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Once high-flying, Priatek now looks to come out from under the radar

An investor and former member of the board of directors contends in court pleadings that company president Milind Bharvirkar wasted company funds.
Tech company Priatek acquired the naming rights to Pinellas County's tallest building in 2015, but its name came off the tower at 200 Central Ave., in downtown St. Petersburg more than a year ago. (Times files | 2015)
Tech company Priatek acquired the naming rights to Pinellas County's tallest building in 2015, but its name came off the tower at 200 Central Ave., in downtown St. Petersburg more than a year ago. (Times files | 2015)
Published Sep. 13, 2019
Updated Sep. 13, 2019

ST. PETERSBURG — Tech startup Priatek once had such lofty aspirations that it paid to put its name on the city’s tallest building.

These days, the name is long gone from the tower that St. Petersburg residents might remember better as One Progress Plaza. Priatek moved out of its offices on the 23rd floor in April. Its trademark technology is in storage. And a former member of the board of directors has gone to court to accuse Priatek president Milind Bharvirkar of squandering company funds — claims that Bharvirkar disputes.

In 2015, Priatek, then a 6-year-old firm with 15 employees, vaulted itself into public view by signing a deal to put its name atop the 28-story tower at 200 Central Ave. Previously known for former marquee tenants like Bank of America and Florida Progress, the building became known as Priatek Plaza.

RELATED STORY: The story behind Priatek, the little company with its name on Pinellas County’s tallest building

Priatek — the name is a mash-up of “prize advertising technology” — has a business model of combining advertising with video games. It aimed to put its UGot2Play electronic game kiosks in malls, movie theaters and other public places. Up to 40 advertisers are featured on the kiosks. Users pick one, then play a spinning-wheel game to win an on-the-spot prize, coupon or discount from that advertiser.

Bharvirkar, 51, said the company placed kiosks in Tampa, Orlando and New York and came away with encouraging results and “fabulous data" for companies trying to pitch themselves and their products to potential customers.

“It’s an absolutely incredible product,” he said.

At the moment, however, the kiosks — numbering somewhere around 275; Bharvirkar declined to say exactly how many — sit unused. The company has no employees and is inactive. Bharvirkar said the company was thrown in paralysis after a prospective investor made a written offer to put new money into Priatek, then never followed through.

“We’re in the process of getting with investors and coming up with a new launch plan for the product,” Bharvirkar said in a telephone interview.

Along the way, the tower was sold in 2017, and Priatek’s name came off the building more than a year ago. Priatek itself decided not to renew its rights to keep its name on two sides of the tower, said Wendy Giffin, a Cushman & Wakefield director and broker who is the leasing agent for the building. These days, buying that kind of visibility on that building, now known as 200 Central, would cost $195,000 a year, but Giffin said Priatek paid less than that.

As of this month, Bharvirkar faces claims of breach of fiduciary duty and waste in Hillsborough Circuit Court from John Glasscock, a Priatek investor and former member of its board of directors.

Glasscock contends in court pleadings that Bharvirkar received excessive compensation and spent company funds on travel and dinners, as well as other personal expenses. In correspondence in May, before the suit was filed, his attorney said Glasscock had recently discovered the “serious infractions by Bharvirkar.” Glasscock has demanded that Bharvirkar return more than $1 million as a partial payment of damages done to the company.

In response, Bharvirkar released a statement from a report written by a special investor committee led by Mike Brazerol.

“The basis for the demand is that anything spent by the Milind should be returned to the company,” the statement said. “The demand by John Glasscock is absent of any vetting or verification that one or more of charges were improper. The committee has not received any information that would substantiate his claims.”

Glasscock, who is seeking arbitration of the dispute, also contends that Bharvirkar:

• Sold $50,000 in Priatek assets to satisfy a $2,000 debt.

• Spent an average of $600,000 a month when the company had “no reasonable expectation of success and no earnings.”

• Hired a master metal worker full time and bought forge equipment to make more kiosks because the metal worker was the husband of Bharvirkar’s hair stylist, who was out of work.

• Spent about $100,000 updating kiosks sitting in a warehouse with LED message displays against the advice of key personnel and a consultant from Disney.

• Spent more than $2 million making 275 kiosks, of which only 75 were ever deployed and all of which are now idle.

Asked about the claims of excessive spending, Bharvirkar said, “I refute any allegations of misappropriation.”

Last fall, he said, Priatek’s board of directors considered less specific claims from a different critic who accused Bharvirkar of misappropriation of funds. Priatek’s board of directors ended up issuing a statement saying that the allegations had been withdrawn, “as though they were never issued,” according to court records.

As Priatek’s managing member as well as its president, Bharvirkar said he had the authority to commission work that he determined to be necessary for the business and in line with its product standards.

The thing about Glasscock, Bharvirkar said, is that he served on Priatek’s board of directors for two years. During that time, he participated in board meetings concerning operations, strategic planning, funding, salaries, and personnel matters.

Many of the allegations that Glasscock raises now, Bharvirkar said, were things that he helped decide or had oversight over as a board member. Asked about hiring the metal worker, he said in an email: “John Glasscock was aware of our metal shop and the purpose it served. He never objected to the metal shop while serving on the board for two years.”

“He should have voiced his opinion when I made these purchases,” Bharvirkar said.

In correspondence with Glasscock’s attorney, Bharvirkar said Glasscock never suggested that “my authority had been exceeded.” To the contrary, he added, board of directors minutes for the last three years indicate “there was harmony surrounding most circumstances as it relates to the strategy and direction of Priatek.”

In May, Bharvirkar offered to work with a neutral third party to investigate the expenses that Glasscock had flagged. He also offered to resign as managing member after a new board was named and help the board hire new staff.

Despite the lawsuit, Bharvirkar says he’s focused on engineering Priatek’s revival. This time, he said, the roof “over its head doesn’t have to be a big tower in the middle of St. Petersburg.”

It just needs to get its kiosks in circulation.

“We have that product now after years of development, ready for prime time,” he said. “My responsibility is to do the best I can to relaunch the company.”

Times senior news researcher John Martin contributed to this report. Contact Richard Danielson at rdanielson@tampabay.com or (813) 226-3403. Follow @Danielson_Times


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