0001104659-03-018672.txt : 20030814 0001104659-03-018672.hdr.sgml : 20030814 20030814155835 ACCESSION NUMBER: 0001104659-03-018672 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HYPERFEED TECHNOLOGIES INC CENTRAL INDEX KEY: 0000745774 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES [6200] IRS NUMBER: 363131704 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11108 FILM NUMBER: 03847639 BUSINESS ADDRESS: STREET 1: 300 S WACKER DR STREET 2: STE 300 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129132848 MAIL ADDRESS: STREET 1: 300 SOUTH WACKER DR STREET 2: SUITE 300 CITY: CHICAGO STATE: IL ZIP: 60606 FORMER COMPANY: FORMER CONFORMED NAME: PC QUOTE INC DATE OF NAME CHANGE: 19920703 10-Q 1 a03-2510_110q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2003

o 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 0-13093

I.R.S. Employer Identification Number 36-3131704

HYPERFEED TECHNOLOGIES, INC.

(a Delaware Corporation)

300 S. Wacker, Suite 300

Chicago, Illinois 60606

Telephone (312) 913-2800

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 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 ý No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý.

As of August 13, 2003, the registrant had 3,043,805 shares of $.001 par value common stock outstanding.

HYPERFEED TECHNOLOGIES, INC.

INDEX

PART I.	Financial Information

Item 1.	Consolidated Balance Sheets as of June 30, 2003 (unaudited) and December 31, 2002

	Consolidated Statements of Operations for the three and six month periods ended June 30, 2003 and 2002 (unaudited)

	Consolidated Statements of Cash Flows for the six month periods ended June 30, 2003 and 2002 (unaudited)

	Notes to Unaudited Interim Consolidated Financial Statements

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.	Quantitative and Qualitative Disclosures about Market Risk

Item 4.	Controls and Procedures

PART II.	Other Information

Item 1.	Legal Proceedings

Item 2.	Changes in Securities and Use of Proceeds

Item 4.	Submission of Matters to a Vote of Security Holders

Item 5.	Other Information

Item 6.	Exhibits and Reports on Form 8-K

	Company’s Signature Page

HYPERFEED TECHNOLOGIES, INC. AND SUBSIDIARY

Consolidated Balance Sheets

June 30, 2003 and December 31, 2002

	June 30, 2003			December 31, 2002
	(Unaudited)			(Audited)
Assets
Current Assets
Cash and cash equivalents	$	946,529		$	1,096,711
Accounts receivable, less allowance for doubtful accounts of: 2003: $104,715; 2002: $82,355	638,759			700,942
Notes receivable, less allowance for doubtful accounts of: 2003: $75,000; 2002: $150,000	249,571			199,142
Prepaid expenses and other current assets	429,046			328,128
Total Current Assets	2,263,905			2,324,923

Property and equipment
Computer equipment	2,371,096			3,345,614
Communication equipment	1,359,624			1,463,954
Furniture and fixtures	82,839			108,947
Leasehold improvements	531,809			531,397
	4,345,368			5,449,912
Less: Accumulated depreciation and amortization	(2,896,565		)	(3,762,376		)
	1,448,803			1,687,536
Notes receivable, less allowance for doubtful accounts of: 2003: $75,000	99,571			—
Intangible assets, net of accumulated amortization of: 2003: $40,000; 2002: $10,000	140,000			170,000
Software development costs, net of accumulated amortization of: 2003: $2,637,258; 2002: $3,189,313	1,913,736			2,013,703
Deposits and other assets	64,614			99,428
Total Assets	$	5,930,629		$	6,295,590

Liabilities and Stockholders’ Equity
Current Liabilities
Note payable	$	23,011		$	—
Accounts payable	1,314,638			1,249,350
Accrued expenses	318,946			717,519
Accrued restructuring charge	165,884			405,301
Accrued compensation	148,437			106,576
Unearned revenue	1,054,884			1,173,402
Total Current Liabilities	3,025,800			3,652,148

Note payable, less current portion	44,104			—
Deferred rent	289,743			36,089
Unearned revenue, less current portion	17,303			12,536
Total Noncurrent Liabilities	351,150			48,625
Total Liabilities	3,376,950			3,700,773

Stockholders’ Equity
Common stock, $.001 par value; authorized 50,000,000 shares; issued and outstanding 3,043,805 shares at June 30, 2003 and 2,503,069 shares at December 31, 2002	3,044			2,503
Additional paid-in capital	46,039,300			44,585,588
Accumulated deficit	(43,488,665		)	(41,993,274		)
Total Stockholders’ Equity	2,553,679			2,594,817

Total Liabilities and Stockholders’ Equity	$	5,930,629		$	6,295,590

See Notes to Unaudited Interim Consolidated Financial Statements.

HYPERFEED TECHNOLOGIES, INC. AND SUBSIDIARY

Consolidated Statements of Operations (Unaudited)

	For The Three Months Ended June 30,						For The Six Months Ended June 30,
	2003			2002			2003			2002
Revenue
HyperFeed Services	$	2,847,394		$	4,183,725		$	5,877,100		$	8,914,021
PCQuote Services	304,480			371,278			624,608			820,025
Total Revenue	3,151,874			4,555,003			6,501,708			9,734,046

Direct Cost of Services
HyperFeed Services	2,141,994			2,390,408			4,285,081			5,004,416
PCQuote Services	49,490			477,423			109,862			969,988
Total Direct Cost of Services	2,191,484			2,867,831			4,394,943			5,974,404

Gross Margin	960,390			1,687,172			2,106,765			3,759,642

Operating Expenses
Sales	466,961			437,586			903,725			985,511
General and administrative	626,275			722,131			1,185,077			1,305,177
Product and market development	544,810			618,551			1,023,757			1,191,825
Depreciation and amortization	268,671			434,099			539,436			900,366
Total Operating Expenses	1,906,717			2,212,367			3,651,995			4,382,879

Loss from Operations	(946,327		)	(525,195		)	(1,545,230		)	(623,237		)

Other Income (Expense)
Interest income	3,205			6,051			6,078			12,526
Interest expense	(312		)	—			(312		)	(2,772		)
Net Other Income	2,893			6,051			5,766			9,754

Loss from Continuing Operations Before Income Taxes	(943,434		)	(519,144		)	(1,539,464		)	(613,483		)
Income taxes	—			337			—			337
Loss from Continuing Operations	(943,434		)	(519,481		)	(1,539,464		)	(613,820		)

Discontinued Operations
Loss from discontinued operations	(139,258		)	(136,728		)	(318,116		)	(282,914		)
Gain on disposition of discontinued operations	362,189			—			362,189			—
Income (Loss) from Discontinued Operations	222,931			(136,728		)	44,073			(282,914		)

Net Loss	$	(720,503	)	$	(656,209	)	$	(1,495,391	)	$	(896,734	)

Basic and diluted net income (loss) per share:
Continuing operations	$	(0.34	)	$	(0.22	)	$	(0.58	)	$	(0.26	)
Discontinued operations	0.08			(0.05		)	0.01			(0.12		)
Basic and diluted net loss per share	$	(0.26	)	$	(0.27	)	$	(0.57	)	$	(0.38	)

Basic and diluted weighted-average common shares outstanding	2,776,121			2,389,115			2,640,349			2,387,049

See Notes to Unaudited Interim Consolidated Financial Statements.

HYPERFEED TECHNOLOGIES, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows (Unaudited)

	For The Six Months Ended June 30,
	2003			2002
Cash Flows from Operating Activities:
Net loss	$	(1,495,391	)	$	(896,734	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	539,436			900,366
Provision for doubtful accounts	60,000			17,000
Amortization of software development costs	676,385			661,146
Amortization of value assigned to common stock warrant issued in lieu of cash license fees	—			840,000
Loss from discontinued operations	318,116			282,914
Gain on disposition of discontinued operations	(362,189		)	—
Changes in assets and liabilities, net of effects from disposition:
Accounts receivable	23,503			335,895
Prepaid expenses and other current assets	(32,212		)	(112,588		)
Deposits and other assets	34,814			(352		)
Accounts payable	65,288			(5,358		)
Accrued expenses	(972,660		)	(456,600		)
Deferred rent	253,654			(18,044		)
Income taxes payable	—			(5,000		)
Unearned revenue	14,276			(358,831		)
Net Cash Provided By (Used In) Operating Activities	(876,980		)	1,183,814

Cash Flows from Investing Activities:
Purchase of property and equipment	(347,402		)	(215,230		)
Software development costs capitalized	(597,168		)	(683,414		)
Proceeds from sale of discontinued operations	150,000			—
Repayment of note receivable	—			858
Net Cash Used In Investing Activities	(794,570		)	(897,786		)

Cash Flows from Financing Activities:
Proceeds from issuance of common stock	1,454,253			45,709
Issuance (repayment) of notes payable	67,115			(250,000		)
Net Cash Provided By (Used In) Financing Activities	1,521,368			(204,291		)

Net increase (decrease) in cash and cash equivalents	(150,182		)	81,737
Cash and cash equivalents:
Beginning of the period	1,096,711			607,263

End of the period	$	946,529		$	689,000

Supplemental Disclosures of Noncash Investing Activities:
Note received as consideration for disposition of discontinued operations	$	150,000		$	—

See Notes to Unaudited Interim Consolidated Financial Statements.

HYPERFEED TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(1) BASIS OF PRESENTATION

PRINCIPLES OF CONSOLIDATION: The accompanying unaudited interim consolidated financial statements include the accounts of HyperFeed Technologies, Inc. (“HyperFeed” or the “Company”) and its subsidiary, PCQuote.com, Inc. (“PCQuote”), and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The consolidated interim financial statements include all adjustments, including the elimination of all significant intercompany transactions in consolidation, which, in the opinion of management, are necessary in order to make the financial statements not misleading. The amounts indicated as “audited” have been extracted from the Company’s December 31, 2002 annual report. For further information, refer to the consolidated financial statements and footnotes included in HyperFeed’s annual report on Form 10-K for the year ended December 31, 2002.

SOFTWARE DEVELOPMENT COSTS: The Company’s continuing investment in software development consists primarily of enhancements to its Managed Exchange Platform Service (“MEPS”) and H!BOX, its existing Windows-based market data distribution platform, the direct exchange services, the development of new data analysis software and programmer tools and the application of new technology to increase the data volume and delivery speed of the Company’s distribution system.

Costs associated with the planning and design phase of software development, including coding and testing activities necessary to establish technological feasibility of computer software products to be licensed or otherwise marketed, are expensed as research and development costs as incurred. Once technological feasibility has been determined, costs incurred in the construction phase of software development including coding, testing, and product quality assurance are capitalized.

Amortization commences at the time of capitalization or, in the case of a new service offering, at the time the service becomes available for use. Unamortized capitalized costs determined to be in excess of the net realizable value of the product are expensed at the date of such determination. The accumulated amortization and related software development costs are removed from the respective accounts effective in the year following full amortization.

The Company’s policy is to amortize capitalized software costs by the greater of (a) the ratio that current gross revenue for a product bear to the total of current and anticipated future gross revenue for that product or (b) the straight line method over three years, the remaining estimated economic life of the product including the period being reported. The Company assesses the recoverability of its software development costs against estimated future undiscounted cash flows. Given the highly competitive environment and technological changes, it is reasonably possible that those estimates of anticipated future gross revenue, the remaining estimated economic life of the product, or both may be reduced significantly.

FINANCIAL INSTRUMENTS: The Company has no financial instruments for which the carrying value materially differs from fair value.

INCOME TAXES: Income taxes are accounted for under the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

STOCK BASED COMPENSATION: At June 30, 2003, the Company had one stock-based employee compensation plan. The Company has adopted the disclosure-only provisions of Financial Accounting Standards Board (“FASB”) Statement No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), as amended by FASB Statement No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure” (“SFAS 148”) and will continue to use the intrinsic value based method of accounting prescribed by Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees.” Under APB No. 25, no compensation cost has been recognized for options granted with an option price equal to the grant date market value of the Company’s common stock. Had compensation cost for the Company’s options granted been determined based on the fair value of the option at the grant date consistent with the provisions of SFAS 123, the Company’s net loss and net loss per share for the three and six months ended June 30, 2003 and 2002 would have been adjusted to the pro forma amounts indicated below:

	Three months ended June 30,						Six months ended June 30,
	2003			2002			2003			2002
Net loss, as reported	$	(720,503	)	$	(656,209	)	$	(1,495,391	)	$	(896,734	)

Stock-based compensation recovery (expense) determined under fair value method for all awards	136,560			(629,086		)	83,434			(1,402,420		)

Pro forma net loss	$	(583,943	)	$	(1,285,295	)	$	(1,411,957	)	$	(2,299,154	)

Basic and diluted net loss per share, as reported	$	(0.26	)	$	(0.27	)	$	(0.57	)	$	(0.38	)

Pro forma basic and diluted net loss per share	$	(0.21	)	$	(0.54	)	$	(0.53	)	$	(0.96	)

EARNINGS PER SHARE: Basic earnings per share (“EPS”) is based on the weighted-average number of shares outstanding and excludes the dilutive effect of unexercised common stock equivalents. Diluted earnings per share includes the dilutive effect of unexercised common stock equivalents. The Company had equity securities that, if exercised, would have had a dilutive effect on EPS had the Company generated income during the three and six months ended June 30, 2003. The dilutive effect of such securities would have been an additional 27,575 weighted-average shares outstanding during the three months ended June 30, 2003 and an additional 21,835 weighted-average shares outstanding during the six months ended June 30, 2003. The Company did not have any equity securities that, if exercised, would have had a dilutive effect on EPS had the Company generated income during the three and six months ended June 30, 2002. For the three months ended June 30, 2003 and 2002, weighted-average equity securities totaling 518,967 and 885,279, respectively, were excluded from the calculations as their effect was anti-dilutive due to such securities having exercise prices in excess of the weighted-average fair value of the Company’s common stock during the three month periods. For the six months ended June 30, 2003 and 2002, weighted-average equity securities totaling 1,013,023 and 1,378,567, respectively, were excluded from the calculations as their effect was anti-dilutive due to such securities having exercise prices in excess of the weighted-average fair value of the Company’s common stock during the six month periods.

REVENUE RECOGNITION: The Company principally derives its revenue from service contracts for the provision of market data only (“HyperFeed® license fees”) and service contracts for the provision of market data together with analytical software (“Analytics license fees”). HyperFeed primarily services the business-to-business marketplace. Revenue from service contracts is recognized ratably over the contract term as the contracted services are rendered. HyperFeed customers are generally billed one month in advance with 30-day payment terms. Payments received prior to services being rendered are classified as unearned revenue on the balance sheet. Customers’ deposits on service contracts are classified as either current unearned revenue, if the contract expires in one year or less, or non-current unearned revenue, if the contract expiration date is greater than one year.

On June 2, 2003, the Company sold certain assets of PCQuote, consisting of its retail investor unit and Web site. Revenue recognized prior to June 2, 2003 related to the PCQuote assets sold was primarily derived from analytics service, powered by the HyperFeed data feed, for Internet users in the consumer marketplace and from the sale of advertising on its Web site, www.pcquote.com. Revenue from the sale of advertising was recognized as the advertising was displayed on the Web site. License fees for Analytics on the Internet were generally paid by credit card within five days prior to the month of service and classified as unearned revenue on the balance sheet. The retained PCQuote assets generate revenue from HyperFeed market data delivered over the Internet and integrated into customer’s proprietary Web application or used to populate electronic tickerboards. Additionally, PCQuote derives revenue from license fees for customers referred by PCQuote to Townsend Analytics, Ltd. prior to December 31, 2002. Following the completion of the sale, the corporate name of PCQuote.com, Inc. was changed to HYPRWare, Inc.

The Company applies the provisions of Statement of Position 97-2, “Software Revenue Recognition,” as amended, which specifies the following four criteria that must be met prior to recognizing revenue: (1) persuasive evidence of the existence of an arrangement, (2) delivery, (3) fixed or determinable fee, and (4) probable collection. In addition, revenue earned on software arrangements involving multiple elements is allocated to each element based on the relative fair value of the elements. When applicable, revenue allocated to the Company’s software products (including specified upgrades/enhancements) is recognized upon delivery of the products. Revenue allocated to post contract customer support is recognized ratably over the term of the support and revenue allocated to service elements (such as training) is recognized as the services are performed.

(2) RECLASSIFICATIONS

We have reclassified our consolidated statements of operations data for all periods presented to reflect the sale on June 2, 2003 of the individual retail investor unit and related assets of our subsidiary, PCQuote, which has been accounted for as a discontinued operation.

(3) INCOME TAXES

At December 31, 2002, the Company had Federal income tax net operating loss carryforwards of $24.9 million for Federal income tax purposes and $24.5 million for the alternative minimum tax. Of these net operating losses, $1.1 million relates to exercise of incentive employee stock options and will be credited directly to stockholders’ equity when realized. The Company also had research and development credits of $106,000 that will all expire by 2011 if not previously utilized. The future utilization of these net operating losses and research and development credits will be limited due to changes in Company ownership. The net operating loss carryforwards expire through 2022. The Company has not recorded any tax benefits related to these net operating loss carryforwards.

(4) SEGMENT INFORMATION

While the Company operates in one industry, financial services, in applying SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information”, the Company has identified two segments within which it operates. The parent Company’s services are principally in the business-to-business sector, while its subsidiary, PCQuote, operates in the business-to-consumer marketplace. The Company evaluates performance and allocates resources based on operating profitability and growth potential. The accounting policies of the reportable segments are the same as those described in Note 1. Financial information relating to industry segments for the three and six months ended June 30, 2003 and June 30, 2002 is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2003			2002			2003			2002
Sales to unaffiliated customers:
HyperFeed services	$	2,847,394		$	4,183,725		$	5,877,100		$	8,914,021
PCQuote services	304,480			371,278			624,608			820,025
Total revenue	$	3,151,874		$	4,555,003		$	6,501,708		$	9,734,046

HyperFeed services	90.3		%	91.8		%	90.4		%	91.6		%
PCQuote services	9.7		%	8.2		%	9.6		%	8.4		%
Total revenue	100.0		%	100.0		%	100.0		%	100.0		%

Operating income (loss) from continuing operations
HyperFeed services	$	(1,068,471	)	$	(235,367	)	$	(1,783,856	)	$	(106,215	)
PCQuote services	122,144			(289,828		)	238,626			(517,022		)
Total operating loss from continuing operations	$	(946,327	)	$	(525,195	)	$	(1,545,230	)	$	(623,237	)

HyperFeed services			*	44.8		%			*	17.0		%
PCQuote services			*	55.2		%			*	83.0		%
Total operating loss from continuing operations			*	100.0		%			*	100.0		%

Identifiable assets:
HyperFeed services	$	5,454,594		$	7,714,427		$	5,454,594		$	7,714,427
PCQuote services	476,035			944,051			476,035			944,051
Total identifiable assets	$	5,930,629		$	8,658,478		$	5,930,629		$	8,658,478

HyperFeed services	92.0		%	89.1		%	92.0		%	89.1		%
PCQuote services	8.0		%	10.9		%	8.0		%	10.9		%
Total identifiable assets	100.0		%	100.0		%	100.0		%	100.0		%

* not meaningful

(5) DISCONTINUED OPERATIONS

On June 2, 2003, the Company sold the individual retail investor unit and related assets of its subsidiary, PCQuote, to a third party and recorded a $362,189 gain on the sale. The sale was part of the Company's definitive strategy to reduce its dependence on revenue from the individual investor and replace and grow that revenue from MEPS technology licensing sales. It also allowed us to expand and transition our customer base from two target markets (retail and institutional) to six target markets, including exchanges, content providers, re-distributors, institutions, channel partners, and value-added resellers. The sale price consisted of (1) $150,000 cash received in June 2003, (2) $70,000 cash received in July 2003, and (3) a $150,000 promissory note due in twelve equal installments commencing on July 15, 2003 with an interest rate of 8.0% per annum. The Company transferred net assets with a net book value of $7,811 to the third party. As a result of the sale, the disposition has been accounted for as a discontinued operation in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, and, accordingly, amounts in the consolidated statement of operations for all periods shown have been reclassified to reflect the disposition as a discontinued operation. The results of operations for the discontinued business are as follows:

	Three months ended June 30,						Six months ended June 30,
	2003			2002			2003			2002
Revenue	$	182,711		$	416,073		$	485,543		$	883,270
Direct Cost of Services	131,301			263,427			337,445			577,096
Gross Margin	51,410			152,646			148,098			306,174
Operating Expenses	190,668			289,374			466,214			589,088
Loss from discontinued operations	$	(139,258	)	$	(136,728	)	$	(318,116	)	$	(282,914	)

(6) PRIVATE PLACEMENT OFFERING

On May 15, 2003, the Company completed a planned private placement of 526,063 shares of common stock to its executive officers, individual board members, and largest investor, PICO Holdings, Inc., for an aggregate purchase price of $1.4 million.

(7) REVERSE STOCK SPLIT

On August 13, 2003, the Company effected a one-for-ten (1:10) reverse split of its common stock. All share and per share data of the Company in the accompanying unaudited interim consolidated financial statements and in these notes to the unaudited consolidated financial statements give effect to the reverse stock split.

PART I. ITEM 2

Management’s Discussion and Analysis of
Financial Condition and Results of Operations

INTRODUCTION – SAFE HARBOR DISCLOSURE

The following discussion and analysis contains historical information. It also contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, particularly in reference to statements regarding our expectations, plans, and objectives. You can generally identify forward-looking statements by the use of the words “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “continue,” or similar language. Forward-looking statements involve substantial risks and uncertainties. You should give careful consideration to cautionary statements made in this discussion and analysis. We base our statements on our current expectations. HyperFeed undertakes no obligation to publicly release the results of any revision to these forward-looking statements which may be made to reflect events or circumstances after the dates hereof or to reflect the occurrence of unanticipated events. Forward-looking statements may be impacted by a number of factors, risks, and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Among these factors are:

(i) that the information is of a preliminary nature and may be subject to further adjustment;

(ii) variability in our quarterly operating results;

(iii) our ability to fund our current and future business strategies either through continuing operations or external financing;

(iv) our ability to successfully attract and retain qualified management and key employees;

(v) our ability to successfully compete against competitive products and services;

(vi) our ability to deliver and maintain performance standards according to the terms and conditions of our customer contracts;

(vii) our ability to maintain relationships with key suppliers and providers of market data;

(viii) our ability to maintain our existing customer base while increasing our presence in the financial institutional marketplace;

(ix) our ability to develop, complete and introduce new product and service initiatives in a timely manner and at competitive price and performance levels;

(x) our ability to manage the timing of the development and introduction of new products or enhanced versions of existing products;

(xi) our ability to gain the market’s acceptance of new products;

(xii) the effect of economic and business conditions generally;

(xiii) risks related to pending or future legal proceedings;

(xiv) risks relating to possible delisting from The Nasdaq SmallCap Market; and

(xv) other risks identified from time to time in our reports and registration statements filed with the Securities and Exchange Commission.

OVERVIEW

We are a provider of Managed Exchange Platform Services (“MEPS”) to exchanges, content providers, re-distributors, institutions, channel partners, and value-added resellers. Our ticker plant technology and financial exchange managed services are designed specifically to support the delivery of real-time data, data management, data reporting, and value added services for use in distributing and receiving financial content with a competitive edge. Beginning with a comprehensive understanding of the diverse needs of the financial equities industry, we apply advanced technologies to the processing, delivery, distribution and access to financial market data. HyperFeed® offers some of the fastest, most complete and reliable MEPS that can be used with industry-leading APIs, third-party applications or online desktop solutions.

We are focused on products and services that produce the most revenue from our ticker plant technologies. Our sales model includes direct sales, alliance partner (channel) sales, and building business development relationships.

In the second quarter of 2003, we achieved major milestones in the execution of our strategy to license our core ticker plant technologies in a managed services model. Specifically, we (i) launched our new product initiatives, MEPS and H!BOX; (ii) obtained validation and buy-in on the new products by signing contracts with key industry customers; (iii) divested a portion of the assets associated with our retail investor subsidiary, PCQuote; and (iv) launched our H!VE Partnership Program.

(i) MEPS and H!BOX Launch

On May 15, 2003, we launched MEPS to our target customer base. MEPS is a new revenue stream, addressing the expected decrease in revenue from retail investors in general and from the sale of part of our subsidiary, PCQuote. Upon launch, we had already secured our first MEPS customer, CBOE. We have since added two enterprise level ($125,000/month or greater) MEPS customers. We expect to realize revenue from MEPS technology sales after the installation period is completed, which can be from three to six months after the sale.

MEPS offers customers the ability to interchange combinations of content providers and direct exchange connectivity with a fully managed suite of services. As a complete turnkey solution for the normalization, data-basing, integration and transmission of high performance, real-time data sources from exchanges, consolidated data vendors and proprietary in-house sources, MEPS provides direct access to all North American exchanges and offers a complete set of data cleansing and management tools for remote or on-site use. It provides adaptors to a number of widely used middleware platforms and can be used collectively as a complete solution or individually to augment the functionality of other vendor system products. There are five components to our MEPS: Front End Processors (“FEP”), Data Management, Value Added Services, Technologies, and Tools and Adaptors.

On June 16, 2003, we released our on-site ticker plant — H!BOX. H!BOX is an offering born from MEPS, that allows customers to have a complete on-site financial ticker plant solution. While MEPS is a high level solution offering the utmost in flexibility and customization, H!BOX is an off-the-shelf solution for customers who want the benefits associated with direct exchange access, but who do not require the development and breadth of customization MEPS offers. As a complete, on-site financial exchange information processing solution, H!BOX is housed in a server class machine to reduce infrastructure costs. It provides customers with the means to receive and manage real-time data lines directly from any source. H!BOX plugs into all five MEPS components to offer customers a complete solution.

(ii) MEPS Customers

Simultaneous with the launch of MEPS on May 15, 2003, we announced our first MEPS customer, The Chicago Board Options Exchange (“CBOE”). CBOE is using our ticker plant technologies in a MEPS model to manage market data available through CBOEdirect HyTS^TM, CBOE’s innovative new Hybrid Trading System. Our MEPS, coupled with CBOE’s systems, is providing exchange data for auto quoting in the exchange’s new Hybrid trading environment.

On May 29, 2003, we announced that we had extended and renewed our contract with OptionsXpress. OptionsXpress customers are making complex trading decisions based on proprietary trading applications powered by our high performance exchange data, a component of MEPS. Our exchange data feed is known for its speed, its dynamic options data, its ability to transmit complete options strings and its capability to produce in-depth delayed options data. Options traders can log into the OptionsXpress Web site and access our real-time streaming data, as well as snapshot and delayed information via OptionsXpress trading products.

Subsequent to the second quarter, we signed contracts with more key customers including MoneyLine Telerate, FutureTrade, MidasTrade, First Options of Chicago, and a large enterprise level customer. The total potential aggregate revenue from these contracts will be approximately $350,000 per month. We expect to realize revenue from these contracts after the installation period is completed, which can be from three to six months after the signing of the contract. There is no assurance that the total potential revenue will be realized.

On July 10, 2003, we announced that MoneyLine Telerate (“MLT”) signed a multi-year, multi-million dollar agreement to license and deploy our MEPS and H!BOX ticker plant technologies globally. MLT, a leading global provider of real-time information and transaction services, will use our MEPS and H!BOX to augment its own global ticker plant, Crucible, and as the distribution technology for its data.

(iii) Sale of PCQuote

On June 2, 2003, we executed a definitive agreement for the sale of the individual retail investor unit of our subsidiary, PCQuote, to Money.net, Inc. (“Money.net”), a leading provider of streaming real time market data and custom financial software and technology. Money.net acquired the PCQuote Web site and the retail investor applications available through PCQuote. We retained the portion of PCQuote that provides streaming real-time quote objects over customer’s Web sites. Following the completion of the sale, the corporate name of PCQuote.com, Inc. was changed to HYPRWare, Inc.

This sale was part of our definitive strategy to reduce our dependence on revenue from the individual investor and replace and grow that revenue with MEPS technology licensing sales. It also allowed us to expand and transition our customer

base from two target markets (retail and institutional) to six target markets, including exchanges, content providers, re-distributors, institutions, channel partners, and value-added resellers.

(iv) H!VE Partnership Program Launch

On June 10, 2003, we launched our H!VE Partnership Program. The goal of the H!VE Program is to allow access to exchange information and services to a wide variety of Joint Products Partners, Alliance Partners, Network Service Providers, Technology Partners and Contributors. We encourage partners and end users to utilize our standards based offerings in a non-proprietary model to facilitate solutions that make sense for their own customers. Our customers get the added benefit of being able to utilize H!VE Partner products with their current distribution systems. By leveraging our MEPS, H!VE partners can take advantage of their core competencies while saving on costs and benefiting from expanded distribution and increased exposure to an expanded customer base.

Key H!VE partnerships executed in the second quarter of 2003 include: Tibco, Savvis, VhaYu, EGAR, InfoReach, Visualize and Fusion InfoTech.

RECENT BUSINESS DEVELOPMENTS

PC Quote Canada Settlement

On July 24, 2003, the Company and PC Quote Canada signed a settlement agreement each releasing the other from all claims. The case has been dismissed with each party agreeing to bear their own costs.

MoneyLine Telerate

On July 10, 2003, HyperFeed announced that MoneyLine Telerate had signed a multi-year, multi-million dollar agreement to license and deploy HyperFeed’s MEPS and H!BOX ticker plant technologies globally. MoneyLine Telerate, a leading global provider of real-time information and transaction services, will use HyperFeed’s MEPS and H!BOX to augment its own global ticker plant, Crucible, and as the distribution technology for its data.

Continuation of Listing on The Nasdaq SmallCap Market

On July 15, 2003, the Company was notified that its common stock would continue to be listed on The Nasdaq SmallCap Market in accordance with the exception from the continued listing criteria granted by the Nasdaq Listing Qualifications Panel (the “Panel”). The exception was granted subsequent to the June 19, 2003 hearing held before the Panel.

Under the terms and conditions of the exception, HyperFeed is required to meet certain interim performance and disclosure milestones. Specifically, on or before August 14, 2003 and for ten consecutive trading days thereafter, HyperFeed must demonstrate a closing bid price of at least $1.00 per share. Further, on or before the same date, HyperFeed must file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 evidencing stockholders’ equity of at least $2.5 million. Finally, on or before November 14, 2003, HyperFeed must file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 evidencing stockholders’ equity of at least $2.5 million.

The exception will expire on November 14, 2003 subject to said milestones to be achieved and evidenced by HyperFeed. In the event that the Company is deemed to have met all of the terms of the exception, its securities will continue to be listed on The Nasdaq SmallCap Market. HyperFeed has presented the Panel with a definitive plan that should enable the Company to achieve compliance with continued listing criteria during the period of time set forth in the Panel’s decision. However, there is no assurance that it will be able to do so.

Should HyperFeed’s securities cease to be listed on The Nasdaq SmallCap Market, the Company’s securities may continue to be listed on the OTC Bulletin Board. A switch to the OTC market will likely result in more volatility for the Company’s stock, less volume, and no analyst coverage. As a result, the Company’s stock price would likely decline further and the ability of any potential or future investors to achieve liquidity from HyperFeed’s common stock could be severely limited, not only in the number of shares that could be bought and sold at a given price, but also through delays in the timing of transactions and reduction in media coverage of the Company. This could inhibit, if not preclude, the Company’s ability to raise additional working capital on acceptable terms, if at all. In addition, current and prospective customers and strategic partners may limit or cease their business relationships with the Company because of concerns or perceptions regarding its listing status and future liquidity.

Effective as of July 18, 2003 and for the duration of the exception, HyperFeed’s trading symbol will be modified to include a fifth character qualifier from “HYPR” to “HYPRC.”

Reverse Stock Split

On August 8, 2003, the Company held a special meeting of stockholders to approve a proposal to grant the Board of Directors authority to effect a reverse stock split of HyperFeed’s common stock currently listed on The Nasdaq SmallCap Market. Following the special meeting of stockholders, the Board of Directors voted to execute a one-for-ten reverse stock split.

To effect the reverse stock split, the Company filed an amendment to its Articles of Incorporation on August 8, 2003. The Company will begin trading under the new symbol “HYPCD” on August 13, 2003. After 20 trading days, the symbol will revert back to “HYPRC.”

As a result of the reverse stock split, the Company’s total number of shares of common stock issued and outstanding will decrease from 30,438,046 to 3,043,805. Fractional shares will be rounded up to the next whole number and HyperFeed will not be paying cash in lieu of issuing fractional shares. Computershare Investor Services, Inc., HyperFeed’s transfer agent, will act as the exchange agent for purposes of implementing the reverse split and exchanging stock certificates.

HyperFeed’s stockholders, management team, and Board of Directors feel that it is important to take the necessary steps to remain listed on The Nasdaq SmallCap Market; a market that will provide greater visibility for the Company’s recent and future successes, including the three enterprise licensing deals it was recently awarded on its new MEPS platform.

RESULTS OF OPERATIONS: FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 2003 AND 2002

Revenues

Total revenue for the six months ended June 30, 2003 decreased 33.2% to $6.5 million compared with $9.7 million for the six months ended June 30, 2002. Total revenue for the three months ended June 30, 2003 decreased 30.8% to $3.2 million compared with $4.6 million for the three months ended June 30, 2002. Both our HyperFeed services and our PCQuote services posted decreases for the six months and three months ended June 30, 2003 compared to the same periods in 2002.

HyperFeed service revenue decreased 34.1% to $5.9 million for the six months ended June 30, 2003 compared with $8.9 million for the six months ended June 30, 2002. For the three months ended June 30, 2003, HyperFeed service revenue decreased 31.9% to $2.8 million compared with $4.2 million for the three months ended June 30, 2002. Decreases in the number of end users and related services associated with the provision of analytics applications accounted for 42.6% of the decline in HyperFeed service revenue for the six months ended June 30, 2003 and for 38.7% of the decline for the three months ended June 30, 2003. Additionally, decreases in data feed license fees accounted for 55.0% of the decline in HyperFeed service revenue for the six months ended June 30, 2003 and for 55.9% of the decline for the three months ended June 30, 2003, of which 30.6% and 36.4%, respectively, resulted from a reduction in services provided to our largest customer.

PCQuote service revenue decreased 23.8% to $0.6 million for the six months ended June 30, 2003 compared with $0.8 million for the six months ended June 30, 2002. For the three months ended June 30, 2003, PCQuote service revenue decreased 18.0% to $0.3 million compared with $0.4 million for the three months ended June 30, 2002. The decline in PCQuote service revenue is primarily due to decreases in revenue from Townsend Analytics, Ltd.

Direct Costs of Services

Total direct costs of services decreased 26.4% to $4.4 million for the six months ended June 30, 2003 compared with $6.0 million for the six months ended June 30, 2002. For the three months ended June 30, 2003, total direct costs of services decreased 23.6% to $2.2 million compared with $2.9 million for the three months ended June 30, 2002. Principal components of the decrease in both periods were royalties and payments to providers of market data, attributable to the decline in analytics subscriptions, and the decrease in amortization of prepaid license fees, which were fully amortized in the fourth quarter of 2002, offset by increases in datafeed operations costs related to data acquisition and distribution costs. Amortization of software development costs remained unchanged at $0.7 million for the six months ended June 30,

2003 and at $0.3 million for the three months ended June 30, 2003. Gross margin decreased 44.0% to $2.1 million for the six months ended June 30, 2003 compared with $3.8 million for the six months ended June 30, 2002. Gross margin decreased 43.1% to $1.0 million for the three months ended June 30, 2003 compared with $1.7 million for the three months ended June 30, 2002. Direct costs, as a percentage of revenue, increased to 67.6% for the six months ended June 30, 2003 compared with 61.4% for the six months ended June 30, 2002. Direct costs as a percentage of revenue increased to 69.5% for the three months ended June 30, 2003 compared with 63.0% for the three months ended June 30, 2002.

Direct costs associated with HyperFeed services decreased 14.4% to $4.3 million for the six months ended June 30, 2003 compared with $5.0 million for the six months ended June 30, 2002. For the three months ended June 30, 2003, direct costs associated with HyperFeed services decreased 10.4% to $2.1 million compared with $2.4 million for the three months ended June 30, 2002. Increases in datafeed operations costs related to data acquisition and distribution costs were offset by decreases in costs related to product royalties and exchange fees, directly attributable to the decrease in analytics subscription revenue. The resulting gross margin for HyperFeed services decreased 59.3% to $1.6 million for the six months ended June 30, 2003 compared with $3.9 million for the six months ended June 30, 2002 and decreased 60.7% to $0.7 million for the three months ended June 30, 2003 compared with $1.8 million for the three months ended June 30, 2002. HyperFeed services gross margin as a percentage of HyperFeed services revenue decreased to 27.1% for the six months ended June 30, 2003 compared to 43.9% for the six months ended June 30, 2002 and decreased to 24.8% for the three months ended June 30, 2003 compared to 42.9% for the three months ended June 30, 2002. This decrease in gross margin is due to declines in revenue exceeding the cost saving measures implemented in the fourth quarter of 2002.

Direct costs associated with PCQuote services decreased 88.7% to $0.1 million for the six months ended June 30, 2003 compared with $1.0 million for the six months ended June 30, 2002. For the three months ended June 30, 2003, direct costs associated with PCQuote services decreased 89.6% to $49,000 compared with $0.5 million for the three months ended June 30, 2002. The amortization of prepaid license fees, which were fully amortized in the fourth quarter of 2002, was the principal component of the decrease in direct costs. The resulting gross margin on PCQuote services increased to $0.5 million for the six months ended June 30, 2003 compared with ($0.1) million for the six months ended June 30, 2002 and increased to $0.3 million for the three months ended June 30, 2003 compared with ($0.1) million for the three months ended June 30, 2002. PCQuote services gross margin as a percentage of PCQuote services revenue increased to 82.4% for the six months ended June 30, 2003 compared to (18.3)% for the six months ended June 30, 2002 and increased to 83.7% for the three months ended June 30, 2003 compared to (28.6)% for the three months ended June 30, 2002.

Operating Expenses

Total operating expenses decreased 16.7% to $3.7 million for the six months ended June 30, 2003 compared with $4.4 million for the six months ended June 30, 2002. For the three months ended June 30, 2003, total operating expenses decreased 13.8% to $1.9 million compared with $2.2 million for the three months ended June 30, 2002. Decreases, principally due to cost saving measures associated with the restructuring in the fourth quarter of 2002, were experienced in all categories for the six months ended June 30, 2003 and in all categories except sales for the three months ended June 30, 2003. As a percentage of revenue, total operating expenses increased to 56.2% for the six months ended June 30, 2003 compared to 45.0% for the six months ended June 30, 2002 and increased to 60.5% for the three months ended June 30, 2003 compared to 48.6% for the three months ended June 30, 2002. This increase was due to declines in revenue exceeding the cost saving measures implemented in the fourth quarter of 2002.

Sales costs decreased 8.3% to $0.9 million for the six months ended June 30, 2003 compared with $1.0 million for the six months ended June 30, 2002, as a result of lower commission expense commensurate with the decrease in revenue. For the three months ended June 30, 2003, sales costs increased 6.7% to $0.5 million compared with $0.4 million for the three months ended June 30, 2002, as a result of higher travel and entertainment expenses. Sales costs as a percentage of revenue increased to 13.9% for the six months ended June 30, 2003 compared to 10.1% for the six months ended June 30, 2002 and increased to 14.8% for the three months ended June 30, 2003 compared to 9.6% for the three months ended June 30, 2002.

General and administrative expenses decreased 9.2% to $1.2 million for the six months ended June 30, 2003 compared with $1.3 million for the six months ended June 30, 2002. For the three months ended June 30, 2003, general and administrative expenses decreased 13.3% to $0.6 million compared with $0.7 million for the three months ended June 30, 2002. The decreases were due to cost saving measures implemented in the fourth quarter of 2002, principally in compensation and related expenses, rent expense, and professional fees. General and administrative expenses as a percentage of revenue increased to 18.2% for the six months ended June 30, 2003

compared to 13.4% for the six months ended June 30, 2002 and increased to 19.9% for the three months ended June 30, 2003 compared to 15.9% for the three months ended June 30, 2002.

Product and market development costs decreased 14.1% to $1.0 million for the six months ended June 30, 2003 compared with $1.2 million for the six months ended June 30, 2002. For the three months ended June 30, 2003, product and market development costs decreased 11.9% to $0.5 million compared with $0.6 million for the three months ended June 30, 2002. The decreases were principally due to reductions in employee compensation and related expenses attributable to the workforce reduction in the fourth quarter of 2002. Product and market development costs as a percentage of revenue increased to 15.7% for the six months ended June 30, 2003 compared to 12.2% for the six months ended June 30, 2002 and increased to 17.3% for the three months ended June 30, 2003 compared to 13.6% for the three months ended June 30, 2002.

Depreciation and amortization decreased 40.1% to $0.5 million for the six months ended June 30, 2003 compared with $0.9 million for the six months ended June 30, 2002. For the three months ended June 30, 2003, depreciation and amortization decreased 38.1% to $0.3 million compared with $0.4 million for the three months ended June 30, 2002. The decrease primarily results from the write-down of intangible assets and the write-off of certain fixed assets relating to the restructuring in the fourth quarter of 2002. Depreciation and amortization as a percentage of revenue decreased to 8.3% for the six months ended June 30, 2003 compared to 9.2% for the six months ended June 30, 2002 and decreased to 8.5% for the three months ended June 30, 2003 compared to 9.5% for the three months ended June 30, 2002.

Discontinued Operations

On June 2, 2003, the Company disposed of the individual retail investor unit and related assets of its subsidiary, PCQuote. Income from discontinued operations of $44,000 for the six months ended June 30, 2003 includes a gain on disposition of $0.4 million compared with a net loss from operations of $0.3 million for the six months ended June 30, 2002. Income from discontinued operations of $0.2 million for the three months ended June 30, 2003 includes a gain on disposition of $0.4 million compared with a net loss from operations of $0.1 million for the three months ended June 30, 2002.

CRITICAL ACCOUNTING POLICIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses the Company’s unaudited interim consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

On an on-going basis, management evaluates its estimates and judgments, including those related to bad debts and intangible assets. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management believes the following critical accounting policies, among others, affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

Allowance For Doubtful Accounts: We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make payments for services or debtors to satisfy note receivable obligations. We analyze accounts receivable, customer credit-worthiness, current economic trends and changes in our customer payment terms when evaluating the adequacy of the allowance for doubtful accounts and notes receivable. If the financial condition of our customers or debtors deteriorates, resulting in an impairment of their ability to make payments, additional allowances may be required.

Valuation of Intangible Assets and Software Development Costs: We assess the impairment of intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors we consider important which could trigger an impairment review include significant underperformance relative to expected historical or projected future operating results, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, and significant negative industry or economic trends. The Company assesses the recoverability of its software development costs against estimated future revenue over the estimated remaining economic life of the software.

LIQUIDITY AND CAPITAL RESOURCES

Net cash and cash equivalents of $0.9 million at June 30, 2003 decreased $0.2 million from $1.1 million at December 31, 2002. The decrease is due to our operating loss as well as our continuing investment in equipment and our developed technology.

The net cash of $0.9 million used in operating activities for the six months ended June 30, 2003 is due to our net loss and a decrease in accrued expenses, offset in part by non-cash items such as depreciation and amortization of long-lived assets. The decrease in accrued expenses relates to the restructuring charge recorded in fourth quarter of 2002. Net cash of $1.2 million provided by operating activities for the six months ended June 30, 2002 is primarily due to depreciation and amortization, including amortization of prepaid license fees as a result of the value assigned to the warrant issued in April 1999 to CNNfn, offset by changes in operating assets and liabilities.

The net cash of $0.8 million used in investing activities for the six months ended June 30, 2003 is due to our investment in equipment and our developed technology, offset by $0.2 million of proceeds from the sale of our discontinued operation. Net cash used in investing activities for the six months ended June 30, 2002 was $0.9 million. Capital expenditures were $0.3 million for the six months ended June 30, 2003 compared to $0.2 million for the six months ended June 30, 2002. The increase in capital expenditures is primarily due to our business strategy of licensing our ticker plant technology in a MEPS model. We anticipate our capital expenditures to continue to increase as we purchase equipment to support and maintain our MEPS product. Capitalized software costs were $0.6 million for the six months ended June 30, 2003 compared to $0.7 million for the six months ended June 30, 2002.

On June 2, 2003, we sold the individual retail investor unit and related assets of our subsidiary, PCQuote, to Money.net, a HyperFeed customer and a leading provider of streaming real time market data and custom financial software and technology. Money.net acquired the PCQuote Web site and the retail-trading applications available through PCQuote. We recorded a gain of $0.4 million related to the sale. The consideration included (1) $150,000 cash received in June 2003, (2) $70,000 cash received in July 2003, and (3) a $150,000 promissory note. The Company transferred net assets with a net book value of $7,811 to Money.net.

Net cash of $1.5 million provided by financing activities for the six months ended June 30, 2003 is primarily due to the $1.4 private placement of common stock with our executive officers, individual board members, and the Company’s majority stockholder, PICO Holdings, Inc., completed in May 2003. Net cash used in financing activities for the six months ended June 30, 2002 was $0.2 million. Net proceeds from the sale of shares of common stock to employees pursuant to our Employee Stock Purchase Plan provided $31,000 and $46,000 for the six months ended June 30, 2003 and 2002, respectively. In the second quarter of 2003, we borrowed $69,000 to finance capital expenditures relating to specific customers and repaid $2,000 in June 2003. In the first quarter of 2002, we made the last $250,000 installment payment on our note payable to Motorola.

Earnings before interest, taxes, depreciation, and amortization (“EBITDA”) was a loss of $0.3 million for the six months ended June 30, 2003 compared to income of $1.8 million for the six months ended June 30, 2002. EBITDA was a loss of $0.3 million for the three months ended June 30, 2003 compared to income of $0.7 million for the three months ended June 30, 2002. A reconciliation of EBITDA to net loss for the three and six months ended June 30, 2003 and June 30, 2002 follows:

	Three months ended June 30,						Six months ended June 30,
	2003			2002			2003			2002
EBITDA	$	(338,015	)	$	664,950		$	(329,409	)	$	1,778,275
Depreciation and amortization	(268,671		)	(434,099		)	(539,436		)	(900,366		)
Amortization of value assigned to common stock warrant issued in lieu of cash license fees	—			(420,000		)	—			(840,000		)
Amortization of software development costs	(339,641		)	(336,046		)	(676,385		)	(661,146		)
Interest income, net	2,893			6,051			5,766			9,754
Income (loss) from discontinued operations	222,931			(136,728		)	44,073			(282,914		)
Income taxes	—			(337		)	—			(337		)
Net loss	$	(720,503	)	$	(656,209	)	$	(1,495,391	)	$	(896,734	)

We believe our existing capital resources, available line of credit, cash generated from continuing operations and our ability to access external capital, if necessary, are sufficient for working capital and to fund operations over the next twelve months.

As previously reported, we have explored multiple alternatives that may be available for the purpose of enhancing stockholder value, including a merger, a spin-off or sale of part of our business, a strategic relationship or joint venture with another technology or financial services firm and equity financing. We continue to explore opportunities to enhance stockholder value.

EFFECT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation - Transition and Disclosure, an amendment of FASB Statement No. 123”. This Statement amends FASB Statement No. 123, “Accounting for Stock-Based Compensation”, to provide alternative methods of transition for a voluntary change to the fair value method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirements of Statement No. 123 to require prominent disclosures in both annual and interim financial statements. The Company adopted the disclosure provisions of SFAS No. 148 in December 2002.

In November 2002, the FASB reached a consensus on EITF Issue 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables” (“the Issue”). The guidance in this Issue is effective for revenue arrangements entered into for fiscal periods beginning after June 15, 2003. The Issue addresses certain aspects of the accounting by a vendor for arrangements under which it will perform multiple revenue-generating activities. Specifically, the Issue addresses how to determine whether an arrangement involving multiple deliverables contains more than one earnings process and, if it does, how to divide the arrangement into separate units of accounting consistent with the identified earnings processes for revenue recognition purposes. The Issue also addresses how arrangement consideration should be measured and allocated to the separate units of accounting in the arrangement. Management is currently reviewing the impact that EITF 00-21 will have on the Company’s future results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the Company’s market risk during the three and six month periods ended June 30, 2003. For additional information, refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002.

ITEM 4. CONTROLS AND PROCEDURES

(a)		Disclosure Controls and Procedures. The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this quarterly report. Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that the Company file or submit under the Exchange Act.

(b)		Internal Control Over Financial Reporting. There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rule 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

HyperFeed v. PC Quote Canada: On July 3, 2002, the Company filed a two-count action against PC Quote Canada asserting breach of Agency License Agreement (the “Agreement”) and fraud and unjust enrichment and requests damages, plus interest, costs and attorneys fees. The defendant filed an answer, affirmative defenses and counterclaim asserting that oral agreement modified the Agency License Agreement and requests damages.

On January 28, 2003, the defendant filed a motion for a preliminary injunction to enjoin HyperFeed from terminating services provided under the Agreement and HyperFeed has agreed not to terminate such services until a court-ordered audit of the defendant’s records has been completed.

On March 28, 2003, the defendant filed an amended counterclaim claiming breach of the contract. In its amended counterclaim, the defendant (1) claims unjust enrichment, (2) claims overpayment of communication fees, (3) claims that HyperFeed licensed directly to users in Canada and/or allowed U.S. customers to do so in violation of the defendant’s exclusive license in Canada, (4) claims breach of contract for terminating the Agreement, and (5) requests an injunction.

The defendant requests damages in excess of $1.4 million. HyperFeed answered the counterclaim denying all material allegations and believes the claims are without merit.

On July 24, 2003, the Company and the defendant signed a settlement agreement, releasing the other from all claims. The case has been dismissed with each party to bear their own costs.

HyperFeed v. John Juska: HyperFeed filed a one-count complaint action in the Circuit Court of Cook County, Illinois on December 17, 2002, claiming failure to pay on a promissory note and requesting damages in excess of $250,000, plus interest through the date of payment, costs and attorneys fees. Mr. Juska filed an answer and affirmative defenses to the Complaint. The parties are now conducting discovery.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

On May 15, 2003 we completed a planned private placement of 526,063 shares of common stock to our executive officers, individual board members, and largest investor, PICO Holdings, Inc., for an aggregate purchase price of $1.4 million. During the first and second quarters of 2003, we issued 7,126 and 7,547 shares of our common stock, respectively, to employees, who purchased the shares under our Employee Stock Purchase Plan.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The annual meeting of the stockholders of HyperFeed Technologies, Inc. was held on May 15, 2003. The following proposals were submitted, considered and voted upon, as indicated below, by the stockholders. The share amounts listed below have not been adjusted for the reverse stock split, effective August 13, 2003.

1. To elect seven members to our Board of Directors to serve until the 2004 Annual Meeting, or until their successors are elected and shall have qualified.

Director	Shares For	Shares Withheld
Jim R. Porter	23,845,247	133,254
Louis J. Morgan	23,844,859	133,642
Ronald Langley	23,725,951	252,550
John R. Hart	23,845,297	133,204
Charles J. Henry	23,845,097	133,404
Kenneth J. Slepicka	23,844,858	133,643
John L. Borling	23,845,297	133,204

2. To approve an amendment to the 1995 Employee Stock Purchase Plan to increase the number of shares issuable under the plan from 1,000,000 shares to 2,000,000 shares.

Shares For		Shares Against		Abstentions		Not Voted
13,923,737		511,255		51,245		9,492,264

3. To approve a private placement of 5,260,628 shares of common stock (representing 17.4% of the Company’s outstanding common stock after including the shares from this transaction) at $0.2705 per share to officers, board members and an affiliate for an aggregate purchase price of $1,423,000.

Shares For		Shares Against		Abstentions		Not Voted
13,903,751		540,425		42,061		9,492,264

4. To approve and ratify the appointment of KPMG LLP as our independent auditors for 2003.

Shares For		Shares Against		Abstentions
23,879,554		69,747		29,200

No other matters were submitted for vote.

ITEM 5. OTHER INFORMATION

In May 2003, the Company received notification from Nasdaq indicating that the Company failed to comply with the minimum $1.00 per share continued listing requirements set forth in NASD Marketplace Rule 4310(c)(4) and that it is not in compliance with listing maintenance standards established by Nasdaq requiring that the Company have stockholders’ equity of at least $2.5 million, or a $35 million market value of listed securities, or $500,000 of net income from continuing income for the most recently completed fiscal year or two of the three most recently completed fiscal years.

Nasdaq further informed the Company that if it did not appeal the decision, HyperFeed’s common stock would be delisted from The Nasdaq SmallCap Market at the opening of business on May 22, 2003. The Company requested and was granted a hearing with Nasdaq on June 19, 2003 to appeal Nasdaq’s determination to delist HyperFeed’s common stock from The Nasdaq SmallCap Market.

Effective as of July 18, 2003 and for the duration of the exception, HyperFeed’s trading symbol will be modified to include a fifth character qualifier from “HYPR” to “HYPRC.”

ITEM 6. EXHIBITS and REPORTS on FORM 8-K

(a) Exhibits

Exhibit 10(a) – Asset Purchase Agreement dated June 2, 2003.

Exhibit 31.1 - Certification of the Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act.

Exhibit 31.2 - Certification of the Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act.

Exhibit 32 – Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code.

(b) A Form 8-K was filed on April 30, 2003 attaching a copy of the press release reporting the first quarter 2003 results.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

HYPERFEED TECHNOLOGIES, INC.


Date:	August 14, 2003

By:	/s/ Jim R. Porter

	Jim R. Porter
	Chairman and Chief Executive Officer

By:	/s/ Randall J. Frapart

	Randall J. Frapart
	Chief Financial Officer and Principal Accounting Officer

EX-10.A 3 a03-2510_1ex10da.htm EX-10.A

Exhibit 10(a)

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of June 2, 2003, is made and entered into by and between PCQUOTE.COM, INC., a Delaware corporation (“Seller”), and Money.net, Inc., a Delaware corporation (“Purchaser”).

WHEREAS, Seller desires to sell certain of Seller’s assets relating to Seller’s retail Internet business that consists of Seller’s website and the sale, processing and delivery of exchange data and services via the internet to non-professional, individual investors, and as such business and operations are currently operated (the “Business”);

WHEREAS, Purchaser desires to purchase such assets and assume certain of Seller’s liabilities;

NOW, THEREFORE, in consideration of the mutual representations, warranties and covenants herein contained, and on the terms and subject to the conditions herein set forth, the parties hereto, intending to be legally bound, hereby covenant and agree as follows:

Article I
Purchase and Sale

Section 1.1 Sale and Purchase of Assets. Subject to and upon the terms and conditions contained herein, at the Closing (as hereinafter defined), Seller shall sell, transfer, assign, convey and deliver to Purchaser, and Purchaser shall purchase, accept and acquire from Seller, the following (collectively, the “Purchased Assets”):

(a) The furniture, office equipment, computer equipment, machinery, equipment, vehicles, and other items of personal property owned by Seller to the extent set forth on Schedule 1.1(a);

(b) The intellectual property rights owned by Seller to the extent set forth on Schedule 1.1(b) (the “Transferred Intellectual Property”);

(d) Copies of all books, documents and records owned by Seller and relating to the operation of the Business;

(e) Copies of all personnel records and payroll records for calendar years 2002 and 2003 for all employees of Seller;

(f) All rights, privileges and interest of Seller arising from the contracts, agreements and understanding to the extent set forth on Schedule 1.1(f) (the “Assigned Contracts”);

(g) All right, title and interest in any assignable licenses and permits relating to the Business; and

(h) All materials and supplies and sundry items owned by Seller and relating to the operation of the Business.

Notwithstanding the foregoing, Seller will not deliver any computer sourcecode relating to any of the Purchased Assets at the Closing. Promptly after the Closing, Seller will deliver such sourcecode to into an escrow pursuant to such terms and with such escrow agent as may be acceptable to the parties with such sourcecode to be delivered to Purchaser upon Seller’s receipt of the cash payment of the Purchase Price contemplated in Section 1.7(a) below.

Section 1.2 Excluded Assets. The Purchased Assets shall not include any of the following (collectively, the “Excluded Assets”):

(a) all cash, cash equivalents, and bank deposits

(b) The intellectual property rights owned or licensed by Seller to the extent set forth on Schedule 1.2(b) (the “Excluded Intellectual Property”);

(c) any tax refund or tax credit (or right to claim such a tax refund or tax credit) for any period ending on or prior to the Closing Date;

(d) all policies of insurance maintained by Seller;

(e) any of Seller’s property, real or personal, other than the Purchased Assets including, without limitation any assets not used in the Business and the assets listed on Schedule 1.2(e); and

(g) all accounts receivable, notes receivable (and any security relating to such notes) and all other receivables of any other kind.

Section 1.3 Assumed Liabilities. Commencing from and after the Closing Date, Purchaser shall assume and agree to pay, perform and discharge, promptly when due the following duties, liabilities and obligations (the “Assumed Liabilities”):

(a) all liabilities relating to the Business and/or the Purchased Assets to the extent accruing after the Closing;

(b) all obligations accruing for all periods from and after the Closing under the Assigned Contracts;

(c) all credit balances due to customers including, but not limited to, those resulting from prepayment and overpayment (“Customer Credits”);

(d) obligations to customers relating to services to be rendered after the Closing and pertaining to the Business for which Seller has already issued invoices (“Invoiced Post-Closing Services”); and

(e) all other debts, obligations and liabilities specifically assumed by Purchaser under this Agreement.

Section 1.4 Transaction with HyperFeed Technologies, Inc. and Ancillary License Agreement.

At the Closing Seller shall enter into a License Agreement in the form attached hereto as Exhibit A-1, pursuant to which Seller will license to Purchaser certain intellectual property rights described in Exhibit A to be licensed from Seller to Purchaser.

At the Closing Seller shall cause HyperFeed Technologies, Inc. (“Parent”) to enter into a License Agreement in the form attached hereto as Exhibit A-2 (together with the license agreement referenced in the preceding paragraph, the “License Agreements”), pursuant to which Parent will license to Purchaser certain intellectual property rights described in Exhibit A (together with the intellectual property to be licensed by Seller pursuant to the preceding paragraph, the “Licensed Intellectual Property”). All Licensed Intellectual Property shall be deemed Excluded Intellectual Property under this Agreement.

In exchange for the licenses granted in the License Agreements and in addition to the payments set forth in Section 1.7 below, Purchaser agrees to amend the DataFeed License Agreement dated October 15, 2002 between Purchaser and Parent (the “DLA”) in a form to be agreed to by the parties no later than the Closing, which amendment shall extend the term of such DLA through January 31, 2008 and shall increase the licensing fees payable under such DLA as follows: (i) beginning February 1, 2004, Purchaser shall pay to Seller an additional $5,000 per month in licensing fees for services provided under such DLA for a total monthly minimum fee of $25,000 (“Minimum Monthly Fees”), (ii) in addition to Minimum Monthly Fees, Purchasers shall pay the following additional incremental fees based on usage:

Number of Users	Usage Fees	Total Monthly Fees
3000-5499 users	$10,000 per month	$35,000 per month
5500-unlimited users	$20,000 per month	$45,000 per month

; provided, however, (A) in calculating the number of users above, pre-existing customers of Purchaser will not be included and future customers of Purchaser that do not utilize any of the Purchased Assets will also not be included and (B) the aggregate license fees payable under the DLA shall be reduced by $1,000 per month in the event that, and for so long as thereafter, the iTrading.com “Private Label Site” has not “gone live” by February 1, 2004 as contemplated in that certain Marketscreen Private Label Agreement dated January 30, 2003, as amended, between Seller and iTrading.com, a Delaware limited liability corporation unless Purchaser collects payments under such agreement notwithstanding any failure to “go live”; (iii) Purchaser shall also pay $3,000 per month for Iverson Historical Data and (iv) Purchaser will be able to terminate the DLA anytime after January 31, 2006, upon written notice to Parent provided that Purchaser pays Parent any outstanding amounts due and a termination fee based on the number of users at the time of termination as follows:

Number of Users	Total Termination Fee
0 - 5499 users	$	50,000
5500 or more users	$	100,000

Seller acknowledges and agrees that any breach by Parent of the DLA referenced above shall be deemed a breach of this Agreement by Seller.

Section 1.5 Transition Services. Following the Closing and pursuant to the terms and conditions set forth in the form of Transition Services Agreement attached hereto as Exhibit B (the “Transition Services Agreement”), Seller will provide certain transition services to Purchaser as described in the Transition Services Agreement.

Section 1.6 Closing. The closing of the transactions contemplated hereby (the “Closing”) shall occur on June 2, 2003 (the “Closing Date”) or such other date as the parties may agree in the offices

of Wildman, Harrold, Allen & Dixon, 225 West Wacker Drive, Chicago, Illinois 60606; provided, however, the parties may close by facsimile with original to follow by overnight courier.

Section 1.7 Purchase Price. The aggregate consideration (the “Purchase Price”) to be paid to Seller for the Purchased Assets and covenants contained in this Agreement shall be both of the following:

(a) a $300,000 cash payment payable on June 15, 2003 in immediately available funds pursuant to the following wire transfer instructions:

Lakeside Bank

141 W. Jackson Boulevard

Chicago, IL 60604-2993

Routing #071001504

Account #1665799001

; and

(b) delivery of a promissory note at closing in form and substance acceptable to Seller in the principal amount of $150,000 bearing interest at the rate of 8% per annum with interest and principal payable in twelve equal monthly installments commencing on June 1, 2003 and secured by a grant of a valid first priority security interest in the Purchase Assets.

In addition, Seller shall remit to Purchaser at Closing $70,000 representing the estimated amount of (i) accounts receivable and notes receivable as of the Closing pertaining Post-Closing Services and (ii) Customer Credits. Within five (5) business days following the Closing, Seller and Purchase shall agree in good faith as to the actual amount of Customer Credits and accounts receivable for Post-Closing Services as of the Closing. Upon the completion of such reconciliation, Purchaser and Seller agree to promptly make appropriate payments reconciling the actual amounts to the $70,000 estimate.

Section 1.8 Allocation of Purchase Price. The Purchase Price shall be allocated to the Purchased Assets as set forth on Schedule 1.8. Seller and Purchaser each covenant and warrant to each other that in no tax return hereafter filed by any party or any of their respective successors or assigns, shall the allocation of the Purchase Price be treated or reported inconsistently with or differently from the allocation of the Purchase Price set forth above, unless such change in allocation is the result of a determination by a governing authority for that year or a preceding year; and that in no tax audit, tax examination, tax or compliance review or tax litigation, will either party or any of their respective successors or assigns claim or assert that the allocation of the Purchase Price is inconsistent with or different than that which is set forth in Schedule 1.8, unless as a result of the determination made by a governing authority.

Section 1.9 Closing Deliveries. In order to consummate the transactions contemplated hereby, the following items shall be executed and/or delivered at the Closing, as appropriate:

(a) Seller shall deliver to Purchaser possession of the Purchased Assets and each of the following items executed by Seller as appropriate:

(i) assignments, bills of sale and other instruments (including certificates of title, as applicable) in form and substance acceptable to Purchaser sufficient to transfer title to the Purchased Assets;

(ii) all documentation reasonably required by Purchaser to effect the change by Seller of its corporate name to a new name bearing no resemblance to its present name and not including in such new name the words “PCQuote.com” or “PCQuote”;

(iii) all documentation reasonably required by Purchaser to effect the transfer of any trademarks, service marks, domain names or other intellectual property included in the Purchased Assets;

(iv) the License Agreements;

(v) the Transition Services Agreement;

(vi) a Certificate of Good Standing for Seller from the Delaware Secretary of State dated within twenty (20) days of the Closing; and

(vii) a secretary’s certificate from Seller certifying Seller’s certificate of incorporation, bylaws, copies of resolutions duly adopted by the board of directors of Seller approving the execution and delivery of this Agreement and the closing of the transactions contemplated hereunder and the incumbency of the officers of Seller executing any document to be delivered pursuant to this Agreement.

From time-to-time after the Closing, at Purchaser’s request and without further consideration from Purchaser, Seller shall execute and deliver such other instruments of conveyance and transfer and take such other action as Purchaser reasonably may require to convey, transfer to and vest in Purchaser and to put Purchaser in possession of Purchased Assets, and to comply with the purposes and intent of this Agreement.

(b) Purchaser shall deliver to Seller each of the following items executed by Purchaser as appropriate:

(i) the Purchase Price payable in the manner described in Section 1.7 above;

(ii) an assumption agreement in form and substance acceptable to Seller sufficient to assume the Assumed Liabilities;

(iii) the License Agreements;

(iv) the Transition Services Agreement; and

(v) a Certificate of Good Standing for Purchase from the Delaware Secretary of State dated within twenty (20) days of the Closing; and

(vi) a secretary’s certificate from Purchaser certifying Purchaser’s certificate of incorporation, bylaws, copies of resolutions duly adopted by the board of directors of Purchaser approving the execution and delivery of this Agreement and the closing of the transactions contemplated hereunder and the incumbency of the officers of Purchaser executing any document to be delivered pursuant to this Agreement.

From time-to-time after the Closing, at Seller’s request and without further consideration from Seller, Purchaser shall execute and deliver such other instruments and take such other action as Seller reasonably may require to evidence the assumption by Purchaser of the Assumed Liabilities, including without

limitation those arising under the Assigned Contracts, and to comply with the purposes and intent of this Agreement.

Section 1.10 Cooperation on Accounts Receivable. Seller will receive the benefits from its operation of the Business through the Closing Date. Except as otherwise provided herein, all monies received by either party hereto which, under the terms of this Agreement, belong to the other party, shall be received in trust by the party receiving such funds, and shall promptly upon receipt be paid over to the other party. The parties agree, in this regard, to cooperate fully and to execute and deliver as expeditiously as possible such papers, checks and documents as are needed immediately to complete the transfer of such payments. Purchaser shall attempt to collect for Seller’s account as Seller’s agent the accounts receivable of the Business that are due to Seller (the “Seller Accounts”) and shall remit any amounts collected to Seller on a weekly basis. Seller shall provide to Purchaser a list of all Seller Accounts as of the Closing Date that identifies, by debtor, amount, age and invoice date, all accounts receivable of Seller relating to the business of Seller as of the Closing Date. In attempting to collect the Seller Accounts, Purchaser shall employ such methods it and its affiliates customarily employ in collecting their own accounts, but it shall not be required to bring suit or otherwise commence any collection action in respect of any Seller Account or refer any Seller Account to a third party for collection. Any extraordinary collection efforts shall require approval from Seller and shall be at Seller’s expense. If Purchaser receives payment from a customer who is indebted both to Seller on a Seller Account and to Purchaser, Purchaser shall apply that payment to the particular invoice or account liability, if any, referenced by the customer in connection with the making of the payment or, in the absence of any such reference or other clear identification (including but not limited to an exact matching of an invoice amount, invoice date or a statement from the customer), to the oldest invoice or account liability first. Purchaser shall not use any direct or indirect means to cause any customer indebted to both Purchaser and Seller to designate payment to Purchaser instead of Seller on a Seller Account. Together with its remission to Seller of amounts collected upon Seller Accounts, Purchaser will give Seller notice of any instances in which a customer, who is indebted both on a Seller Account and to Purchaser, advises Purchaser that a payment is to be applied otherwise than to the oldest invoice or account liability first. Promptly after the close of each week during which Seller receives any payment (other than through Purchaser) on Seller Accounts outstanding at the Closing Date, Seller shall provide Purchaser with a list of all such direct receipts. Seller agrees not to seek collection on any Seller Accounts for 90 days following the Closing. Thereafter, Seller may use any legal means to seek collection on a Seller Account.

Article II
Purchaser’s Representations and Warranties

Purchaser represents and warrants that the following are true and correct as of this date and will be true and correct on the Closing Date as if made on that date:

Section 2.1 Organization and Good Standing. Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware with all requisite power and authority to carry on the business and in good standing in which it is engaged, to own the properties it owns and to execute and deliver this Agreement and to consummate the transactions contemplated hereby.

Section 2.2 Authorization and Validity. The execution, delivery and performance of this Agreement and the other agreements contemplated hereby by Purchaser, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by Purchaser. This Agreement and each other agreement contemplated hereby have been or will be prior to Closing duly executed and delivered by Purchaser and constitute or will constitute as of the Closing, legal, valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with their respective terms, except

as may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally or the availability of equitable remedies.

Section 2.3 Violation. Neither the execution and performance of this Agreement or the other agreements contemplated hereby, nor the consummation of the transactions contemplated hereby or thereby, will (a) conflict with, or result in a breach of the terms, conditions and provisions of, or constitute a default under, the Certificate of Incorporation or Bylaws of Purchaser or of any agreement, indenture or other instrument under which Purchaser is bound, or (b) violate or conflict with any judgment, decree, order, statute, rule or regulation of any court or any public, governmental or regulatory agency or body having jurisdiction over Purchaser or the properties or assets of Purchaser.

Section 2.4 Finder’s Fee. Purchaser has not incurred any obligation for any finder’s, broker’s or agent’s fee in connection with the transactions contemplated hereby for which Seller may be liable.

Article III
Representations and Warranties of Seller

Except as set forth on the Disclosure Schedules attached to this Agreement, Seller represents and warrants that the following are true and correct as of this date and will be true and correct on the Closing Date as if made on that date. Any reference in this Article or any Schedule attached hereto to Seller’s “knowledge” shall mean the actual knowledge of Jim Porter, Frank Guerrera, Randy Diehs.

Section 3.1 Organization and Good Standing. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, with all requisite power and authority to carry on the business in which it is engaged and to own the properties it owns. Seller is duly qualified to do business in Illinois and every other jurisdiction where the absence of such qualification would have a material adverse affect on the Business.

Section 3.2 Authorization and Validity. The execution, delivery and performance of this Agreement and the other agreements contemplated hereby by Seller, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by the Board of Directors of Seller and shareholders of Seller, if necessary. This Agreement and each other agreement contemplated hereby have been or will be duly executed and delivered by Seller and constitute, or will constitute as of the Closing, legal, valid and binding obligations of Seller enforceable against Seller in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally or the availability of equitable remedies.

Section 3.3 Financial Statements. Attached hereto as Schedule 3.3 are the unaudited balance sheets of Seller as of March 31, 2003, and the related statement of earnings before interest, tax, depreciation and amortization (or the equivalent) for the three-month period then ended (collectively, the “Financial Statements”). The Financial Statements fairly present the financial condition and results of operations of Seller as of the dates and for the periods indicated and have been prepared on a consistent basis with prior practices. Seller has no liability or obligation, whether absolute, contingent or otherwise as of the respective dates of the Financial Statements required to be recorded, reflected or disclosed thereon or therein which was not so recorded, reflected or disclosed.

Section 3.4 Employee Benefits. Seller does not sponsor, maintain, or otherwise is a party to, or is in default under, or has any accrued obligations under any pension, deferred compensation, bonus or other incentive plan, severance plan, health, group insurance or other welfare plan, employee benefit plan or other similar plan, agreement, policy or understanding.

Section 3.5 Absence of Material Adverse Change. Since December 31, 2002, Seller has not suffered any material adverse change in its financial condition, assets, liabilities or business.

Section 3.6 Title Matters. Except as set forth in Schedule 3.6 hereto, Seller owns the Purchased Assets free and clear of all liens, liabilities, claims, and encumbrances. Upon consummation of the transactions contemplated hereby, Purchaser shall receive good, valid, and marketable title to the Purchased Assets.

Section 3.7 Material Agreements. Except for the Assigned Contracts, contracts listed as Excluded Assets or as otherwise set forth in Schedule 3.7 hereto, Seller has not entered into, nor are the Purchased Assets or the Business bound by, whether or not in writing, any (a) partnership or joint venture agreement; (b) deed of trust or other security agreement; (c) guaranty or suretyship, indemnification or contribution agreement or performance bond; (d) employment, consulting or compensation agreement or arrangement, including the election or retention in office of any director or officer; (e) labor or collective bargaining agreement; (f) debt instrument, loan agreement or other obligation relating to indebtedness for borrowed money or money lent to another; (g) deed or other document evidencing an interest in or contract to purchase or sell real property; (h) lease of real or personal property, whether as lessor, lessee, sublessor or sublessee; (i) agreement for the acquisition of services, supplies, equipment or other personal property other than agreements entered into in the ordinary course of business; (j) contract containing noncompetition covenants; or (k) other agreement or commitment not made in the ordinary course of business consistent, that is material to the Business or financial condition of Seller (all of the foregoing are hereinafter collectively referred to as the “Material Agreements”). True, correct and complete copies of the written Material Agreements, and true, correct and complete written descriptions of the oral Material Agreements, have heretofore been delivered to Purchaser. There are no existing defaults with respect to the Material Agreements. The Material Agreements are in full force and effect and are valid and enforceable obligations of the parties thereto in accordance with their terms.

Section 3.8 Intellectual Property Matters. With respect to the Transferred Intellectual Property and the Licensed Intellectual Property (collectively, the “Intellectual Property”) and except as set forth in Schedule 3.8, (a) Seller, or, as to the Licensed Intellectual Property, Parent, has the sole and exclusive right to use the Intellectual Property without infringing or violating the rights of any third parties, (b) no consent of third parties will be required for the use thereof by Purchaser upon consummation of the transactions contemplated by this Agreement, (c) no claim has been asserted by any person to the ownership of or right to use any Intellectual Property or challenging or questioning the validity or effectiveness of any such license or agreement, and Seller has no knowledge of any valid basis for any such claim. To Seller’s knowledge, no product, activity or operation of Seller infringes upon or involves, or has resulted in the infringement of, any intellectual property rights of any other person, corporation or other entity. No proceedings have been instituted, are pending or, to Seller’s knowledge, are threatened which challenge the rights of Seller with respect thereto. Purchaser acknowledges and agrees that Seller will not be liable for and Seller will not have breached any representation or warranty under this Section 3.8 if Purchaser (i) uses the Intellectual Property other than as intended, (ii) combines the Intellectual Property with data, hardware or software provided by anyone other than Seller or its agents, or (iii) modifies any of the Intellectual Property.

Section 3.9 No Violation. Neither the execution and performance of this Agreement or the agreements contemplated hereby nor the consummation of the transactions contemplated hereby or thereby will (a) result in a violation or breach of the Certificate of Incorporation or Bylaws of Seller or any agreement or other instrument under which Seller is bound or to which any of the Purchased Assets are subject, or result in the creation or imposition of any lien, charge or encumbrance upon any of the

Purchased Assets or (b) violate any applicable law or regulation or any judgment or order of any court or governmental agency.

Section 3.10 Consents. Seller has received all necessary authorizations, consents, and approvals required (a) to authorize the execution, delivery and performance of this Agreement or the agreements contemplated hereby on the part of Seller or (b) in connection with the transfer of any Purchased Assets from Seller to Purchaser, including but not limited to the assignment of the Assigned Contracts.

Section 3.11 Finder’s Fee. Seller has not incurred any obligation for any finder’s, broker’s or agent’s fee in connection with the transactions contemplated hereby for which Purchaser may be liable or for which a claim could be asserted against the Purchased Assets.

Section 3.12 Claims and Proceeding. Schedule 3.12 is a complete and accurate list and description of all claims, actions, suits, proceedings and investigations currently pending or, to Seller’s knowledge, threatened against or affecting the Business or any of the Purchased Assets, at law or in equity, or before or by any court, municipal or other governmental department, commission, board, agency or instrumentality. No inquiry, action or proceeding has been asserted, instituted or, to Seller’s knowledge, threatened to restrain or prohibit the carrying out of the transactions contemplated by this Agreement or to challenge the validity of such transactions or any part thereof or seeking damages on account thereof.

Section 3.13 Employee Matters. Set forth in Schedule 3.13 hereto is a complete and accurate list of all employees of Seller as of the date of this Agreement, together with their positions and their annual salaries and other compensation. Except as set forth in Schedule 3.13 hereto, to Seller’s knowledge, Seller is in compliance with all federal and state laws respecting employment and employment practices, terms and conditions of employment and wages and hours and is not engaged in, nor has it committed, any unfair labor practice as defined in the National Labor Relations Act of 1947, as amended.

Section 3.14 Real Property. Seller owns no real property.

Article IV

Covenants and Agreements

Section 4.1 Covenant Not to Compete. Acknowledging that the following restrictions are reasonable and necessary in order to protect Buyer’s legitimate interests, and that any violation thereof would result in irreparable injury to Purchaser, Seller and Parent agree and covenants as follows:

(a) Non-Competition by Seller. During the period beginning on the Closing Date and ending on February 1, 2006 (the “Non-Compete Period”), except as hereafter provided, neither Seller nor Parent shall alone, through any subsidiary or joint venture or as a member, partner, or agent of any partnership, or as an agent, member, stockholder (except stockholder of not more than five percent (5%) of the outstanding stock of any company listed on a national securities exchange or traded over the counter) or as an investor in any corporation or other person or entity of any kind whatsoever, directly or indirectly, (i) engage in, (ii) own, manage, operate, control or participate in the ownership, management, operation or control of, or (iii) be connected in any manner with, any business or activity which engages in a business competitive with the Business in anywhere in the United States. Notwithstanding anything to the contrary contained in this Section, (A) Seller shall be entitled to exercise its rights and obligations (i) under that certain Distribution Agreement between Townsend Analytics Ltd. and Seller dated July 31,

2001 (a summary of the relationship under such agreement is attached as Schedule 4.1(a) and (ii) in relation to current and future web data and display data customer contracts, and (B) Seller and Parent shall not be prevented in any way from (X) selling any of its other divisions, subsidiaries, or other businesses to a Person which is or may be in competition with the Business, (Y) entering into a joint venture with a Person relating to another division, subsidiary or other business of Seller, which Person is also in competition with the Business; provided such joint venture is not in competition with the Business, or (Z) merging with any Person which is or may be in competition with the Business.

(b) Non-Enticement. During the period beginning on the date hereof and ending on February 1, 2006, neither Seller nor Parent shall directly or indirectly, whether for its own account or for or with any other person or entity of any kind whatsoever, hire, solicit or endeavor to entice away from Purchaser, any person who was employed by Seller or Parent (to the extent that such person worked in the Business) or Purchaser at any time during the period beginning one year prior to the date of this Agreement and ending on the second anniversary of the Closing Date, and neither Seller nor Parent shall approach any such person for any such purpose or authorize or knowingly cooperate with the taking of any such action by any other individual, person or entity.

(c) Remedies. In the event of any violation of this Section, Purchaser shall be authorized and entitled to obtain from any court of competent jurisdiction preliminary and permanent injunctive relief as well as an equitable accounting of all profits or benefits arising out of such violation, which rights and remedies shall be cumulative and in addition to any other rights or remedies to which Purchaser may be entitled under applicable law or this Agreement.

(d) Partial Invalidity. In the event any of the restrictions contained in this Section are held to be in any respect an unreasonable restriction upon Seller, then the court so holding shall alter or amend this Agreement, including making any reduction in the territory to which it pertains and/or the period of time in which it operates, or effect any other change to the extent necessary to render any of the restrictions enforceable. Each of the terms and provisions of this Section is and is to be deemed severable in whole or in part and, if any term or provision or the application thereof in any circumstances should be invalid, illegal or unenforceable, the remaining terms and provisions or the application thereof to circumstances other than those as to which it is held invalid, illegal or unenforceable, shall not be affected thereby and shall remain in full force and effect.

Section 4.2 Name Change. At the Closing, Seller shall deliver to Purchaser executed but unfilled documentation in a form sufficient to change Seller’s name in Delaware and Illinois from “PCQUOTE.COM, INC.” to another name chosen by Seller which does not include the words “PCQUOTE” or “PCQUOTE.COM”.

Section 4.3. Consents of Third Parties.

(a) Notwithstanding anything in this Agreement to the contrary, this Agreement shall not constitute an agreement to assign any asset or agreement or any claim or right or any benefit arising under or resulting from such asset or agreement if an attempted assignment thereof, without the consent of a third party, would constitute a breach or other contravention of the rights of such third party, would be ineffective with respect to any party to an agreement concerning such asset, or would in any way adversely affect the rights of Seller or, upon transfer, Purchaser under such asset or agreement. If any transfer or assignment by Seller to, or any assumption by Purchaser of, any interest in, or liability, obligation or commitment under, any asset or agreement requires the consent of a third party, then such assignment or assumption shall be made subject to such consent being obtained. To the extent any Assigned Contract may not be assigned to Purchaser by reason of the absence of any such consent,

Purchaser shall not be required to assume such Assigned Contract and if not assigned shall not be entitled to receive benefits arising under such Assigned Contract.

(b) In connection with those consents that have not been obtained as of the Closing, Seller and Purchaser hereby agree that, until any such required consent is obtained, Seller, or HyperFeed Technologies, Inc., as appropriate, shall, with the reasonable and necessary cooperation of Purchaser continue to fulfill any and all obligations and commitments, and enforce any and all rights, of Seller in connection with any asset, claim or right that constitutes a Purchased Asset or Assigned Contract but for which any required consent has not been obtained, and that Purchaser shall be entitled to all of the economic claims, rights and benefits under such asset, claim or right and Seller shall pay or cause to be paid to Purchaser all such economic benefits as promptly as practicable following receipt by Seller or its parent; provided that Purchaser shall be responsible for the Assumed Liabilities, if any, arising under such asset, claim or right, to the extent that Purchaser has received the economic benefit of such asset, claim or right, and further provided that Purchaser shall reimburse Seller for its costs to fulfill any such obligations, commitments or enforcement of rights.

Article V
Indemnification

Section 5.1 Seller’s Indemnity. Subject to the terms and conditions of this Article V, Seller hereby agrees to indemnify, defend and hold Purchaser and its shareholders, officers, directors, agents, attorneys and affiliates (defined as Purchaser and any person or entity controlling, controlled by, or under common control with, Purchaser) harmless from and against all losses, claims, obligations, demands, assessments, penalties, liabilities, costs, damages, reasonable attorneys’ fees and expenses (collectively, “Damages”), incurred by any or all of them or assessed against the Purchased Assets by reason of or resulting from or based upon the material inaccuracy of any representation or material breach or material default of or under any warranty, covenant or agreement made by Seller in this Agreement or any exhibit or schedule attached hereto or in any certificate, document or other instrument delivered by Seller in connection with the transactions contemplated by this Agreement.

Section 5.2 Purchaser’s Indemnity. Subject to the terms and conditions of this Article V, Purchaser hereby agrees to indemnify, defend and hold Seller and its shareholders, officers, directors, agents, attorneys and affiliates (defined as Seller and any person or entity controlling, controlled by, or under common control with, Seller) harmless from and against all Damages asserted against or incurred by any or all of them by reason of or resulting from or based on any of the Assumed Liabilities or the material inaccuracy of any representation or material breach or material default of or under any warranty, covenant or agreement made by Purchaser in this Agreement or any exhibit or schedule attached hereto or in any certificate, document or other instrument delivered by Purchaser in connection with the transactions contemplated by this Agreement.

Section 5.3 Procedures for Indemnification. The respective obligations and liabilities of Seller and Purchaser (the “indemnifying party”) to the other (the “party to be indemnified”) under Sections 5.1 and 5.2 hereof with respect to claims resulting from the assertion of liability by third parties shall be subject to the following terms and conditions:

(a) Within 20 days (or such earlier time as might be required to avoid prejudicing the indemnifying party’s position) after receipt of notice of commencement of any legal action evidenced by service of process or other legal pleading, or with reasonable promptness after the assertion in writing of any claim by a third party, the party to be indemnified shall give the indemnifying party written notice

thereof together with a copy of such claim, process or other legal pleading, and the indemnifying party shall have the right to undertake the defense thereof by representatives of its own choosing (but subject to the approval of the indemnified party which approval will not be unreasonably withheld or delayed) and at its own expense; provided, however, that the party to be indemnified may participate in the defense with counsel of its own choice and at its own expense and, provided further, that the failure of the party to be indemnified to give timely notice shall not affect the right to indemnification hereunder except to the extent (and then only to the extent) the indemnifying party proves actual damages caused by such failure.

(b) In the event that the indemnifying party, by the 30th day after receipt of notice of any such claim (or, if earlier, by the 10th day preceding the day on which an answer or other pleading must be served in order to prevent judgment by default in favor of the person asserting such claim), does not elect to defend against such claim, the party to be indemnified will (upon further notice to the indemnifying party) have the right to undertake the defense, compromise or settlement of such claim on behalf of and for the account and risk of the indemnifying party and at the indemnifying party’s expense, subject to the right of the indemnifying party to assume the defense of such claims in accordance with this Section 5.3(b) at any time prior to settlement, compromise or final determination thereof.

(c) Anything in this Section to the contrary notwithstanding, the indemnifying party shall not settle any claim without the consent of the party to be indemnified unless such settlement involves only the payment of money and the claimant provides to the party to be indemnified a release from all liability in respect of such claim. If the settlement of the claim involves more than the payment of money, the indemnifying party shall not settle the claim without the prior consent of the party to be indemnified, which consent shall not be unreasonably withheld.

(d) The party to be indemnified and the indemnifying party will each cooperate with all reasonable requests of the other.

Section 5.4 Limitations Period. All representations, warranties, covenants and obligations of Purchaser and of Seller under this Agreement shall survive the Closing for one (1) year.

Section 5.5 Exclusive Remedy. The sole and exclusive remedy of each Party for any all monetary claims or Damages relating to or arising out of or in connection with this Agreement and the facts and circumstances relating and pertaining thereto shall be an action for indemnity pursuant to this Article which shall be governed and limited by this Article, whether any such claim is made in contract, breach of warranty, tort, statutory, or common law.

Section 5.6 Limits on Liability.

(a) No indemnifying party shall have liability under this Article unless the aggregate amount of all Damages finally determined to arise from such breaches, misrepresentations or omissions exceeds Five Thousand Dollars ($5,000), and, in such event such indemnifying party shall be required to pay the amount of such Damages without regard to such threshold amount.

(b) Notwithstanding anything to the contrary contained in this Agreement, no indemnifying party shall have any liability to any party to be indemnified to the extent that the breach of the warranty or covenant or the falsity of the representation upon which such liability would be based is disclosed in any of the Schedules or Exhibits to this Agreement.

(c) The maximum amount of Damages that an indemnifying party shall, in the aggregate, be required to pay to all parties to be indemnified hereunder pursuant to any provision of this Agreement shall not, in the aggregate, exceed the Purchase Price.

Article VI

Miscellaneous

Section 6.1 Amendment and Waiver. No provision of this Agreement may be amended, modified, supplemented or waived except by an instrument in writing executed by all of the parties hereto or, in the case of an asserted waiver, executed by the party against which enforcement of the waiver is sought.

Section 6.2 Successors and Assigns; Assignment. This Agreement shall be binding upon and inure to the benefit of the heirs, successors, administrators, executors, and assigns of each of the Parties; provided, however, that this Agreement may not be assigned by any Party in whole or in part, to any third party without the express written permission of the other Party which permission may be withheld or conditioned in such Party’s sole discretion and without regard to any standard of commercial reasonableness. Any attempted assignment of this Agreement in violation of this paragraph shall, at the option of the non-assigning Party be rendered null and void and deemed a breach of the terms of this Agreement.

Section 6.3 Notice. Any notice or communication must be in writing and given by depositing the same in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, or by delivering the same in person, by overnight courier or by facsimile. Such notice shall be deemed received on the date on which it is hand-delivered or sent by facsimile (with electronic confirmation), on the third business day following the date on which it is so mailed, or one day after timely deposit with an overnight courier for next-day delivery. For purposes of notice, the addresses of the parties shall be as set forth on the signature page of this Agreement. Any party may change its address for notice by written notice given to the other parties in accordance with this Section.

Section 6.4 Confidentiality.

(a) The Parties agree that any information provided by one to the other (whether in written, oral or other form)(the “Information”) is provided solely in connection with the transactions contemplated hereby and that only such directors, officers, employees, agents and consultants (including attorneys and auditors, the “Advisors”) of any Party who are directly involved in the proposed transactions will be provided access to such Information. Unless approved by the other Party in writing, the Parties agree not to disclose any of such Information to any third Party who is not an Advisor except as required by statute, regulatory authority, court order or decree or except for the portions of such Information which are in or which come into the public domain other than through the acts or omissions of the Parties or their respective Advisors

(b) Prior to the Closing, except as otherwise agreed in writing, the Parties agree not to disclose, and to take all steps necessary or desirable to ensure that none of its Advisors disclose the transactions contemplated hereby or the existence of this Agreement to any third party including, but not limited to, customers, potential customers, suppliers and potential suppliers, other than Advisors, except as may be required by statute, regulatory authority, court order or decree.

(c) The Parties shall consult with each other as to the form and substance of any press release or other public disclosure regarding the transactions contemplated hereby, and neither Party shall make any public disclosure thereof prior to Closing without the written consent of the other, provided that nothing in this Agreement shall prohibit either Party from making any public disclosure which it, with the

advice of counsel, deems reasonable necessary to comply with law applicable to it.

(d) The Parties agree that, in connection with any breach or alleged breach by a Party of the terms and provisions of this Section, in addition to all other remedies available at law or hereunder, the injured Party shall be entitled to equitable relief, including injunctive relief and specific performance and all reasonable attorneys fees and court costs incurred in connection therewith.

(e) The provisions of this section are in addition to any other confidentiality obligations a Party may have to whether by agreement, applicable law or otherwise and shall not, in any way, limit the applicability, scope or enforceability of such obligations.

Section 6.5 Entire Agreement. This Agreement and the exhibits hereto supersede all prior agreements and understandings relating to the subject matter hereof, except that the obligations of any party under any agreement executed pursuant to this Agreement or any other confidentiality agreement executed by a party shall not be affected by this Section.

Section 6.6 Transactional Expenses. Except as otherwise provided in this Agreement, Purchaser and Seller shall each bear their respective costs and expenses of the transactions contemplated hereby, including without limitation, the fees and expenses of their attorneys, accountants and other advisors. The prevailing party in any arbitration or other legal proceeding hereunder or under any agreement executed pursuant hereto will, however, be entitled to recover its reasonable attorneys’ fees and expenses.

Section 6.7 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision never comprised a part hereof; and the remaining provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as part of this Agreement, a provision as similar in its terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

Section 6.8 Specific Performance. Each party to this Agreement acknowledges that a refusal by the other party to consummate the transactions contemplated hereby will cause irrevocable harm to the non-refusing party, for which there may be no adequate remedy at law and for which the ascertainment of damages would be difficult. Therefore, the non-refusing party shall be entitled, in addition to, and without having to prove the inadequacy of, other remedies at law, to specific performance of this Agreement, as well as injunctive relief.

Section 6.9 Governing Law. This Agreement shall be governed by, and construed in accordance with, the substantive laws of the State of Illinois without reference or regard to the conflicts of law rules of any state or jurisdiction. In the event a dispute arises under this Agreement, the parties agree and consent to the non-exclusive jurisdiction and venue of the state and federal courts located in Cook County, Illinois for the resolution of any dispute arising under this Agreement. Each party irrevocably submits to the jurisdiction of such courts and waives any objection, which it may have based upon improper venue or forum non conveniens to the conduct of any proceeding in any such courts.

Section 6.10 Captions. The captions in this Agreement are for convenience of reference only and shall not limit or otherwise affect any of the terms or provisions hereof.

Section 6.11 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

Section 6.12 Number and Gender. Whenever the context requires, references in this Agreement to the singular number shall include the plural, the plural number shall include the singular and words denoting gender shall include the masculine, feminine and neuter.

Section 6.13 No Third Party Beneficiaries. Except as expressly indicated elsewhere in this Agreement, nothing expressed or implied in this Agreement is intended or will be construed to confer upon or give any person or entity other than the parties to this Agreement any rights or remedies under or by reason of this Agreement or any transactions contemplated hereby.

Section 6.14 Waiver of Trial by Jury. EACH OF THE PARTIES TO THIS AGREEMENT WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH OF THE PARTIES TO THIS AGREEMENT REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

Section 6.15 No Strict Construction. This Agreement has been prepared, and negotiations in connection herewith have been carried on, by the joint efforts of the parties to this Agreement and their respective counsel. This Agreement is to be construed fairly and simply and not strictly for or against any of the parties to this Agreement. This Agreement is acknowledged by each Party as having been co-drafted.

Section 6.16 Incorporation of Recitals, Exhibits and Schedules. The recitals above and all exhibits and schedules identified in or attached to this Agreement are incorporated herein by reference and made a part of this Agreement.

[SIGNATURE PAGES TO FOLLOW]

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have executed this Asset Purchase Agreement as of the date first above written.

PURCHASER:

MONEY.NET, INC.,
a Delaware corporation

By:	/s/ H.L. Van Arnem
Name:	H.L. Van Arnem
Its:	CEO & Chairman

Address:			155 Spring Street
			3rd FL
			NY, NY 10012
		Attn:
		Fax:

SELLER:

PCQUOTE.COM, INC.,
a Delaware corporation

By:	/s/ Jim R. Porter
Name:	Jim R. Porter
Its:	CEO

Address:			300 S. Wacker Dr.
			Chicago, IL 60606

		Attn:
		Fax:

The undersigned hereby agrees and covenants to be bound by the terms and provisions of Section 4.1 hereof; provided such provisions shall not be amended without the approval of the undersigned.

	HyperFeed Technologies, Inc.,
	a Delaware corporation

	By:	/s/ Jim R. Porter
	Name:	Jim R. Porter
	Its:	CEO

EX-31.1 4 a03-2510_1ex31d1.htm EX-31.1

Exhibit 31.1

Certification of the Chief Executive Officer

Pursuant to

Rules 13a-14(a) and 15d-14(a) under the Exchange Act

I, Jim R. Porter, certify that:

1. I have reviewed this quarterly report on Form 10-Q of HyperFeed Technologies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) [Paragraph omitted in accordance with SEC transition instructions contained in SEC Release 34-47986];

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2003


	/s/ Jim R. Porter
	Jim R. Porter
	Chairman of the Board of Directors, and Chief Executive Officer

EX-31.2 5 a03-2510_1ex31d2.htm EX-31.2

Exhibit 31.2

Certification of the Chief Financial Officer

Pursuant to

Rules 13a-14(a) and 15d-14(a) under the Exchange Act

I, Randall J. Frapart, certify that:

1. I have reviewed this quarterly report on Form 10-Q of HyperFeed Technologies, Inc.;

(b) [Paragraph omitted in accordance with SEC transition instructions contained in SEC Release 34-47986];

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2003

	/s/ Randall J. Frapart
	Randall J. Frapart
	Chief Financial Officer

EX-32 6 a03-2510_1ex32.htm EX-32

Exhibit 32

Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of HyperFeed Technologies, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Jim R. Porter, as Chief Executive Officer of the Company, and Randall J. Frapart, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2003


	/s/ Jim R. Porter
	Jim R. Porter
	Chairman of the Board of Directors,
	and Chief Executive Officer


Date: August 14, 2003


	/s/ Randall J. Frapart
	Randall J. Frapart
	Chief Financial Officer

This certification accompanies the Report pursuant to section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by HyperFeed Technologies, Inc. for purposes of section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by section 906 of the Sarbanes-Oxley Act of 2002 has been provided to HyperFeed Technologies, Inc. and will be retained by HyperFeed Technologies, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Three Months Ended June 30,

Six Months Ended June 30,

2003

2002

2003

2002

Three Months Ended
June 30,

Six Months Ended
June 30,