Chicago-based market data technology vendor HyperFeed Technologies has filed for Chapter 7 bankruptcy protection at a US court in Delaware following the breakdown of a merger deal with Missouri-based Exegy.
The move follows the termination of a "contribution agreement" that was inked in August by HyperFeed, its majority shareholder Pico holdings and Missouri-based Exegy.
Under the deal Pico was expected to contribute all of the outstanding shares of HyperFeed's common stock it owns to Exegy in exchange for shares of Exegy preferred stock. Exegy was then expected to take HyperFeed private by completing a short form merger.
This new deal replaced a previous merger agreement between HyperFeed and Exegy announced in June where stockholders of both companies would have each owned 50% of the merged company.
Prior to the merger agreement, HyperFeed had been looking to extend its product portfolio beyond the ticker plant technology market and move into the desktop market data business using the former Telerate TRS/Active8 product line spun off from Reuters. The merger with Exegy would have combined HyperFeed's content distribution offerings with Exegy's feed processing technology.
In today's statement HyperFeed says it has been informed that Exegy is terminating the contribution agreement.
In a SEC filing, the Chicago firm says it "disputes Exegy's right to terminate the contribution agreement and plans to vigorously defend its rights thereunder through all available legal means".
The vendor says it was relying on the Exegy deal "to finance its current and future capital needs and operating costs". Funding from Pico is currently HyperFeed's only source of financing and "will not be sufficient to fund its operations on a going concern basis".
As a result, HyperFeed's board of directors have approved a resolution authorising the immediate filing of a voluntary petition for bankruptcy under Chapter 7, Title 11, United States Code.
"In connection with the planned Chapter 7 Bankruptcy filing, Hyperfeed will cease all business activity and operations," the vendor says in a statement.
HyperFeed's revenue in 2005 was $4.3 million, compared to $6.0 million in 2004, a decrease of 28% year over year. The company reported a net loss of $9.2 million in 2005, compared to a net loss of $5 million in 2004.
Pico's third quarter results statement, which was released earlier this week, states that HyperFeed recorded a loss of $7.75 million, compared to $1.8 million in Q3 2005.