MIST 3Q/01

MIST Inc., a leading provider of wireless and smart card transaction-enabling
reported results for the fourth quarter and for the year ended September 30,

Revenue for the year ended September 30, 2001, decreased 11.6% to $51,809,000,
compared to $58,637,000 in 2000. The decline in revenue was predominantly
related to the transition of the point-of-sale business from traditional wired
technology to the wireless enabled gateway technologies. Due to the completion
of certain products later in the fiscal year than anticipated, certain revenue
was delayed. Operating loss from continuing operations was $15,955,000
to a loss of $3,178,000 in the prior year. Income from discontinued operations
was $937,000, compared to $3,634,000 in the prior year. Discontinued
include the results of the US and Canadian card manufacturing plants and the
Imprinter business. Net loss for the year was $7,015,000 or ($.21) loss per
share on a fully diluted basis, compared to a net loss of $3,628,000, or
($0.12) loss per share on a fully diluted basis for 2000. During the year, a
significant investment was made to develop gateway technologies, including
expansion into the United States and Japan.

Revenue for the fourth quarter of Fiscal 2001 was $11,946,000, a decrease of
25.4% from revenue of $16,018,000 in the same period last year. Operating loss
from continuing operations was $6,635,000 compared to a loss of $1,465,000 in
the prior year. Loss from discontinued operations was $117,000, compared to
income of $1,120,000 in the prior year. Net loss for the quarter was
$12,594,000 or ($.38) loss per share on a fully diluted basis, compared to net
loss of $942,000, or ($.03) loss per share on a fully diluted basis for the
same period in 2000.

During the fiscal year, the Company reorganized in order to focus its energies
on its wireless applications and smart card businesses. The reorganization of
MIST included the sale of the Canadian and US plastic card manufacturing
and the Imprinter business. The Company focused on development of
FreedomGate, the MIST Freedom family of wireless and ethernet enabled
of sale terminals, and smart card technologies. FreedomGate will be
to our strategy of providing retail merchants with value added applications
services, such as messaging, reporting, and e-Commerce services. Development
was completed on MIST Freedom III, MIST’s desktop wireless and Ethernet
touch screen terminal, and FreedomSPD, a smart card enabled pin pad. Both
devices have been specifically designed to take full advantage of the value
added features of FreedomGate and have been well received in the US, Japan and
Canada. Availability of these products on a wide commercial basis will occur
during Q1 and Q2 of fiscal 2002 and represent meaningful opportunities for
revenue growth.

Recent operating highlights include:

– During the fourth quarter, the manufacture of POS terminals was transferred
to a contract manufacturer in Asia in order to allow MIST to focus on its
strength of developing leading edge technology and bringing our customers
solutions which includes ensuring that the cost of our products are
competitive, while maintaining high quality.

– MIST has been able to successfully attract new customers in Japan. With the
growing importance of smart cards in the Japanese market, MIST’s focus on
cards and smart card enabled terminals represent excellent opportunities for
revenue growth. Technology developed for the Japanese market can also be
leveraged to develop products for other markets more quickly and cost

– The MIST Freedom III terminal’s Ethernet capability has attracted great
interest among our customers. Allowing businesses to network POS terminals and
reduce the cost of communication, while enabling the value added features of
FreedomGate, presents a compelling value proposition to our customers.
Customers have numerous value added applications that they are keen to
introduce to their merchant base. FreedomGate’s component based architecture
allows applications to be created quickly and integrated seamlessly into

– During December 2001, the Company settled litigation for proceeds of $4.5
million. The proceeds, net of estimated legal expenses of $500,000 will be
to repay a portion of the Junior Note and for operating cash requirements.

“MIST has spent significant time and resources developing the MIST FreedomGate
and the MIST Freedom family of POS terminals. We have a great solution to
our customers that clearly differentiates MIST from our competitors and offers
a compelling value proposition,” stated Charles E. Lee, President and CEO of
MIST Inc. “Our focus in the coming year is to deploy FreedomGate and roll out
our value added model to the marketplace. We look forward to working closely
with our customers to bring them new technology and opportunities for growing
their businesses. We feel this strategy is the key to revenue and income
for MIST.”

About MIST Inc.

MIST Inc., a leading provider of wireless transaction-enabling and smart card
technologies, designs, manufactures and distributes wireless and wired
point-of-sale solutions and smart card software and solutions. The “MIST
Freedom” family of wireless transaction terminals was developed to complement
its range of existing products. The MIST FreedomGate(TM) provides gateway
services with value-added options such as messaging, time and attendance and
e-commerce. With facilities in Canada, the United States and Japan, MIST’s
clients include banks, financial institutions, credit and debit card
processors, as well as retail, hotel, restaurant, health care and loyalty
customers. For more information, visit
http://www.mistwireless.com. Investors may contact


AmEx Online

American Express has launched a major campaign to incent small merchants to switch from paper statements to electronic statements. Effective January 1, AmEx will charge merchants a $4.50 monthly fee for statements sent by mail. AmEx emphasizes that one major advantage of its ‘Online Merchant Services’ program is better communication with the handling of charge-back requests. Merchants receive e-email notification of disputes which gives merchants more response time, thus reducing the no-reply chargeback problem. The AmEx online merchants services program offers free access to ‘Merchant Profile Reports’, which analyzes customers and their spending patterns. The program also offers access to ‘Merchant Edge’, which provides aggregate marketplace reporting about the merchant’s AmEx customers. The base fee for ‘Merchant Edge’ is $100 per month. The AmEx Online Merchant Services program also enables merchants to update account information or to setup a new location for AmEx acceptance.



Plastic Printing Corp., a worldwide leader in card manufacturing for almost 40
years, announces its intention to form a strategic alliance with ORGA, a world
leader in smart card production since 1972.

ORGA offers a full range of smart cards as well as hardware, software,
system integration and solutions for the telecommunications, banking, retail,
healthcare, and Internet sectors. The alliance between Perfect Plastic
and ORGA will provide a U.S.-based manufacturing solution to large-scale chip
card production.

ORGA Card Systems, Inc., part of the authentos group of companies, is one of
the market leaders in the smart card industry. Headquartered in Paderborn,
Germany, it operates its Smart Card Center in Flintbek, Germany, in one of the
world’s most modern production facilities for smart cards.

With a workforce currently numbering over 1,600 employees worldwide, the ORGA
Group posted record sales of EURO282 million ($250 million U.S.) in fiscal
2000. Subsidiaries, sales offices and joint ventures give ORGA a strong
presence in Great Britain, the U.S., France, Singapore, Russia, South Africa,
the United Arab Emirates, Denmark, China, Brazil, Hong Kong, Italy, Portugal,
Austria and Lithuania.

Perfect Plastic Printing is a world leader in card manufacturing and the
largest single secure card manufacturer in North America. Perfect Plastic has
been on the cutting edge of card technology for almost 40 years with
innovations in printing and card production technology. These include digital
printing, translucent cards, full-face holograms, and full-face foil printing.
Together, Perfect Plastic and ORGA will be a U.S. as well as an international

For additional information contact Doug Eden, Director of Marketing, Perfect
Plastic Printing, doug@perfectplastic.com or Heather Reinsel, Marketing
ORGA Card Systems, Inc., HReinsel@orga.com.


ValiCert VBV

ValiCert, Inc., a leading provider of secure solutions for paperless e-Business, announced that ValiCert Digital Receipt Solutions is one of the technology partners powering Verified by Visa, Visa U.S.A.’s Internet payer authentication process. Verified by Visa is an initiative designed to ensure secure online payment transactions. The service reduces disputes related to unauthorized card use on the Web, resulting in increased consumer and merchant confidence in electronic commerce. Visa will be utilizing the ValiCert Digital Receipt Solutions to provide a record in case of dispute resolutions. Used by major banks, credit card, healthcare, and government institutions around the world, ValiCert Digital Receipt Solutions comprise an end-to-end solution for generating and managing legal-grade proof of electronic transactions.

“The biggest inhibitor of online shopping has been due to consumer security concerns. Visa U.S.A understands the importance of having a secure infrastructure supporting their cards for the widespread adoption of e-Commerce,” said David Jevans, vice president of Corporate Development and head of e-Payment initiatives at ValiCert. “ValiCert Digital Receipt Solutions provides Visa U.S.A. with the fundamental Internet infrastructure to securely protect online transactions against unauthorized card use as well as providing a valid forum for dispute resolution.”

About ValiCert

ValiCert is a leading provider of secure solutions for paperless e-Business. ValiCert Global 2000 customers in financial services, healthcare, manufacturing and government sectors realize significant ROI from deploying ValiCert solutions to help migrate costly or inefficient business processes to the Internet, without losing any trust and security in the process. ValiCert’s family of products conforms to the guidelines of the e-Sign legislation and provides a secure, legal-grade environment for conducting online commerce.

ValiCert has technology and marketing alliances with a range of security, e-Commerce, systems integrators and application specific companies. With its products and services available through a worldwide direct sales force, resellers and global affiliate network, ValiCert is headquartered in Mountain View, California and has operations throughout the Americas, Europe and Asia. More information about ValiCert is available on the World Wide Web at [http://www.valicert.com][1].

[1]: http://www.valicert.com/


MasterCard’s 3Q/01

MasterCard continues to be the fastest growing network in the USA, as the number of cards-in-force rose more than 20% during the third quarter. The number of U.S. cards issued hit 268.5 million during 3Q/01, compared to 256.3 million at mid-year. MasterCard’s domestic credit card portfolio is growing at annual rate of 20.8%, while MasterCard’s U.S. off-line debit card segment is growing 19.9% annually. VISA has not released 3Q/01 data, however at mid-year, VISA’s U.S. card portfolio was growing less than 5%, with nearly all the increase coming from off-line debit cards. The American Express cardbase was growing 5.5% annually and Discover’s cardbase was growing 2.4% annually, at the end of the third quarter. As of September 30th, MasterCard had 229.0 million credit cards and 39.5 million off-line debit cards in the USA. MasterCard’s domestic gross dollar volume for the quarter rose 15.2% for credit cards to $106.0 billion, while U.S. off-line debit card GDV soared by 22.7% to $19.0 billion. U.S. purchase volume for off-line debit MasterCards is growing twice as fast as credit cards. Debit card purchase volume posted a 25.4% year-to-year gain, while credit card purchase volume rose 12.5% during the same period. For complete details on MasterCard’s U.S. 3Q/01 data visit CardData (www.carddata.com) and for details on MasterCard’s third quarter international figures visit The RAM Report ([www.ramreport.com][1]).

[1]: http://www.ramreport.com


Voyager Certified

Corillian Corp., a leading global provider of eFinance solutions, and Spectrum EBP, a payment systems company for electronic bill presentment and payment, announced a strategic alliance in which Corillian’s Voyager Internet banking platform will be certified to the Spectrum network. Corillian Voyager enables financial institutions to offer presentment and payment functionality for their online retail banking customers while Spectrum will process and route the transactions through its extensive network of participants.

“Corillian is a respected brand in the financial services marketplace and our alliance is in response to the industry’s continued demand for Spectrum’s open, bank-centric EBPP platform,” said John M. Perry, Spectrum ’s Chairman and CEO. “The addition of Corillian’s online banking customers to the Spectrum network and access to the Voyager platform creates additional value for all our participants while reinforcing the openness and flexibility on which we were founded.”

Corillian Voyager ­ The Operating System for eFinance — is a high-performance platform that allows for the delivery of a wide range of financial services to customers via the Internet. Voyager provides a direct link between a financial institution’s host system and its customers, using Internet browsers, personal financial management software and internet-ready wireless devices. Voyager’s open architecture design allows an institution to quickly integrate emerging technologies and deploy the platform in-house or in a secure data center while providing a personalized portal to its customers.

“This relationship will help us expand the functionality and capabilities of our Voyager platform,” said Alex Hart, president of Corillian. “Many of our financial institution clients were asking for access to the Spectrum network. This alliance will allow us to better serve our clients and gives their customers added electronic bill payment and bill presentment services.”

Founded by J.P. Morgan Chase, Wachovia and Wells Fargo, Spectrum routes online payments, presentments, invoices, statements and other related information through an EBPP switch. A total of 24 financial institutions belong to the Spectrum network or have signed letters of intent to participate in the network, including six of the top ten U.S. banks. Spectrum features the industry’s only standards-based OFX/IFX platform enabling participants to benefit from low-cost switch fees, a good funds model and a unique same-day settlement process. The expansive reach of the Spectrum network is comprised of nearly 8 million online banking customers from its founders and 282 large-industry billers through strategic alliances with 11 technology partners.

About Corillian

Based in Oregon, and with international offices in Europe, Asia and Australia, Corillian Corporation is an award-winning provider of eFinance-enabling software for the financial services industry. Built on the Microsoft Windows 2000 platform, Corillian applications support Internet banking, bill delivery and payment, brokerage, customer relationship management, enhanced data aggregation, and small business transactions. Voyager can be deployed on-site at the financial firm or in the state-of-the-art Corillian Data Center. Corillian technology also enables Open Financial Exchange (OFX) access by finance management software packages such as Quicken, QuickBooks and Microsoft Money. For more information about Corillian Corporation, visit our Web site at [www.corillian.com][1].

About Spectrum

Spectrum EBP, LLC, headquartered in Atlanta, Ga., is an independent payment systems company fully owned by J.P. Morgan Chase & Co. (JPM), Wachovia Corporation (WB) and Wells Fargo & Company (WFC). Formed to facilitate the exchange of electronic bills and payments, Spectrum’s mission is to provide a secure, open and interoperable infrastructure to electronically link consumer and biller service providers. Additionally, Spectrum seeks to provide value to its participants by providing superior service and reducing overall bill presentment and payment costs. Spectrum does not host any bills directly, nor does it retain any bill details. Including the three founders, 24 financial institutions currently belong go the Spectrum network or have signed letters of intent to participate in the network including Citibank, Fleet, First Tennessee, Hibernia, M&I bank, Provident Bank and Union Bank of California. More information on Spectrum can be found at [www.spectrumebp.com][2].

[1]: http://www.corillian.com/
[2]: http://www.spectrumebp.com/



As more than 21.7 million adult Canadians flock
to the shopping malls this holiday season, Visa Canada released the
results of a survey showing that less than one in five Canadians expect the
current economic climate to impact their holiday gift-giving activity this

Conducted by Thompson Lightstone, the survey shows that only 17 percent
of Canadians expect world events and the current economic slowdown to affect
their holiday gift-giving behaviour. Some of the ways Canadians will change
their gift-giving behaviour include buying more thoughtful or personalized
gifts, giving to charity, focusing on family and appreciating what they
already have.

This year, 55 percent of holiday shoppers are in the holiday spirit and
it seems even more, 62 percent of Canadians, are enjoying buying holiday
gifts. Interestingly, the older one gets, the less likely they are to enjoy
holiday shopping. Seventy-one percent of Canadians aged 18-29 enjoy holiday
shopping, compared to 64 percent of 30-49 year-olds and 53 percent of adults
aged 50-plus. On a regional basis, 44 percent of Quebec residents enjoy
holiday shopping versus 70 percent of Ontario residents.

“The survey points to some encouraging findings for retailers, consumers
and for the Canadian economy overall,” said Rick Pyves, Senior Vice-President,
Marketing, Visa Canada Association. “As we head into the busiest week of the
year, it will be interesting to see how these findings translate into actual
retail sales.”

This year a number of key factors are driving consumers to shop at one
retail outlet over another. Key factors influencing consumers include the
quality of in-store promotions and discounts, in-store selection, the value
for the dollar and the convenience or close proximity of the retail outlet.

The national telephone survey was conducted between November 22nd and
29th, 2001. A total of 1,000 male and female respondents 18 years of age and
older were interviewed. The findings are accurate, plus or minus 3.1 percent,
19 times out of 20.

As the “World’s Best Way to Pay”, Visa is the leading credit card payment
brand in Canada and around the world. There are more than 23.6 million VISA
cards in Canada accepted at more than 595,000 merchant locations across the
country. VISA is accepted at over 23 million locations around the world
including over 700,000 ATMs. The Internet address for Visa is


Ducato Project

The first implementation of ‘CEPS’, demonstrating international interoperability of different CEPS-based e-purse technologies has been completed, according to ‘The RAM Report’ ([www.ramreport.com][1]). The ‘Ducato’ project included as partners: Banksys, Groupement des Cartes Bancaires, Europay International, Interpay Nederland, Proton World, Sermepa, Sistema 4B and VISA. Following publication of ‘CEPS’ in 1999, a number of tasks, such as the establishment of type approval procedures and the upgrading of international networks, network simulators, terminal and host specifications and issuing systems needed to be completed to enable the implementation of ‘CEPS’-based systems. Card and terminal manufacturers also needed to develop ‘CEPS’-based components that are retro-compatible with existing e-purse technologies, to facilitate migration to ‘CEPS’-based systems. The two ‘CEPS’-compatible smart card technologies used in the ‘Ducato’ project are Sermepa’s Advantis, applied by Sermepa and Groupement des Cartes Bancaires, and Proton World’s ‘Proton Prisma’, applied by Banksys and Interpay. Banksys and Interpay used ‘C-ZAM/Smash’ terminals from Banksys for ‘CEPS’ load and payment transactions.

[1]: http://www.ramreport.com


FUSA Relationship Chief

First USA, Bank One Corporation’s credit card business, appointed Thomas P. Kerwin as executive vice president and head of relationship management.

Kerwin’s appointment supports First USA’s new focus on business segment profitability and reflects the company’s commitment to its many partners. He will provide leadership for First USA’s eight business segments and new partner sales. Kerwin will work closely with the company’s marketing, decision management and operations areas to build beneficial relationships with new and existing customers and partners.

Kerwin, 51, has 20 years of leadership experience with Citigroup’s card and payments groups and was instrumental in building a strong affinity and agent bank business. He was most recently business manager of Citibank Affinity Cards

“We are delighted to have Tom lead our Relationship Management team,” said Phil Heasley, chairman and chief executive officer of First USA. “His experience developing strong partner relationships and leading organizational change will be an important advantage for our organization as we continue to grow and strengthen our customer relationships.”

Kerwin reports to Dan Frate, president and chief operating officer of First USA.

“Tom’s background in business development, marketing, relationship management, and product development will be a valuable asset to help continue to build this important aspect of First USA’s business model,” Frate said.

“I am very eager to join the First USA team,” Kerwin said. “There are many opportunities for First USA, a recognized leader in innovative credit card marketing, to enhance its customer relationships and grow its business.”

Kerwin began his career as a management trainee with a major retailer. He then held various administration and financial positions at a large insurance company prior to joining Citigroup. He earned a bachelor’s degree in English from Fairfield University, Fairfield, Conn.

First USA, a subsidiary of Bank One Corp. (NYSE: ONE), is the largest issuer of Visa credit cards in the world, offering credit cards for consumers and businesses under the First USA and Bank One names and on behalf of its 1,900 marketing partners. These partners include some of the leading corporations, universities and affinity organizations in the United States. Bank One is the nation’s sixth-largest bank holding company, with assets of more than $270 billion. More information can be found at [http://www.firstusa.com][1] and .

[1]: http://www.firstusa.com/


Bonds 2002

Credit card-backed securities, among some issuers, may face a difficult year in 2002. Chicago-based, GimmeCredit, ranked three credit card specialists among the ‘Bottom Ten’ of finance companies whose bonds will most likely underperform next year. In a report released Friday, American Express, Capital One, and Metris Companies were listed among the bottom performers. GimmeCredit says Capital One needs to better disclose its exposure to the subprime segment with a good chance its losses may accelerate. The research firm says American Express could be vulnerable to a downgrade if the U.S. economy doesn’t bounce back as its credit quality in its charge card and lending businesses erode. The company says Metris Companies focus on subprime lending could mean rising regulatory scrutiny. Moody’s Investors Service and Standard & Poor’s currently rates Capital One as ‘Baa3/BB+’; American Express as ‘A1/A+’; and Metris as ‘Ba3/B+’.


Tight Consumers

A new survey shows consumers are keeping a tight grip on their purse strings. Despite heavy promotions by retailers in recent days, a majority of consumers surveyed are sticking to their budgets with 80% reporting that they plan to spend the same or less than last year. According to the survey by Deloitte & Touche LLP and BIGresearch, 37% of consumers report they intend to pay down debt in the next three months and 27% say they plan to increase savings. In addition, 62% report paying for their holiday purchases with cash or check instead of credit, with 32% saying they plan to decrease overall spending in the next 90 days. According to CardWeb.com’s home page ‘Holiday Spending’ tracker consumers have charged more than $93 billion since the start of the holiday season. Nearly one billion card transactions have made since November 23rd.


Austin Logistics Conference

Austin Logistics Incorporated, providers of well-known call-targeting software such as CallTech, CallSelect, and OnQ, announced its 3rd Annual Users’ Conference will be held February 24 to 26 in Austin, Texas.

Given today’s rising delinquencies, more financial services companies are turning to call-center and collections technology, such as Austin Logistics’ software solutions, which increase productivity at every stage of collections (“who to call,” “when to call,” and “where to call from”). These solutions work together to refine the delinquent pool, leaving only the most productive calls, made in the most productive way.

Collections executives from the top banks and financial services companies in America, and throughout the world, will gather to share success strategies on a wide range of topics, including: Some Champions & Challengers You Should Know, Using CallTech and Other Reports to Make Strategic Decisions & Keep Management Happy, What You Need to Know About Scoring, Ideas to Improve Late-Stage Performance, Pros & Cons of Different Performance Metrics, and many others.

For more information on this conference, please go to [www.AustinLogistics.com][1], or send an email to info@AustinLogistics.com

, and write “Users’ Conference” in the subject line.

About Austin Logistics Incorporated

Austin Logistics has been trusted since 1992 by America’s largest financial services companies for innovative, practical solutions to increase effectiveness of consumer credit collections, telemarketing, and risk management. For further information on Austin Logistics, please visit the web site at [http://www.AustinLogistics.com][2].

[1]: http://www.austinlogistics.com/
[2]: http://www.austinlogistics.com/