Hitachi and Dai Nippon Printing Co and six other firms have formed a new company to issue Mondex cards to be capitalized at 850 million yen. The other firms include: JCB, Nissho Iwai, Hitachi Software, Toppan Printing, Kyodo Printing, and TIS. Hitachi and Dai Nippon will each own 17.6% while JCB, Nissho Iwai and Hitachi Software will each hold an 11.7% stake. Toppan Printing, Kyodo Printing and TIS will each own 5.8%. The newly formed company expects to reach revenue of 1.7 bln yen by 2004.


Marshall to Blackstone

Blackstone (), one of the nation’s leading electronic providers of prepaid telecommunications products and services, Monday named John Marshall to the newly created position of president of Blackstone’s Prepaid Systems Group, a wholly owned subsidiary of Blackstone Communications.

Bringing over 25 years of experience in the electronic payment industry, John was most recently senior vice president, office of the president, for Hypercom (NYSE:HYC) (, a leading global provider of electronic payment solutions that add value at the point-of-sale for consumers, merchants and acquirers. In his new position, John will be responsible for the overall direction, coordination and evaluation of the Prepaid Systems Group, including the day-to-day operations, sales & marketing, and long term strategic planning.

According to John, “The opportunity that Blackstone has to quickly bring two large, but separate industries together (prepaid calling cards and credit cards) and better serve the merchant, is a ‘once in a lifetime opportunity.’ I am very happy to be a part of the Blackstone team.”

The Blackstone POS terminal, utilizing the Hypercom ICE 5500, is revolutionizing the electronic transaction industry. By integrating the processing of all major credit cards (MasterCard, Visa, American Express, Discover Card and Diners Club), ATM/bank cards and EBT (electronic benefits transfer) with the sale of prepaid cellular and prepaid calling cards into one, easy-to-use POS terminal.

Luis Arias, Blackstone’s president and chief executive officer added, “For the last several months, I have been trying to entice John to join Blackstone. I am thrilled to have him on board and look forward to announcing our major successes in the coming weeks.”

Blackstone has rapidly become one of the country’s largest providers of prepaid telecommunications products and services with over 300,000 retail locations nationwide. Established and headquartered in Miami, Florida since 1995, Blackstone is privately owned, and managed by a team of executives experienced in payment processing, networking, information services, oil & gas and prepaid telecommunications. Under their direction, Blackstone has developed ongoing distribution relationships with internationally recognized companies such as AT&T, VoiceStream, ADMA, Americatel, Cingular, Embratel, Hypercom, Qwest and Universal Savings Bank. Today, Blackstone is successfully merging two industries, prepaid telecommunications and electronic transactions, into one terminal to the benefit of merchants across the United States.

Blackstone POS are trademarks of Blackstone Communications Co., US and foreign patents pending.


AmEx Double Dip

Hilton HHonors, one of the world’s leading guest reward programs, has teamed up with American Express to offer a new Double Dip option that raises the bar for reward programs.

For the first time ever, HHonors members and American Express Membership Rewards enrollees residing in the United States can earn both HHonors points and Membership Rewards bonus points for the same stay at U.S. HHonors hotels — a new spin on what HHonors calls Double Dipping.

From Aug. 27, 2001, through Aug. 31, 2002, members can earn 500 Membership Rewards bonus points for each stay at U.S. HHonors hotels, including Hilton(R), Conrad(TM), Doubletree(R), Embassy Suites Hotels(R), Hilton Garden Inn(R) and Homewood Suites(R) by Hilton hotels, and 100 Membership Rewards bonus points for each stay at all Hampton Inn(R) and Hampton Inn & Suites(R) hotels. Guests choosing to earn Membership Rewards bonus points for their Double Dip stays instead of airline miles must simply present their HHonors account number and eligible, enrolled American Express(R) Card account number at check-in and request both HHonors points and Membership Rewards bonus points.

In addition, Membership Rewards enrollees will continue to earn Membership Rewards points for charging hotel stays to their eligible, Membership Rewards — enrolled American Express Card.

Membership Rewards points can be redeemed for a wide variety of shopping, recreation, home and travel rewards. Additionally, Membership Rewards points will continue to be available for exchange into HHonors points, which can be redeemed for free hotel stays, airline tickets, cruises, great merchandise from a variety of retailers, and more.

“We are delighted that American Express has teamed up with Hilton HHonors on this unprecedented offer to Membership Rewards enrollees, because it adds even more value to our popular Double Dipping benefit,” said Jeffrey Diskin, president and chief operating officer of Hilton HHonors Worldwide. “Offering the option of Membership Rewards bonus points is yet another example of how we continually add the kinds of benefits to HHonors that make it one of the most rewarding frequent guest programs in the hospitality industry.”

“Now, as part of Hilton HHonors’ exclusive Double Dipping benefit, the Membership Rewards Program offers even more value to its enrollees — putting them on a fast track to earning their favorite rewards,” said Chris Lynch, vice president of the Membership Rewards Program from American Express. “Adding Membership Rewards bonus points as an option to HHonors’ Double Dipping program is a natural fit for both reward programs because the consumer benefit is so great; we are pleased to extend our relationship with Hilton and the Hilton HHonors program through this offering.”

About the Membership Rewards Program from American Express

The Membership Rewards Program from American Express was first launched in June 1991 under the name Membership Miles(R). In 1995, retail and other non-travel rewards were added to the program, and it was renamed the Membership Rewards Program.

Membership Rewards is the world’s largest card-based rewards program, with 4 million U.S. enrollees. The program allows cardmembers to earn one point for virtually every dollar charged on eligible, enrolled American Express Cards. Points are then redeemable in a wide selection of reward categories including travel, retail merchandise, shopping and recreation gift certificates and charity rewards.

About the HHonors Program

Hilton HHonors is a guest reward program that gives frequent travelers a faster way to earn the rewards they want most. Enrolled members can earn HHonors points and airline miles for the same stay, at nearly any rate, at more than 2,100 participating Hilton, Conrad, Doubletree, Embassy Suites Hotels, Hampton Inn, Hampton Inn & Suites, Hilton Garden Inn and Homewood Suites by Hilton hotels around the world.

In addition, HHonors is the only guest reward program that allows its member to exchange airline miles for hotel points and vice versa.

Due to the unmatched flexibility, generosity and value offered by HHonors program features, as well as the many attractive promotions that HHonors offers each year, the program has been recognized with numerous travel industry awards.

Membership in Hilton HHonors is free. Travelers may enroll online by visiting Or, to enroll instantly in the program and make reservations, consumers in the United States and Canada may also call 800/HHONORS. Outside the United States and Canada, travelers may call the Hilton Reservations Worldwide office in their area. Travelers also may pick up an enrollment form with a membership card at any participating Hilton, Conrad, Doubletree, Embassy Suites Hotels, Hampton Inn, Hampton Inn & Suites, Hilton Garden Inn or Homewood Suites by Hilton hotel around the world.



Canadian Bank Note Company has signed an important contract with the
Government of Togo for the supply of national identity cards, driver’s
licenses, motor vehicle registration certificates, military identity cards
and foreign resident’s cards. The five-year contract includes the
installation of a unified document production system in the capital, Lome,
and a satellite production site in the northern city of Kara. The complete
range of documents and systems will be delivered and installed within the
coming months by CBN’s Identification Systems division. Systems previously
installed by CBN have established Togo as a leader in the field of secure
identity documents.

The signature of this new agreement makes Togo one of the world’s
most advanced countries in the field of identity documents, according to
the Minister of National Defense, General Assani Tidjani. The new Togolese
passport is a sophisticated document, which has enabled its citizens to
easily travel the world. Togo is eager to improve all its identity
documents through the adoption of this leading edge technology. Its
expressed goal is to end the trafficking in all Togolese travel and
identity documents.

CBN’s Executive Director of Sales, Stephen Dopp, paid tribute to
Togo’s ability to assimilate advanced systems in record time. “The Togolese
authorities have shown themselves to be efficient administrators and ready
to adopt the latest technologies,” said Dopp. “We have nothing but praise
for their desire to establish a leadership role in the field of
identification systems in West Africa.”

The Republic of Togo (Republique Togolaise) is situated in West
Africa. Its capitol city, Lome, has hosted numerous international
conferences and treaties. Its President, Gnassingbe Eyadema has this past
year assumed the important chairmanship of the Organization of African Unity.
Canadian Bank Note Company, Limited is an independent ISO 9001
certified organization that provides total solutions for security documents
and systems across four main products areas–Lottery Systems,
Identification Systems, Payment Systems, and Shareholder Services. The
Company markets its products to government agencies and authorities as well
as institutional and other customers in more than 40 countries.


Healthcare Cards

Pittsburgh-based UPMC Health System has launched a smart card that allows patients to carry their own medical information in their wallets. The ‘Healthcare Passport’ smart card will hold a patient’s demographic, insurance or basic medical information, such as allergies, conditions and immunizations, and will be updated at each doctor visit. With an upcoming partnership with Mellon Financial, patients will be able to deduct co-payments for visits or pharmacy items or tap into flexible spending accounts using the card. The UPMC card contains a 64-kilobyte microchip, with 32 KB devoted to applications and security. While UPMC’s smart card project initially involves a limited number of practice patients, the program will eventually cover nearly 3 million patients who are seen at any one of the system’s hospitals and more than 200 physician practices in western Pennsylvania.



Official Payments Corporation announced that Uinta, Sweetwater, Platte and Teton Counties have signed service agreements which enable taxpayers to pay their personal property and real estate tax obligations over the Internet by visiting [][1], or via the telephone by calling toll-free 1-800-2PAY-TAX.

American Express, Discover Card, MasterCard and VISA are the cards accepted by the program. The program will commence next month. Official Payments Corp. is the leading provider of electronic payment options in over 900 government entities in 48 states across the county. The Company has contracts with the Internal Revenue Service, 18 state governments, and the District of Columbia to collect taxes, fees, and fines by credit card over the Internet and telephone.

Sweetwater County is the largest recent addition to the Wyoming client base as well as the third largest county in Wyoming. Uinta County includes the city of Evanson, one of the largest cities in Wyoming. This county collects an estimated $52MM in personal property and real estate taxes. Teton County consists of 35,000 parcels and a combined estimated $33MM is collected in personal property and real estate taxes annually. Platte County, the fourth new addition to the Wyoming client base, collects an estimated $14MM in real estate and personal property taxes.

“We have been eager to continue our business development in the state of Wyoming, knowing the marketing opportunities that could be created. Wyoming Department of Revenue does not levy a personal or corporate income tax, signifying the importance of county growth with this service. The security, efficiency and innovation of this program are proven by the utilization of services by other counties in Wyoming. This utilization has helped us expand our business to these four additional counties,” stated Thomas R. Evans, CEO and Chairman of Official Payments Corp.

The combined County authorities collected over $132MM in personal property and real estate taxes last year. The real estate tax first installment date is September 1st; delinquent payments are due by November 10th. Second installment taxes are due by March 1st; delinquent payments are due by May 10th. To avoid any interest, both payments are due by December 31st. Property tax, which consists of motor vehicle tax, is collected monthly by last name of taxpayer.

Official Payments Corp. charges taxpayers a convenience fee for processing these credit card transactions. The fee schedule can be found on the Internet at [][2]. For example, a taxpayer who owed a current tax of $2500.00 in real estate taxes and charged their taxes, would find a total of $2568.00 on their credit card statement: $2500.00 for the tax bill and $68.00 for the convenience fee. American Express, MasterCard, Discover Card and Visa are the credit cards accepted by the program. Taxpayers using credit cards with bonus rewards programs can, depending on their card’s program, earn rewards, points, and cash-back on airline frequent flyer miles for paying their taxes.

About Official Payments Corporation

Official Payments Corporation (Nasdaq: OPAY) is the leading provider of electronic payment options to government entities. The company’s principal business is enabling consumers to pay their government taxes, fees, fines, and utility bills by credit card, via Internet and telephone. The company is unequaled in market penetration and national footprint. Official Payments has agreements to collect and process credit card payments with the Internal Revenue Service, 18 state governments, the District of Columbia, and over 900 county and municipal governments in 48 states across the United States. In 2000, Official Payments collected and processed over $925 million in federal, state and local government payments.

Official Payments was founded in the San Francisco Bay area in 1996. Thomas R. Evans, the former President & CEO of the Internet company GeoCities, became Chairman & CEO of Official Payments in the summer of 1999. Mr. Evans brought Official Payments public in November of 1999, raising $80 million in its IPO on the NASDAQ national market. The company’s success in new client acquisition, increasing business with its existing clients and in building consumer awareness can be attributed to the combination of an enormous market opportunity with a highly skilled and experienced management and staff, aggressive sales and marketing, and a core competency in developing and implementing leading-edge technical systems.



Dataworks & CheckFree

US Dataworks Inc., a wholly owned subsidiary of SonicPort Inc., and CheckFree Corp. announced the renewal of their business alliance to provide an end-to-end solution for converting checks to ACH transactions.

With the agreement, CheckFree will provide marketing and strategic support for all US Dataworks products. US Dataworks will continue system development and provide integration services and daily product support. All US Dataworks systems run on Windows-based client/server architecture and are integrated with CheckFree’s PEP+ ACH processing system.

Currently, more than two-thirds of the estimated 6 billion annual ACH transactions are processed through CheckFree’s ACH Alliance Processing platform or its PEP+ application software. As the leader in ACH processing software, CheckFree will fully leverage the capabilities of the US Dataworks software while providing banks of all sizes a cost-effective alternative with a high-capacity level. CheckFree offers established, high-volume processing capacity and industry-leading disaster recovery services for ACH processing.

US Dataworks President Terry Stepanik commented, “Our relationship with CheckFree provides an entry point for our entire product line into a very dynamic market that will significantly benefit from this new expanded teaming of our combined resources.”

Stepanik added, “CheckFree’s market leadership in the transaction processing industry and their track record of consistent, high-quality systems, combined with the innovative US Dataworks solutions, makes a compelling case for large corporations to process their check conversions in-house rather than use outside service providers.”

“As the leader in electronic payment processing, CheckFree clearly recognizes the trend of converting checks to ACH transactions,” said Denny Oswalt, senior vice president and general manager of CheckFree’s ACH business unit. “This check conversion product suite will position CheckFree to offer a complete processing package from the corporate location through the Federal Reserve Banking system.”

The benefits of the combined systems include seamless compatibility; automated in-house processing; industry-leading return item decisioning based on corporate parameters and item history; a flexible resubmit calendar with timing determined by the originator; automated return fee generation that reduces collection time; and monthly analysis reports to assist the originator in improving return processing compared with other corporations.

The systems incorporate Thomson Financial Publishing Co.’s EPICWare database and the recently announced “1FOR1” database co-developed with Thomson’s. These databases significantly reduce the number of returns experienced in the conversion process.

About US Dataworks

Established in 1997, US Dataworks develops, markets and supports transaction processing software for Windows NT computer systems. Its customer base includes many of the largest financial institutions, as well as credit card companies, government institutions and high-volume merchants in the United States. It also has a strategic alliance with Thomson Financial Publishing, a unit of Thomson Corp. (TSE:TOC), to incorporate their EPICWare database into US Dataworks products.

About SonicPort Inc.

SonicPort Inc. is a financial services company specializing in the integration of transaction-processing software with ASP services, IT expertise and customer service. Additional value-added services include custom software applications and technical support.

About CheckFree

CheckFree (Nasdaq:CKFR) is the leading provider of financial electronic commerce services and products. Celebrating its 20th year in e-commerce, CheckFree launched the first fully integrated electronic billing and payment solution in 1997. Today, CheckFree enables 5.2 million consumers to receive and pay bills electronically.

The company has multi-year contracts with 271 of the nation’s top billers to provide online billing and payment through more than 300 financial services organizations, including banks, brokerage firms, Internet portals and content sites and personal financial management (PFM) software.

CheckFree Software Services division provides solutions that are used to process more than two-thirds of the nation’s 6 billion Automated Clearing House payments, and reconciliation and compliance products and services to more than 400 organizations in the banking, brokerage, utility, retail, insurance and credit card industries, among others. This division includes CheckFree i-Solutions, the leading provider of interactive e-billing and e-statement software and services that enable companies to transform bills and statements into interactive conduits for customer relationship management, marketing and customer self service.

CheckFree Investment Services provides a broad range of investment management services to thousands of financial institutions nationwide. The division’s clients manage more than 1,500,000 portfolios totaling more than $500 billion in assets. For more information, visit [][1].



Drug Abuse Cards

Smart cards have found an application in managing California’s ‘Proposition 36’ initiative. The new law, which went into effect July 1, mandates treatment instead of incarceration for first- and second-time nonviolent drug offenders. NY-based Netsmart Technologies has been selected by San Joaquin County to manage the county’s ‘Prop 36’ initiative with smart cards. The San Joaquin Office of Substance Abuse is responsible for collecting data on all offenders and submitting it to the California Department of Alcohol and Drug Programs, which in turn submits a report on participant performance to the Governor. The smart card tracks every class, medical appointment, counseling session, and treatment appointment each participant attends, which could be as many as 30 different agencies and organizations. The card has an ‘HL7’ record, which is capable of interfaces across a broad range of legacy information systems. The card’s software, which is bridgeware, can be an integral part of the organization’s solutions to pending HIPAA mandates.



Carreker Corporation, a
leading provider of e-finance enabling solutions to the financial industry,
announced that Carreker’s Check Solutions Group has entered into a
multi-million dollar contract with Symcor to integrate new back-office
software, image technology and archive into the Company’s item processing

Through its system of network-connected processing centers, Symcor is the
leading processor of financial transactions in Canada. In 2000, Symcor
processed nearly 2 billion checks, 34 million credit card transactions and
44 million customer payments for clients in the financial service,
telecommunications, utility, retail, insurance and healthcare sectors.
“Teaming with Carreker and Check Solutions will allow us to move forward
quickly and efficiently with our plans to expand our services to customers in
the North American marketplace,” said Paul Currie, Chief Executive Officer of

The Check Solutions group will provide proven software and advanced
technology to significantly improve efficiencies enabling Symcor to move to an
enhanced systems platform. The systems include conventional check processing
as well as image capture and automated reject reentry on the front end of the
item processing operation. In addition, the back-office software will provide
new services such as image statements, CD/ROM statements, archive storage and
retrieval. Further enhancing Symcor’s back office processes will be the CS
Inbound Returns Express(TM) and CS Exceptions Express(TM) to handle their
returned items and exceptions processing.

Joe Rowell, President of Carreker’s Check Solutions Group said, “We are
very pleased to have Symcor choose our company and complete suite of products
to assist them in putting into place a number of systems that will provide new
services to its customers, reduce processing time and lower expenses. Symcor
will now be in a position to convert paper-based information into electronic

Symcor now also has access to Carreker’s Electronic Check Presentment
(ECP) technology. ECP allows banks to process incoming paper check
information into their deposit posting systems before the arrival of the
physical paper items. This results in an increase of investable funds through
corporate deposit replenishment, reduction in interest paid, and increased
fraud detection capabilities. ECP also facilitates the move towards paper
truncation and image processing.

“As the leading provider of item processing in Canada, Symcor is committed
to providing efficient and secure business and technology outsourcing to their
clients. Check Solutions technology will provide Symcor with an advanced
platform to expand their market reach while maintaining their quality of
service to current clients. Additionally, the integration of Carreker’s ECP
product line with Check Solutions’ image technology further emphasizes the
benefits our customers will receive as a result of our merger,” said J.D.
“Denny” Carreker, Chairman and Chief Executive Officer of Carreker

“This kind of customer win is precisely the reason we acquired Check
Solutions. Check Solutions’ customer base and value proposition have
dovetailed perfectly with Carreker’s clients and solutions, greatly adding to
our ability to expand our presence in the marketplace,” said J.D. “Denny”
Carreker, Chairman and Chief Executive Officer of Carreker Corporation.
Symcor now joins Wells Fargo, Fleet, Bank One, Union Planters, and Bank of
New York on a growing list of outsourcing service providers and financial
institutions that have chosen products from Carreker’s Check Solutions Group
to further enhance their back-room processing.



Equifax announced this morning U.S. Patent and Trademark Office approval for a “System and Method for Authentication of Network Users.” Unlike basic authentication methods that rely solely on wallet information to identify users online, the Equifax system requests both financial and non-financial information that should be known only to the end user and Equifax, such as the amount of a car payment each month or the name of the mortgage lender. After the end user completes this interactive query process, Equifax verifies that the individual is who he or she claims to be. The consumer authentication is sold under the trade name ‘eIDverifier’. Among companies that have selected Equifax to authenticate their end users are eBay, CheckFree, State Farm and Fidelity Investments. Additionally, such companies as IBM, PricewaterhouseCoopers, VeriSign and are authorized resellers.


SLMSOFT 2Q/01 Inc. y announced financial results
for the second quarter ended June 30, 2001.
For the second quarter of 2001, the Company reported a loss of $4.3
million or ($0.25) per share, compared to a loss of $6.0 million or ($0.45)
per share for the same period in 2000. The loss from continuing operations
totaled $3.6 million or ($0.21) per share, compared to a loss of $5.9 million
or ($0.45) per share in 2000. Excluding the loss from its 49% owned
subsidiary, Infocorp (TSE:INP),’s second quarter 2001 loss from
continuing operations equaled $2.5 million or ($0.15) per share.
For the six months ended June 30, 2001, the Company achieved earnings of
$45.9 million or $2.65 per share, compared to a loss of $11.2 million or
($0.84) per share for the same period last year. This year’s results reflect
the gain on the sale of U.S. processing operations, referred to above, of
$50.4 million. The six-month loss from continuing operations amounted to $4.5
million or ($0.26) per share, compared to a loss of $8.5 million or ($0.64)
per share for the corresponding period of last year.

“During the second quarter of 2001, we continued to refocus our leaner
organization’s strategy toward driving growth from sales in the international
markets,” said Govin Misir Chairman and CEO “Substantial efforts
were placed on three elements of our growth strategy: first, we concentrated
on building a sizeable pipeline of software licensing opportunities and
bringing negotiations on some key accounts to closure; secondly, we sought an
appropriate location for a global development centre and screened potential
partner or acquisition candidates that would be able to provide us with a
strong base for reducing software development costs and building a scalable
implementation team; finally, we looked to monetize a portion of the proceeds
from the sale of our U.S. operations in order to have the growth capital to
invest in our sales efforts, acquisitions, and the ongoing development of new
In the second quarter the Company made considerable advancement towards
closure of several contracts during the second half of 2001, including:

– A smart-card and electronic banking system project for the Post Office
Bank in Côte d’Ivoire;

– An electronic transaction network system for the National Bank of

– An Internet banking and electronic transaction network system for the
Central Bank of UAE;

– An electronic transaction network system for the Bank of Katmandu;

– An electronic transaction network system for the Bank of Cairo;

– A credit card processing agreement with an organization in the U.S.
that issues over 10,000 cards a month; and

– Additional ATM processing revenue, after having assisted one of the
Company’s ATM processing clients in closing a deal to supply ATMs and
provide processing services to a major North American oil company’s
service centres.

Revenue from these contracts will be recognized during subsequent
quarters and will provide SLM with a strong foundation to meet its growth
targets. These contracts are expected to bring in over $10 million annually of
net new revenue over the next three years.
The second area of its strategy that was able to
substantially complete during the second quarter was the selection of a site
for its global development centre. After assessing the pros and cons of a
number of regions, decided to focus on India because of the
maturity of their software industry, the abundance of qualified technical
personnel, and the relative cost advantage. Subsequent to the quarter’s end,
the Company announced the acquisition of Design Expo, a leading provider of
Internet technology in the region. The negotiations were concluded in August,
and now owns a 70% interest in a well established software
engineering firm that has over one hundred employees. is confident
that significant benefits will accrue as a result of being able to reduce
development costs and improve its time-to-market for new products. is also pleased to report on the successful completion of the
third element of its strategy. The transition of the cheque item and back-
office processing division to The InterCept Group was substantially completed
by the end of the second quarter. During the quarter, the Company was able to
monetize a significant portion of the share proceeds from the sale of the
cheque item and back-office processing division, by way of an $18 million loan
from InterCept. Subsequent to the quarter’s end, sold 610,000
InterCept shares. The total proceeds of $27 million enabled the loan to be
repaid and provided us with net proceeds of approximately $9 million. This
additional capital will be invested in the Company’s growth strategy going

In terms of its portfolio of companies,’s 49% owned
subsidiary, Infocorp, requires particular attention as it is in the process of
transitioning its technology, repositioning its brand, and rebuilding its
sales and marketing engine after focusing almost exclusively on the delivery
of its e-government electronic service delivery technology to New York City.
During the second quarter, invested $500,000 in Infocorp to enable
this transition to begin. The Company anticipates that further investments
will be required over the next two quarters to complete this transition.

Financial Results


Revenue for the second quarter totaled $2.2 million, compared to $4.1
million in the second quarter of 2000. While the reduction was primarily
caused by reduced license fees, it was offset in part by growth in
installation and other service revenue, which reflects initial results of the
Company’s increased sales and distributor activities. For the six-month period
ended June 30, 2001, revenues declined to $4.3 million from $7.8 million last
year, almost entirely as a result of reduced license fees.

Research and development expenses

Research and development expenses increased to $1.5 million in the second
quarter compared to $0.4 million for the same period in 2000, and to $3.7
million for the year-to-date, compared to $2.7 million for the corresponding
six-month period last year. These increases are due to increased development
activities carried on this year for the development of Web-Teller and eCRM
enabling middleware solution.

Selling and marketing expenses

Selling and marketing expenses increased slightly, to $2.3 million for
the second quarter from $2.0 million for the same period last year. For the
six months ended June 30, 2001, selling and marketing expenses increased to
$4.4 million, compared to $3.1 million last year. The increases reflect the
investment made in creating a strong pipeline for future license sales.

General and administrative expenses

General and administrative expenses amounted to $1.8 million in the
second quarter of 2001, compared to $4.2 million for the same period last
year. The decrease is due in part to operational efficiencies in 2001,
together with a reduction from the amount provided for doubtful accounts in
2000. For the six months ended June 30, 2001, these expenses amounted to $4.4
million, compared to $5.5 million for the same period in 2000.

Provision for income taxes

The Company recorded a tax benefit of losses carry-forward of $1.5
million in the second quarter of 2001 and $5.1 million in the first quarter,
for an aggregate recovery of $6.6 million for the year-to-date. This recovery
of income taxes will be used to offset the taxes otherwise payable on the
reported gain on sale of the discontinued division reported in the first

Liquidity and Capital Resources

In the second quarter of fiscal 2001, operating activities used net cash
of $10.8 million compared to $4.7 million in the second quarter of fiscal 2000
as the Company continued to pay down its trade accounts payable. The Company
funded operations in the second quarter of fiscal 2001 with the proceeds from
sale of its discontinued division including an advance from InterCept Group of
$18 million pending the sale of 610,000 of that company’s shares owned by

The Company targets to be cash-flow positive through increased revenues
and operational efficiencies during 2001. At June 30, 2001, the Company had
cash of $17 million and marketable securities of $46 million, representing
approximately 1.25 million shares of InterCept with a market value at that
date of approximately $62 million. Following completion of the sale of shares
(referred to above) in August, the advance to InterCept was repaid and cash
was increased by the remaining proceeds of $9 million.


Founded in 1986, is a leading developer of electronic payment
systems and transaction processing solutions, including e-commerce
applications with a focus on the financial services industry.
provides real-time end-to-end e-banking solutions that include Internet
banking, interactive voice recognition (IVR), debit and credit card issuing,
automated teller machines and point-of-sale network management, retail branch
management, and e-CRM enabling technology. also provides
investment brokerage client and portfolio management applications for the
brokerage industry; e-health solutions which enable health insurance claims to
be evaluated at the point of service, processed and settled in real time; and
e-government solutions which enable consumers to pay fees for government
services in person, at kiosks, through IVR systems or the Internet. For more
information, please visit the Company’s website at