UK Card Rates

While bank credit card rates are tumbling in the UK largely due to competition from US-based issuers, store cards continue to carry high interest rates. Timecard now carries an APR of 31.9% compared to an 8% APR on the Cahoot bank credit card. The latest issue of London-based Moneywise magazine notes that John Lewis and Waitrose carried the lowest rates for retail cards, coming in at 13%. Among other retailers charging the highest interest rates on UK store credit cards: Laura Ashley, Owen Owen, Kwik Fit, Monsoon, Country Casuals, and Russell & Bromley.


Conference Card

American Express will be the official card of COMDEX, NetWorld+Interop, and Seybold Seminars. Under a multi-year marketing agreement signed with Key3Media Group, AmEx will become the official card of Key3Media event brands throughout the U.S. AmEx will also promote its products and services at all U.S. Key3Media events. AmEx says the deal creates an ideal venue to promote its smart ‘Blue’ card. Key3Media Group serves more than 6,000 exhibiting companies and two million attendees through 60 events in 19 countries.


4th Largest ATM Net

Customers of Firstar Bank and U.S. Bank can now use any Firstar or U.S. Bank ATMs to make withdrawals, transfers and balance inquiries free of charge. It is the first tangible benefit that customers will experience in the newly merged U.S. Bancorp.

The new U.S. Bancorp operates the fourth-largest ATM network in the nation, with 5,208 ATMs. The ATMs will not be able to accept deposits from both banks until systems are fully integrated, which will occur over the next several months.

![][1] After the integration is complete, customers will be able to use any of more than 2,239 branches to conduct their banking business. The signs on Firstar branches, ATMs and other buildings will be changed to U.S. Bank market-by-market starting later this year and continuing into 2002.

“As the systems of both companies integrate, customers will have access to the full range of the new U.S. Bancorp’s combined products, services and locations, which clearly sets us on course to becoming the best bank in America,” said Richard Davis, vice chairman of consumer banking and payment services for U.S. Bancorp.

Customers will be notified of additional benefits or any changes to their accounts well in advance of the change. Customers will soon see other changes, including the adoption of Firstar’s Five Star Service Guarantee, a unique brand of customer service that credits customer accounts with $5 if any element of the guarantee isn’t delivered.

Minneapolis-based U.S. Bancorp, with assets in excess of $160 billion, is the 8th largest financial services holding company in the United States. The company operates 2,239 banking offices, 5,208 ATMs and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payments services products to consumers, businesses and institutions. U.S. Bancorp is the parent company of Firstar Banks and U.S. Bank. Visit U.S. Bancorp on the web at [][2] and Firstar Bank at [][3]

[1]: /graphic/usbank/usbank.gif


Feb Checkwriting

Same-store retail sales for February rose a moderate 2.6 percent over the same period last year, according to data compiled by TeleCheck Services, Inc., the world’s leading check acceptance company. TeleCheck’s figures concur with Alan Greenspan’s comment last week that the economy may be strengthening, despite prevalent discussions of a recession. The Southeast region led the nation, followed by the Southwest, the Midwest, the West, the Mid-Atlantic and the Northeast. The TeleCheck Retail Index is based on a year-over-year, same-store comparison of the dollar volume of checks written by consumers at more than 27,000 of TeleCheck’s 228,000 subscribing locations. Compiled on a calendar basis, TeleCheck’s index is based on a broad cross-section of retailers nationwide. Checks account for about one-third of retail spending and remain second only to cash as the most popular method of payment. TeleCheck is a subsidiary of Atlanta-based First Data Corp. (NYSE: FDC).

“Sales are surprisingly good considering recent widespread talk of declining consumer confidence and the incidents of severe weather, especially in the Northeast, that prevented many shoppers from getting out,” said Dr. William Ford, TeleCheck’s Senior Economic Adviser. “Mardi Gras celebrations occurred in February this year, as opposed to March last year, resulting in significant sales boosts for the Southeast region. Louisiana, in particular, experienced an impressive 4.8 percent increase in retail sales.”

Sales rose 3.5 percent in the Southeast, with Louisiana up 4.8 percent and Georgia up 3.5 percent. Sales were up 3.4 percent in both The Carolinas and Tennessee, and sales grew 3.1 percent in Florida. Sales increased 4.5 percent in New Orleans, 3.6 percent in Memphis, 3.4 percent in Miami/Ft. Lauderdale, 3.2 percent in both Nashville and Atlanta, 3.0 percent in Tampa and 2.5 percent in Orlando.

In the Southwest, sales rose 3.3 percent. Oklahoma’s sales jumped 4.2 percent, Texas’ sales rose 3.9 percent and Missouri’s grew 2.6 percent. Sales in both Houston and Tulsa increased 4.3 percent, sales climbed 4.1 percent in Dallas/Ft. Worth, 4.0 percent in Oklahoma City, 3.6 percent in Austin, 3.3 percent in San Antonio, 2.9 percent in Kansas City and 2.4 percent in St. Louis.

Sales in the Midwest climbed 2.6 percent, with Michigan up 3.6 percent, Minnesota up 3.0 percent, Ohio up 2.7 percent, Wisconsin up 2.0 percent and Illinois up 1.8 percent. Sales grew by 3.2 percent in Detroit, 2.6 percent in Minneapolis/St. Paul, 2.5 percent in Cleveland, 1.6 percent in Milwaukee and 1.5 percent in Chicago.

The West was up 2.4 percent with sales increasing 5.7 percent in Hawaii, 2.8 percent in Arizona and 2.6 percent in California. Sales rose 1.6 percent in Colorado, 1.1 percent in Oregon and 0.4 percent in Washington. Sales rose 2.8 percent in San Diego, 2.5 percent in Los Angeles and 2.2 percent in both the Bay Area and Phoenix. Sales grew 1.8 percent in Denver, 1.4 percent in Portland and sales decreased 1.5 percent in Seattle.

The Mid-Atlantic’s sales increased 1.9 percent. Pennsylvania’s sales were up 2.9 percent, Virginia’s sales increased 1.9 percent, New Jersey’s sales rose 1.3 percent and Maryland’s sales grew 1.1 percent. Pittsburgh saw sales jump 3.3 percent, Philadelphia’s sales grew 2.6 percent, the District of Columbia saw sales rise 2.0 percent and Baltimore’s sales grew 1.3 percent.

The Northeast region’s sales grew a modest 0.8 percent. Sales rose 2.1 percent in Massachusetts and declined 0.5 percent in New York State. Boston saw sales increase by 2.4 percent, while New York City’s sales decreased by 1.1 percent.

TeleCheck’s index is compiled on a calendar basis and is based on the total sales volume of check-writing consumers at a broad cross-section of retailers. Figures are not adjusted for inflation. Checks account for approximately one-third of retail spending. In 1999, TeleCheck authorized more than $155 billion in checks, representing 3.1 billion transactions. For more information about TeleCheck, visit the Internet site at [][1].

Note: The TeleCheck logo and retail sales figures can be downloaded from the TeleCheck press center at [ leCheck.html][2] or from PR Newswire and NewsCom.

Atlanta-based First Data Corp. is a global leader in electronic commerce and payment services. Serving more than two million merchant locations, more than 1,400 card issuers and millions of consumers, First Data makes it easier, faster and more secure for people and businesses to buy goods and services, using virtually any form of payment: credit, debit, stored-value card or check at the point-of-sale, over the Internet or by money transfer. For more information, please visit the company’s Web site at [][3].

Dr. William Ford holds the Weatherford Chair of Finance at Middle Tennessee State University. Earlier in his career he was president of the Federal Reserve Bank of Atlanta and served on former Fed Chairman Paul Volcker’s Federal Open Market Committee.

Retail Sales
(Period: 2/1/01-2/28/01)
March 5, 2001


Florida 3.1% Arizona 2.8% Illinois 1.8%
Ft. Lauderdale 3.4% Phoenix 2.2% Chicago 1.5%
Orlando 2.5% California 2.6% Michigan 3.6%
Tampa 3.0% Bay Area 2.2% Detroit 3.2%
Louisiana 4.8% Los Angeles 2.5% Minnesota 3.0%
New Orleans 4.5% San Diego 2.8% Minneapolis/
St. Paul 2.6%
Georgia 3.5% Oregon 1.1% Wisconsin 2.0%
Atlanta 3.2% Portland 1.4% Milwaukee 1.6%
Tennessee 3.4% Washington 0.4% Ohio 2.7%
Memphis 3.6% Seattle -1.5% Cleveland 2.5%
Nashville 3.2% Colorado 1.6%
The Carolinas 3.4% Denver 1.8% MID-ATLANTIC 1.9%
District of
Hawaii 5.7% Columbia 2.0%
SOUTHWEST 3.3% Pennsylvania 2.9%
Texas 3.9% NORTHEAST 0.8% Philadelphia 2.6%
Austin 3.6% Massachusetts 2.1% Pittsburgh 3.3%
Dallas/Ft. Worth 4.1% Boston 2.4% New Jersey 1.3%
Houston 4.3% New York -0.5% Virginia 1.9%
San Antonio 3.3% New York City -1.1% Maryland 1.1%
Missouri 2.6% Baltimore 1.3%

Kansas City 2.9%
St. Louis 2.4%
Oklahoma 4.2%
Oklahoma City 4.0%
Tulsa 4.3%

SOURCE TeleCheck Services, Inc. Web Site: [ leCheck.html][4]



P2P Tickets

Western Union Financial Services and have signed an agreement to provide users with a link to the Western Union ‘MoneyZap’ service. The relationship enables users to request payment from friends or family after they have purchased tickets. For example, an individual buying tickets for large groups, family or friends can divide the ticket cost, send a ‘MoneyZap’ money request and then settle up through a money transfer online. The agreement will provide a link to the ‘MoneyZap’ service on as well as other sites in the Ticketmaster network, including Citysearch,,, and Within these entities, 8 million Internet users are given the opportunity to use the ‘MoneyZap’ service to send, request or receive payments by money transfer online.


InterCept 4Q/00

The InterCept Group, Inc. reported record financial results for the three months and year ended December 31, 2000. Previous year results have been restated to reflect the acquisition of Advanced Computer Enterprises, Inc. which has been accounted for on a pooling-of- interest basis.

Net revenues for the three months ended December 31, 2000 totaled $18.7 million, a 19% increase compared with $15.8 million for the three months ended December 31, 1999. Net income available to common shareholders, excluding net losses generated from InterCept’s 28% ownership of Netzee, Inc., totaled $2.6 million or $0.19 per share (diluted), on 13.8 million average shares outstanding for the three months ended December 31, 2000 versus $1.5 million or $0.14 per share (diluted), on 10.4 million shares outstanding for the three months ended December 31, 1999. Net losses reflect losses related to changes in Netzee’s shareholders’ equity less InterCept’s portion of Netzee’s losses. Net loss available to common shareholders including these net losses was ($10.1) million for the three months ended December 31, 2000 versus $5.9 million or $0.56 per share (diluted) for the three months ended December 31, 1999.

Net revenue for the year ended December 31, 2000 totaled $69.6 million, a 33% increase compared with $52.4 million for the year ended December 31, 1999. Net income available to common shareholders for the year ended December 31, 2000, excluding net losses generated from InterCept’s ownership of Netzee, was $8.9 million, versus $5.1 million in 1999. Net loss available to common shareholders, including net losses generated from Netzee, was ($16.9) million for the year ended December 31, 2000. Net income per share for the year ended December 31, 2000, excluding the net losses generated from InterCept’s ownership of Netzee, was $0.67 per share (diluted) on 13.4 million shares outstanding versus $0.49 per share (diluted) on 10.6 million average shares outstanding in 1999. Net loss per share including the net losses totaled ($1.32) per share for the year ended December 31, 2000.

John Collins, Chairman and Chief Executive Officer of InterCept, said, “We are very pleased to be reporting outstanding financial results for the fourth quarter and full year of 2000. These record results represent a solid finish to a year of tremendous growth for our company. The consistent execution of geographic expansion and penetration supplemented by the acquisition of businesses that complement our comprehensive suite of products and services, and our focus of developing new and retaining long-term relationships with the community banks we serve, are reflected in our results. In 2000, InterCept completed several important business transactions including the completion of our largest acquisition, to date, in January 2001 of the U.S. data operations of This transaction added ten data centers and gives us additional opportunities for expanding our market share and increasing our name recognition throughout the U.S. We will continue to look for acquisitions of businesses in 2001 that we believe will increase our geographic and customer reach, enhance our product and services offerings and create additional value for our shareholders.”

About InterCept

InterCept is a single-source provider of a broad range of technologies, products, and services that work together to meet the electronic commerce and operating needs of community financial institutions. InterCept’s services include electronic funds transfer, debit card programs, core bank processing software, check imaging, and data communications management, as well as Internet banking products and services through its affiliate, Netzee, Inc. More information about InterCept can be found on the Internet at [][1] or by calling (770) 248-9600.

The InterCept Group, Inc.
Financial Highlights
(in thousands, except per share data)

Three-months Ended Year Ended
December 31, December 31,
2000 1999* 2000 1999*

Service fee income $15,458 $12,057 $55,289 $39,677
Data communications management
income 1,578 1,420 6,002 5,163
Equipment and product sales,
services and other 1,711 2,339 8,348 7,519
Total revenues 18,747 15,816 69,639 52,359

Cost of Services:
Cost of service fees 4,485 3,607 16,198 11,145
Cost of data communications 1,239 988 4,404 3,561
Cost of equipment and product
sales 1,396 1,733 6,350 5,746
Total cost of services 7,120 6,328 26,952 20,452

Selling, general and administrative 7,153 5,940 27,017 20,992
Depreciation and amortization 1,160 1,054 4,403 4,462
Operating Income 3,314 2,494 11,267 6,453
Other income (expense), net 1,326 23,036 11,825 39,172
Income before income taxes and
minority interest 4,640 25,530 23,092 45,625
Provision for income taxes 1,871 9,828 9,216 20,212
Equity in loss of affiliate (12,820) (9,811) (30,710) (15,352)
Minority interest (10) (33) (28) (120)
Net (loss) income (10,061) 5,858 (16,862) 9,941

(Loss) income per share:
Basic $(0.76) $0.59 $(1.32) $0.99
Diluted $(0.76) $0.56 $(1.32) $0.94

Weighted average shares outstanding:
Basic 13,185 9,976 12,820 10,095
Diluted 13,185 10,409 12,820 10,564

* All prior period amounts have been restated to reflect the acquisition

of Advanced Computer Enterprises, Inc. in a pooling transaction.

The InterCept Group, Inc.
Condensed Consolidated Balance Sheets
(in thousands)

December 31, December 31,
2000 1999*
Current assets:
Cash and cash equivalents $8,061 $1,945
Short term investments 37,484 200
Accounts receivable, net 9,960 9,099
Advances to SLM 5,000 —
Inventory, prepaid expenses and
other 4,689 4,766
Total current assets 65,194 16,010

Property and equipment, net 16,883 11,662
Intangible assets, net 24,786 20,600
Accounts receivable – affiliate 15,000 10,957
Investment in affiliate 19,196 40,446
Other assets 1,067 1,220
Total assets $142,126 $100,895

Current liabilities:
Current maturities of long-term
debt $45 $154
Accounts payable and accrued
expenses 3,188 6,387
Deferred revenue 5,054 5,777
Total current liabilities 8,287 12,318

Long-term debt, net of current
portion 4,513 12,669
Deferred revenue 453 440
Deferred taxes 26,279 22,633
Total liabilities 39,532 48,060

Minority interest 202 175

Shareholders’ equity:
Common stock 109,340 42,657
Retained earnings (6,951) 9,911
Unrealized gain on securities 3 92
Total shareholders equity 102,392 52,660
Total liabilities and
shareholders’ equity $142,126 $100,895

* All prior period amounts have been restated to reflect the acquisition
of Advanced Computer Enterprises, Inc. in a pooling transaction.

The InterCept Group, Inc.

Condensed Consolidated Statement of Operations
Three Months Ended December 31, 2000
(in thousands except per share data)

Consolidated Netzee InterCept
Service fee income $15,458 $— $15,458
Data communications management 1,578 — 1,578
Equipment & product sales,
services and other 1,711 — 1,711
Total Revenues 18,747 — 18,747

Cost of Services:
Cost of service fees 4,485 — 4,485
Cost of data communications 1,239 — 1,239
Cost of equipment and product
sales 1,396 — 1,396
Selling, general & administrative 7,153 — 7,153
Depreciation & amortization 1,160 — 1,160

Total Operating Expenses 15,433 — 15,433

Operating Income 3,314 — 3,314

EBITDA 4,474 — 4,474

Other Income (Expense)
Interest income, net 1,061 — 1,061
Gain in Netzee ownership 265 265 —

Total Other Income 1,326 265 1,061

Income Before Income Taxes and
Minority Interest 4,640 265 4,375

Provision for Income Taxes 1,871 107 1,764
Equity in Loss of Affiliate (12,820) (12,820) —
Minority interest in consolidated
subsidiary (10) — (10)

Net (Loss) Income Attributable
To Common Shareholders $(10,061) $(12,662) $2,601

Net (Loss) Income Per Common Share
(Diluted) $(0.76) $0.19
Net (Loss) Income Per Common Share
(Diluted, excluding
goodwill amortization) 0.20

Weighted Average Shares Outstanding
(Diluted) 13,185 13,827

The InterCept Group, Inc.

Condensed Consolidated Statement of Operations
Year Ended December 31, 2000
(in thousands except per share data)

Consolidated Netzee InterCept
Service fee income $55,289 $— $55,289
Data communications management 6,002 — 6,002
Equipment & product sales,
services and other 8,348 — 8,348
Total Revenues 69,639 — 69,639

Cost of Services:
Cost of service fees 16,198 — 16,198
Cost of data communications 4,404 — 4,404
Cost of equipment and product
sales 6,350 — 6,350
Selling, general & administrative 27,017 — 27,017
Depreciation & amortization 4,403 — 4,403

Total Operating Expenses 58,372 — 58,372

Operating Income 11,267 — 11,267

EBITDA 15,670 — 15,670

Other Income (Expense)
Interest income 3,847 — 3,847
Gain in Netzee ownership 7,978 7,978 —

Total Other Income 11,825 7,978 3,847

Income Before Income Taxes and
Minority Interest 23,092 7,978 15,114

Provision for Income Taxes 9,216 3,068 6,148
Equity in Loss of Affiliate (30,710) (30,710) —
Minority interest in consolidated
subsidiary (28) — (28)

Net (Loss) Income Attributable
To Common Shareholders $(16,862) $(25,800) $8,938

Net (Loss) Income Per Common Share
(Diluted) $(1.32) $0.67
Net (Loss) Income Per Common Share
(Diluted, excluding
goodwill amortization) $0.72

Weighted Average Shares Outstanding
(Diluted) 12,820 13,421

SOURCE IntertCept Group, Inc. Web Site: [][2]



VISA Biz Chip

VISA USA announced the release of a small business version of its ‘smart VISA’ card this morning. Reportedly FleetBoston will be the first issuer to offer the new product. The announcement builds on the VISA smart card program introduced last September. The small business version of the ‘smart VISA’ card will initially offer three areas of functionality including the payment, access, and loyalty. Under the access function small business cardholders may be able to set spending limits for different employees while the loyalty function can capture discounts. By focusing initially on the payment function and the Internet, ‘smart VISA’ allows immediate use and acceptance of the new payment technology. An example of how the chip-enabled technology would work for a merchant would be to use a ‘smart VISA Business’ card to purchase supplies online and gain volume discounts through the suppliers’ secure Web site. Special offers could be downloaded from the Web site and used at the physical world store. This same business could build a rewards program for its own customers, offering discounts or free merchandise to customers for repeat business. Points or coupons could be awarded for purchases made and stored on the chip. In a different scenario, a contracting firm could issue ‘smart VISA Business’ cards to its employees, with the chip automatically recording purchase information and integrating it into the firm’s accounting software. VISA is continuing the push to incent merchants to obtain a plug-in application to take advantage of the payer authentication feature of the new ‘smart VISA’ cards. Fleet and Providian introduced consumer versions of the first ‘smart VISA’ cards on Sept. 12. First USA joined the smart card issuers Oct. 24. While VISA will not release figures on the number of ‘smart VISA’ cards issued to-date, it says the program has exceeded expectations. The AmEx ‘Blue Card’, the first general purpose smart card issued in the U.S., has signed up more than four million cardholders since its launch in Sept. 1999. AmEx also released a business version of ‘Blue Card’ last year. (CF Library 9/12/00; 9/13/00; 10/03/00;10/25/00)



Orbiscom, the leading provider of Controlled Payment Number technology, announced the launch of its Canadian operation in Toronto in a committed effort to extend it’s North American reach and establish marketplace leadership in Canada. Further, the global technology company announces the appointment of Frank Austin, BASc. MBA, P.Eng. to Chief Executive Officer of Orbiscom-Canada, Inc.

“By creating a Canadian operation, we have the ability to quickly establish Canadian customers and build consumer confidence for safe, online transactions,” said Ray Sheridan, Orbiscom’s chief operating officer. “Frank Austin’s extensive management expertise will prove invaluable in continuing to maintain our global leadership position.”

Mr. Austin brings more than 20 years of experience in applying technology systems, improving operations and initiating change to his current post, overseeing Orbiscom’s operations, management and team development in the Canadian market. Recognized as an innovator and successful change agent for his work with Tescor Energy, Saudi Aramco, The Body Shop, Dow Chemical and ServiceMaster. Austin is poised to advance Orbiscom’s CPN technology to ensure secure online payments for Canadian consumers.

Orbiscom-Canada’s first order of business is to sign a Canadian financial institution to license the Orbiscom, Inc. core product, O-power, a win-win solution for consumers, merchants and financial institutions.

“Our O-powered Controlled Payment Number is an incredibly powerful product, that enables people to shop on-line without exposing their personal credit card number. Orbiscom’s timing to market is ideal given the complete lack of proven and tested solutions available to Canadian consumers at this time, ” says Austin.

Orbiscom is also developing a number of other products utilizing O-power to address other on-line shopping needs of Canadian consumers. These new products will be available in Canada later this year.

About Orbiscom Inc.

Orbiscom Incorporated is a software technology service provider that is setting a new standard for controlled, protected on-line payments. The Orbiscom technology, O-power, enables consumers to generate a Controlled Payment Number (CPN) and specify a dollar limit valid for that on-line purchase. O-power is compatible with all current payment initiatives – credit, debit, checks – and allows consumers to shop at any e-tailer with confidence. Orbiscom, as the first to develop and successfully implement a Controlled Payment Number Technology, has installed O-power in Ireland, the UK and the United States. Founded in 1998, Orbiscom Incorporated is head quartered in New York with a development center in Dublin, Ireland, and operation centers in London, Brussels, Sydney and Toronto.


SwiftPay Card

Western Union and Verizon Wireless have signed a multi-year contract, which will allow Verizon Wireless’ ‘Prepay’ customers to use the Western Union ‘SwiftPay’ card to replenish minutes on their accounts. Verizon Wireless ‘Prepay’ customers will be able to simply present the ‘SwiftPay’ card and their cash payment at more than 30,000 Western Union agent locations. The payment is posted to the customer’s account on a near real-time basis, replenishing the account within minutes. Rollout to customers in Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, and Georgia will begin this month.


Heavenly Calling

Beverly Hills, CA-based MAXX International and NY-based Telstar International have set plans to begin marketing affinity prepaid telephone cards in English and Spanish featuring Pope John Paul II along with selected prayers by his Holiness printed on the cards. This is the first time that photographs of the Pope, along with his prayers, will have appeared on prepaid telephone cards. The marketing will begin in two weeks. A series of four prepaid telephone cards will be marketed throughout the USA, Mexico, Canada, Brazil, Argentina, the Philippines and Peru. The cards will be sold in denominations of $5, $10 and $20. MAXX will also distributed the cards through religious stores, religious gift shops, religious publications, and its Internet sited Last summer, Maxx signed an exclusive license agreement with the Treasures of St. Peter’s in The Vatican for the rights to market and distribute Vatican-branded credit, debit and telephone cards. There are approximately 60 million Catholics in the USA and over one billion Catholics worldwide. (CF Library 6/30/00; 11/06/00)


Carreker Global

Dallas-based Carreker Corp. has signed a new fraud prevention contract in excess of $1 million with one of the largest banks in Australia and has completed its first licensing agreement in the UK to provide its ‘eiManager’ ATM monitoring software to Halifax plc. In Australia, Carreker will provide its ‘FraudLink On-us’ and ‘FraudLink Deposit’ software to monitor potential fraudulent activity across all check transactions within the bank’s operations. In the UK, Carreker’s ‘eiManager’ will provide ATM fault and device monitoring, as well as automated dispatch and escalation of service requests, to the more than 2,500 ATMs operated by Halifax throughout the U.K.


CyberCash Bankruptcy

CyberCash announced Friday morning that due to its inability to raise the financing necessary to consummate the company’s previously announced merger with Network 1 Financial, the companies have terminated their merger agreement and entered into an asset purchase agreement under which Network 1 Financial will acquire all of CyberCash’s operating assets. The transaction will be consummated under a Chapter 11 bankruptcy proceeding filed Friday in Delaware. As a result, Nasdaq trading was immediately halted in CyberCash. CyberCash stock closed at 25/32 Thursday, down more than 95% from a 52-week high of $16 and near a 52-week low of 1/2. CyberCash said Friday it will continue to support its existing customer base of more than 27,500 Internet merchants and more than 100,000 software users. The Company will also maintain all normal business functions including marketing and sales activities designed to generate new business, partner marketing programs, and completing scheduled enhancements to its Internet payment processing service while to bankruptcy proceedings are underway. The decision to file bankruptcy comes less than three months after CyberCash announced it would purchase Network 1 for $64.5 million in stock. The parties hope to close the asset sale transaction in early April. Network 1 Financial Corp, headquartered in McLean, VA, provides electronic payment processing systems and merchant accounting, employs 120 people and had revenue of $23.6 million in 2000. (CF Library 12/15/00; 1/10/01; 2/02/01)