UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 2000
---------------------------------------------
Commission file number 0-19170
JUNIPER GROUP, INC.
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(Exact name of small business issuer as specified in its charter)
New York 11-2866771
- -------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
111 Great Neck Road, Suite 604, Great Neck, New York 11021
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(Address of principal executive offices)
(516) 829-4670
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(Issuer's telephone number)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
--- ---
The number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date, May 11, 2000, was 6,906,204 shares of
common stock - $.001 par value.
Transitional Small Business Disclosure Format: Yes No X
--- ---
1
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1: Financial Statements
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
March December
31, 2000 31, 1999
-------- ---------
ASSETS
Current Assets
Cash ........................................... $ 15,553 $ 3,290
Accounts receivable - trade .................... 352,883 329,875
Due from affiliates ............................ - 44
Prepaid expenses and other current assets ...... 213,482 206,514
Due from officer ............................... - 3,857
----------- -----------
Total current assets ....................... 581,918 543,580
Film licenses .................................. 2,887,267 2,887,267
Property and equipment net of accumulated
depreciation of $107,478 and $123,354
respectively ................................. 130,132 110,462
Investment in NetDIVE, Inc...................... 200,000 200,000
Goodwill ....................................... 559,886 409,886
Other assets ................................... 78,151 82,620
----------- -----------
$ 4,437,354 $ 4,233,815
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses .......... $ 658,024 $ 796,104
Notes payable - current ........................ 371,886 52,910
Due to affiliates .............................. 4,204 -
Due to officer ................................. 12,138 -
Due to shareholders ............................ 7,000 7,000
----------- ---------
Total current liabilities ................. 1,053,252 856,014
Notes payable - long term ...................... 103,017 400,606
Due to producers - long term ................... 11,958 11,958
----------- ---------
Total liabilities ........................ 1,168,227 1,268,578
----------- ---------
Shareholders' Equity
12% Non-voting convertible redeemable
preferred stock: $.10 par value, 875,000
shares authorized, 42,747 shares
issued and outstanding at March 31, 2000,
and December 31, 1999: aggregate liquidation
preference, $85,494 at March 31, 2000
and December 31, 1999, respectively........... 4,275 4,275
Common Stock - $.001 par value, 75,000,000
shares authorized, 7,523,066 and 6,741,618
issued and outstanding at March 30, 2000
and December 31, 1999, respectively ........... 7,523 6,742
Capital contributions in excess of par:
Attributed to preferred stock ................. 38,109 38,109
Attributed to common stock .................... 11,914,042 11,409,017
Retained earnings (deficit) .................... (8,694,822) (8,492,906)
----------- -----------
Total shareholders' equity .................... 3,269,127 2,965,237
----------- -----------
$ 4,437,354 $ 4,233,815
=========== ===========
See Notes to Consolidated Financial Statements
2
<PAGE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
March 31, March 31,
2000 1999
------------ ------------
Revenues:
Healthcare .............................. $ 247,190 $ 153,929
Entertainment and technology service..... 83,204 --
------------ ------------
330,394 153,929
------------ ------------
Operating Costs:
Healthcare .............................. 19,430 31,886
Entertainment and technology service..... 44,171 -
Selling, general and administrative expenses.. 468,709 324,307
------------ ------------
532,310 356,193
------------ ------------
Net income (loss) before (loss) from
minority interest........................... (201,916) (202,264)
(Loss) from minority interest................. - (68,431)
------------ ------------
Net income (loss) ............................ $ (201,916) $ (270,695)
============ ============
Weighted average number of shares outstanding 7,044,801 3,368,323
============ ============
Basic earnings per share data:
Net income (loss) per common share $ (0.03) $ (0.08)
============ ============
See Notes to Consolidated Financial Statements
3
<PAGE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31, March 31,
2000 1999
--------- ---------
Operating Activities
Net income (loss) ............................ $ (201,916) $ (270,695)
Adjustments to reconcile net cash provided
by operating activities:
Depreciation and amortization expense ........ 7,299 7,010
Loss from minority interest .................. - 68,431
Payment of officer's compensation with equity 30,705 34,563
Payment of various liabilities with equity .. 116,626 38,627
Payment of employees compensation with equity - 19,000
Changes in assets and liabilities:
Accounts receivable ......................... (23,008) 82,468
Prepaid expenses and other current assets ... (6,968) (1,940)
Other assets ................................ 4,469 605
Due to/from officers and shareholders........ 15,995 (22,439)
Due from affiliates ......................... 4,248 780
Accounts payable and accrued expenses ....... (146,299) 63,119
----------- -----------
Net cash provided from (used for)
operating activities ....................... (198,849) 19,529
----------- -----------
Investing activities:
Sale (purchase) of equipment ................ (18,750) (2,386)
___________ ___________
Financing activities:
Investment in Nuclear Cardiac Imaging, Inc... - (125,686)
Reduction in borrowings ..................... (199,363) (22,317)
Proceeds from borrowings .................... 220,750 100,000
Payments to and on behalf of producers ...... 7,100 (11,296)
Proceeds from private placements ............ 201,375 -
----------- ------------
Net cash provided from (used for)
financing activities ...................... 229,862 (59,299)
------------ ------------
Net increase (decrease) in cash ............. 12,263 (42,156)
Cash at beginning of period ................. 3,290 48,925
------------ ---------
Cash at end of period ....................... $ 15,553 $ 6,769
============ =========
Supplemental cash flow information:
Interest paid .............................. $ 365 $ 5,830
------------ ------------
See Notes to Consolidated Financial Statements
4
<PAGE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
Preferred Stock Common Stock
------------------------- ----------------------------
Capital Capital
Contributions Contributions Retained
Par Value in excess Par Value in excess Earnings
at $.10 of par at $.001 of par (Deficit) Total
----------- ----------------- ----------- ------------- ---------- --------
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Balance
December 31, 1999 $ 4,275 $ 38,109 $ 6,742 $11,409,017 $(8,492,906) $2,965,237
Initial Capitalization
of Computer Design
Associates, Ltd. - - - 7,100 - 7,100
Acquisition of Computer
Design Associates, Ltd. - - 150 149,850 - 150,000
Shares issued as payment
for various expenses - - 116 116,510 - 116,626
Shares issued as
compensation to
officers- - - 70 30,635 - 30,705
Shares issued from
exercise of stock
options .. - - 176 (176) - -
Shares issued in
private placements - - 269 201,106 - 201,375
Net (loss) for the
three months
ended March 31, 2000 - - - - (201,916) (201,916)
_______ _________ _______ ___________ _________ __________
Balance,
March 31, 2000 $ 4,275 $ 38,109 $ 7,523 $11,914,042 $(8,694,822) $3,269,127
========= ========== ========= =========== =========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - Basis of Presentation:
The interim consolidated financial statements included herein have been
prepared without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission ("SEC"). Certain information and footnote disclosures,
normally included in the financial statements prepared in accordance with
generally accepted accounting principles, have been condensed or omitted
pursuant to SEC rules and regulations; nevertheless, management of the Company
believes that the disclosures herein are adequate to make the information
presented not misleading. The consolidated financial statements and notes should
be read in conjunction with the audited consolidated financial statements and
notes thereto as of December 31, 1999 included in the Company's Form 10-KSB
filed with SEC.
In the opinion of management, all adjustments consisting only of normal
recurring adjustments necessary to present fairly the consolidated financial
position of the Company with respect to the interim consolidated financial
statements have been made. The results of operations for the interim periods are
not necessarily indicative of the results to be expected for the full year.
6
<PAGE>
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis of financial condition and results of
operations should be read in conjunction with the Company's consolidated
financial statements and notes thereto included elsewhere herein. The statements
disclosed herein include forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company's actual results could
differ materially from those projected in the forward-looking statements as a
result of certain risks and uncertainties, including, but not limited to, the
Company's historical lack of profitability, the Company's need for additional
financing, competition in the managed healthcare and in the entertainment
industry, and other risks detailed from time to time in the Company's filings
with the Securities and Exchange Commission.
OVERVIEW
- --------
Juniper Group, Inc. (the "Company")is a Nevada Corporation. Its principal
businesses are composed of two segments, 1) healthcare, and 2) entertainment and
technology services: (i) the healthcare operations are conducted principally
through PartnerCare, a subsidiary of Juniper Medical Systems, Inc. ("JMSI"),
which is a wholly owned subsidiary of the Company. PartnerCare, Inc. ("PCI"), is
a managed care revenue enhancement company providing various types of services
such as: accounts receivable management, regulatory reimbursement compliance,
charge-off reviews, revenue collections, and other related business office
outsourcing services to newly evolved integrated hospital and physician
markets.; and (ii) the entertainment and technology segment is conducted
principally through 1)Juniper Pictures, Inc. ("Pictures"), a wholly owned
subsidiary of Juniper Entertainment, Inc. ("JEI"), a wholly owned subsidiary of
the Company, which engages in the acquisition, exploitation and distribution of
rights to films to the various media (i.e., Internet media, home video, pay-per
view, pay television, cable television, networks and independent syndicated
television stations) in the domestic and foreign marketplace; and 2)through
Computer Design Associates, Ltd. ("CDA"), which is a wholly owned subsidiary of
the Company. CDA, was acquired during the first quarter of 2000, is a systems
integration company, providing, through strategic alliances, technology services
in the areas of communications, Internet services, DSL, e-commerce, web
developing and hosting. The Company's operations are based at 111 Great Neck
Road, Suite 604, Great Neck, New York 11021.
On March 17, 2000, the Company acquired CDA. CDA provides the Company with
the means to offer its customers the technology services needed to correct
deficiencies in their communication and operation systems. The acquisition was
completed by exchanging all of CDA's outstanding shares of common stock for
150,000 shares of the Company's common stock valued at $150,000, substantially
all of which was recorded as Goodwill. Under the terms of the acquisition, as
performance based consideration, the Company may become obligated to issue
300,000 additional shares of common stock, if certain projections are achieved
at various times throughout the calendar year 2000.
Further, due to the increasing demand for streaming of videos, as well as
live entertainment product, the Company has begun introducing itself as a
provider of such services to the entertainment industry. Accordingly, CDA has a
high synergistic value to both the healthcare and entertainment industries in
which the Company currently operates.
7
<PAGE>
RESULTS OF OPERATIONS
- ---------------------
Three Months Ended March 31, 2000 vs Three Months Ended March 31, 1999
- ------------------------------------------------------------------------
Revenue related to the Healthcare segment increased to $247,000 in the
first quarter of 2000 from $154,000 in the first quarter of 1999, representing a
60% increase. The increase in revenue during the first quarter of 2000 was
predominately attributed to the revenue from an increase in market penetration
and a wider array of managed care clients for PCI.
The entertainment and technology segment recognized $83,000 of revenue in
the first quarter of 2000, which represents revenue from the technology sector
and no revenue in 1999. Certain of the Company's films that generated revenue
when the contracts were signed are still under license, and are currently being
aired by the licensees. The Company is currently utilizing its resources to
build the technology segment of its business, and has not devoted resources
toward the promotion and solicitation of the films in 2000. However, the Company
has begun looking for outside salesmen to help market and merchandise the films
that are not currently under license.
Healthcare operating costs decreased to $19,000 in the first quarter of
2000 from $32,000 in the first quarter of 1999, a 41% decrease. As a percentage
of revenue, operating costs of the healthcare operations decreased to 8% from
21% in the first quarter of 1999. This was primarily due to certain fixed
oeprating costs which increaed as a percentage of sales, when revenue is lower
as in the first quarter of 1999.
The entertainment and technology segment recognized operating costs of
$44,000 in the first quarter of 2000, which was exclusively attributed to the
technology service business. There were no operating costs for this segment in
the first quarter of 1999.
Selling, general and administrative expenses increased to $468,000 in the
first quarter of 2000 from $324,000 in the first quarter of 1999, a 44%
increase. This increase is primarily due to increases in salaries of $25,000,
bad debt expenses of $16,000 and consulting expenses of $126,000, offset by a
decrease in legal expenses of $41,000, and commission expense of $11,000. The
increase in salaries was primarily due to the costs concerning the early
termination of PCI's prior president's employment contract. The increase in
consulting expenses was attributed to the engagement of a consultant in
connection with the Company's continued and expanded efforts to grow through
acquisitions, as well as, an additional consultant engaged to assist in the
administration and operations of PCI in the transition from the prior president.
The decrease in legal expense was due to the costs incurred in 1999 in
connection with a potential corporate acquisition, as well as the costs reserved
by PCI in connection with the NYPHRM engagements. The decrease in commissions
was primarily due to the sales incurred in 1999 by PCI in connection with
certain contracts. The increase in bad debt expense was due to a more
conservative evaluation than in previous periods of the Company's accounts
receivable. This conservative evaluation has caused the Company to record a
greater allowance for certain types of accounts receivable related to its
healthcare business.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Working capital at March 31, 2000 was ($471,000), compared to working
capital of ($312,000) at December 31, 1999. The ratio of current assets to
current liabilities was 0.55:1 at March 31, 2000 and 0.64:1 at December 31,
1999. Cash flow used for operations during the first quarter of 2000 was
$199,000, compared to cash flow provided by operations during the first quarter
of 1999, of $20,000.
8
<PAGE>
Accounts receivable - trade increased to $353,000 at March 31, 2000 from
$330,000 at December 31, 1999.
Accounts payable decreased to $658,000 at March 31, 2000 from $777,000 at
December 31, 1999.
Although the Company plans to continue to expand both segments of its
business to the extent that resources are available, particularly through the
utilization of CDA's services, the Company has no firm material commitments for
capital expenditures or film acquisitions.
The Company believes that it may not have sufficient liquidity to meet its
operating cash requirements for the current level of operations during the
remainder of 2000. During the first quarter of calendar 2000, the Company has
raised greater than $200,000 from the sale of its common stock or the issuance
of corporate notes. Based upon the expected revenue of CDA, the Company expects
the cash flow from this subsidiary to contribute positively by year end.
However, the Company will require additional financing. Although the Company may
be able to obtain external financing through the sale of its securities, there
can be no assurance that financing will be available, or if available, on terms
acceptable to the Company. If the Company is unable to fund its operating cash
flow needs, the Company may be required to substantially curtail operations.
The Company currently does not have any bank lines of credit.
9
<PAGE>
PART II: OTHER INFORMATION
Item 2. Changes in Securities
(a) The information disclosed in Item 4 below is incorporated herein by
reference.
(b) N/A
(c) Shares of Common Stock, $0.001 par value, sold through the first quarter
of 2000 were as follows:
No.
Date Purchaser of Shares Consideration Exemption
- ----------- --------- ---------- --------------------------- ---------
1/7-3/31/00 Officers 70,182 The President and CEO of the
Company accepted common stock
in lieu of accrued salary and
other amounts owed to him in
the amount of $30,705. 4(2)
1/12-1/31/00 Private
Holders 41,111 Payment in cash 4(2)
1/04-1/31/00 Private
Holders 228,125 Satisfaction of indebtedness 4(2)
1/01-3/31/00 Vendors 116,355 Vendors accepted common stock in
lieu of unpaid fees in the amount
of $116,626. 4(2)
3/31/2000 Private
Holders 150,000 100% of the outstanding common
stock of CDA 4(2)
______________________
Item 3. Defaults Upon Senior Securities
Preferred Stockholders are entitled to receive out of assets legally
available for payment a dividend at a rate of 12% per annum of the Preferred
Stock liquidation preference of $2.00 (or $.24 per annum) per share, payable
quarterly on March 1, June 1, September 1, December 1, and March 1, in cash or
in shares of Common Stock having an equivalent fair market value. Unpaid
dividends on the Company's Preferred Stock cumulate. The quarterly payments due
on September 1 and December 1, 1992, and all payments due in 1993, in 1994, in
1995, in 1996, in 1997, in 1998, in 1999 and the payment due on March 1, 2000
have not yet been paid and are accumulating. These dividends have not been
declared because earned surplus is not available to pay a cash dividend.
Accordingly, dividends will accumulate until such time as earned surplus is
available to pay a cash dividend or until a post effective amendment to the
Company's registration statement covering a certain number of common shares
reserved for the payment of Preferred Stock dividends is filed and declared
effective, or if such number of common shares are insufficient to pay cumulative
dividends, then until additional common shares are registered with the
Securities and Exchange Commission (SEC).
10
<PAGE>
No dividends shall be declared or paid on the Common Stock (other than a
dividend payable solely in shares of Common Stock) and no Common Stock shall be
purchased, redeemed or acquired by the Company unless full cumulative dividends
on the Preferred Stock have been paid or declared, or cash or shares of Common
Stock have been set apart which is sufficient to pay all dividends accrued on
the Preferred Stock for all past and then current dividend periods.
As stated above, pursuant to the terms of the Preferred Stock, the Company
has the option of making quarterly dividend payments in cash or shares of Common
Stock. The Company does not intend to make any Preferred Stock dividends in cash
in the foreseeable future. Prospectively, subject to the Company's Prospectus
being current, and a sufficient number of common shares being registered with
the SEC, the Company anticipates making quarterly dividend payments in shares of
Common Stock for the foreseeable future including the payments which have not
yet been made. The total cash value of the arrearage of unpaid dividends at
March 31, 2000, was $92,334.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
Exhibit Description
10.7 Computer Design Associates, Ltd. Stock Purchase Agreement.
27.1 Financial Data Schedule
(b) Reports on Form 8-K.
NONE
11
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed by the undersigned, thereunto duly authorized.
JUNIPER GROUP, INC.
Date:___________________________
By:/s/ Vlado P. Hreljanovic
------------------------
Vlado P. Hreljanovic
Chairman of the Board, President,
Chief Executive Officer and Acting
Chief Financial Officer
12
Exhibit 10.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered into as
of this 17th day of March, 2000 by and among Michael Silverman ("Silverman" or
"Seller") at 12 Sussex Road, Great Neck, NY 11020 on the one hand, and Juniper
Group, Inc., a Nevada corporation having its principal place of business at 111
Great Neck Road, Great Neck, New York 11021 ("Purchaser"), on the other hand.
W I T N E S S E T H:
WHEREAS, Seller owns and desires to sell, assign and convey to Purchaser
one hundred percent (100%) of the issued and outstanding shares of the capital
stock (the "CDA Shares") of Computer Design Associates, Ltd., a New York
corporation (the "Company"), and Purchaser desires to purchase and acquire such
CDA Shares from Seller on and subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the respective representations and
warranties hereinafter set forth and of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SALE AND PURCHASE OF SHARES
1.1 Sale and Purchase. Subject to the terms and conditions contained herein,
Seller hereby agrees to sell, transfer, assign, convey and deliver to
Purchaser, and Purchaser hereby agrees to purchase and accept from Seller,
all of its right, title and interest in and to the CDA Shares, free and
clear of any liens, pledges, security interests, claims or encumbrances of
any kind.
1.2 The Purchase Price. The consideration payable by Purchaser for the CDA
Shares to be sold to Purchaser as provided herein shall be One Hundred
Fifty Thousand (150,000) shares of Common Stock, $.001 par value, of
Purchaser (the "JUNI Shares"). The JUNI Shares shall have the piggyback
registration rights set forth in Exhibit A annexed hereto.
1.3 Additional Consideration (a) 90 days from closing, 100,000 shares or
options as bonus compensation if 65% of the projections through the month
prior to 90 days from closing are met. Options are exercisable at $.68 per
share for five years.
(b) 180 days from closing, 100,000 shares or options as bonus compensation if
65% of the projections through the month prior to 180 days from closing are
met. Options are exercisable at $.68 per share for five years.
(c) On January 31, 2001, 100,000 shares or options (on same terms) if earnings
before Purchaser's overhead, interest, taxes and amortization of $300,000
is achieved for calendar 2000.
ARTICLE II
CLOSING; CONDITIONS TO CLOSING; DELIVERIES
2.1 Closing. The closing of this transaction (the "Closing") shall be held on
or about April 3, 2000, the Closing Date, at or about 10:00 A.M., Eastern
Standard Time, at the offices of the Purchaser, or at such other time and
place upon which the parties shall agree.
2.2 Conditions to Purchaser's Obligation. Purchaser's obligation hereunder to
purchase and pay for the CDA Shares by issuing the JUNI Shares to Seller,
is subject to the satisfaction, on or before the Closing Date, of the
following conditions, any of which may be waived, in whole or in part, by
Purchaser in its discretion, and Seller shall use its best efforts to cause
such conditions to be fulfilled:
(a) Representations and Warranties Correct; Performance of Covenants;
Satisfaction of Conditions. The representations and warranties of Seller
contained in this Agreement (including the Exhibits and Schedules hereto)
and those otherwise made in writing by or on behalf of Seller in connection
with the transactions contemplated by this Agreement shall be true,
complete and accurate both when made and on and as of the Closing Date as
though such representations and warranties were made at and as of such
date. Seller shall have duly and properly performed, complied with,
satisfied and observed each of its covenants, agreements, conditions to
closing and obligations contained in this Agreement to be performed,
complied with, satisfied and observed on or before the Closing Date.
(b) Purchase Permitted by Applicable Laws. The purchase of and payment for the
CDA Shares to be purchased by Purchaser hereunder shall not be prohibited
by any applicable law or governmental regulation and shall not subject
Purchaser to any tax, penalty, liability or other onerous condition under
or pursuant to any applicable law or governmental regulation.
(c) Proceedings; Receipt of Documents. All corporate and other proceedings
taken or required to be taken by Seller and Purchaser in connection with
the transactions contemplated hereby and all documents incident thereto
shall have been taken and shall be satisfactory in form and substance to
Purchaser and its counsel, and Purchaser shall have received all such
information and such counterpart originals or certified or other copies of
such documents as Purchaser may reasonably request.
(d) Delivery of Documents. Seller shall have delivered, or caused to be
delivered, to Purchaser the following:
( i) corporate certificate of good standing of the Company from the
jurisdiction in which the Company is incorporated;
( ii) the CDA Shares, with duly executed stock powers and all other documents
and signatures necessary or appropriate for their transfer to Purchaser
free and clear by delivery;
(iii)certified copies of the Certificate of Incorporation and By-Laws of the
Company;
(iv) the written resignations of each and every officer and director of the
Company and all documents necessary to elect or appoint Purchaser's
nominees to such positions;
(vi) all documents necessary or appropriate to change the authorized signatories
of Company' bank accounts and to otherwise take possession and full
operational control of the Company and its respective assets; and (vii) all
other consents, agreements, schedules, documents and exhibits required by
this Agreement to be delivered by Seller, or reasonably requested by
Purchaser, at or before the Closing.
(e) No Adverse Decision. There shall be no action, suit, investigation or
proceeding pending or threatened by or before any court, arbitrator or
administrative or governmental body which seeks to restrain, enjoin,
prevent the consummation of or otherwise affect the transactions
contemplated by this Agreement or questions the validity or legality of any
such transactions or seeks to recover damages or to obtain other relief in
connection with any such transactions.
(f) No Adverse Change. From the date of incorporation up to the Closing Date,
the Company shall not have suffered any adverse change (whether or not such
change is described in the Exhibits or Schedules hereto or any supplement
to the Exhibits or Schedules) in its business, affairs, prospects,
financial condition, working capital, assets, liabilities (absolute,
accrued, contingent or otherwise), reserves or operations, and Seller shall
have delivered to Purchaser a certificate signed by it and dated the
Closing Date, to such effect.
(g) Due Diligence. The Purchaser shall have completed, to its reasonable
satisfaction, its due diligence review of the Company's operations.
(h) Securities Law Compliance. All actions and steps necessary to assure
compliance with applicable Federal and state securities laws in connection
with the lawful sale of the CDA Shares pursuant to this Agreement, shall
have been duly obtained and shall be effective on and as of the Closing.
This shall be the sole responsibility of the Purchaser.
(i) Approvals and Consents. Seller and Purchaser shall have duly obtained all
authorizations, consents, rulings, approvals and licenses, or exemptions
therefrom, by or of all governmental authorities and non-governmental
administrative or regulatory agencies, having jurisdiction over the parties
hereto, which are required for the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
hereby, at no cost or other adverse consequence to each other, and all
thereof shall be in full force and effect at the time of Closing.
(j) Web Site. The Company's web site will be in reasonably acceptable condition
to Purchaser.
2.3 Conditions to the Obligation of the Seller. The obligation of Seller to
consummate the transactions contemplated hereby are subject to the
fulfillment of the following conditions on or prior to the Closing Date,
any of which may be waived, in whole or in part, by the Seller in its sole
discretion, and Purchaser shall use its best efforts to cause such
conditions to be fulfilled:
(a) Representations and Warranties Correct; Performance. The representations
and warranties of Purchaser in this Agreement shall be true, complete and
accurate when made and on and as of the Closing Date.
(b) Purchase Permitted by Applicable Laws. The purchase of and payment for the
CDA Shares shall not be prohibited by any applicable law or governmental
regulation.
(c) Delivery of JUNI Shares. Purchaser shall have delivered the JUNI Shares, or
a copy of the Board Resolution authorizing and directing delivery to Seller
within ten (10) days after closing.
ARTICLE III
SELLER'S REPRESENTATIONS AND WARRANTIES
Seller hereby represents and warrants to, and agrees with, Purchaser as
follows:
3.1 Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of New York.
3.2 Authority. Seller has full authority to execute and to perform this
Agreement in accordance with its terms; the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby does
not and will not result in a breach, violation or default or give rise to
an event which with the giving of notice or after the passage of time, or
both, would result in a breach, violation or default of any of the terms or
provisions of the Company's respective Certificate of Incorporation,
By-Laws or of any indenture, agreement, judgment, decree or other
instrument or restriction to which the Company or Seller is a party or by
which the Company, Seller, the Shares or any of their assets may be bound
or affected; the execution and delivery of this Agreement have been and, as
of the Closing Date, the consummation of the transactions contemplated
hereby will have been, duly authorized, and no authorization or approval,
whether of the stockholders or directors of the Company or of governmental
bodies or otherwise, will be necessary in order to enable Seller to enter
into and perform same; and this Agreement constitutes a valid and binding
obligation enforceable against Seller in accordance with its terms.
3.3 Capitalization. The authorized capital stock of the Company consists of 200
shares of common stock, $ no par value, of which 100 shares are issued and
outstanding. All of the aforesaid issued and outstanding shares of the
Company are directly owned of record and beneficially by Seller, have been
duly authorized and validly issued and are fully paid and non-assessable.
3.4 Compliance With Law. The Company is not in violation of any laws,
governmental orders, rules or regulations to which the Company or
businesses are subject.
3.5 Litigation. There are no actions, suits, proceedings or investigations
(including any purportedly on behalf of the Company) pending or threatened
against or affecting the business or properties of the Company whether at
law or in equity or admiralty or before or by any governmental department,
commission, board, agency, court or instrumentality, domestic or foreign;
nor is the Company operating under, subject to, in violation of or in
default with respect to, any judgment, order, writ, injunction or degree of
any court or other governmental department, commission, board, agency or
instrumentality, domestic or foreign. No inquiries have been made directly
to the Company or Seller by any governmental agency which might form the
basis of any such action, suit, proceeding or investigation, or which might
require the Company to undertake a course of action which would involve any
expense. No filings have been made by any present or former employee of the
Company with the Equal Employment Opportunity Commission or any
governmental agency, asserting any claim based on alleged race, gender
(including, without limitation, sexual harassment), age or other type of
discrimination on the part of the Company.
3.6 Brokers. There has been no broker or finder involved in any manner in the
negotiations leading up to the execution of this Agreement or the
consummation of any transactions contemplated hereby, and Seller agrees to
indemnify Purchaser against and hold Purchaser harmless from any claim made
by any person for a broker's or finder's fee or other similar payment based
upon any agreements, arrangements or understanding made by Seller.
3.7 Transactions with Affiliates. There are no loans, leases, royalty
agreements, employment contracts or any other agreement or arrangement,
oral or written, between the Company, on the one hand, and any past or
present stockholder, officer, employee, consultant or director of the
Company or Seller (or any member of the immediate family of such
stockholder, officer, employee, consultant, director or Seller), on the
other hand.
3.8 Acquisition of Securities.
(a) Seller is acquiring the JUNI Shares for his own account for investment only
and not with a view towards the public sale or distribution thereof and not
with a view to or for sale in connection with any distribution thereof.
(b) Seller is: (i) an "accredited investor" as that term is defined in Rule 501
of the General Rules and Regulations under the Securities Act, (ii)
experienced in making investments of the kind described in this Agreement
and the related documents, (iii) able, by reason of the business and
financial experience, to protect his own interests in connection with the
transactions described in this Agreement, and the related documents, and
(iv) able to afford the entire loss of his investment in the JUNI Shares.
(c) Seller acknowledges that the JUNI Shares are being offered and sold to it
in reliance on specific exemptions from the registration requirements of
United States federal and state securities laws and that the Purchaser is
relying upon the truth and accuracy of, and Seller's compliance with, the
representations, warranties, agreements, acknowledgments and understandings
of Seller set forth herein in order to determine the availability of such
exemptions and the eligibility of Seller to acquire the JUNI Shares.
(d) Seller has been provided with, and has read the Company's Annual Report on
Form 10KSB for fiscal year ended December 31, 1999, the Company's Proxy
dated December 10, 1999, and the Company's Quarterly Reports on Form 10 QSB
for the fiscal quarter ended September 30, 1999 (collectively, the SEC
Reports). Seller and his advisors, if any, have also been furnished with
materials relating to the business, finances and operations of Purchaser
and materials relating to the offer and sale of the JUNI Shares which have
been requested by Seller. Seller and his advisors, if any, have been
afforded the opportunity to ask questions of the Purchaser and has received
complete and satisfactory answers to any such inquiries.
(e) Seller understands that his investment in the JUNI Shares involves a high
degree of risk.
(f) Seller understands that no United States federal or state agency or any
other government or governmental agency has passed on or made any
recommendation or endorsement of the JUNI Shares.
(g) Seller acknowledges that: (i) the JUNI Shares have not been and are not
being registered under the provisions of the Securities Act and may not be
transferred unless (A) subsequently registered thereunder or (B) Purchaser
shall have received an opinion of counsel, reasonably satisfactory in form,
scope and substance to Purchaser, to the effect that the JUNI Shares to be
sold or transferred may be sold or transferred pursuant to an exemption
from such registration; (ii) any sale of the JUNI Shares made in reliance
on Rule 144 promulgated under the Securities Act may be made only in
accordance with the terms of said Rule and further, if said Rule is not
applicable, any resale of such JUNI Shares under circumstances in which the
seller, or the person through whom the sale is made, may be deemed to be an
underwriter, as that term is used in the Securities Act, may require
compliance with some other exemption under the Securities Act or the rules
and regulations of the Securities and Exchange Commission thereunder; and
(iii) neither the Company nor any other person is under any obligation to
register the JUNI Shares under the Securities Act or to comply with the
terms and conditions of any exemption thereunder.
(h) Seller acknowledges and agrees that until such time as the JUNI Shares have
been registered under the Securities Act, the JUNI Shares shall bear a
restrictive legend in substantially the following form:
THESE SECURITIES (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR
OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Seller as follows:
4.1 Organization and Good Standing. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Nevada.
4.2 Corporate Authority. Purchaser has full authority to execute and to perform
this Agreement in accordance with its terms; the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
does not and will not result in a breach, violation or default or give rise
to an event which, with the giving of notice or after the passage of time,
would result in a breach, violation or default of any of the terms or
provisions of Purchaser's Certificate of Incorporation, By-Laws or of any
indenture, agreement, judgment, decree or other instrument or restriction
to which Purchaser is a party or by which Purchaser may be bound or
affected; and this Agreement constitutes a valid and binding obligation
enforceable against Purchaser in accordance with its terms.
4.3 JUNI Shares. The JUNI Shares to be issued to Seller hereunder will be duly
authorized, validly issued, fully paid, and nonassessable, without any
personal liability attaching to the ownership thereof.
4.4 SEC Documents, Financial Statements. The Common Stock of Purchaser is
registered pursuant to Section 12(g) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") and listed for quotation on The
Nasdaq SmallCap Market under the symbol "JUNI". Purchaser has filed all
reports, schedules, forms, statements and other documents required to be
filed by the Purchaser with the Securities and Exchange Commission ("SEC")
pursuant to the reporting requirements of the Exchange Act, including
material filed pursuant to Section 13(a) or 15(d), in addition to one or
more registration statements and amendments thereto heretofore filed by
Purchaser with the SEC under the Securities Act of 1933, as amended (the
"Act") (all of the foregoing including filings incorporated by reference
therein being referred to herein as the "SEC Documents"). Purchaser has
delivered to the Seller true and complete copies of the SEC Documents
(except for exhibits and incorporated documents).
As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Act or the Exchange Act as the case may be
and the rules and regulations of the SEC promulgated thereunder and other
federal, state and local laws, rules and regulations applicable to such SEC
Documents, and none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of Purchaser included in the SEC Documents comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC or other applicable rules and regulations with
respect thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of Purchaser as of the dates thereof and the results of operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).
4.5 No Material Adverse Change. Since the date of the most recently filed SEC
Documents, no event has occurred or exists with respect to Purchaser or any
of its subsidiaries which would be likely to have, or has had, a material
adverse effect on Purchaser and its subsidiaries taken as a whole.
4.6 Brokers. There has been no broker or finder involved in any manner in the
negotiations leading up to the execution of this Agreement or the
consummation of any transactions contemplated hereby, and Purchaser agrees
to indemnify Seller against and hold Seller harmless from any claim made by
any person for a broker's or finder's fee or other similar payment based
upon any agreements, arrangements or understanding made by Purchaser.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE CLOSING
Between the date hereof and the Closing, and except as otherwise expressly
consented to in writing in advance or approved in writing in advance by
Purchaser:
5.1 Regular Course of Business. Seller will cause the Company to carry on its
business diligently and substantially in the same manner as heretofore
conducted, and shall not permit it to institute any new methods of
management, accounting or operation or engage in any transaction or
activity, enter into any agreement or make any commitment, except in the
usual and ordinary course of business and consistent with past practice as
limited by the more restrictive provisions of this Agreement, where
applicable, or as otherwise specifically contemplated by this Agreement and
not in violation thereof.
5.2 Organization. Seller shall preserve the corporate existence and business
organization of the Company intact. In addition, and not in limitation of
the foregoing, Seller will cause the Company to maintain and update any web
sites.
ARTICLE VI TERMINATION AND ABANDONMENT
6.1 Methods of Termination. The transactions contemplated herein may be
terminated at any time, but not later than the Closing:
(a) By mutual written agreement of Purchaser and Seller;
(b) By Purchaser or Seller, if the Closing shall not have occurred on or prior
to June 5, 2000 and the delay is beyond the reasonable control of the
parties hereto.
6.2 Procedure upon Termination. In the event of termination and abandonment
pursuant to Section 6.1 hereof, written notice thereof shall forthwith be
given to the other parties hereto and the transactions contemplated by this
Agreement shall be terminated without further action by Purchaser or
Seller.
ARTICLE VII
GENERAL PROVISIONS
7.1 Notices. All notices, requests, demands and other communications hereunder
shall be in writing and shall be delivered personally, sent by telex or
facsimile transmission or sent by certified or registered mail, return
receipt requested, postage prepaid. Any such notice shall be deemed given
when so delivered personally or when sent by facsimile transmission or, if
mailed by certified or registered mail, ten (10) days after the date of
deposit in the United States mail, postage prepaid, if addressed:
(a) in the case of Seller to:
Michael Silverman
12 Sussex Road
Great Neck, New York 11020
Facsimile #: (516) 773-4516
(b) in the case of Purchaser or JUNI to:
Juniper Group, Inc.
111 Great Neck Road
Great Neck, NY 11021
Facsimile #: (516) 829-4691
or to such other address or to such other person as Purchaser or Seller shall
have last designated by written notice given as herein provided.
7.2 Modification. This Agreement contains the entire agreement between the
parties hereto and there are no agreements, warranties or representations
which are not set forth herein. All prior negotiations, representations,
warranties, agreements and understandings are superseded hereby. This
Agreement may not be modified or amended except by an instrument in writing
duly signed by or on behalf of the parties hereto and dated on or
subsequent to the date hereof.
7.3 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within the State. Seller and
Purchaser hereby irrevocably consent to the jurisdiction of any New York
State or Federal court located in Nassau County, New York over any action
or proceeding arising out of any dispute between Seller and Purchaser and
irrevocably agrees, in this regard, not to commence any action or
proceeding arising out of any dispute between Seller and Purchaser in any
other jurisdiction.
7.4 Counterparts. This Agreement may be executed simultaneously in any number
of counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
7.5 Paragraph Headings. The paragraph headings in this Agreement are for
convenience of reference only and shall not be deemed to alter or affect
any provision hereof.
7.6 Waiver. The waiver of one breach or default hereunder shall not constitute
the waiver of any other or subsequent breach or default.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
the day and date first above written.
SELLER JUNIPER GROUP, INC., (PURCHASER)
By: /s/ Michael Silverman By:/s/ Vlado P. Hreljanovic
--------------------- ------------------------
Michael Silverman
Title: President
---------
<PAGE>
EXHIBIT "A"
(a) Request for Registration. At any time after the date hereof, if the
Company proposes to file a registration statement under the Securities Act
(other than a registration statement on Form S-4 or S-8 (or any similar or
successor form that may be adopted by the Commission) or a registration
statement filed in connection with an exchange offer or offering of securities
or debt solely to the Company's existing security or debt holders) with respect
to an offering of securities of the same class as the Registrable Securities by
the Company for its own account or for the account of any of its security
holders, then the Company shall give written notice of such proposed filing to
each Holder as soon as practicable (but in no event less than 20 days before the
anticipated filing date). Such notice shall offer each Holder the opportunity to
have all or any of the Registrable Securities held by such Holder included in
the registration statement proposed to be filed or, at the Company's option, in
a separate registration statement to be filed concurrently with such
registration statement (the "Piggy-back Registration"). Within ten days after
receiving such notice, each Holder may make a written request to the Company
that any or all of the Holder's Registrable Securities be included in the
Piggy-back Registration, which notice shall specify the number of shares to be
so included. Subject to Section 3(b) hereof, the Company shall include in the
Piggy-back Registration (or in a separate registration statement filed
concurrently therewith) all Registrable Securities with respect to which the
Company has received written requests for inclusion therein within ten days
after the receipt by each Holder of the Company's notice. The Company may in its
discretion withdraw any registration statement filed pursuant to this Section
3(a) subsequent to its filing without liability to the Holders except with
respect to Registration Expenses. Any Holder shall be permitted to withdraw all
or part of such Holder's Registrable Securities requested to be included in a
Piggy-back Registration at any time prior to the effective date of such
Piggy-back Registration without any liability for any Registration Expenses.
(b) Priority on Piggy-back Registration. If any Piggy-Back Registration is
to be an underwritten offering, the Company shall use its commercially
reasonable efforts to cause the managing Underwriter or Underwriters to permit
the shares of Registrable Securities requested by the Holders of Registrable
Securities ("Selling Piggy-back Holders") to be included in the Piggy- back
Registration (on the same terms and conditions as similar securities of the
Company included therein to the extent appropriate). Notwithstanding the
foregoing, if the managing Underwriter or Underwriters of such offering advise
the Company in writing that, in their opinion, the number of Registrable
Securities and any other securities requested to be included in such offering is
sufficiently large to have Material Adverse Effect, then (i) if such Piggy-back
Registration is incident to a primary registration on behalf of the Company, the
amount of securities to be included in the Piggy-back Registration for any
persons (other than the Company and the Selling Piggy-back Holders) shall first
be reduced, and thereafter the Registrable Securities to be offered for the
account of the Selling Piggy-back Holders shall be reduced or limited, subject
to any written agreement among the Selling Piggy-back Holders, on a Pro Rata
Basis so that the total number of securities to be included in the offering
shall be the total number of securities recommended by such managing Underwriter
or Underwriters, unless any of the Selling Piggy-back Holders desires to sell a
number of Registrable Securities that is less than the total pro rata amount
that he is entitled to sell, in which event the number of Registrable Securities
not so elected to be sold shall be allocated among the other Selling Piggy-back
Holders on a Pro Rata Basis, and (ii) if such Piggy-back Registration is
incident to a secondary registration on behalf of holders of securities of the
Company (excluding pursuant to Section 2 hereof, in which priority will be
governed by Section 2(d) hereof), the Company shall include in such registration
statement (A) first, the number of securities of such person(s) on whose behalf
the registration is being made (allocated among such persons as they may so
determine), (B) second, the number of Registrable Securities requested to be
included in such registration pursuant to this Section 3 in excess of the
securities of such persons on whose behalf the registration is being made
propose to sell that, in the opinion of such managing Underwriters, can be sold
without causing a Material Adverse Effect on such offering, allocated among the
Selling Piggy-back Holders, subject to any written agreement among the Selling
Piggy- back Holders on a Pro Rata Basis as described in clause (i) above, and
(C) third, the number of securities requested to be included in such
registration by the Company or by other persons pursuant to similar piggy-back
registration rights (allocated among the Company and such persons as they may so
determine).
(c) Limitations on Piggy-back Registration. The Company shall not be
obligated to effect more than two Piggy-back Registrations under this Section.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF INCOME FOUND ON PAGES
2 & 3 OF THE COMPANY'S FORM 10-QSB FOR THE THREE MONTHS ENDED MARCH 31, 2000.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> Mar-31-2000
<CASH> 15,553
<SECURITIES> 0
<RECEIVABLES> 352,883
<ALLOWANCES> 0
<INVENTORY> 3,440
<CURRENT-ASSETS> 581,918
<PP&E> 237,610
<DEPRECIATION> 107,478
<TOTAL-ASSETS> 4,437,354
<CURRENT-LIABILITIES> 1,053,252
<BONDS> 0
0
4,275
<COMMON> 7,523
<OTHER-SE> 3,257,329
<TOTAL-LIABILITY-AND-EQUITY> 4,437,354
<SALES> 0
<TOTAL-REVENUES> 330,394
<CGS> 0
<TOTAL-COSTS> 532,310
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (201,916)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (201,916)
<EPS-BASIC> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
