
(Deficiency) Equity, Years Ended July 31,
1999, 1998 and 1997 F-6 - F-8
Consolidated Statements of Cash Flows, Years
Ended July 31, 1999, 1998 and 1997 F-9 - F-11
Notes to Consolidated Financial Statements F-12 - F-27
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
and Stockholders of
Regent Group Inc.
New York, New York
We have audited the consolidated balance sheets of Regent Group Inc.
and subsidiary, as of July 31, 1999 and 1998, and the related consolidated
statements of operations, stockholders' equity (deficiency), and cash flows for
each of the three years in the period ended July 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements referred to
above present fairly, in all material respects, the financial position of Regent
Group Inc. and subsidiary at July 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
July 31, 1999 in conformity with generally accepted accounting principles. Also,
in our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, present fairly
in all material respects the information set forth therein.
F-1
<PAGE>
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As more fully
explained in Note 1 of Notes to Consolidated Financial Statements, the Company
needs to obtain additional financing and achieve a level of sales to support its
cost structure. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note 1. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
WIENER, GOODMAN & COMPANY, P.C.
Certified Public Accountants
Eatontown, New Jersey
October 14, 1999
F-2
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
July 31,
------------------------------
1999 1998
----------- -----------
Current Assets:
Cash $ 194,034 $ 4,111
Notes receivable -- 97,898
Prepaid expenses and other current
assets -- 210,557
----------- -----------
Total Current Assets 194,034 312,566
----------- -----------
Property, plant and equipment -
net 3,558
Convertible debenture to
unaffiliated company -- 1,131,100
Goodwill - net 17,087,037 --
----------- -----------
TOTAL ASSETS $17,281,071 $ 1,447,224
=========== ===========
See notes to consolidated financial statements
F-3
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
<TABLE>
<CAPTION>
July 31,
---------------------------------
1999 1998
------------ ------------
<S> <C> <C>
Current Liabilities:
Short-term debt $ 200,000 $ 1,157,500
Accounts payable 12,694 --
Accrued expenses 64,533 211,329
Unearned revenue 3,750 --
Due to officer -- 342,500
------------ ------------
Total Current Liabilities 280,977 1,711,329
------------ ------------
Commitments and Contingent Liabilities
Stockholders' Equity (Deficiency):
Preferred stock, par value $1; authorized
500,000 shares (involuntary liquidation value $777,912):
Convertible Series B, at redemption
value; issued and outstanding
65,141 shares 130,282 130,282
Cumulative Series C, par value $1;
issued and outstanding 64,763
shares 64,763 64,763
Common stock, par value $.06-2/3;
authorized 20,000,000 shares; issued
and outstanding 13,891,118 and 2,351,993
shares 926,538 156,878
Additional paid-in capital 27,192,151 9,500,101
Deficit (11,313,640) (10,116,129)
------------ ------------
Total Stockholders' Equity
(Deficiency) 17,000,094 (264,105)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIENCY) $ 17,281,071 $ 1,447,224
============ ============
</TABLE>
See notes to consolidated financial statements.
F-4
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended
---------------------------------------------------
July 31,
---------------------------------------------------
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Revenues:
Sales $ 3,750 $ -- $ 1,079,808
Other income -- -- 19,668
----------- ----------- -----------
3,750 -- 1,099,476
----------- ----------- -----------
Costs and Expenses:
Cost of sales 1,000 -- 413,722
Selling, general and administrative
expenses 998,021 1,426,645 1,404,380
Interest expense 202,240 428,535 228,032
----------- ----------- -----------
1,201,261 1,855,180 2,046,134
----------- ----------- -----------
Loss from operations (1,197,511) (1,855,180) (946,658)
Minority interest in net income
of consolidated subsidiary -- -- (88,331)
Gain on sale of subsidiary -- -- 620,529
----------- ----------- -----------
Loss from continuing operations
before income taxes (1,197,511) (1,855,180) (414,460)
Provision for income taxes -- -- --
----------- ----------- -----------
Loss from continuing operations (1,197,511) (1,855,180) (414,460)
Discontinued operations (Note 6)
Loss from discontinued operations
with no tax benefit -- (1,115,210) --
Gain on rescission -- 1,061,615 --
----------- ----------- -----------
Net loss $(1,197,511) $ 1,908,775) $ (414,460)
=========== =========== ===========
Basic loss per share
Loss from continuing operations $ (.41) $ (.94) $ (.35)
Loss from discontinued operations -- (.03) --
----------- ----------- -----------
Net loss $ (.41) $ (.97) $ (.35)
=========== =========== ===========
Weighted average number of common
shares outstanding 2,902,912 1,975,639 1,177,644
=========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
F-5
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
YEARS ENDED JULY 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
Preferred Stock
---------------------- Cumulative
Convertible Cumulative Common Additional Other
Series B Series C Stock Paid - In Comprehensive Comprehensive
Amount Amount Amount Capital Deficit Income (loss) Income (loss) Total
----------- ---------- -------- ----------- ----------- ------------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, August 1, 1996 $130,282 $64,763 $65,811 $7,368,110 $(7,792,894) $10,053 $(153,875)
Issuance of options and
warrants in lieu of
compensation (at $.001
to $2.50 per share) 390,821 390,821
Issuance of common stock
in lieu of compensation
and consulting (at $1.00
to $2.9375 per share) 10,005 266,870 276,875
Exercise of stock options
and warrants (at $.001
to $1.00 per share) 23,866 76,343 100,209
Issuance of warrants in
lieu of interest (at
$.001 per share) 122,714 122,714
Foreign currency
translation adjustment (10,053) $ (10,053) (10,053)
Net (loss) (414,460) (414,460) (414,460)
----------- ---------- -------- ----------- ----------- ------------- -------------- ----------
Comprehensive (loss) $(424,513)
==============
Balance, July 31, 1997 130,282 64,763 99,682 8,224,858 (8,207,354) - 312,231
</TABLE>
See notes to consolidated financial statements.
F-6
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
YEARS ENDED JULY 31, 1999, 1998 AND 1997
(continued)
<TABLE>
<CAPTION>
Preferred Stock
---------------------- Cumulative
Convertible Cumulative Common Additional Other
Series B Series C Stock Paid - In Comprehensive Comprehensive
Amount Amount Amount Capital Deficit Income (loss) Income (loss) Total
----------- ---------- -------- ----------- ----------- ------------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of common
stock in lieu of
compensation (at
$2.31 per share) 83 2,804 2,887
Issuance of common
stock in lieu of
consulting services
(at $2.25 to $3.00
per share) 21,678 700,073 721,751
Exercise of warrants
(at $1.00 per share) 14,673 205,327 220,000
Issuance of common
stock in lieu of
interest (at $2.16
to $2.44 per share) 20,762 367,039 387,801
Net (loss) (1,908,775) $(1,908,775) (1,908,775)
----------- ---------- -------- ----------- ----------- ------------- -------------- ----------
Comprehensive (loss) $(1,908,775)
==============
Balance, July 31, 1998 130,282 64,763 156,878 9,500,101 (10,116,129) - (264,105)
Cancellation of common
stock issued in lieu
of interest (at $2.25
per share) (2,918) (46,301) (49,219)
</TABLE>
See notes to consolidated financial statements.
F-7
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
YEARS ENDED JULY 31, 1999, 1998 AND 1997
(continued)
<TABLE>
<CAPTION>
Preferred Stock
---------------------- Cumulative
Convertible Cumulative Common Additional Other
Series B Series C Stock Paid - In Comprehensive Comprehensive
Amount Amount Amount Capital Deficit Income (loss) Income (loss) Total
----------- ---------- -------- ----------- ----------- ------------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of common stock
in lieu of interest (at
$1.38 per share) 125 1,168 1,293
Issuance of common stock
in lieu of consulting
services (at $1.44 per
share) 2,068 42,572 - 44,640
Issuance of warrants in
lieu of consulting 25,046 25,046
Issuance of common stock
in connection with the
acquisition of
Stock Siren.com, LLC 770,385 16,554,615 17,325,000
Transfer of assets
and liabilities to
RH Holdings 1,114,950 1,114,950
Net Loss (1,197,511) $(1,197,511) (1,197,511)
----------- ---------- -------- ----------- ------------- ------------- -------------- ------------
Comprehensive loss $(1,197,511)
==============
Balance, July 31, 1999 $130,282 $64,763 $926,538 $26,077,201 $(10,198,690) $ - $17,000,094
=========== ========== ======== =========== ============= ============= ============
</TABLE>
See notes to consolidated financial statements
F-8
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended
---------------------------------------------------
July 31,
---------------------------------------------------
1999 1998 1997
----------- ----------- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(1,197,511) $(1,908,775) $ (414,460)
Loss from discontinued operations -- 53,595 --
----------- ----------- -----------
Loss from continuing operations (1,197,511) (1,855,180) (414,460)
Adjustments to reconcile net loss to net cash provided from operating
activities:
Depreciation and amortization 238,712 1,392 208,792
Non-employee non-cash compensation 25,046 1,109,552 456,038
Non-cash executive compensation 233,696 252,887 211,658
Cancellation of common stock previously issued in
lieu of payment of interest (49,219) -- --
Common stock issued in lieu of expenses 45,933 -- --
Loss on abandonment of leasehold improvements -- 2,558 --
Reserve for bad debts -- -- (9,000)
Gain on sale of subsidiary -- -- (620,529)
Minority interest in income (loss) of consolidated
subsidiary -- -- 88,331
Gain on sale of equipment -- -- (21,282)
Changes in operating assets and liabilities 429,994 399,758 (262,465)
----------- ----------- -----------
Net Cash (Used in) Operating Activities (273,349) (89,033) (362,917)
----------- ----------- -----------
Cash flows from investing activities:
Advances (100,000) (1,131,100) --
Loans to unaffiliated entity (575,993) (97,898) --
Proceeds from sale of subsidiary -- -- 1,624,295
Proceeds from sale of equipment -- -- 54,629
Purchase of property, plant and equipment -- -- (412,904)
Prepayments on acquisitions -- -- (50,000)
----------- ----------- -----------
Net Cash Provided by (Used in) Investing
Activities (675,993) (1,228,998) 1,216,020
----------- ----------- -----------
</TABLE>
(Continued)
See notes to consolidated financial statements.
F-9
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
<TABLE>
<CAPTION>
Years Ended
---------------------------------------------------
July 31,
---------------------------------------------------
1999 1998 1997
----------- ----------- ------------
<S> <C> <C> <C>
Cash flows from financing activities:
Proceeds from borrowings 1,346,765 1,183,200 636,243
Repayments on borrowings (207,500) (157,500) (1,518,652)
Proceeds from exercise of warrants -- 220,000 100,209
----------- ----------- -----------
Net Cash Provided by (Used in) Financing
Activities 1,139,265 1,245,700 (782,200)
----------- ----------- -----------
Foreign currency translation adjustment -- -- (10,053)
----------- ----------- -----------
Net Increase (decrease) in Cash 189,923 (72,331) 60,850
Cash - beginning of year 4,111 76,442 15,592
----------- ----------- -----------
Cash - end of year $ 194,034 $ 4,111 $ 76,442
=========== =========== ===========
Changes in operating assets and liabilities:
(Increase) in accounts receivable $ -- $ -- $ (1,032)
(Increase) decrease in inventories -- -- 8,214
(Increase) decrease in prepaid expenses and
sundry receivables -- 187,310 (274,961)
(Increase) decrease in deferred acquisition costs -- 119,277 (100,409)
Increase in accounts payable 12,694 -- 1,002,820
Increase (decrease) in accrued expenses 413,550 93,171 (256,653)
Increase (decrease) in income taxes payable -- -- (7,970)
Increase (decrease) in deferred revenue 3,750 -- (145,704)
Increase (decrease) in customer deposits -- -- (105,873)
(Decrease) in lease obligations -- -- (380,897)
----------- ----------- -----------
$ 429,994 $ 399,758 $ (262,465)
=========== =========== ===========
Supplementary information:
Cash paid during the year for:
Interest $ 35,562 $ 38,826 $ 126,566
=========== =========== ===========
Income taxes $ -- $ -- $ 7,950
=========== =========== ===========
</TABLE>
(Continued)
See notes to consolidated financial statements.
F-10
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
<TABLE>
<CAPTION>
Years Ended
--------------------------------------------
July 31,
--------------------------------------------
1999 1998 1997
---------- ---------- --------
<S> <C> <C> <C>
Supplementary information of non-cash investing and financing activities:
Common stock issued for compensation $ -- $ 2,887 $ 80,000
========== ========== ========
Common stock issued for consulting services $ 44,640 $ 721,751 $196,875
========== ========== ========
Common stock issued in lieu of payment of interest $ 1,293 $ 387,801 $ --
========== ========== ========
Warrants issued in lieu of payment of interest $ -- $ -- $122,714
========== ========== ========
Warrants issued in lieu of payment of consulting services $ 25,046 $ -- $ --
========== ========== ========
Cancellation of common stock previously issued in
lieu of payment of expenses $ 49,219 $ -- $ --
========== ========== ========
Issuance of options and warrants for employee
and non-employee compensation $ -- $ -- $390,821
========== ========== ========
Transfer of assets and liabilities to RH Holdings $1,114,950 $ -- $ --
========== ========== ========
</TABLE>
See notes to consolidated financial statements.
F-11
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Regent Group Inc. (the "Company" or "Regent"), formerly NMC Corp., is
a holding company for its subsidiary.
Recent Developments
a) On July 14, 1999, Regent acquired Stock Siren.com, LLC ("Siren"), a
New York limited liability company. Siren is an Internet - based
advertising and publishing entity that owns and operates several
financially oriented websites. Regent issued 11,550,000 shares of its
restricted common stock, comprising approximately 83.4% of its voting
shares, in exchange for all of the issued outstanding membership
interests of Siren.
In connection with the acquisition of Siren, Regent transferred its
pre-closing assets, subject to its pre-closing liabilities, to RH
Holdings, LLC ("RH"), a New York limited liability company. The
Company has accounted for the transfer in accordance with Accounting
Principles Board Opinion No. 26 "Early Extinguishment of Debt" (APB
26) resulting in an increase to additional paid-in capital of
approximately $1,115,000. The sole member of RH is Marvin E.
Greenfield. Mr. Greenfield is a former director and former chief
executive officer of Regent and remains a principal stockholder of
Regent. The consideration which RH delivered to Regent for the
pre-closing assets was to assume all of Regent's pre-closing
liabilities. In connection with this transfer of assets and
assumption of liabilities to Mr. Greenfield, the holders of all of
Regent's existing liabilities discharged Regent from those
obligations.
Siren is a wholly-owned subsidiary of Regent and is its primary
operating business. All letters of intent issued by Regent on or
prior to July 14, 1999 have been terminated.
b) On September 22, 1997, the Company acquired eighty (80%) percent of the
common stock of United States Lead Testing and Removal Service, Inc.
("U.S. Lead") for $2 million. U.S. Lead markets and sells franchises to
provide lead testings, hazard assessment, in-place management,
abatement planning and monitoring to owners of commercial and
residential real estate. Through October 30, 1998, the Company advanced
U.S. Lead $1,231,100 toward the purchase price.
F-12
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The Company rescinded the acquisition effective April 30, 1998.
All assets and liabilities of U.S. Lead as of that date were
reacquired by U.S. Lead. The Company incurred losses from U.S. Lead
from the date of acquisition through the date of rescission of
approximately $1,115,000, which is included in the statement of
operations for the year ending July 31, 1998. On October 30, 1998 the
advances made to U.S. Lead by the Company in the amount of
$1,231,100, as partial payment of the original purchase price, were
converted into a convertible debenture which has been transferred to
RH. No interest was earned on the advances until the signing of the
debenture agreement and no value was ascribed to the warrant to
convert the debt to common stock, as U.S. Lead is privately held by
the Company. Upon rescission, the Company recognized a gain of
approximately $1,100,000.
c) On February 21, 1997, the Company sold its then only operating
business, Krystal Fountain Water Company Limited ("Krystal"). The
selling price was approximately $1,600,000 which resulted in a gain
on the sale of approximately $621,000.
Basis of Presentation
The accompanying consolidated financial statements have been
pre-pared on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business.
The Company has experienced recurring losses and negative cash
flows from operations through July 31, 1999.
If management can reasonably liquidate restricted securities
received in lieu of cash compensation the Company believes the cash
flow from Siren should be sufficient to fund the operations of the
Company over the next twelve months. The Company's ability to continue
as a going concern is dependant upon its ability to obtain needed
working capital through additional equity and/or debt financing. There
are no assurances that a financing will be completed or that Siren will
be commercially accepted. This uncertainty raises substantial doubt
about the ability of the Company to continue as a going concern.
The financial statements do not include any adjustments relating
to the recoverability and classification of recorded asset amounts or
the amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.
Principles of Consolidation
The consolidated financial statements include the accounts of
the Company and its subsidiary from the acquisition date and/or
through their respective sale or rescission dates. All significant
intercompany transactions and balances have been eliminated.
F-13
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that effect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities
as of 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.
Foreign Currency Translation
The financial statements of the Company's former foreign
subsidiary is generally measured using the local currency as the
functional currency. Assets and liabilities of the subsidiary are
translated at the rates of exchange at the balance sheet date. The
resultant translation adjustments are included in equity adjustment
from translation, a separate component of stockholders' equity
(deficiency). Income and expense items are translated at average
monthly rates of exchange. Gains or losses from foreign currency
transactions of the subsidiary is included in net earnings.
Property and Equipment
Property and equipment are stated at cost less accumulated
depreciation. Depreciation, which includes amortization of assets
under capital leases, is calculated using the straight-line and
declining-balance methods over the estimated useful lives of the
assets.
Amortization of Intangibles
Goodwill represents the excess of purchase price and related
costs over the value assigned to the net tangible assets acquired.
Goodwill is amortized on a straight-line basis over its estimated life
of five (5) years.
Amortization expense was $237,320 for the year ended July 31, 1999.
Minority Interest
Minority interest represents the minority stockholders'
propor-tionate share of the investment of Krystal. In February 1997,
the Company sold its entire fifty (50%) percent investment interest
in Krystal.
Evaluation of Long-Lived Assets
Long-lived assets are assessed for recoverability on an ongoing
basis. In evaluating the fair value and future benefits of long -
lived assets, their carrying value would be reduced by the excess, if
any, of the long - lived asset over management's estimate of the
anticipated undiscounted future net cash flows of the related long
-lived asset. As of July 31, 1999, management concluded that no
valuation allowance was required.
Revenue Recognition
Revenue is recognized in the period in which it is earned.
F-14
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Stock-Based Compensation
Effective August 1, 1996, the Company adopted Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS No. 123). The standard encourages, but does not
require, companies to recognize compensation expense for grants of
stock, stock options and other equity instruments to employees based
on fair value accounting rules. The Company has adopted the
disclosure only provisions of SFAS No. 123.
Earnings (Loss) Per Common Share
In February, 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128 "Earnings
Per Share" (SFAS No. 128), which requires companies to present basic
earnings per share (EPS) and diluted earnings per share, instead of
the primary and fully diluted EPS that was previously required. The
new standard requires additional informational disclosures, and also
makes certain modifications to the currently applicable EPS
calculations defined in Accounting Principles Board No. 15. The
Company's interim and prior year results have been restated to
conform with the provisions of this statement.
Basic earnings (loss) per common share is computed by dividing
net earnings (loss) by the weighted average number of common shares
outstanding during the year. Diluted earnings (loss) per common share
is computed by dividing net earnings (loss) by the weighted average
number of common and potential common stock shares outstanding during
the year. Potential common stock shares used in computing diluted
earnings (loss) per share relate to stock options and warrants which,
if exercised, would have a dilutive effect on earnings (loss) per
share. Potential common shares are excluded from the earnings (loss)
per share calculation for the years ending July 31, 1999, 1998 and
1997, because the effect would be antidilutive. The number of
potential common shares outstanding were 178,517, 395,489, and
636,935 for the years ending July 31, 1999, 1998 and 1997,
respectively.
Fair Value of Financial Instruments
For financial instruments including cash, notes receivable,
prepaid expenses and other current assets, short-term debt, accounts
payable, accrued expenses, and amounts due to officer it was assumed
that the carrying values approximated fair value because of their
short-term maturities. It is not practicable to estimate the fair
value of the non-publicly traded long-term debt.
New Financial Accounting Standard
During fiscal 1997, the Financial Accounting Standards Board
issued the following accounting standards: Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS
No. 130); and Statement of Financial Accounting Standard No. 131
"Disclosures about Segments of an Enterprise and Related Information"
(SFAS No. 131). The Company has adopted SFAS No. 130 and SFAS No. 131
in the current fiscal year. Neither standard has had a material
impact on the Company.
F-15
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Reclassification
Certain reclassifications have been made to prior year balances
to conform with the current year's presentation.
2. ACQUISITION/SALE OF SUBSIDIARY
On July 14, 1999 Regent acquired Siren. Regent issued 11,550,000
shares of restricted common stock, in exchange for all the issued
outstanding membership interests of Siren. The acquisition has been
accounted for using the purchase method of accounting, and,
accordingly, the purchase price was allocated to assets purchased and
the liabilities assumed based upon the fair values at the date of
acquisition. The fair value of the assets acquired from Siren was $643
and the liabilities assumed total $ -0- resulting in goodwill of
approximately $17,324,000 which will be amortized over five (5) years.
The operating results of the acquired business is included in the
consolidated statement of operations from the date of acquisition.
Proforma unaudited operating information for the year ended July
31, 1999 of Regent and Siren assuming the business combination had
occurred at the beginning of the respective year is as follows:
Year Ended
July 31, 1999
-------------
Net sales $ 3,750
Net (loss) $(4,425,062)
Net (loss) per share $(1.52)
3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
July 31,
---------------------------
1999 1998
--------- ----------
Machinery and equipment $ - $ 22,710
Leasehold improvements - -
Master tapes - 20,001
--------- ----------
- 42,711
Less accumulated depreciation
and amortization - 39,153
--------- ----------
Net property, plant and equipment $ - $ 3,558
========= ==========
F-16
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. LOANS AND ADVANCES
Loans and advances consist of the following:
<TABLE>
<CAPTION>
July 31,
----------------------------------
1999 1998
-------- -----------
<S> <C> <C>
Loan to Edenfield Enterprises, Inc.
interest at 8%, due on demand $ - $ 97,898
Advances to U.S. Lead Testing and Removal Service, Inc., converted
into a debenture on October 30, 1998, interest at 8%, due October
30, 1999; convertible into 17,544,453
shares of U.S. Lead - 1,131,100
-------- ----------
1,228,998
Current portion - 97,898
-------- ----------
$ - $1,131,100
======== ==========
</TABLE>
5. DEBT
Short-term debt is as follows:
<TABLE>
<CAPTION>
July 31,
-----------------------------------
1999 1998
---------- -----------
<S> <C> <C>
Unsecured note, due on demand,
interest at 12% per annum (1) $ - $ 432,500
Secured note, due March 20, 1999,
interest at 7.5% per year (2) - 100,000
Unsecured note, due on demand,
interest at 12% per annum (3) - 200,000
Unsecured notes, due on demand,
interest from 8% to 12% per
annum (4) - 250,000
Unsecured notes, due on demand,
interest at 12% per annum (5) - 55,000
Unsecured notes, due on demand,
interest at 12% per annum (6) - 120,000
Unsecured convertible note,
due December 31, 1999 interest
at 6% per annum, payable
quarterly (7) 200,000 -
--------- ---------
$ 200,000 $1,157,500
========= =========
</TABLE>
F-17
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. DEBT (Continued)
(1) In connection with the acquisition of Siren the note payable to Mrs.
Barbara Greenfield ("Mrs. Greenfield"), wife of Marvin E. Greenfield
("Mr. Greenfield") the Company's former President and Chief Executive
Officer, was assigned to RH. Prior to the acquisition, and as per the
loan agreement, Mrs. Greenfield received shares of Regent common
stock as additional consideration for advancing funds. During the
year ended July 31, 1998, Mrs. Greenfield received a total of 254,375
shares of Regent common stock. Subsequent to July 31, 1998 it was
determined that Mrs. Greenfield inadvertently received more shares
than she was entitled to per the loan agreement. Mrs. Greenfield
returned 43,750 shares during the year ended July 31, 1999. The
Company recorded interest expense in the amount of $8,281 and
$233,160 for the years ended July 31, 1999 and 1998, respectively, in
connection with the issuance of those shares. In addition, the
Company has recorded interest expense in the amount of $48,027 and
$42,542 for the years ended July 31, 1999 and 1998, respectively, in
connection with the note.
(2) In connection with the acquisition of Siren, the note payable to
Republic Bank has been assigned to RH.
(3) In connection with the acquisition of Siren, the unsecured note
payable to a shareholder of the Company has been assigned to RH. On
September 18, 1997, in connection with this note, the unsecured
shareholder received 25,000 shares of Regent common stock as
additional consideration for advancing funds. The Company recorded
interest expense in the amount of $29,183 and $72,860 for the years
ending July 31, 1999 and 1998 respectively in connection with the
issuance of these shares and interest on the note.
(4) In connection with the acquisition of Siren, the unsecured notes
payable to BSM, Inc., a shareholder of Regent, have been assigned to
RH. The Company recorded interest expense of $18,685 and $15,608 for
the years ending July 31, 1999 and 1998, respectively.
(5) In connection with the acquisition of Siren, the unsecured notes
payable to Mrs. Felicia Rubin ("Mrs. Rubin"), daughter of Mr.
Greenfield, have been assigned to RH. Per the loan agreement, Mrs.
Rubin received shares of Regent common stock as additional
consideration for advancing funds. For the year ended July 31, 1998
Mrs. Rubin received 18,750 shares. The Company recorded interest
expense in the amount of $6,238 and $25,190 for the years ended July
31, 1999 and 1998, respectively, in connection with the issuance of
these shares and interest on the notes.
(6) In connection with the acquisition of Siren, the unsecured note
payable to Mrs. Valerie Greenfield ("Mrs. V. Greenfield"), mother of
Mr. Greenfield, has been assigned to RH. Per the loan agreement, Mrs.
V. Greenfield received shares of Regent common stock as additional
consideration for advancing funds. For the year ended July 31, 1998
Mrs. Valerie Greenfield was to receive 15,000 shares, of which 13,125
shares were received during the year ended July 31, 1998 and the
balance of 1,875 was received during the year ended July 31, 1999.
The Company recorded interest expense in the amount of $25,502 and $
36,430 for the years ended July 31, 1999 and 1998, respectively, in
connection with the issuance of these shares and interest on the
note.
F-18
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. DEBT (Continued)
(7) The unsecured convertible note is payable to Robert Platek, a major
shareholder of the Company. The Company recorded interest expense in
the amount of $333 for the year ended July 31, 1999 in connection
with the note. The note is convertible into shares of Regent common
stock at an exercise price of $1.00 per share.
6. DISCONTINUED OPERATIONS
Effective April 30, 1998, the Company rescinded the U.S. Lead
acquisition. All assets and liabilities of U.S. Lead as of that date
were reacquired by U.S. Lead. The results of operations of U.S. Lead
have been reported separately as discontinued operations for the year
ended July 31, 1998.
7. INCOME TAX
The Company has a net operating loss ("NOL") carryforward of
approximately $11,314,000 for financial reporting purposes and
approximately $4,577,000 for tax purposes expiring in the years 1999
through 2012. The Company has not reflected any benefit of such net
operating loss carryforward in the accompanying financial statements in
accordance with Financial Accounting Standards Board Statement No. 109
"Accounting for Income Taxes" (SFAS 109) as the realization of this
deferred tax benefit is not more than likely.
The Tax Reform Act of 1986 provided for a limitation on the use
of NOL carryforwards, following certain ownership changes. As a result
of transactions in the Company's stock during the year ended July 31,
1999, a change in ownership of greater than 50%, as defined, has
occurred. Under such circumstances, the potential benefits from
utilization of tax carryforward may be substantially limited or reduced
on an annual basis.
There is no provision for income taxes during the years ended
July 31, 1997 through July 31, 1999 as the Company had no taxable
income due to net operating losses.
A reconciliation of taxes on income at the federal statutory
rate to amounts provided is as follows:
<TABLE>
<CAPTION>
Year Ended July 31,
--------------------------------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Tax benefit computed at the
Federal statutory rate $(407,154) $(648,984) $(140,916)
Increase in taxes resulting from:
Effect of unused tax losses 407,154 648,984 140,916
-------- -------- --------
$ - $ - $ -
======== ======== ========
</TABLE>
F-19
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. INCOME TAX (Continued)
The temporary differences between the tax bases of assets and
the financial reporting amount that give rise to the deferred tax
assets and their approximate tax effect are as follows:
<TABLE>
<CAPTION>
July 31,
-------------------------------------------------------------------------------
1999 1998
--------------------------------- ----------------------------------
Temporary Temporary
Difference Tax Effect Difference Tax Effect
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net operating
loss carry-forward $ 4,577,000 $ 1,830,800 $ 4,648,000 $ 1,859,200
Officer salary - - 342,500 137,000
Interest expense - - 85,500 34,200
Valuation
allowances (4,577,000) (1,830,800) (5,076,000) (2,030,400)
----------- ----------- ----------- -----------
$ - $ - $ - $ -
=========== =========== =========== ===========
</TABLE>
8. EMPLOYMENT AGREEMENTS
Effective July 14, 1999 all employment agreements with Mr.
Greenfield and any other employee, officers, or directors of the
Company were terminated. All liabilities due to Mr. Greenfield,
including the balance of a $100,000 bonus for the year ending July
31, 1997 and current salary accruals of $250,000 and $233,700 for the
years ending July 31, 1999 and 1998, respectively, have been
transferred to RH.
9. CAPITAL STOCK
a) Preferred Stock
Convertible Series B preferred shares ("Series B") are
non-dividend bearing, and are convertible into shares of the
Company's common stock at any time at the option of the
holder and are subject to adjustment in accordance with
certain antidilution clauses. Cumulative Series C preferred
shares ("Series C") are not convertible but are entitled to
cumulative cash dividends at the rate of $.65 per share per
annum, payable in each year commencing the year after all
the shares of Series B are retired.
b) Voting Rights
The holders of Series B and Series C preferred stock have no
voting rights.
c) Dividend Restrictions
No cash dividends may be declared or paid on the Company's
common stock if, and as long as, Series B is still
outstanding or there are dividends in arrears on outstanding
shares of Series C. No dividends may be declared on Series C
shares if, and as long as, any Series B shares are
outstanding.
F-20
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. CAPITAL STOCK (Continued)
d) Other information is summarized as follows:
<TABLE>
<CAPTION>
Convertible Cumulative
Series B Series C
----------- ----------
<S> <C> <C>
Number of common shares to
be issued upon conversion
of each preferred share 10 None
Redemption price and involuntary
liquidation value per preferred shares
(if redeemed, must be in series order,
Convertible Series B then Cumulative Series C) $2.00 $10.00(1)
</TABLE>
(1) Plus any dividend in arrears.
Because the Series B preferred stock had mandatory
redemption requirements at the time of its issuance (which
are no longer applicable), these shares are stated at
redemption value. Series B shares are stated at par value.
e) Common Stock
On February 25, 1997, Mr. Greenfield and Mr. Woolford, a
former director of Regent, each received 25,000 shares of
the Company's common stock in connection with the sale of
Krystal. This resulted in a total expense of $80,000 which
reduced the gain from the sale of Krystal.
During the fiscal year ended July 31, 1998, 325,000 shares
of common stock were issued in lieu of consulting fees.
Consulting expense of $721,751 was charged to operations
during the year ended July 31, 1998.
On July 24, 1998, two employees of the Company were issued a
total of 1,250 shares of common stock in lieu of
compensation. This resulted in a charge to operations of
$2,887 for the fiscal year ended July 31, 1998.
During April and May, 1998, 220,000 shares of common stock
were issued in exchange for warrants exercised. The Company
received $220,000.
F-21
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. OPTIONS AND WARRANTS
The Company has adopted the disclosure only provisions of
Statement of Financial Accounting Standards No. 123 "Accounting for
Stock-Based Compensation" (SFAS No. 123). Accordingly, no
compensation cost for employees has been recognized for the stock
options and warrants awarded except for $131,660 for fiscal year
ended 1997, which represents the value of stock options and warrants
that were granted below fair market value at the time of the grant.
Had compensation cost for the Company's stock option plans and
warrants been determined based on the fair value at the grant date
for awards in fiscal year 1997 and 1996, the Company's net loss and
net loss per share would have increased to the pro forma amounts
indicated below:
Years Ended
July 31,
------------------------------
1999 1998
------------- ------------
Net loss - as reported $ (1,197,511) $(1,908,775)
Net loss - pro forma $ (1,204,887) $(1,908,775)
Loss per share - as reported $ (.41) $(.97)
Loss per share - pro forma $ (.41) $(.97)
The fair value of options and warrants are estimated on the date
of grant using the Black-Scholes option pricing model with the
following weighted average assumptions used for grants in 1999 and
1998: dividend yield of -0-%, expected volatility of 78% to 184%,
risk-free interest rate of 5.0% and expected live of 1 year.
The granting of Company stock options is not under a formal stock
option plan.
F-22
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. OPTIONS AND WARRANTS (Continued)
(1) During the year ended July 31, 1997, the Board of Directors
approved the issuance of stock options to Mr. Greenfield to
purchase 475,000 shares of the Company's common stock at
prices from $.0667 per share to $1.00 per share (which was
above fair market value) expiring in periods through
November 2007. A portion of these options were issued for
his forgiving accrued compensation for the period April 1,
1995 to July 31, 1997. These below market value options
resulted in additional compensation expense for the year
ended July 31, 1997 of approximately $132,000.
(2) On December 13, 1996, the Company issued options to purchase
53,826 shares of the Company's common stock at a price of
$.0667 (which was below fair market value) expiring December
2006 in connection with legal services performed for the
Company. This resulted in additional legal expense of
approximately $74,000 for the year ended July 31, 1997. The
options were subsequently exercised in December 1996.
(3) During July 1992, certain investors, including the daughter
of Mr. Greenfield, purchased 27,000 shares of the Company's
common stock and warrants to acquire 100,000 shares of the
Company's common stock at $3.00 per share. The warrants
expired on August 1, 1996.
(4) On March 15, 1995, the Company entered into a secured loan
agreement with a third party. (See Notes 1 and 4 of Notes to
Consolidated Financial Statements). In consideration for the
loan, the Company issued warrants to purchase 100,000 shares
of the Company's common stock at $1.00 per share (which was
above fair market value), exercisable through March 13,
1997. In November, 1996, the warrant was exercised and
100,000 shares of common stock was issued by the Company.
(5) On August 19, 1996, the Company issued to BSM 50,000 shares
of common stock and warrants to purchase 220,000 shares of
common stock at an exercise price of $1.00 per share (which
was below fair market value), expiring during November,
2000, in connection with consulting services provided to the
Company. This resulted in a consulting expense in the amount
of $103,774 for the year ended July 31, 1997. BSM
subsequently assigned these warrants to various parties
including 50,000 warrants to a related party. All of these
warrants were exercised during the year ending July 31,
1998.
(6) On December 26, 1996, the Company issued a warrant to Arnold
Poliskin, a former director of the Company, to purchase
200,000 shares of the Company's common stock at a price of
$2.50 per share, expiring January 2000 in connection with
consulting services performed for the Company. This resulted
in additional expense of $80,980 during the year ended July
31, 1997.
F-23
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. OPTIONS AND WARRANTS (Continued)
(7) On December 8, 1995, Regent and Krystal entered into loan
agreements with Ballydine Investments Limited ("Ballydine")
for a combined line-of-credit ("line-of-credit") of up to
$750,000 with interest at 18% per year, payable monthly.
Additionally, the Company granted to Ballydine a warrant to
purchase 9.9% of the outstanding, fully diluted shares of
the Company, or 203,990 shares at $.001 per share (which was
below fair market value) expiring December, 2006. This
resulted in additional interest expense of $13,552 and
$122,714 during the years ended July 31, 1996 and 1997,
respectively. Interest expense on the loans for the years
ended July 31, 1997 and 1996, was $62,092 and $59,689,
respectively. During May 1997, Ballydine exercised their
warrant.
(8) During the fiscal year ended July 31, 1999 the Company
issued warrants to purchase 650,000 shares of the Company's
common stock at exercise prices between $.33 and $1.10 per
share in connection with consulting services and additional
consideration per a loan agreement.
Information regarding the Company's stock option plans and warrants
for fiscal years ended July 31, 1999, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
July 31, 1999 July 31, 1998 July 31, 1997
---------------------- -------------------- ----------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
---------- ---------- --------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Options outstanding-
beginning of year 475,000 $.46 475,000 $.46 - $ -
Options exercised - - (53,826) .07
Options granted - - 528,826 .42
Options cancelled - - -
------- ------- -------
Options outstanding-
end of year 475,000 $.46 475,000 $.46 475,000 $.46
======= ======= =======
Option price range at
end of year $.0667 to $1.00 $.0667 to $1.00 $.0667 to $1.00
Option price range
for exercised shares - - $.0667
Options available for
grant at end of year N/A N/A N/A
</TABLE>
F-24
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. OPTIONS AND WARRANTS (Continued)
<TABLE>
<CAPTION>
July 31, 1999 July 31, 1998 July 31, 1997
------------------------ ---------------------- -------------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
------ -------- ------ -------- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
Warrants outstanding-
beginning of year 200,000 $2.50 420,000 $1.71 403,990 $ .99
Warrants exercised - (220,000) 1.00 (303,990) .33
Warrants granted 650,000 .73 - 420,000 1.71
Warrants cancelled - - (100,000) 3.00
------- ------- --------
Warrants outstanding-
end of year 850,000 $1.15 200,000 $2.50 420,000 $1.71
======= ======= ========
Warrants price range at
end of year $.33 to $2.50 $1.00 to $2.50 $1.00 to $2.50
Warrants price range
for exercised shares - $1.00 $.001 to $1.00
Warrants available for
grant at end of year N/A N/A N/A
</TABLE>
The weighted exercise price and weighted fair value of options and
warrants granted by the Company for fiscal years ended 1999 and 1998
are as follows:
<TABLE>
<CAPTION>
July 31, 1999 July 31, 1998 July 31, 1997
-------------------- --------------------- ------------------
Weighted Weighted Weighted Weighted Weighted Weighted
Average Average Average Average Average Average
Exercise Fair Exercise Fair Exercise Fair
Price Value Price Value Price Value
-------- -------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Weighted average of options and warrants granted
during the year whose exercise
price exceeded fair market value at
the date of grant $1.07 $ .21 $ - $ - $ 1.48 $ .35
Weighted average of options and warrants exercised
during the year whose exercise price was less
than fair market value at the date of grant $ .33 $1.50 $ - $ - .0667 .63
</TABLE>
F-25
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. OPTIONS AND WARRANTS (Continued)
The following table summarizes information about fixed-price stock
options and warrants outstanding at July 31, 1999.
<TABLE>
<CAPTION>
Weighted
Number Average Weighted Number Weighted
Range of Outstanding Remaining Average Exercisable Average
Exercise At July 31, Contractual Exercise At July 31, Exercise
Prices 1999 Life Price 1999 Price
- - -------- ---------- ---------- ------- ---------- -------
<S> <C> <C> <C> <C> <C>
$ .0667 - .33 575,000 4.64 years $ .20 575,000 $ .20
$1.00 - $2.50 750,000 2.96 years 1.43 750,000 1.43
--------- ---------
1,325,000 1,325,000
========= =========
</TABLE>
11. SEGMENTS - GEROGRAPHIC AREAS
The Company does not have reportable operating segments as defined in
Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information." The method for
attributing revenues to individual countries is based on the
destination to which finished goods are shipped. During the fiscal year
ended July 31, 1997, the Company operated facilities in the United
States and Europe.
<TABLE>
<CAPTION>
July 31, 1999 July 31, 1998 July 31, 1997
------------- ------------- -------------
<S> <C> <C> <C>
Total revenues:
United Kingdom $ - $ - $1,079,808
====== ====== ==========
Loss from operations:
United Kingdom $ - $ - $ (74,582)
United States - - (663,712)
------ ------ ----------
$ - $ - $ (738,294)
====== ====== ==========
Assets:
United Kingdom $ - $ - $ -
United States $ - $ - 662,189
------ ------ ----------
Total identifiable assets $ - $ - $ 662,189
====== ====== ==========
</TABLE>
Operating (loss) represents total revenue less operating
expenses. In computing operating (loss), none of the following items
have been included: interest income or expense, other income and
income taxes.
Identifiable assets are those assets of the Company that are
identified with the operations of each geographic area.
The Company realized exchange losses of approximately $29,125
and $5,078 for the years ended July 31, 1997, and 1996,
respectively.
The Company's foreign operations were principally in the United
Kingdom through February 21, 1997, the date of sale of the
subsidiary.
F-26
<PAGE>
REGENT GROUP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12. COMMITMENTS
The Company did not lease office space as of July 31, 1999.
Rent expense under operating leases for the year ended July 31,
1999, 1998 and 1997 was $36,150, $36,150, and $34,446, respectively.
The Company subleased office space on a month-to-month basis to Mast
Group Inc. ("Mast"). The amount of sublease income was $6,000 in each
of the years ended July 31, 1999, 1998, and 1997. Mr. Greenfield is
the President of Mast and NBMF. The Company believes the terms of the
sublease to Mast were at least as favorable to the Company as rent
which have been received from unaffiliated third parties.
13. SUBSEQUENT EVENTS
On October 18, 1999 the Company announced that it had signed a
letter of intent to acquire all of the outstanding shares of Microtrek
Research Corporation ("Microtrek"), a Lake Ronkonkoma, NY based
software research and development group. Regent has agreed to acquire
the privately owned company in exchange for approximately 1.5 million
shares of its restricted common stock. The transaction is expected to
close during December 1999.
Microtrek develops high-end software products for the financial,
accounting, legal and web-browser industries. Formed in 1993, Microtrek
has recently completed a strategic financial/trade-station software
package known as Market-Trac v2.01 (TM) that affords users the ability
to track and monitor publicly traded securities and portfolio systems
in real-time. In addition to Market-Trac v2.01(TM), Microtrek also
brings custom Internet and general software development technologies
spanning numerous developmental platforms to Regent. Regent's
management expects it will be competitive in the software retail market
within one year of the anticipated merger.
F-27
<PAGE>
10.4 Distributor Agreement dated June 11, 1999, by and between Stock
Siren.com, LLC and Media General Financial Services, Inc.
<PAGE>
DISTRIBTUOR AGREEMENT
11 June 1999
Agreement between MEDIA GENERAL FINANCIAL SERVICES, INC., a Virginia
Corporation with its principal place of business at 333 East Franklin Street,
Richmond, Virginia 23219 ("Media"), and Stock Siren.com, LLC, a New York Limited
Liability Company, with its principal place of business at 720 Milton Road,
Suite J3, Rye, New York 10580 ("StockSiren").
1. Subject to the terms and conditions of this Agreement, Media hereby
grants to StockSiren a non-exclusive license to install, market, and distribute
the QuickSource dataset of selected elements of Media's common stock database
through StockSiren Web site described in EXHIBIT I attached hereto and
incorporated herein by reference. The QuickSource data elements licensed,
hereinafter referred to as "Media data", are shown in EXHIBIT II, attached
hereto and made a part hereof. The licensed Media data shown in EXHIBIT II of
this Agreement may be utilized in part or in whole by the StockSiren Web site
under the terms and conditions shown in EXHIBIT III. StockSiren may also build a
screening module for its WEB site under the terms and conditions shown in
EXHIBIT IV. In addition, StockSiren may use the Media data shown in EXHIBIT II
to calculate only the fields shown in EXHIBIT V. In addition to the license
granted hereunder for use of the Media data through StockSiren Web site,
StockSiren may develop and market such other products utilizing the Media data
as the parties mutually agree to add to this Agreement by additional specific
Amendments, subject to the provisions of Paragraph 14 hereof.
Media reserves the right to modify its databases from time to time in
its sole discretion. Media shall give StockSiren sixty (60) days prior written
notice if any such change will affect the Media data.
The Media data will be made available to StockSiren via FTP and in such
format as shall be mutually agreed upon. Frequency of delivery of the Media data
to StockSiren will be daily according to a production schedule as shall be
mutually agreed upon.
Media shall have no liability for delays or non-performance occasioned
by causes beyond its control, including but not limited to acts of God, fires,
inability to obtain materials, strikes or other labor actions, breakdown of
equipment, delays or shutdowns of carriers or suppliers, and government acts or
regulations.
2. (a) Media represents and warrants to StockSiren that the Media data
as delivered to StockSiren does not and will not infringe upon or violate any
patent, copyright, trade secret, or any other proprietary rights of any third
party, or otherwise subject StockSiren to liability. In the event of any claim,
suit or action by any third party against StockSiren arising out of Media's
alleged breach of the foregoing representation and warranty, StockSiren shall
promptly notify Media, and Media shall defend such claim, suit or action in
StockSiren' name but at Media's expense under Media's control. Media shall
indemnify and hold harmless StockSiren against any loss, cost or damage, expense
or liability arising out of such claim, suit or action (including litigation
costs and reasonable attorneys fees) whether or not such claim, suit or action
is successful. Should any material and/or information constituting Media data
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modification of such material and/or information to render it non-infringing.
(b) StockSiren represents and warrants to Media that neither the
reformatting nor the means of presentation on or through the StockSiren service
will cause the Media data to infringe upon or violate any patent, copyright,
trade secret or any other proprietary rights of any third party, or otherwise
subject Media to liability. In the event of any claim, suit or action by any
third party against Media arising out of StockSiren's alleged breach of the
foregoing representation and warranty, Media shall promptly notify StockSiren,
and StockSiren shall defend such claim, suit or action in Media's name but at
StockSiren's expense under StockSiren's control. StockSiren shall indemnify and
hold harmless Media against any loss, cost or damage, expense or liability
arising out of such claim, suit or action (including litigation costs and
reasonable attorneys fees) whether or not such claim, suit or action is
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(c) Media bases its data input on sources believed by it to be
reliable and will endeavor to ensure that the data contained in the licensed
Media data are complete, accurate and timely. However, Media does not represent,
warrant, or guarantee such completeness, accuracy or timeliness, and it shall
have no
<PAGE>
liability of any kind whatsoever to StockSiren, to any of StockSiren's
customers, or to any other party, on account of any incompleteness of,
inaccuracies in or untimeliness of the Media data provided hereunder, or for any
delay in reporting such data. Media expressly disclaims all warranties of
fitness of the Media data or computations and analyses thereof for a particular
purpose or use. With regard to the subject matter of this Paragraph 2(c), in no
event shall Media have any liability of any kind for any damages even if
notified of the possibility of such damages. Except as specifically set forth in
this Agreement, neither party makes any warranties and each party hereto
specifically disclaims any implied warranties of merchantability or fitness for
a particular purpose.
(d) StockSiren shall ensure that the Media data displayed in Web pages,
individual reports and in a screening module shall be clearly identified as
provided by Media with the Media/Quick Source logo described in EXHIBIT III and
following attribution: Source: Media General Financial Services, Inc. In
addition, in materials that describe the sources of data in the StockSiren
service, StockSiren must provide an appropriate disclaimer approved by Media and
containing a paraphrase of the language contained in subparagraph 2(c) above. In
addition, from the above attribution, StockSiren shall include a hyperlink to
the Media Web site at www.mgfs.com.
3. The purpose of providing the Media data to StockSiren is to
disseminate the Media data in the markets served by StockSiren. Any other use of
the Media data by StockSiren not expressly authorized herein must be approved in
advance in writing by Media in its sole discretion.
4. (a) StockSiren will perform all necessary accounting, billing and
collection for use of the Media data. For the license hereby granted to
StockSiren by Media to offer the Media data through the product set forth in
EXHIBIT I, StockSiren shall pay to Media a monthly royalty fee calculated as
follows:
The greater of:
30% of the net advertising revenue realized by any page that
contains MGFS data (net advertising revenue will be the gross receipts of any
advertisements contained on any page of Media data, less agency fees or
commissions).
or
40% for any non-advertising based components of the Media data
(e.g., subscription or pay-per-view data).
or
$1,000 per month
(b) StockSiren shall pay such royalties to Media on or before
the thirtieth (30th) day after the month in which the royalties shall accrue,
and if any payment due hereunder is not received by Media within that period,
Media shall have the option to discontinue providing the Media data and of
terminating this Agreement should such payment not be received within 30 days
after written notice to StockSiren. Each royalty payment by StockSiren for use
of the Media data shall be accompanied by a royalty statement showing detailed
computation (including agency and advertising sales commission) of monthly
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figures on the number of hits or "page views" of the Media data on its service.
(c) At Media's option and no more than once per year, an
independent auditor selected by Media may inspect, audit and copy, during
regular business hours and with advance notice of at least five (5) business
days, those records of StockSiren that specifically relate to usage of the Media
data hereunder, for the purpose of verifying the accuracy of the royalty
payments made to Media and the accuracy of StockSiren' reports specified in
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auditor selected pursuant to this subparagraph, unless the results of the audit
show a deficiency of more than five percent (5%) in royalty payments made to
Media hereunder, in which case, in addition to the deficiency, which shall be
due immediately in any event, StockSiren shall pay the costs of such audit.
5. StockSiren agrees that its user agreements do and will contain
provisions prohibiting its customers accessing the Media data for resale and
redistribution of the data obtained from the StockSiren's service (which will
include the Media data) in any form. StockSiren represents and warrants to Media
that it assumes all responsibility for the accuracy, integrity and support of
its software which utilizes the Media data. Specific references by StockSiren
that the Media data has any predictive value for the purpose of enhancing
investment returns are strictly prohibited.
6. StockSiren represents and warrants that the Media data supplied
hereunder shall be used and released from its data system only in accordance
with the terms of this Agreement and in furtherance thereof. The license granted
under Paragraph 1 hereof does not permit StockSiren to use, sell or distribute
2
<PAGE>
the Media data for any use or purpose other than those specifically set forth in
the EXHIBITS attached hereto and made a part hereof.
7. Any use of the names or marks of either party in connection with
promotional activities, advertising, or other use outside the ordinary course of
business in performing this Agreement shall be subject to the prior written
approval of the other party. Notwithstanding anything contained herein to the
contrary, both parties shall have the right to disclose that it has entered into
this Agreement.
8. StockSiren acknowledges that the Media data in the form delivered
represent confidential proprietary business information and that its utilization
of the Media data is strictly limited in accordance with this Agreement. Media
acknowledges that any StockSiren software used for the access, delivery and
manipulation of Media data represents confidential proprietary business
information and utilization of such software by Media or any of its employees or
agents is strictly limited in accordance with the terms of this Agreement.
9. StockSiren acknowledges that the Media data consist of factual
information gathered, selected and arranged by Media by special methods and at
considerable expense; that the Media data, and all titles, formats and other
descriptive headings associated herewith, are and at all times shall be, the
sole property of Media, and that neither StockSiren nor any of its agents in any
capacity shall sell or otherwise dispose of or distribute the Media data, or any
portion thereof, to others at any time, either during or after the expiration of
this Agreement, except as permitted by the terms hereof. Upon notice thereof,
StockSiren will act promptly to prevent any breach or continuation of a breach
by a subscriber or any of its agents of the provisions of this Agreement, or its
subscriber agreements, such action to include termination of services, if
required by Media.
10. StockSiren expressly recognizes and acknowledges that its covenants
set forth in Paragraphs 6, 7, 8, and 9 are reasonable requirements of Media in
the protection of substantial business interests. StockSiren further
acknowledges that the remedy at law for breach of any of its undertaking in said
paragraphs would be inadequate and that, in addition to all other remedies
provided by law, Media shall be entitled to injunctive relief restraining any
breach or threatened breach. StockSiren's liability for breach of this Agreement
and for sums due to Media hereunder shall survive any termination hereof. Except
for amounts payable to third parties pursuant to the indemnification provision
of Section 2 hereof, and to the extent permitted by applicable law, neither
Media nor StockSiren shall have any liability for any special, indirect,
incidental or consequential damages even if advised of the possibility thereof.
The foregoing limitation of liability shall apply regardless of the cause of
action under which such damages are sought, including, without limitation,
breach of contract, negligence, or other tort.
11. (a) Subject to the terms and conditions described below, the term
of this Agreement shall be for a period of two (2) years from the effective date
of this Agreement, specified in Paragraph 18. At the end of the initial term,
this Agreement will be automatically renewed from year to year unless either
party gives to the other written notice of termination at least ninety (90) days
prior to the expiration of the initial term, or any renewal terms, as the case
may be. Notwithstanding the termination or expiration of this Agreement, the
right and obligations under Paragraphs 2, 4, 5, 6, 7, 8, 9, 10 and of this
Paragraph 11 shall survive and continue and bind the parties and their legal
representatives and permitted assigns.
(b) Promptly following termination or expiration of this
Agreement for any reason, StockSiren shall use all reasonable efforts to purge
all Media data from its systems and return any tapes or other media on which the
Media data or any other Media information may have been provided, together with
all copies thereof, whether in printed or machine-readable form, to Media.
StockSiren shall certify to Media in writing that the requirements of this
paragraph have been met within ten business (10) days of termination.
(c) Either Media or StockSiren may terminate this Agreement
and the license conferred hereunder as follows:
(i) Media may terminate as specified in Paragraph
4(b).
(ii) Either party may terminate if the other breaches
any other term or covenant of this Agreement, and such breach continues
unremedied for sixty (60) days after written notice to the party in breach by
the other party. Either party may seek liability for breach of this Agreement by
the other party.
12. All marketing and promotional references to the Media data to be
used by StockSiren in its efforts to market StockSiren's service involving use
of the Media data shall be subject to the prior written approval of Media. In
the event that Media advertises its connection with StockSiren' service, or in
3
<PAGE>
the event Media or any Media agent promotes the availability of the Media data
on StockSiren's services, StockSiren shall have the right of prior approval of
all materials used in such efforts. If the approving party does not respond
within five (5) business days, the other party may consider the materials
approved.
13. All notices, payments and other communications permitted or
required by this Agreement shall be in writing addressed as follows:
(a) MEDIA GENERAL FINANCIAL SERVICES, INC.
333 EAST FRANKLINSTREET
RICHMOND, VIRGINIA 23219
ATTN: Dennis H. Cartwright, President & CEO
(b) STOCK SIREN.com, LLC
720 MILTON ROAD, STE J3
RYE, NEW YORK 10580
ATTN: Anthony Vickerson, President
Either party may change its address for such matters by notice given in
the manner prescribed above. If sent by certified or registered mail, notices
shall be effective three business days after posting; otherwise, notices shall
be effective upon receipt by the other party.
14. This Agreement represents the entire understanding between
StockSiren and Media as to the subject matter hereof. Any amendments or
additions hereto shall be only in writing executed by the parties.
15. This Agreement is made in, and shall be governed by and construed
in accordance with the laws of, the State of Virginia.
16. No rights or duties hereunder may be transferred or assigned by
either party in any manner without the written approval of the other party in
its sole discretion, other than to a subsidiary, parent or other affiliate of
the transferring or assigning party. Media may not transfer or assign this
Agreement without the consent of StockSiren, which shall not be unreasonably
withheld.
17. No waiver of any breach of any term or condition herein shall be
deemed to be a waiver of any subsequent breach of any term or condition. Failure
or delay by either party in exercising any right or authority hereunder shall
not be construed as a waiver of such right or authority.
18. This Agreement shall become effective June 15, 1999. Royalties due
for the StockSheet.com web site are covered under the Amendment executed on June
10, 1999 between Daily Stocks and Media, and notwithstanding this Agreement,
Daily Stocks is obligated for full royalties due Media through June 30, 1999.
The StockSheet.com web site has been acquired by StockSiren and under this
Agreement, StockSiren's initial monthly payment to Media as determined under
Section 4 of this Agreement shall become due and payable on July 30, 1999.
MEDIA GENERAL FINANCIAL SERVICES, INC. STOCK SIREN.com, LLC
333 EAST GRACE STREET 720 MILTON ROAD, STE J3
RICHMOND, VIRGINIA 23219 RYE, NEW YORK 10580
By: _______________________________ By: ________________________
Title: _______________________________ Title: ________________________
Date: _______________________________ Date: _________________________
4
<PAGE>
EXHIBIT I
Stocksheet.com is a financial web site that provides easy-to-read, easy-to-use
data sheets for stock companies. There are many future plans for this web site
including but not limited to: providing live stock quotes, editorial commentary
and articles, user portfolios, charts and many other tools for stock market
related analysis.
The URL is : http://www.stocksheet.com
-------------------------
5
<PAGE>
EXHIBIT II
On all common issues in the "then current" Media database, the QuickSource
dataset is composed of the below data items.
Media does not guarantee that all data are available for all companies over all
historical periods requested and shall have no responsibility to STOCKSIREN
under this Agreement to provide any missing and/or incomplete data on any
companies.
The QuickSource data file is a standard product offering of Media that will be
delivered in below format.
<TABLE>
<CAPTION>
Maximum Item Description
Item # # Bytes #Occurrences Identifying Information:
- - ------------------- ----------------- ------------------ ------------------------------------------------
<S> <C> <C> <C> <C>
General Company Information:
1 8 - MG Number Key
2 18 - Record Identifier (ex. 'Company')
3 30 - Company Name
4 28 - Street Address
5 35 - City + State + Zip
6 14 - Telephone Number
7 14 - Fax Number
8 5 - Ticker Symbol
9 4 - Exchange
10 3 - Fiscal Year Month
11 4 - Primary SIC
12 36 - MG Industry Group Number + Name
13 50 - Chief Executive Officer
14 320 - Principal Business Description
Current Price Data:
15 8 - Report Date
16 8 - Latest Close Price
17 8 - 52 Week High Price
18 8 - 52 Week Low Price
19 8 - 5 Year High Price
20 8 - 5 Year Low Price
21 12 - Liquidity Ratio
Fundamental Report History:
22-28 9 7 Report Header Item 22 is '12 Mos(#)' Items 23-28
are 6 Years, with the most recent year in Item 23;
All Fundamental Items below correspond to the
Report Headers
29-35 12 7 Revenues ($Mil)
36-42 12 7 Depreciation ($Mil)
43-49 12 7 EBIT ($Mil)
50-56 12 7 Net Income ($Mil)
57-63 12 7 EPS ($)
64-70 12 7 Dividends ($)
71-77 12 7 Current Assets ($Mil)
78-84 12 7 Current Liabilities ($Mil)
85-91 12 7 Long Term Debt ($Mil)
92-98 12 7 Shares Outstanding (000)
99-105 12 7 Common Equity ($Mil)
105-112 9 7 Profit Margin (%)
113-119 9 7 Return on Equity (%)
120-126 9 7 Return on Assets (%)
127-133 9 7 P/E (ratio)
134-140 9 7 Price/Book (%)
141-147 9 7 Debt/Equity (ratio)
148-154 9 7 Interest Coverage (ratio)
155-161 9 7 Book Value ($)
162-168 9 7 Price/Sales (%)
169-175 6 7 Dividend Payout (%)
176 12 - Data filler
177 12 - Data Filler
178 12 - Data Filler
179 12 - Data Filler
Company as % Industry:
180 9 - Price to Industry
181 9 - Sales To Industry
182 9 - Earnings to Industry
183 9 - Earnings per Share to Industry
184 9 - P/E Ratio to Industry
185 9 - Price/Book to Industry
186 9 - ROE to Industry
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
187 9 - ROA to Industry
188 9 - Debt/Equity to Industry
189 9 - Profit Margin to Industry
Quarterly Performance:
190-194 7 5 Quarterly Report Headers
Items 190-194 are 5
Quarter Dates with the
most recent Quarter in
# 190 All Quarterly
Items listed correspond
to the Header
195-199 12 5 Sales ($Mil)
200-204 12 5 Net Income ($Mil)
205-209 12 5 EPS ($)
210-214 12 5 Dividends ($)
215-219 12 5 Shares Outstanding (000)
Current Statistics:
220 12 - Market Value
221 6 - Number of Institutions Holding Shares
222 9(%) - % Shares Held by Institutions
223 9(%) - Latest 12 Mos. EPS Change
24 10(%) - 5 Year Revenue Growth Rate
225 10(%) - 5 Year EPS Growth Rate
226 10(%) - 5 Year Dividend Growth Rate
227 9 - Current Dividend Rate
228 9(%) - Current Dividend Yield
229 5 - 36 Month Beta
230 8 - Total Return Last 12 Months
231 8 - Total Return Last 3 Years
232 8 - Total Return Last 5 Years
Price History Newest to Oldest:
233-292 8 60 Monthly High Price
293-352 8 60 Monthly Low Price
353-412 8 60 Monthly Close Price
413-472 12 60 Monthly Volume
Latest Full Context Quarter and Related:
473 18 - Date ex. September 30 1996
474 12 - Cash & Equivalents
475 12 - Net Fixed Assets
476 12 - Intangibles
477 12 - Other Assets
478 12 - Total Assets
479 12 - Short Term Debt
480 12 - Other Liabilities
481 12 - Total Equity
482 12 - Total Liabilities & Total Equity
483 8 - Percent Price Change 1 Month
484 8 - Percent Change EPS 1 Quarter
485-489 12 5 EBIT from 5 latest Full Context Quarters Newest to
Oldest
490-494 9 5 Profit Margin from 5 most recent Quarters
495-499 8 5 High Price from 5 most recent Quarters
500-504 8 5 Low Price from 5 most recent Quarters
505-509 6 5 Quarter Month Name & Year from 5 most recent
Quarters
510 12 - Latest 12 Mo. EPS & Qtr. Ind.
511 129 - Comment that Preliminary data has being reported
</TABLE>
7
<PAGE>
EXHIBIT III
TERMS FOR USE FOR QUICKSOURCE
o StockSiren has permission to develop and present for viewing on their
Internet site, as described in EXHIBIT I, a report entitled
"StockSiren-MGFS QuickSource." StockSiren has permission to break the
QuickSource report into as many as seven sections, as follows:
1. General Company Information
2. 60-Month Price Chart
3. Price Data
4. Fundamental History
5. Company to Industry Comparison
6. Quarterly Performance
7. Current Statistics
The seven sections, as indicated above, must remain whole and as
presented in the attached report; they may not be further subdivided.
Nelson's EPS Estimates previously included in the Quicksource report is
NOT part of this agreement. All display and usage of Nelson's EPS estimate data
must be removed from the STOCKSIREN site.
The Media/QuickSource logo will be provided by Media, to be included in
any page of the StockSiren Web site that includes Media data.
o STOCKSIREN can archive and display historical versions of report.
8
<PAGE>
EXHIBIT IV
LISTING OF DATA FIELDS THAT STOCKSIREN USE TO CREATE SCREENING LISTS.
1. 52 Week High Price
2. 52 Week Low Price
3. Daily High price
4. Daily Low Price
5. Highest EPS Growth latest quarter
6. EPS Growth of 12mos, 5 Year and 1 quarter v. certain criteria
7. Highest 5 Yr Growth Rate
8. Highest ROE
STOCKSIREN may display following fields from result of screenings:
1. Trailing Twelve Months P/E
2. Price/Sales Ratio
3. Stock Price
4. Yield
5. Price/Book Ratio
6. Beta
7. % Change in EPS
8. 5 Year EPS Growth Rate
9. Return on Equity (ROE)
10. Dividend Payout Ratio
11. Debt/Equity Ratio
12. Accelerating % Change in EPS (not an input field)
13. Market Capitalization
14. Number of Shares Outstanding
15. Membership Indicator (S&P 500, Dow Jones Industrial Average, MG
Industry Group)
16. Exchange Indicator
17. 5 Year Average Annual Rate of Return
9
<PAGE>
EXHIBIT V
Listing of calculations StockSiren may perform using the items listed in EXHIBIT
II, for display on the StockSiren site described in EXHIBIT I.
1. Percentage Change in Annual EPS vs. Prior Year for the last 5 Years.
(e.g. 1996 vs. 1995, 1995 vs. 1994, etc.)
2. Percentage Change in Annual Revenue per Share vs. Prior Year for the last 5
Years.
3. Percentage Change in Quarterly EPS vs. Prior Year for the last 5 Quarters.
4. Percentage Change in Quarterly Revenue per Share vs. Prior Year for the
last 5 Quarters.
5. Average Annual Rate of Return of Stock for the Last 5 Years.
6. Annual P/E Ranges, Price to Book, Price to Sales, Price to Cash Flow for
the last 5 Years.
10
<PAGE>
10.5 Letter Agreement dated July 29, 1999 by and between Regent Group, Inc.
and Investorlinks.com, LLC.
<PAGE>
July 29, 1999
Mr. Frank A. Kollar
Investorlinks.com, LLC
P.O. Box 6244
Charlottesville, VA 22906
Dear Mr. Kollar:
In connection with the possible transaction ("Transaction") between
Regent Group, Inc. together with its subsidiaries (the "Recipient") and
Investorlinks.com, LLC, (the "Company"), the Recipient has requested access to
certain information, properties, and personnel of the Company.
In consideration for and as a condition to the Company's furnishing
access to such information, properties, and personnel of the Company as the
Company, in its sole discretion, agrees to make available to the Recipient, the
Recipient agrees as follows:
1. CONFIDENTIAL AND PROPRIETARY NATURE OF THE INFORMATION
The Recipient acknowledges the confidential and proprietary
nature of the Confidential Information (as defined below), agrees to hold and
keep the same as provided in this letter agreement, and otherwise agrees to each
and every restriction and obligation in this letter agreement
2. CONFIDENTIAL INFORMATION
As used in this letter agreement, the term "Confidential
Information" means and includes any and all:
(a) trade secrets concerning the business and affairs of the
Company (which includes the financial materials provided to the Recipient by
Company), product specifications, data, know-how, formulae, compositions,
processes, designs, sketches,. photographs, graphs, drawings, samples,
inventions and ideas, past, current, and planned research and development,
current and planned manufacturing or distribution methods and processes,
customer lists, current and anticipated customer requirements, price lists,
market studies, business plans, computer software and program (including object
code and source code), computer software and database technologies, system,
structures and architectures (and related processes, formulae, composition,
improvements, devices, know-how, inventions, discoveries, concepts, ideas,
designs, methods and information), and any other information, however
documented, that is a trade secret within the meaning of applicable state trade
secret law, and;
<PAGE>
Frank Kollar
Confidentiality Agreement
July 29, 1999
(b) information concerning the business and affairs of the
Company (which includes historical financial statements, financial projections
and budgets, historical and projected sales, capital spending budgets and plans,
the names and backgrounds of key personnel, personnel training techniques and
materials), however documented, that has been or may hereafter be provided or
shown to the Recipient by the Company or by the directors, officers, employees,
agents, consultants, advisors, or other representatives including legal counsel,
accountants and financial advisors ("Representatives") of the Company (the
"Company Representatives") or is otherwise obtained from review of Company
documents or property or discussions with Company Representatives by the
Recipient or the Recipient's Representatives (including current or prospective
financing sources) or Representatives of the Recipient's Representatives
irrespective of the form of the communication, and also includes all notes,
analyses, compilations, studies, summaries, and other material prepared by the
Recipient or the Recipient's Representatives containing or based, in whole or in
part, on any information included in the foregoing. Any trade secrets of the
Company will also be entitled to all of the protections and benefits under
applicable state trade secret law and any other applicable law. If any
information that the Company deems to be a trade secret is found by a court of
competent jurisdiction not to be a trade secret for purposes of this letter
agreement, then such information will be considered Confidential Information for
purposes of this letter agreement. In the case of trade secrets, the Recipient
hereby waives any requirement that the Company submit proof of the economic
value of any trade secret or post a bond or other security.
3. RESTRICTED USE OF CONFIDENTIAL INFORMATION
The Recipient agrees that the Confidential Information (a)
will be kept confidential by the Recipient and the Recipient's Representatives
and (b) without limiting the foregoing, will not be disclosed by the Recipient
or the Recipients Representatives to any person (including current or
prospective financing sources) except with the specific prior written consent of
Frank A. Kollar (the "Company Contact") or except as expressly otherwise
permitted by the terms of this letter agreement. It is understood that the
Recipient may disclose Confidential Information to only those of the Recipient's
Representatives who (i) require such material for the purpose of evaluating a
possible Transaction (but to the extent practicable, only such part that is so
required and without revealing the possible Transaction), and (ii) are informed
by the Recipient of the confidential nature of the Confidential Material and the
obligations of this letter agreement. The Recipient Ruther agrees that the
Recipient and the Recipient's Representatives will not use any of the
Confidential Information either for any reason or purpose other than to evaluate
a possible Transaction or in any way detrimental to the Company (it being
acknowledged that any use other than evaluation of and negotiating the possible
Transaction will be deemed detrimental). The Recipient also agrees to be
responsible for enforcing the terms of this letter agreement as to the
Recipient's Representatives and the confidentiality of the Confidential
Information and to take such action, legal or otherwise, to the extent necessary
to cause them to comply with the terms and conditions of this letter agreement
and
Page 2
<PAGE>
Frank Kollar
Confidentiality Agreement
July 29, 1999
thereby prevent any disclosure of the Confidential Information by any of the
Recipients Representatives (including all actions that the Recipient would take
to protect its own trade secrets and confidential information).
4. NONDISCLOSURE OF POSSIBLE TRANSACTION
Except as permitted by the previous paragraph and except as
expressly permitted by a definitive acquisition agreement, if any, entered into
by the Recipient for the acquisition of the Company, neither the Recipient nor
the Recipient's Representatives will disclose to any person (including another
prospective purchaser who has been provided Confidential Information) the fact
that the Confidential Information has been made available to the Recipient or
the Recipient's Representatives or that the Recipient or the Recipients
Representatives have inspected any portion of the Confidential Information.
Except with the prior written consent of the other party and except as expressly
permitted by a definitive acquisition agreement, if any, entered into by the
Recipient for the acquisition of the Company, neither the Recipient nor
Recipient's Representatives will disclose the fact that any discussions or
negotiations are taking place concerning a possible Transaction, including the
status of such discussions or negotiations.
5. COMPANY CONTACT
All requests 'by the Recipient or the Recipients
Representatives for Confidential Information, meetings with Company personnel or
Company Representatives, or inspection of the Company's properties must be made
to the Company Contact.
6. EXCEPTIONS
All of the foregoing obligations and restrictions do not apply
to that part of the Confidential Information that the Recipient demonstrates (a)
was or becomes generally available to the public other than, as a result of a
disclosure by the Recipient or the Recipient's Representatives or (b) was
available, or becomes available, to the Recipient on a non-confidential basis
prior to its disclosure to the Recipient by the Company or a Company
Representative, but only if (i) the source of such information is not bound by
the Confidentiality Agreement with the Company or is not otherwise prohibited
from transmitting the information to the Recipient or the Recipient's
Representatives by a contractual, legal, fiduciary, or other obligation and (ii)
the Recipient provides the Company with written notice of such prior possession
either (A) prior to the execution and delivery of this letter agreement or (B)
if the Recipient later becomes aware of (through disclosure to the Recipient or
otherwise through the Recipients work on the Transaction) any aspect of the
Confidential Information of which the Recipient had prior possession, promptly
upon the Recipient becoming aware of such aspect
Page 3
<PAGE>
Frank Kollar
Confidentiality Agreement
July 29, 1999
7. LEGAL PROCEEDINGS
If the Recipient or any of the Recipient's Representatives are
requested or become legally compelled (by oral questions, interrogatories,
requests for information or documents, subpoena, civil or criminal investigative
demand, or similar process) or is required by a regulatory body to make any
disclosure that is prohibited or otherwise constrained by this letter agreement,
the Recipient or such Representative, as the case may be, will provide the
Company with prompt notice of such request so that it may seek an appropriate
protective order or other appropriate remedy. Subject to the foregoing, the
Recipient or such Representative may furnish that portion (and only that
portion) of the Confidential Information that, in the written opinion of its
counsel reasonably acceptable to the Company, the Recipient is legally compelled
or is otherwise required to disclose or else stand liable for contempt or suffer
other material censure or material penalty; provided, however, that the
Recipient and the Recipient's Representatives must use reasonable efforts to
obtain reliable assurance that confidential treatment will be accorded any
Confidential Information so disclosed
8. RETURN OF CONFIDENTIAL INFORMATION
If the Recipient determines that it does not wish to proceed
with a Transaction (the Recipient will promptly notify the Company Contact of
such decision) or if the Company notifies the Recipient that it does not wish
the Recipient to consider the Transaction any further, then (a) the Recipient
(i) will promptly deliver to the Company Contact all documents or other
materials furnished by the Company or any Company Representative to the
Recipient or the Recipient's Representatives constituting Confidential
Information, together with all copies and summaries thereof in the possession or
under the control of the Recipient or the Recipients Representatives, and (ii)
will destroy materials generated by the Recipient or the Recipients
Representatives that include or refer to any part of the Confidential
Information, without retaining a copy of any such material or (b) alternatively,
if the Company Contact requests or gives his prior written consent to the
Recipients request, the Recipient will destroy all documents or other matters
constituting Confidential Information in the possession or under the control of
the Recipient or the Recipients Representatives. Any such destruction pursuant
to the foregoing must be confirmed by the Recipient in writing to the Company
(such confirmation must include a list of the destroyed materials).
9. NO OBLIGATION TO NEGOTIATE A DEFINITIVE AGREEMENT
The Company and its shareholders reserve the right, in their
sole discretion, to reject any and all proposals made by the Recipient or the
Recipient's Representatives with regard to a Transaction and to terminate
discussions and negotiations with the Recipient and the Recipient's
Representatives at any time. Without limiting the preceding sentence, nothing in
this letter agreement requires either the Recipient or the Company or its
shareholders to enter into a
Page 4
<PAGE>
Frank Kollar
Confidentiality Agreement
July 29, 1999
Transaction or to negotiate such transaction for any specified period of time.
10. NO REPRESENTATIONS OR WARRANTIES
The Company retains the right to determine, in its sole
discretion, what information, properties, and personnel it wishes to make
available to the Recipient, and neither the Company nor its Representatives make
any representation or warranty (express or implied) concerning the completeness
or accuracy of the Confidential Information, except pursuant to representations
and warranties the may be made to the Recipient in a definitive acquisition
agreement for a Transaction if, when, and as executed and subject to such
limitations and restrictions as may be specified therein. The Recipient also
agrees that if the Recipient determines to engage in a Transaction, the
Recipient's determination will be based solely on the terms of such definitive
acquisition agreement and on the Recipients own investigation, analysis, and
assessment of the Company. Moreover, unless and until such a definitive written
agreement is entered into, neither the Company nor the Recipient will be under
any legal obligation of any kind with respect to such a Transaction except for
the matters specifically agreed to in this letter agreement or in another
written agreement
11. REMEDIES
The Recipient agrees to indemnify and hold the Company and its
shareholders harmless from any damages, loss, cost, or liability (including
legal fees and the cost of enforcing this indemnity) a rising out of or
resulting from any unauthorized use or disclosure by the Recipient or the
Recipients Representatives of the Confidential Information or other violation of
this letter agreement. In addition, because an award of money damages (whether
pursuant to the foregoing sentence or otherwise) would be inadequate for any
breach of this letter agreement by the Recipient or the Recipients
Representatives and any such breach would cause the Company irreparable harm,
the Recipient also agrees that, in the event of any breach or threatened breach
of this letter agreement, the Company will also be entitled, without the
requirement of posting a bond or other security, to equitable relief, including
injunctive relief and specific performance. Such remedies will not be the
exclusive remedies for any breach of this letter agreement but will be in
addition to all other remedies available at law or equity to the Company.
12. MISCELLANEOUS
(a) Modification. The agreements set forth in this letter
agreement may be modified or waived only by a separate writing signed by the
Company and the Recipient expressly modifying or waiving such agreements.
(b) Waiver. The rights and remedies of the parties to this
letter agreement are cumulative and not alternative. Neither the failure nor any
delay by any party in exercising any right, power, or privilege under this
letter agreement will operate as a waiver of such dot, power,
Page 5
<PAGE>
Frank Kollar
Confidentiality Agreement
July 29, 1999
or privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (i) no claim or right arising out of
this letter agreement can be discharged by one party, in whole or in part, by a
waiver or renunciation of the claim or right unless in writing signed by the
other party; (ii) no waiver that may be given by a party will be applicable
except in the specific instance for which it is given; and (iii) no notice to or
demand on one party will be deemed to be a waiver of any obligation of such
party or of the right of the party giving such notice or demand to take further
action without notice or demand as provided in this letter agreement.
(c) Person. The term "person" means any individual,
corporation (including any non-profit corporation), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or governmental body.
(d) Severability. The invalidity or unenforceability of any
provision of this letter agreement shall not affect the validity or
enforceability of any other provisions of this letter agreement, which shall
remain in full force and effect If any of the covenants or provisions of this
letter agreement are determined to be unenforceable by reason of its extent,
duration, scope or otherwise, then the parties contemplate that the court making
such determination shall reduce such extent, duration, scope or other provision
and enforce them in their reduced form for all purposes contemplated by this
letter agreement.
(e) Costs. The Recipient agrees that if it is held by any
court of competent jurisdiction to be in violation, breach, or nonperformance of
any of the terms of this letter agreement, then it will pay all costs of such
action or suit, including reasonable attorneys' fees.
(f) Assignment. The Company reserves the right to assign all
of its rights under this letter agreement, including the right to enforce all of
its terms. In the event of a Transaction that involves a sale of assets, the
Company currently intends to assign to the buyer rights to enforce the
restrictions and other obligations of this letter agreement, including the right
to enforce all of its terms.
(g) Section Headings, Construction. The headings of Sections
in this letter agreement are provided for convenience only and will not affect
its construction or interpretation. All references to "Section" or "Sections"
refer to the corresponding Section or Sections of this letter agreement unless
otherwise specified. All words used in this letter agreement will be construed
to be of such gender or number, as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
(h) Jurisdiction; Service of Process. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
letter agreement may be brought
Page 6
<PAGE>
Frank Kollar
Confidentiality Agreement
July 29, 1999
against either of the parties in the courts of the State of new York, County of
New York, and each of the parties consent to the jurisdiction of such courts
(and of the appropriate appellate courts) in any such action or proceeding and
waives any objection to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence may be served on any party anywhere in the
world.
(i) Governing Law. This letter agreement will be governed by
the laws of the State of New York without regard to conflicts of laws
principles.
(j) Counterparts. This letter agreement may be executed in one
or more counterparts, each of which will be deemed to be an original copy of
this letter agreement, and all of which, when taken together, shall be deemed to
constitute one and the same agreement.
If you are in agreement with the foregoing, please sign and return one
copy of this letter agreement, which thereupon will constitute our agreement
with respect to its subject matter.
Very truly yours,
By: /s/
Name: Anthony L. Escamilla
Its: Chief Executive Officer
DULY EXECUTED and agreed to on July 29,1999.
By: /s/
Name: Frank A. Kollar
Its: Managing Partner
Page 7
<PAGE>
10.6 Redemption and Resignation Agreement dated October 8, 1999 among Regent
Group, Inc., Stock Siren.com, LLC, Eric J. Miller and SRU, Inc.
<PAGE>
REDEMPTION AND RESIGNATION AGREEMENT
This REDEMPTION AND RESIGNATION AGREEMENT (the "Agreement") is made as
of October 8, 1999 (the "Effective Date") by and among Regent Group, Inc., a
Delaware Corporation (the "Company"), Stock Siren.com, LLC, a New York Limited
Liability Company and wholly-owned subsidiary of the Company ("Stock Siren"),
Eric J. Miller, an individual with an address at 9745 E. Hampden Avenue, Suite
440, Denver Colorado (the "Employee"), and SRU, Inc., a Colorado Corporation
("SRU").
WHEREAS, the Employee is the controlling stockholder and an officer and
director of SRU;
WHEREAS, at the Employee's direction and pursuant to negotiations that
took place in the State of New York, SRU was issued 1,000,000 membership units
in Stock Siren in consideration of the Employee's future contributions to Stock
Siren;
WHEREAS, SRU received 1,040,541 shares of the Company's common stock
(the "SRU Shares") pursuant to that certain Securities Purchase Agreement by and
among the Company and the members of Stock Siren dated as of July 7, 1999 (the
"Securities Purchase Agreement");
WHEREAS, pursuant to the Securities Purchase Agreement, the Employee
became the President and a Director of the Company;
WHEREAS, acting on behalf of the Company and as its President, the
Employee entered into, on July 30, 1999, a three-year lease for office space in
Denver, Colorado (the "Lease", attached hereto as Exhibit A) which was
subsequently used as the principal place of business of SRU while the Company
and/or Stock Siren paid all amounts due under the lease;
WHEREAS, in connection with Employee's positions with the Company and
Stock Siren, the Company and/or Stock Siren purchased and/or reimbursed the
Employee and/or SRU for certain items of computer and office equipment which
were subsequently principally used for the benefit of SRU;
WHEREAS, the Employee desires to resign from his positions with the
Company, and the Company is willing to accept the Employee's resignation,
subject to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
<PAGE>
1. REDEMPTION. The Employee, individually and on behalf of SRU,
represents and warrants to the Company that SRU is the sole owner of the SRU
Shares, free and clear of all liens, claims, or encumbrances of any kind or
nature whatsoever. SRU hereby sells and the Company purchases all of the SRU
Shares upon the following terms and conditions.
(a) Purchase Price. The purchase price for all of the SRU
shares is TEN (10) dollars and has been paid to SRU contemporaneously with the
execution of this Agreement; receipt thereof is hereby acknowledged by SRU.
(b) Delivery of Stock Certificate(s). SRU has executed and
delivered to the Company the certificate(s) evidencing SRU's ownership of the
SRU Shares duly endorsed to the Company, and such certificate(s) is/are
otherwise in form and substance sufficient to transfer ownership of the SRU
Shares to the Company; receipt thereof is hereby acknowledged by the Company.
(c) Authority. The Employee, individually and on behalf of
SRU, represents and warrants that any and all SRU corporate action (including,
without limitation, meetings, votes, and/or resolutions) necessary to authorize
this transaction has been taken and that the Employee has such authority.
2. RESIGNATION. The Employee resigns as an officer, director, and
employee of the Company, and the Company hereby accepts the Employee's
resignations, effective as of the close of business on October 15, 1999 (the
"Separation Date").
3. PAYMENTS AND BENEFITS. The Employee hereby acknowledges, represents,
warrants, and agrees that he has received all standard compensation, payments,
and reimbursements due to him by the Company, and that the Company was and is
under no obligation to pay the Employee any severance or termination pay or any
bonus, non-competition, deferred compensation, or any other sum which is in
excess of any amounts otherwise paid to the Employee. In consideration of the
general release set forth in Paragraph 5, the Company shall provide to the
Employee the following:
(a) References. The Employee may refer prospective employers
to the Chief Executive Officer of the Company, who shall, if asked, (1) confirm
the Employee's dates of employment and positions held with the Company and (2)
state that the Company does not provide any further information in connection
with such requests.
(b) Indemnification. The Company will indemnify the Employee
from and against any and all claims, liabilities, losses, costs, damages, or
expenses asserted against him or incurred by him arising in the future as a
result of his employment by the Company, except to the extent that such claims,
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liabilities, losses, costs, damages, or expenses have resulted from the
Employee's willful misconduct, dishonesty, fraudulent act or omission, gross
negligence, or breach of fiduciary duty to the Company. The Employee represents
and warrants that he has as of the Effective Date no knowledge of any such
claims. Without limiting the foregoing, the Company will not indemnify the
Employee from or against any claim, liability, loss, cost, damage, or expense
asserted against him or incurred by him in connection with (1) the Lease and/or
(2) that certain lawsuit filed against the Employee and SRU in the District
Court, City and County of Denver, State of Colorado, Docket Number 99CV006910 on
October 12, 1999 or any later related lawsuit.
4. PROTECTIVE AGREEMENTS. The parties desire to provide for the
protection of the Company's business, goodwill, confidential, trade secret
and/or other proprietary information, and other rights of the Company and its
subsidiaries, divisions, related companies and affiliates (such subsidiaries,
divisions, related companies and affiliates, including but not limited to Stock
Siren, shall be referred to as the "Related Entities"), and the Employee agrees,
in consideration of the payments and benefits provided to the Employee pursuant
to this Agreement, to the following.
(a) Property of the Company. No later than the Separation
Date, the Employee shall hand over to the Company any Company property in his
possession, including but not limited to, credit cards, documents, files,
computer equipment and software (except as indicated pursuant to Paragraph 7),
and all recorded information pertaining to the Company's business.
(b) No Disparagement. The Employee agrees that he shall not at
any time engage in any form of conduct, nor make any statements or
representations, that disparage or otherwise impair the reputation, goodwill or
interests of the Company or any of the Related Entities. The Company agrees that
it shall not at any time engage in any form of conduct, nor make any statements
or representations, that disparage or otherwise impair the reputation of the
Employee.
(c) Confidentiality. The Employee acknowledges that he has had
and will have access to confidential information including, but not limited to,
current and prospective confidential know-how, pricing, sales and marketing
information, financial information, inventions, trade secrets, customer lists,
supplier lists, business plans, processes and technology concerning the
business, customers, plans, finances, suppliers, and assets of the Company and
the Related Entities which is not generally known outside the Company and the
Related Entities ("Confidential Information"). The Employee agrees that he will
not at any time without the prior written authorization of the Chief Executive
Officer of the Company, directly or indirectly use, divulge, furnish, or make
accessible to any person any Confidential Information, but instead shall keep
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all Confidential Information strictly and absolutely confidential. Nothing
contained in this paragraph shall be construed as a noncompetition agreement;
however, this confidentiality agreement applies to any of the Employee's
prospective or actual employers and in the case of self-employment.
(d) Payments Under the Lease. The Employee hereby acknowledges
and agrees that binding the Company to a three-year Lease was not in the best
interests of the Company. The Employee hereby agrees, on a best efforts basis,
to endeavor to assign the Lease to SRU or some other entity determined by the
Employee. In the event that the Employee is unable to assign the Lease, he
hereby agrees to make any and all payments due under the Lease directly to the
landlord, to assume any and all of the tenant's obligations, responsibilities,
agreements, or covenants under the Lease, and to indemnify the Company from and
against any and all claims, liabilities, losses, costs, damages, or expenses
asserted against it or incurred by it in connection with the Lease including,
without limitation, attorneys' fees.
(e) Irreparable Harm. The Employee acknowledges that: (i) his
compliance with this Agreement is necessary to preserve and protect the rights,
confidential and other proprietary information, and the goodwill of the Company
as a going concern; (ii) any failure by the Employee to comply with the
provisions of this Agreement will result in irreparable and continuing injury to
the Company for which there will be no adequate remedy at law; and (iii) in the
event that the Employee should fail to comply, the Company shall be entitled in
addition to such other relief as may be available (including, but not limited
to, the issuance of any injunction or temporary restraining order), to such
relief as may be necessary to cause the Employee to comply with this Agreement,
to restore to the Company its property, and to make the Company whole.
5. GENERAL RELEASE. In consideration of the payments and benefits to
the Employee described hereunder, the sufficiency of which the Employee hereby
acknowledges, the Employee releases the Company and all of its past, present,
and future shareholders, directors, officers, employees, agents, divisions,
subsidiaries, related companies, affiliates, and assigns, from any and all
claims, charges, demands, suits, rights, or causes of action, at law or equity
or otherwise, including but not limited to, claims, charges, demands, suits,
causes or rights of action relating to breach of contract or public policy,
wrongful, retaliatory, or constructive discharge, any claims under Title VII of
the Civil Rights Act of 1964, as amended, claims under the Age Discrimination in
Employment Act of 1967, as amended, the New York Human Rights law, New York
Executive Law ss.290, et seq., the Americans with Disabilities Act, 42 U.S.C.
ss.12116, et seq., The Family Medical Leave Act, claims for any other type of
discrimination, personal injury, additional compensation, or fringe benefits,
and any and all rights to or claims for continued employment, attorneys' fees,
or damages (including contract, compensatory, punitive, or liquidated damages),
or equitable relief, which the Employee may ever have had, has now, or may ever
have in the future or which the Employee's heirs, executors, or assigns can or
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shall have, against any or all of them, whether known or unknown, on account of
or arising out of his employment with the Company or any Related Entities or his
separation from such employment. The Employee specifically waives the benefit of
any statute or rule of law which, if applied to the instant Agreement, would
otherwise exclude from its binding effect any claims not now known by the
Employee to exist.
6. PROHIBITED ACTIVITIES.
(a) Solicitation of Clients. For a period of twelve (12)
months from the Separation Date (the "Prohibition Term"), the Employee shall not
directly or indirectly solicit or accept business of the type conducted by the
Company or its Related Entities from any person or entity to whom the Company or
its Related Entities then or has, during the six months preceding the Separation
Date, provided products and/or rendered services.
(b) Solicitation of Employees. During the Prohibition Term,
the Employee shall not directly or indirectly employ, or solicit to leave the
Company's employ, or solicit to join the employ of another person, firm, or
corporation owned or controlled, directly or indirectly, by the Employee any
employee or consultant of the Company or its Related Entities or any person who
has been such an employee or consultant during the twelve months preceding the
Separation Date.
(d) Confidential Information. During and at all times
subsequent to the Prohibition Term, the Employee shall keep secret and shall not
exploit or disclose or make accessible to any person, firm, or corporation, any
confidential business information of any type that was acquired or developed by
either the Company or its Related Entities, or the Employee, prior to or during
the Prohibition Term.
(e) Relief. The Employee acknowledges that the provisions of
this section 6 are reasonable and necessary for the protection of the Company
and that the Company will be irreparably damaged if such covenants are not
specifically enforced. Accordingly, it is agreed that the Company will be
entitled to injunctive relief for the purpose of restraining the Employee from
violating such covenants (and no bond or other security shall be required in
connection therewith), in addition to any other relief to which the Company may
be entitled.
7. REIMBURSEMENT. The Employee hereby agrees to reimburse the Company
for certain expenditures made by the Company, which, the Employee hereby
acknowledges, principally benefitted SRU, upon the following terms and
conditions.
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(a) Description of the Expenditures. The Employee and the
Company agree that the following table accurately describes the nature and
amount of each expenditure for which the Employee will reimburse the Company.
Item Value
--------------------------------------------------------
Computer and related peripherals............ $ 1,128.00
Refurbished 6-line telephone system......... 1,795.00
Rent paid for Oct. 1999..................... 1,295.00
========================================================
TOTAL $ 4,218.00
(b) Terms of Payment. The Employee agrees to pay to the
Company the sum of FOUR THOUSAND TWO HUNDRED EIGHTEEN DOLLARS (4,218) dollars,
in cash or good check, no later than the close of business on December 15, 1999.
8. CONFIDENTIALITY OF AGREEMENT. The Employee shall keep strictly
confidential all the terms and conditions, including amounts, in this Agreement
and shall not disclose them to any person other than his spouse, or legal and/or
financial advisor(s) who need to know such information for the purpose of
evaluating the terms and conditions of this Agreement or in response to legal
process.
9. COOPERATION. The Employee agrees to make himself reasonably
available to the Company to respond to reasonable requests by the Company for
information pertaining to or relating to the Company and/or the Related Entities
or any of its (their) agents, officers, directors, or employees which may be
within the knowledge of the Employee. The Employee will cooperate fully with the
Company in connection with any and all existing or future depositions and/or
litigations or investigations brought by or against the Company or any of its
Related Entities or any of its (their) agents, officers, directors, or
employees, whether administrative, civil, or criminal in nature, in which and to
the extent the Company deems the Employee's cooperation necessary, such
cooperation not to unreasonably interfere with the Employee's other business
activities. In the event that the Employee is subpoenaed in connection with any
litigation or investigation involving the Company, the Employee will immediately
notify the Company and shall give the Company an opportunity to respond to such
notice to the extent practicable before taking any action or making any decision
in connection with such subpoena. The Company will reimburse the Employee for
reasonable out-of-pocket expenses, including attorneys' fees, incurred as a
result of such cooperation, provided that the Company will not reimburse the
Employee for any such expenses if, in the Company's good faith determination,
the cooperation was necessitated by the Employee's actions as a director,
officer, or employee of the Company.
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10. MISCELLANEOUS.
(a) Successors. This Agreement shall be binding upon,
enforceable by, and inure to the benefit of the Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devises, and legatees, and SRU, the Company, and Stock Siren and any successor
to all or substantially all of their respective businesses and/or assets.
(b) Severability. If any provision of this Agreement shall be
found invalid or unenforceable, in whole or in part, then such provision shall
be deemed to be modified or restricted to the extent and in the manner necessary
to render the same valid and enforceable, or shall be deemed excised from this
Agreement, as the case may require, and this Agreement shall be construed and
enforced to the maximum extent permitted by law, as if such provision had been
originally incorporated herein as so modified or restricted, or as if such
provision had not been originally incorporated herein, as the case may be.
(c) Controlling Law. This Agreement shall in all respects be
governed and construed in accordance with the laws of the State of New York.
(d) Arbitration. The Employee and the Company agree that any
claim arising out of or relating to this Agreement or the breach thereof, shall
be settled by arbitration in accordance with the Employment Arbitration Rules of
the American Arbitration Association in New York, and judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof.
(e) Amendment. Any amendment to this Agreement shall be made
in writing and signed by the parties, hereto.
(f) Waiver. No claim or right arising out of a breach or
default under this Agreement can be discharged by a waiver of that claim or
right unless the waiver is in writing signed by the party hereto to be bound by
such waiver. A waiver by either party hereto of a breach or default by the other
party of any provision of this Agreement shall not be deemed a waiver of future
compliance therewith and such provision shall remain in full force and effect.
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(g) Counterpart Execution. This Agreement may be executed in
counterparts and such counterparts when taken together shall constitute one
agreement.
11. ENTIRE AGREEMENT. Any existing written or oral agreement of any
kind between or among any of the parties hereto is fully superseded by this
Agreement and is null and void. The parties warrant that no promise or
inducement has been offered or made except as herein set forth and that the
consideration stated herein is the sole consideration for this Agreement. This
Agreement constitutes the entire agreement among the parties, and states fully
all agreements, understandings, promises, and commitments among the parties.
12. ADVICE. The Employee represents and warrants that he has read this
entire Agreement; has had up to twenty-one (21) days to consider it; has been
given the opportunity and has been encouraged to have this Agreement reviewed by
an attorney; understands its meaning and application; and is signing of his own
free will with the intent of being bound by each and every provision of this
Agreement. The Employee further understands that he has seven (7) days to revoke
this Agreement after signing it.
[The remainder of this page is intentionally blank.]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.
Regent Group, Inc.
- - ------------------------ ------------------------
Eric J. Miller By:
Its:
Dated: Dated:
SRU, Inc. Stock Siren.com, LLC
- - ------------------------ ------------------------
By: Eric J. Miller By:
Its: Its:
--------------------
Dated: Dated:
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EXHIBIT A
---------
LEASE, dated July 30, 1999,
by and between
AMERICAN OIL & GAS CORPORATION
(the "Landlord")
and
REGENT GROUP, INC.
(the "Tenant")
<PAGE>
21.1 Subsidiaries of the Small Business Issuer.
Jurisdiction of
Incorporation or
Name Organization
---- ------------
Stock Siren.com, LLC New York
