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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 25, 1997
REGISTRATION NO. 333-___
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CYBERCASH, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
54-1725021
(I.R.S. Employer Identification No.)
2100 Reston Parkway
Third Floor
Reston, Virginia 20191
(703) 620-4200
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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RUSSELL B. STEVENSON, JR.
General Counsel
2100 RESTON PARKWAY
THIRD FLOOR
RESTON, VIRGINIA 20191
(703) 620-4200
(name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
MICHAEL J. SILVER
HOGAN & HARTSON L.L.P.
111 S. CALVERT STREET, SUITE 1600
BALTIMORE, MARYLAND 21202
(410) 659-2741
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [X]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933 other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed Maximum Proposed Maximum Amount of
Title of each class of securities Amount to be Offering Price Aggregate Offering Registration
to be registered registered per unit (1) Price (1) Fee
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<S> <C> <C> <C> <C>
Common Stock, $.001 par value . . . . . . 2,070,000 shares (2) $16.625 $34,413,750 $10,429
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</TABLE>
(1) Estimated solely for the purpose of calculating the Registration Fee and
based upon the average of the high and low sale prices of the Registrant's
Common Stock on August 19, 1997, as reported on the Nasdaq Stock Market of
$16.625.
(2) Includes shares of Common Stock which may be offered pursuant to
this Registration Statement consisting of an estimated 1,900,000 shares
issuable upon conversion of 15,000 shares of Series C Convertible Preferred
Stock. For purposes of estimating the number of shares of Common Stock to be
included in this Registration Statement, the Company calculated 200% of the
number of shares of Common Stock issuable in connection with the conversion of
the Company's Series C Convertible Preferred Stock (based on a conversion price
of $16.625 which is the single lowest closing price of the Common Stock
reported on the Nasdaq National Market for the ten (10) consecutive trading
days ending August 19, 1997). In addition to the shares set forth in the table,
the amount to be registered includes an indeterminate number of shares issuable
upon conversion of or in respect of the Series C Convertible Preferred Stock
and Warrants to purchase Common Stock, as such number may be adjusted as a
result of stock splits, stock dividends and antidilution provisions (including
floating conversion prices) in accordance with Rule 416.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
AUGUST 25, 1997
CYBERCASH, INC.
COMMON STOCK, PAR VALUE $.001 PER SHARE
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This Prospectus relates to the offer and sale of up to 2,070,000 shares
(the "Shares") of common stock, $.001 par value ("Common Stock") of CyberCash,
Inc. ("CyberCash" or the "Company"). The Shares will be offered for sale by
certain stockholders of the Company, or by donees or certain other permitted
transferees (the "Selling Stockholders"), from time to time in one or more
transactions (which may involve block transactions) effected on the Nasdaq
Stock Market (or any national securities exchange or U.S. inter-dealer
quotation system of a registered national securities association, on which the
Shares are then listed), in sales occurring in the public market off such
exchange, in privately negotiated transactions, through the writing of options
on the Shares, short sales or in a combination of such methods of sale. Such
methods of sale may be conducted at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. The Selling Stockholders may effect such transactions directly, or
indirectly, through broker-dealers, underwriters or agents acting on their
behalf, and in connection with such sales, such broker-dealers or agents may
receive compensation in the form of commissions or discounts from the Selling
Stockholders and/or the purchasers of the Shares for whom they may act as agent
or to whom they sell Shares as principal or both (which commissions or
discounts are not anticipated to exceed those customary in the types of
transactions involved). In connection with any sales by the Selling
Stockholders of Common Stock hereunder, the Selling Stockholders and any
broker-dealers participating in such sales may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"). To the extent required, the names of any agents or broker-dealers, and
applicable commissions or discounts and any other required information with
respect to any particular offer of Shares by the Selling Stockholders, will be
set forth in a Prospectus Supplement. Any securities covered by this Prospectus
which qualify for sale pursuant to Rule 144 under the Securities Act of 1933,
as amended (the "Securities Act"), may be sold under Rule 144 rather than
pursuant to this Prospectus. See "Selling Stockholders" and "Plan of
Distribution."
None of the proceeds form the sale of the Shares by the Selling Stockholders
will be received by the Company. All expenses of registration incurred in
connection with this offering are being borne by the Company, but all brokerage
commissions and other expenses incurred by individual Selling Stockholders will
be borne by each such Selling Stockholder.
The Selling Stockholders and any dealer acting in connection with the
offering of any of the Shares or any broker executing selling orders on behalf
of the Selling Stockholders may be deemed to be "underwriters" within the
meaning of the Securities Act, in which event any profit on the sale of any or
all of the Shares by them and any discounts or commissions received by any such
brokers or dealers may be deemed to be underwriting discounts and commissions
under the Securities Act.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR CERTAIN CONSIDERATIONS RELEVANT
TO AN INVESTMENT IN CYBERCASH.
The Company's Common Stock is traded on the Nasdaq Stock Market under the
symbol "CYCH." On August 22, 1997, the reported last sale price of the Common
Stock on Nasdaq was $18.50 per share.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is August 25, 1997
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices in New York (Seven World Trade Center, Suite 1300, New York,
New York 10048) and Chicago (Suite 1400, Northwestern Atrium Center, 500 West
Madison Street, Chicago, Illinois 60661). Copies of such material can also be
obtained at prescribed rates from the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549. The Commission also maintains a World Wide Web site that contains
reports, proxy statements and other information regarding registrants,
including the Company, that file such information electronically with the
Commission. The address of the Commission's Web site is http:\\www.sec.gov.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act")
with respect to the Common Stock. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by reference and made a
part hereof: the Company's Annual Report on Form 10-K, as amended on Form
10-K/A, for the year ended December 31, 1996, the Company's quarterly reports
on Form 10-Q for the quarters ended March 31, 1997 and June 30, 1997, the
Company's current report on Form 8-K filed on August 8, 1997 the description of
the Company's Common Stock set forth in the Company's Registration Statements
on Form 8-A filed under the Exchange Act including all amendments and reports
filed for the purpose of updating such descriptions and the Company's Current
Report on Form 8-K dated August 5, 1997. All documents filed by the Company
with the Commission pursuant to Sections 13(a) of the Exchange Act and any
definitive proxy statement filed pursuant to Section 14 of the Exchange Act and
any reports filed pursuant to Section 15(d) of the Exchange Act after the date
of this Prospectus and prior to the termination of the offering of the Common
Stock shall be deemed to be incorporated by reference into this Prospectus and
to be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which is
incorporated by reference herein modifies or supersedes such earlier statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus. Copies of all
documents incorporated by reference herein (other than exhibits to such
documents which are not specifically incorporated by reference into such
documents) will be provided without charge to each person who receives a copy
of this Prospectus, upon request of such person, directed to James J. Condon,
CyberCash, Inc., 2100 Reston Parkway, Reston, VA 20191, 703-620-4200, or via
e-mail: [email protected].
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RISK FACTORS
In addition to the other information contained or incorporated by
reference in this Prospectus, prospective investors should consider carefully
the following risk factors in evaluating the Company and its business before
purchasing Common Stock. The following discussion identifies important factors
that could cause CyberCash's actual results to differ materially from results
predicted or implied in any forward-looking statements made in this Prospectus
or elsewhere by or on behalf of CyberCash.
LIMITED OPERATING HISTORY; ACCUMULATED DEFICIT
The Company is a development stage company founded in August 1994 and
presently has only a limited number of financial institutions and merchants
utilizing its services. The Company commercially released its Credit Card
service in January 1996 and its CyberCoin(TM) service in September 1996 and has
only conducted pilot projects for its PayNow(TM) Secure Electronic Check
service. Accordingly, the Company has only a limited operating history upon
which an evaluation of the Company and its prospects can be based. The
Company's prospects must be considered in light of the risks, expenses and
difficulties frequently encountered by companies in their earlier stage of
development, particularly companies in new and rapidly evolving markets. To
address these risks, the Company must, among other things, continue to provide
enhancements to its Credit Card and CyberCoin service, further develop and
commercially release its PayNow service and supporting software, successfully
implement its marketing strategy, respond to competitive developments, continue
to attract, retain and motivate qualified personnel, expand its management
processes and capabilities, and develop and upgrade its technology. There can
be no assurance that the Company will succeed in addressing these risks, and
the failure to do so could have a material adverse effect on the Company's
business, financial condition and operating results.
As of June 30, 1997, the Company had an accumulated deficit of $53,246,000.
Since its inception, the Company has only recognized revenues that are small
relative to its expenses. The Company's ability to generate significant
revenue is subject to substantial uncertainty. In addition, the Company
anticipates that its operating expenses will continue to increase in the
foreseeable future as it further develops its technology, releases the PayNow
service, further increases its sales and marketing activities, creates and
expands the distribution channels for its services and broadens its customer
support capabilities. Accordingly, the Company expects to continue to incur
significant operating losses on both a quarterly and an annual basis at least
through 1998 and perhaps for some time thereafter. There can be no assurance
that the Company will achieve or sustain profitability.
UNCERTAINTY OF DEVELOPMENT OF MARKET
The market for the Company's services is at an early stage of development,
is rapidly evolving, and is characterized by an increasing number of market
entrants who have introduced or are developing competing products and services.
As is typical for a new and rapidly evolving industry, demand and market
acceptance for recently introduced products and services are subject to a high
level of uncertainty. Moreover, critical issues concerning the Internet
(including security, reliability, cost, ease of use and quality of service)
remain unresolved and may affect growth of the use of the Internet in general
and of Internet commerce in particular. The widespread adoption of the Internet
for commerce will require a broad acceptance of new methods of conducting
business and exchanging information. Enterprises that have invested substantial
resources in other methods of conducting business have tended to be slow to
adopt a new strategy that may limit or compete with their existing business.
They have also had to overcome technical obstacles and develop new business
models to succeed in this new environment.
The Company intends eventually to offer its payment services principally
through banks and other financial institutions. Many larger financial
institutions have been reluctant to commit to involvement with Internet
commerce. They have expressed concerns about the security, stability, and
economic viability of Internet payment systems such as those offered by the
Company. While the Company believes that some larger institutions are
demonstrating an increased willingness to consider offering Internet payment
services, it is uncertain how many banks and other financial institutions will
decide to do so, or how long before they will do so in significant numbers. If
financial institutions do not begin to commit to offering Internet payment
services, the Company will have to change its strategy. There is no assurance
that the Company would be able to develop a successful alternative strategy.
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Consumers have also been slower to commence substantial volumes of purchases
over the Internet than had been anticipated. They have demonstrated concerns
about privacy and security, as well as convenience and ease of use of payment
systems. While the Company believes that consumers are beginning to be more
willing to use its payment services, the rate at which the services will become
widely accepted remains uncertain.
Some of the Company's services currently require consumers to download and
install the Company's Wallet software and to bind it to credit card or checking
accounts. With respect to the CyberCoin service, in particular, the incentive
for them to do so is largely dependent upon the number and quality of merchants
that have agreed to use the CyberCoin service. Conversely, the incentive for
merchants to adopt the CyberCoin service is largely dependent on the number of
consumers that are equipped to use it. For the CyberCoin service to become
successful, the Company will have to overcome the obstacle that this presents,
and there can be no assurance that it will succeed. If it cannot achieve
widespread acceptance of its services by both consumers and merchants, the
Company's business will be materially and adversely affected.
For the reasons discussed above, among others, Internet commerce, and
consequently the market for the Company's services, have developed more slowly
than some had predicted. Although Internet commerce continues to grow, it is
not known how soon, if ever, the demand for payment services will become
sufficient to sustain a viable market for the Company's services. The Company's
business includes services that have never existed before, which operate in a
market that previously did not exist. In this regard, it is unknown whether any
significant market for effecting payments by electronic check or for making low
denomination cash transfers over the Internet will develop. The use of the
Company's services is dependent in part upon the continued development of an
infrastructure for providing adequate Internet access and the proper management
of Internet traffic. The Internet may not prove to be a viable commercial
marketplace because of inadequate development of the necessary infrastructure,
such as adequate capacity, a reliable network backbone or timely development of
complementary products, such as high speed modems. There can be no assurance
that commerce over the Internet will become widespread, that a significant
market for the Company's services will emerge, or that the Company's services
will become generally adopted. If the market fails to continue to develop,
develops more slowly than expected or becomes saturated with competitors, the
infrastructure for the Internet is not adequately developed or the Company's
services do not achieve market acceptance by a significant number of
individuals, businesses and financial institutions, the Company's business,
financial condition and operating results will be materially and adversely
affected.
POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
Because Internet commerce is still at an early stage, the Company's revenue
expectations are based almost entirely on expectations of future demand and not
on actual experience. Moreover, the Company must continue to control its
operating expenses in order that its accumulated losses do not exceed what it
can finance with its existing working capital or it will be forced to raise
additional capital. In the event market demand and revenues do not meet
expectations, the Company may be unable to adjust its spending levels on a
timely basis to compensate for unexpected revenue shortfalls. In addition, the
Company's operating expenses increased substantially in recent periods. The
Company currently anticipates that its operating expenses will remain
relatively constant during 1997 and the first half of 1998. Thereafter,
however, operating expenses may increase as the Company continues to develop
its services and technology, increase its sales and marketing operations,
develop new distribution channels, improve its operational and financial
systems and broaden its customer support capabilities. Any material shortfall
of demand for the Company's services in relation to the Company's expectations
would have a material adverse effect on the Company's business and financial
condition and could cause significant fluctuations in the Company's results of
operations.
The Company expects to experience significant fluctuations in future
quarterly operating results that may be caused by many factors, including
changes in acceptance of Internet commerce in general, demand for the Company's
services, introduction or enhancement of services by the Company and its
competitors, market acceptance of new services, the mix of distribution
channels through which services are provided, the distribution of the Company's
software to individuals, businesses and financial institutions, the timing and
effectiveness of collaborative marketing and distribution efforts by the
Company's strategic partners, the mix of international and North American
revenues, the timing and rate at which the Company increases its expenses to
support projected growth, the cost of compliance with applicable government
regulations, and general economic conditions. In
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particular, the Company believes that quarterly operating results may fluctuate
due to the timing of the adoption of the Company's services by financial
institutions and transaction processors and revenues from international
operations. In addition, as a strategic response to changes in the competitive
environment, the Company may from time to time make certain pricing, marketing
or licensing decisions or business combinations that could have a material
adverse effect on the Company's business, results of operations or financial
condition. As a result, the Company believes that period-to-period comparisons
of its results of operations are not meaningful and should not be relied upon
as any indication of future performance. Because of all of the foregoing
factors, it is likely that the Company's quarterly operating results from time
to time will be below the expectations of public market analysts and investors.
In such event, the price of the Company's common stock would likely be
materially adversely affected.
COMPETITION
The Internet payment services industry is new and rapidly evolving,
resulting in a dynamic competitive environment. The Company expects competition
to persist, intensify and increase in the future. Many of the Company's current
and potential competitors have longer operating histories, greater name
recognition, larger installed customer bases and significantly greater
financial, technical and marketing resources than the Company. In addition,
many of the Company's current or potential competitors, such as Microsoft, have
broad distribution channels that may be used to bundle competing products
directly to end-users or purchasers. If such competitors were to bundle
competing products for their customers, the demand for the Company's services
may be substantially reduced, and the ability of the Company to successfully
effect the distribution of its products and the utilization of its services
would be substantially diminished. There can be no assurance that the Company
will be able to compete effectively with current or future competitors or that
the competitive pressures faced by the Company will not have a material adverse
effect on the Company's business, financial condition or operating results.
The Company competes or may compete directly or indirectly with, among
others, (i) providers of digital cash, such as DigiCash bv; (ii) GC Tech, Inc.,
which currently is providing an Internet micropayment service in Europe; (iii)
Internet credit card service providers, such as VeriFone, Inc., First Virtual
Holdings, Inc., GC Tech, IBM and AT&T Corporation; (iv) banks and others which
may eventually offer direct transfers of funds from checking accounts over the
Internet; and (v) developers of "smart card" programs, such as Mondex.
Additional competition could come from other Web browser companies and software
and hardware vendors that incorporate Internet payment capabilities into their
products. Further, because of the rapidly evolving nature of the industry, many
of the Company's collaborative partners are current or potential competitors.
In addition, current or potential competitors, including certain of the
Company's collaborative partners, have established or may establish cooperative
relationships among themselves or with third parties to increase the ability of
their software, products or services to compete with the Company's software and
services and address the needs of the Company's prospective customers.
Additional competition could come from Web browser companies and software
and hardware vendors that incorporate Internet payment capabilities into their
products. Further, because of the rapidly evolving nature of the industry, many
of the Company's collaborative partners are current or potential competitors.
DEVELOPMENT OF NEW SERVICES, INDUSTRY ACCEPTANCE AND TECHNOLOGICAL CHANGE
Substantially all of the Company's anticipated revenues will be derived from
relatively small fees charged to financial institutions, businesses and
individuals for transactions effected using the Company's services.
Accordingly, broad acceptance of the Company's services and their use in large
numbers of transactions is critical to the Company's success, as is the
Company's ability to design, develop, test, introduce and support new services
and enhancements on a timely basis that meet changing customer needs and
respond to technological developments and emerging industry standards. The
market for the Company's services is characterized by rapidly changing
technology and evolving industry standards. The Company's services are designed
around certain technical standards, and current and future sales of the
Company's services will be dependent on industry acceptance of such standards.
While the Company intends to provide compatibility with the standards
promulgated by leading industry participants and groups, widespread adoption of
a proprietary or closed standard could preclude the Company from effectively
doing so. Moreover, a number of leading industry participants have announced
their intention to enter into or expand their position in the market for
Internet payments through the development of new technologies and standards.
There can be no assurance that the Company's services will achieve market
acceptance, that the
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Company will be successful in developing and introducing its proposed services
or new services that meet changing customer needs and respond to technological
changes or evolving industry standards in a timely manner, if at all, that the
standards upon which the Company's services are or will be based will be
accepted by the industry or that services or technologies developed by others
will not render the Company's services noncompetitive or obsolete. The
inability of the Company to respond to changing market conditions,
technological developments, evolving industry standards or changing customer
requirements, or the development of competing technology or products that
renders the Company's services noncompetitive or obsolete would have a material
adverse effect on the Company's business, financial condition and operating
results.
RISKS OF DEFECTS AND DEVELOPMENT DELAYS
Services based on sophisticated software and computing systems often
encounter development delays and the underlying software may contain undetected
errors or failures when introduced or when the volume of services provided
increases. The Company may experience delays in the development of the software
and computing systems underlying the Company's services. In addition, there can
be no assurance that, despite testing by the Company and potential customers,
errors will not be found in the underlying software, or that the Company will
not experience development delays, resulting in delays in the shipment of its
software, the commercial release of its services or in the market acceptance of
its services, each of which could have a material adverse effect on the
Company's business, financial condition or operating results.
DEPENDENCE ON KEY PERSONNEL
The Company's performance is substantially dependent on the performance of
its executive officers and key employees, most of whom have worked together for
only a short period of time. The Company is dependent on its ability to retain
and motivate high quality personnel, especially its management and highly
skilled development teams. The Company does not have "key person" life
insurance policies on any of its employees. The loss of the services of any of
its key employees, particularly its founder, William N. Melton, could have a
material adverse effect on the Company's business, financial condition or
operating results. The Company's future success also depends on its continuing
ability to identify, hire, train and retain other highly qualified technical
and managerial personnel. Competition for such personnel is intense. There can
be no assurance that the Company will be able to attract, assimilate or retain
qualified technical and managerial personnel in the future, and the failure of
the Company to do so would have a material adverse effect on the Company's
business, financial condition and operating results.
LIMITED SALES FORCE; EVOLVING DISTRIBUTION CHANNELS
The Company has a limited number of sales and marketing employees and has a
limited number of established distribution channels for its software and
services. The Company intends to distribute much of its software to businesses
and individuals free of charge and to effect a significant amount of its
software distribution through bundling arrangements with the developers of
various hardware and software vendors. In order to generate substantial
revenue, the Company must achieve broad distribution of its software to
individuals and businesses and secure general adoption of its services and
technology. No assurance can be given as to the ability of the Company to
continue to establish bundling arrangements, retain existing arrangements or to
broadly distribute its software and generate sufficient demand for its
services, and the inability of the Company to do so would have a material
adverse effect on the Company's business, financial condition and operating
results.
DEPENDENCE ON INTELLECTUAL PROPERTY RIGHTS; RISK OF INFRINGEMENT; POSSIBLE
LITIGATION
The Company's success and ability to compete is dependent in part upon its
proprietary technology. The Company relies primarily on copyright, trade secret
and trademark law to protect its technology. The Company has no patents. The
Company has applied for several United States and foreign patents and intends
to continue to file patent applications on inventions that it may make in the
future. There can be no assurance that any of these patents will be granted, or
that if granted such patents would survive a legal challenge to their validity,
or provide meaningful levels of protection. The source code for the Company's
proprietary software is protected both as a trade secret and as a copyrighted
work. The Company generally enters into confidentiality and assignment
agreements with its employees, consultants and vendors, and generally controls
access to and distribution of its software, documentation and other proprietary
information. Despite these precautions, it may be possible for a third party to
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copy or otherwise obtain and use the Company's services or technology without
authorization, or to develop similar services or technology independently. In
addition, effective copyright and trade secret protection may be unenforceable
or limited in certain foreign countries, and the global nature of the Internet
makes it difficult to control the ultimate destinations of the Company's
services. To license its services, the Company often relies on "on-screen"
licenses that are not manually signed by the end-users and, therefore, may be
unenforceable under the laws of certain jurisdictions. Despite the Company's
efforts to protect its proprietary rights, third parties may attempt to copy
aspects of the Company's services or to obtain and use information that the
Company regards as proprietary. Policing unauthorized use of the Company's
services is difficult, particularly in the global environment in which the
Company operates, and the laws of other countries may afford the Company little
or no effective protection of its intellectual property. There can be no
assurance that the steps taken by the Company will prevent misappropriation of
its technology or that such agreements will be enforceable. In addition,
litigation may be necessary in the future to enforce the Company's intellectual
property rights, to protect the Company's trade secrets, to determine the
validity and scope of the proprietary rights of others, or to defend against
claims of infringement or invalidity. Such litigation, whether successful or
unsuccessful, could result in substantial costs and diversions of resources,
either of which could have a material adverse effect on the Company's business,
financial condition or operating results.
On January 29, 1996, the Company received notification from the holder of a
patent for which the Company holds a license of the licensor's intent to file
suit and to demand arbitration in the event that the Company did not
immediately enter into negotiations to resolve certain claims raised by the
licensor. On April 29, 1996, the licensor sent the Company a letter stating
that the licensor had terminated the license based on a purported breach by the
Company. The Company has informed the licensor that the Company does not
believe that any grounds for termination exist. The Company is not using the
licensed technology and does not currently intend to do so. To date, no
royalties have accrued under the license.
DigiCash bv has registered the trademark "CyberCash," in the Benelux
countries on an "intent-to-use" basis. The Company has not applied to register
its CyberCash mark in the Benelux countries. DigiCash has filed an application,
based on the Benelux registration, to register the CyberCash mark in the United
States but the United States Patent and Trademark Office has issued an office
action denying the registration. The Company believes it has a basis to
challenge this application but, if DigiCash overcomes the USPTO's objection,
its registration of the mark may create rights superior to the Company's rights
in the CyberCash mark. Nevertheless, CyberCash has filed an application to
register the CyberCash mark in the United States, as well as in certain
overseas jurisdictions. No assurance can be given as to the ability of the
Company to secure any registration of or the right to continue to use the name
and mark CyberCash nor can there be any assurance that a license to or
assignment of the CyberCash name and mark would be available to the Company on
reasonable terms or at all should the Company be unable to secure registration
of, or the right to continue to use, the CyberCash name and mark. The
prosecution of claims relating to the CyberCash mark, including the securing of
an injunction preventing the Company's use of CyberCash, could have a material
adverse effect on the Company's business, financial condition or operating
results.
The Company is aware of patents held by independent third parties in the
area of electronic payment systems. No assurance can be given as to the
applicability of such patents to the Company's services and technologies. The
assertion of these patent rights, if successful, could result in substantial
costs to the Company. There can be no assurance that the Company's services are
not, or in the future will not be, within the scope of such patents or any
other existing or future patents, and any litigation arising thereunder, even
if successfully contested, could have a material adverse effect on the
Company's business, financial condition or operating results. In addition, the
Company from time to time has received, and may receive in the future, notices
of claims of infringement of other parties' proprietary rights. There can be no
assurance that claims for infringement or invalidity (or claims for
indemnification resulting from infringement claims) will not be asserted or
prosecuted against the Company. If any such claims or actions are asserted, the
Company may seek to obtain a license under a third party's intellectual
property rights. There can be no assurance that such a license would be
available on reasonable terms or at all, and the assertion or prosecution of
any such claims could have a material adverse effect on the Company's business,
financial condition or operating results.
The Company also relies on certain technology which it licenses from third
parties, including software which is integrated with internally developed
software and used in the Company's software to perform key functions. In this
regard, all of the Company's services incorporate data encryption and
authentication technology licensed from
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<PAGE> 9
RSA Data Security, Inc. RSA Data Security has agreed to indemnify CyberCash for
any claim against the Company on the basis of proprietary rights infringement
with respect to the licensed technology. CyberCash has agreed to a similar
indemnity of its licensees.
There also can be no assurance that the Company's other third party
technology licenses will continue to be available to the Company on
commercially reasonable terms or at all. The loss of or inability to maintain
any of these technology licenses could result in delays in introduction of the
Company's services until equivalent technology, if available, is identified,
licensed and integrated, which could have a material adverse effect on the
Company's business, financial condition or operating results.
RISKS ASSOCIATED WITH ENCRYPTION TECHNOLOGY
A significant barrier to Internet commerce is the secure exchange of value
over public networks. The Company relies on encryption and authentication
technology to provide the security and authentication necessary to effect the
secure exchange of value, including public key cryptography technology licensed
from RSA and private key Data Encryption Standard ("DES") cryptography. There
can be no assurance that advances in computer capabilities, new discoveries in
the field of cryptography or other events or developments will not result in a
compromise or breach of the RSA, DES or other algorithms used by the Company to
protect customer transaction data. Such a development could have a material
adverse effect on the Company's business, financial condition or operating
results.
GOVERNMENT REGULATION
The Company's operations are subject to various state and federal
regulations. Because Internet commerce in general, and the Company's services
in particular, are so new, the application of many of these regulations is
uncertain and difficult to interpret. The agencies responsible for the
interpretation and enforcement of these regulations could amend those
regulations or issue new interpretations of existing regulations. It is also
possible that new legislation may be passed that imposes additional regulation
on the Company. Any such change in the regulations applicable to the Company's
business could lead to increased operating costs and could also reduce the
convenience and functionality of the Company's services, possibly resulting in
reduced market acceptance. In addition, if a regulatory agency or law
enforcement authority should assert that the Company is failing to comply with
existing regulations, the costs of responding to such a challenge could result
in significant drains on the Company's financial and management resources,
which could have a material adverse effect on the Company's business, financial
condition or operating results.
Due to the increasing popularity of the Internet, it is possible that laws
and regulations may be enacted with respect to the Internet, covering issues
such as user privacy, pricing, content, characteristics and quality of products
and services. The adoption of any such laws or regulations may decrease the
growth of the Internet, which could in turn decrease the demand for the
Company's services and increase the Company's cost of doing business or could
otherwise have a material adverse effect on the Company's business, financial
condition or operating results.
All of the Company's services utilize encryption technology, the export of
which is regulated by the U.S. government. The Company has obtained authority
to export the encryption technology in its Wallet and CashRegister software
worldwide, except to Libya, Syria, Cuba, North Korea, Sudan, Iraq and Iran.
This authority may be revoked or modified at any time, however, for any
particular jurisdiction or in general. The Company also intends to apply for an
export license covering the encryption technology in its gateway server
software. There can be no assurance, however, that such a license will be
obtained. Some countries restrict the import of encryption software. In
addition, there can be no assurance that export controls or import controls,
either in their current form or as may be subsequently enacted, will not limit
the Company's ability to distribute its software outside of the United States.
While the Company takes precautions against unlawful exportation of its
software, the global nature of the Internet makes it virtually impossible to
effectively control the distribution of its software. Moreover, federal, state
or foreign legislation or regulation may further limit levels of encryption or
authentication technology. Any such export restrictions, the unlawful
exportation of the Company's software, new legislation or regulation could have
a material adverse effect on the Company's business, financial condition or
operating results.
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<PAGE> 10
FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FINANCING
The Company currently anticipates that its available cash resources combined
with funds from operations will be sufficient to meet its presently anticipated
working capital and capital expenditure requirements for at least the next
twelve months. Thereafter, if the Company has not commenced to generate
significant revenues, it will need to raise additional funds. If the Company
does raise additional funds through the issuance of equity securities, the
percentage ownership of the stockholders of the Company will be reduced,
stockholders may experience additional dilution, or such equity securities may
have rights, preferences or privileges senior to those of the holders of the
Company's Common Stock. There can be no assurance that additional financing
will be available now or in the future. If adequate funds are not available or
are not available on acceptable terms, the Company may be unable to develop or
enhance its services, take advantage of future opportunities or respond to
competitive pressures, which could have a material adverse effect on the
Company's business, financial condition or operating results.
RISK OF LOSS FROM RETURNED TRANSACTIONS, MERCHANT FRAUD OR ERRONEOUS
TRANSMISSIONS
The Company currently utilizes two principal fund transfer systems: the
automated clearing house ("ACH") system for electronic fund transfers and the
national credit card systems (e.g., MasterCard, Visa, American Express and
Discover) for electronic credit card settlements. In its use of these
established payment systems, the Company may bear some of the credit risks
normally assumed by other users of these systems arising from returned
transactions caused by unauthorized use, disputes, theft or fraud. The Company
also may bear some risk of merchant fraud and transmission errors if it is
unable to have erroneously transmitted funds returned by an unintended
recipient. In addition, the agreement between the Company's users of its
services for allocation of these risks will be in electronic form, and while
digitally signed, will not be manually signed and hence may not be enforceable.
Finally, the Company may be subject to merchant fraud, including such actions
as inputting false sales transactions or false credits. The Company intends to
manage all of these risks through risk management systems, internal controls
and system security. There can be no assurance that the Company's risk
management practices or reserves will be sufficient to protect the Company from
returned transactions, merchant fraud or erroneous transmissions which could
have a material adverse effect on the Company's business, financial condition
or operating results.
The Company is currently testing technology that would provide means other
than the ACH system by which consumers can access their checking accounts via
the Internet. This technology has the promise of being more efficient, less
costly, and more secure than the ACH system. There is, however, no assurance
that the Company will be successful in the current effort, or, if it is
successful, that the new approaches it is seeking to develop will prove
cost-effective or will meet with market acceptance.
SYSTEM INTERRUPTION AND SECURITY RISKS; POTENTIAL LIABILITY AND LACK OF
INSURANCE
The Company's operations are dependent on its ability to protect its system
from interruption by damage from fire, earthquake, power loss,
telecommunications failure, unauthorized entry or other events beyond the
Company's control. Most of the Company's computer equipment, including its
processing equipment, are currently located at a single site. There can be no
assurance that the Company's existing and planned precautions of redundant
systems, regular data backups and other procedures are adequate to prevent any
significant system outage or data loss. Consequently, unanticipated problems
may cause such failures or losses. Despite the implementation of security
measures, the Company's infrastructure may also be vulnerable to computer
viruses, hackers or similar disruptive problems caused by its customers or
other Internet users. Any damage or failure that causes interruptions in the
Company's operations could have a material adverse effect on the Company's
business, financial condition or operating results. Such computer break-ins and
other disruptions may jeopardize the security of information stored in and
transmitted through the computer systems of the individuals, businesses and
financial institutions utilizing the Company's services, which may result in
significant liability to the Company and also may deter potential customers
from using the Company's services. Persistent problems continue to affect
public and private data networks. For example, in a number of networks, hackers
have bypassed firewalls and misappropriated confidential information. In
addition, while the Company attempts to be careful with respect to the
employees it hires and maintain controls through software design, security
systems and accounting procedures to prevent unauthorized employee access to
user accounts, it is possible that, despite such safeguards, an employee of the
Company could divert users' funds while they are in the control of the Company,
which would also expose the Company to a risk of loss or litigation and
possible liability to users. The Company attempts to limit its liability to
customers, including
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<PAGE> 11
liability arising from the failure of the security features contained in the
Company's system and services, through contractual provisions. However, there
can be no assurance that such limitations will be enforceable. The Company
currently does not have product liability insurance to protect against these
risks and there can be no assurance that such insurance will be available to
the Company on commercially reasonable terms or at all.
RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS
A component of the Company's strategy is to expand its operations into
international markets. The Company has created joint ventures in Japan and
Germany and has arranged with local strategic allies for the delivery of
certain of its services in France and the United Kingdom. The majority of the
Company's revenues for the first half of 1997 derive from fees and development
work charged to these joint ventures and foreign strategic allies. The
deployment of the Company's services in these countries is at an early stage,
and revenues to the Company from the operation of the services have so far been
small. The Company anticipates that revenues derived from development work and
initial licensing fees from international operations will decline over time.
There can be no assurance that the services will be commercially successful in
these or other foreign markets, or that revenues to the Company resulting from
ongoing commercial operations will ever be significant. In addition, there are
certain risks inherent in doing business in international markets, such as
unexpected changes in regulatory requirements, export restrictions, export
controls relating to encryption technology, tariffs and other trade barriers,
difficulties in staffing and managing foreign operations, political
instability, fluctuations in currency exchange rates, seasonal reductions in
business activity during the summer months in Europe and certain other parts of
the world and potentially adverse tax consequences, which could adversely
affect the success of the Company's international operations. There can be no
assurance that one or more of such factors will not have a material adverse
effect on the Company's future operations and, consequently, on the Company's
business, financial condition or operating results.
BANK FAILURE; LIMITATION ON ACCESS TO FUNDS
Some of the Company's services involve holding funds in the user's Wallet in
financial institutions. These funds are held in accounts by the Company as
agent for its customers. The Company will place funds only in banks which are
subject to state or federal regulation (or the non-U.S. equivalent), are
insured by the Federal Deposit Insurance Corporation and are believed by the
Company to be financially sound. Such regulatory and deposit insurance
protection may not be available for foreign accounts. Even if deposit insurance
is available, such insurance may not fully cover amounts held on behalf of the
user. Furthermore, the Company believes that because the user funds are held in
a fiduciary or trust capacity by the Company, they would not be subject to the
claims of the Company's creditors or a bankruptcy trustee. There can be no
assurance, however, that should there be a failure of a financial institution
in which the Company has placed user funds, or should a creditor or trustee of
a user or of the Company seek control over an agency account containing user
funds, that the Company would not be subject to litigation and possibly
liability to users. The Company does not have insurance to protect against
certain of these risks, and there is no assurance that such insurance will
become available, or if made available, would be affordable to the Company.
DEPENDENCE ON THE INTERNET
The Company's operating performance depends in large part on the emergence
of the Internet as a widely-used commercial marketplace. The Internet may not
prove to be a viable commercial marketplace because of inadequate development
of the necessary infrastructure (e.g., reliable network backbone), untimely
development of complementary products (e.g., high speed modems), delays in the
development or adoption of new standards and protocols required to handle
increased levels of Internet activity, or due to increased government
regulation. In addition, to the extent that the Internet continues to
experience significant growth in the number of users and the level of use,
there can be no assurance that the Internet infrastructure will continue to be
able to support the demands placed on it by such potential growth. Because
global commerce on the Internet and other similar open wide area networks are
new and evolving, it is difficult to predict with any assurance whether the
Internet will prove to be a viable commercial marketplace. If the necessary
infrastructure or complementary products are not developed, or if the Internet
does not become a viable commercial marketplace, the Company's business,
operating results and financial condition will be materially adversely
affected.
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<PAGE> 12
EXTREME VOLATILITY OF STOCK PRICE AND RISK OF LITIGATION
The Company's Common Stock price has been extremely volatile and has
experienced substantial and sudden fluctuations, particularly as a result of
announcements by the Company and its competitors, changes in financial
estimates by securities analysts and announcements with respect to the industry
generally. In addition, the stock market has experienced significant price and
volume fluctuations that have especially affected the market prices of equity
securities of many high technology companies, particularly Internet-related
companies, and that often have been unrelated to the operating performance of
such companies. These broad market fluctuations have adversely affected and may
continue to adversely affect the market price of the Company's Common Stock. In
the past, following periods of volatility in the market price of a company's
securities, securities class action litigation has often been instituted
against such a company. Such litigation could result in substantial costs and a
diversion of management's attention and resources, which would have a material
adverse effect on the Company's business, operating results and financial
condition.
EFFECTS OF CERTAIN CHARTER AND BYLAW PROVISIONS
The Company's Certificate of Incorporation authorizes the Board of Directors
to issue up to 5,000,000 shares of preferred stock and to determine the price,
rights, preferences and privileges, including voting rights, of those shares
without any further vote or action by the stockholders. The Company issued
15,000 shares of Series C Convertible Preferred Stock (the "Series C Stock") in
August 1997. The rights of the holders of the Company's Common Stock will be
subject to, and may be adversely affected by, the rights of the holders of any
preferred stock that may be issued in the future. The Certificate of
Incorporation provides for staggered terms for the members of the Board of
Directors. Certain provisions of the Company's Bylaws, the issuance of
preferred stock, certain provisions in the Certificate of Incorporation, the
staggered Board of Directors as well as applicable provisions of Delaware law
could have a depressive effect on the Company's stock price or discourage a
hostile bid in which stockholders could receive a premium for their shares. In
addition, these provisions could have the effect of making it more difficult
for a third party to acquire a majority of the outstanding voting stock of the
Company, or delay, prevent or deter a merger, acquisition, tender offer or
proxy contest for the Company.
POTENTIAL FOR DILUTION
As of August 20, 1997, 15,000 shares of Series C Stock were issued and
outstanding. Each share of the Series C Stock is convertible into such number
of shares of Common Stock as is determined by dividing the stated value
($1,000) of the share of Series C Stock (as such value is increased by a
premium based on the number of days the Series C Stock is held) by the then
current Conversion Price (which is based on the market price of the Common
Stock). If converted on August 20, 1997, the Series C Stock would have been
convertible into approximately 904,110 shares of Common Stock. Depending on
market conditions at the time of conversion, the number of shares issuable
could prove to be significantly greater in the event of a decrease in the
trading price of the Common Stock. Purchasers of Common Stock could therefore
experience substantial dilution upon conversion of the Series C Stock. The
shares of Common Stock into which the Series C Stock may be converted are being
registered pursuant to this Registration Statement.
THE COMPANY
CyberCash was incorporated in Delaware in 1994. The Company's home
page can be located on the Web at http://www.cybercash.com. CyberCash, Inc.
("CyberCash" or the "Company") is a leading provider of software and services
to enable secure financial transactions on the Internet. The Company's suite
of Internet payment services features the electronic counterparts to cash,
credit cards and checks. The Company believes that it is well-positioned to
capitalize on the emerging market for Internet commerce because it offers a
range of payment services that work with the existing transaction processing
systems of financial institutions. The Company's address is 2100 Reston
Parkway, 3rd Floor, Reston, Virginia 20191 and its phone number is
703/620-4200.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Common
Stock by the Selling Stockholders. Upon exercise of warrants held by Carnegie
Mellon University ("CMU"), the Company will receive approximately $822,500
which will be used for general corporate purposes.
SELLING STOCKHOLDERS
This Prospectus relates to the offering by the Selling Stockholders for
resale of up to 2,070,000 shares of Common Stock. After giving effect to the
Offering, the Selling Stockholders will beneficially own no shares of Common
Stock of the Company. CMU owns 120,000 shares of Common Stock and warrants to
purchase 50,000 shares of Common Stock. RGC International Investors, LDC and
Halifax Fund, L.P. (the "Series C Holders") will acquire Common Stock upon
conversion, from time to time, of the Series C Preferred Stock they acquired in
a private placement in August, 1997. See "Description of Capital Stock --
Series C Convertible Preferred Stock." If the Series C Holders had converted
all of their respective shares of Series C Preferred Stock as of August 20,
1997, RGC International Investors would have received 602,740 shares of Common
Stock upon conversion of the 10,000 shares of Series C Preferred Stock it owns
and Halifax Fund, L.P. would have received 301,370 shares of Common Stock upon
conversion of the 5,000 shares of Series C Preferred Stock it owns. This
Prospectus will be supplemented from time to time to reflect the conversion of
the number of shares of Common Stock acquired by each Series C Holder, as each
Series C Holder converts its shares of Series C Preferred Stock.
The Shares were issued in one or more private placement transactions to the
Selling Stockholders. The following table sets forth certain information with
respect to the Selling Stockholders as of August 20, 1997, as follows: (i)
the name and position or other relationship with the Company within the past
three years of each Selling Stockholder; (ii) the number of the Company's
outstanding shares of Common Stock beneficially owned by each Selling
Stockholder (including shares obtainable under options exercisable within sixty
(60) days of such date) prior to the offering hereby; (iii) the number of
shares of Common Stock being offered hereby; and (iv) the number and percentage
of the Company's outstanding shares of Common Stock to be beneficially owned by
each Selling Stockholder after completion of the sale of Common Stock being
offered hereby. There is no assurance that any of the Selling Stockholders will
sell any or all of the shares offered hereby.
<TABLE>
<CAPTION>
Number of Shares Number of Shares
Beneficially Owned Number of Shares Being Beneficially Owned
Selling Stockholders Prior to the Offering Offered After Offering
-------------------- --------------------- ------- --------------
<S> <C> <C> <C>
Carnegie Mellon University (1) 170,000 170,000 0
RGC International Investors, LDC (1)(2) 602,740 602,740 0
Halifax L.P. (1)(2) 301,370 301,370 0
</TABLE>
(1) The number of shares set forth in the table represents an
estimate of the number of shares of Common stock to be offered by the Selling
Stockholder. The actual number of shares of Common Stock issuable upon
conversion of Series C Stock is indeterminate, is subject to adjustment and
could be materially less or more than such estimated number depending on
factors which cannot be predicted by the Company at this time, including, among
other factors, the future market price of the Common Stock. The actual number
of shares of Common Stock offered hereby, and included in the Registration
Statement of which this Prospectus is a part, includes such additional number
of shares of Common Stock as may be issued or issuable upon conversion of the
Series C Stock or upon exercise of the warrants held by CMU by reason of the
floating conversion price mechanisms described therein, or by reason of any
stock split, stock dividend or similar transaction involving the Common Stock,
in order to prevent dilution, in accordance with Rule 416 under the Securities
Act.
(2) The number of shares of Common Stock beneficially owned by the
Selling Stockholder is based on a conversion price of $16.625, which is the
single lowest closing price of the Common Stock during the ten consecutive
trading days ending August 19, 1997. Pursuant to the terms of the Series C
Preferred Stock, if the Series C Preferred Stock had been actually converted on
August 20, 1997, the conversion price would have been $16.625 (the single
lowest closing price of the Common Stock during the ten (10) consecutive
trading days ending August 19, 1997). Pursuant to the terms of the Series C
Preferred Stock, the shares of Series C Preferred Stock are convertible by any
holder only to the extent that the number of shares of Common Stock owned by
such holder and its affiliates (but not including shares of Common Stock
underlying unconverted shares of Series C Preferred Stock) would not exceed
4.9% of the then outstanding Common Stock as determined in accordance with
Section 13(a) of the Exchange Act. Accordingly, the number of shares of Common
Stock set forth in the table for this Selling Stockholder exceeds the number of
shares of Common Stock that this Selling Stockholder could own beneficially at
any given time through their ownership of the Series C Preferred Stock. In that
regard, beneficial ownership of this Selling Stockholder set forth in the table
is not determined in accordance with Rule 13d-3 under the Exchange Act.
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<PAGE> 13
PLAN OF DISTRIBUTION
The Shares being offered by the Selling Stockholders or their respective
pledgees, donees, transferees or other successors in interest, will be sold in
one or more transactions (which may involve block transactions) on the Nasdaq
Stock Market or on such other market on which the Common Stock may from time to
time be trading, in privately-negotiated transactions, through the writing of
options on the Shares, short sales or any combination thereof. The sale price
to the public may be the market price prevailing at the time of sale, a price
related to such prevailing market price or such other price as the Selling
Stockholders determine from time to time. The Shares may also be sold pursuant
to Rule 144.
The Selling Stockholders or their respective pledgees, donees, transferees
or other successors in interest, may also sell the Shares directly to market
makers acting as principals and/or broker-dealers acting as agents for
themselves or their customers. Brokers acting as agents for the Selling
Stockholders will receive usual and customary commissions for brokerage
transactions, and market makers and block purchasers purchasing the Shares will
do so for their own account and at their own risk. It is possible that a
Selling Stockholder will attempt to sell shares of Common Stock in block
transactions to market makers or other purchasers at a price per share which
may be below the then market price. There can be no assurance that all or any
of the Shares offered hereby will be issued to, or sold by, the Selling
Stockholders. The Selling Stockholders and any brokers, dealers or agents, upon
effecting the sale of any of the Shares offered hereby, may be deemed
"underwriters" as that term is defined under the Securities Act or the Exchange
Act, or the rules and regulations thereunder.
The Selling Stockholders and any other persons participating in the sale or
distribution of the Shares will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of any of the Shares by the Selling
Stockholders or any other such person. The foregoing may affect the
marketability of the Shares.
The Company has agreed to indemnify the Selling Stockholders, or their
transferees or assignees, against certain liabilities, including liabilities
under the Securities Act, or to contribute to payments the Selling Stockholders
or their respective pledgees, donees, transferees or other successors in
interest, may be required to make in respect thereof.
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<PAGE> 14
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 25,000,000
shares of Common Stock, $.001 par value, and 5,000,000 shares of Preferred
Stock, $.001 par value ("Preferred Stock").
COMMON STOCK
As of August 20, 1997, there were 10,904,163 shares of Common Stock
outstanding and held of record by 7,015 stockholders.
The holders of Common Stock are entitled to one vote for each share held
of record on all matters submitted to a vote of the stockholders. The holders
of Common Stock are entitled to receive ratably such dividends as may be
declared by the Board of Directors out of funds legally available therefor. In
the event of a liquidation, dissolution or winding up of the Company, holders
of the Common Stock are entitled to share ratably in all assets remaining after
payment of liabilities. Holders of Common Stock have no preemptive rights and
no right to convert their Common Stock into any other securities. There are no
redemption or sinking fund provisions applicable to the Common Stock. All
outstanding shares of Common Stock are, and all shares of Common Stock to be
outstanding upon completion of this Offering will be, fully paid and
nonassessable.
PREFERRED STOCK
The Board of Directors has the authority to issue up to 5,000,000 shares
of Preferred Stock in one or more series and to fix the rights, preferences and
privileges thereof, including dividend rights, conversion rights, voting
rights, terms of redemption, liquidation preferences, sinking fund terms and
the number of shares constituting any series or the designation of such series,
without any further vote or action by stockholders. The issuance of Preferred
Stock could adversely affect the voting power of holders of Common Stock and
the likelihood that such holders will receive dividend payments and payments
upon liquidation and could have the effect of delaying, deterring or preventing
a change in control of the Company.
SERIES C CONVERTIBLE PREFERRED STOCK
Pursuant to the Company's Certificate of Incorporation, the Board has
classified 15,000 shares of the Preferred Stock as Series C Convertible
Preferred Stock with the rights, preferences, privileges and terms set forth in
the Certificate of Designations filed pursuant thereto. The Stated Value Per
Share of the Series C Stock is $1000.00. With respect to rights upon
liquidation, winding up or dissolution and redemption rights, the Series C
Stock will rank (i) with the consent of the holders of the Series C Convertible
Preferred Stock obtained in accordance with the Certificate of Designation,
junior to any other series of Preferred Stock duly established by the Board of
Directors of the Company, the terms of which shall specifically provide that
such series shall rank prior to the Preferred Stock, whether now existing or
hereafter created (the "Senior Preferred Stock"), (ii) with the consent of the
holders of the Series C Convertible Preferred Stock obtained in accordance with
the Certificate of Designation, on a parity with any other series of Preferred
Stock duly established by the Board of Directors of the Company, the terms of
which shall specifically provide that such series shall rank on a parity with
the Preferred Stock, whether now existing or hereafter created (the "Parity
Preferred Stock"), and (iii) prior to any other class or series of capital
stock of the Company, including, without limitation, all classes of the Common
Stock, par value $0.001 per share, of the Company, whether now existing or
hereafter created (the "Common Stock"; all of such classes or series of capital
stock of the Company to which the Series C Stock ranks prior, including without
limitation the Common Stock, and including, without limitation, junior
securities convertible into or exchangeable for other junior securities or
phantom stock representing junior securities, are collectively referred to
herein as "Junior Securities").
Dividends. Holders of the Series C Stock are not entitled to receive
dividends. So long as the Series C Stock is outstanding, however, no dividends
may be declared or paid on, nor shall any distribution be made on, any Junior
Securities, the Company may not redeem or repurchase any Junior Securities, nor
may any moneys be paid to or made available for a sinking fund for the benefit
of any Junior Securities, without the written consent of the holders of a
majority of the outstanding shares of Series C Stock.
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<PAGE> 15
Liquidation. In the event of any dissolution, liquidation or winding
up of the Company, whether voluntary or involuntary, or any bankruptcy,
insolvency or similar proceedings, whether voluntary or involuntary, shall be
commenced with respect to the Company (a "Liquidation"), the holders of
shares of Series C Stock shall be entitled to receive out of the assets of the
Company legally available for distribution to stockholders (whether
representing capital or surplus), before any payment or distribution shall be
made on the Common Stock or any other Junior Securities (but after distribution
of such assets among, or payment thereof over to, creditors of the Company and
to holders of any stock of the Company with liquidation rights senior to the
Series C Stock, including holders of Senior Preferred Stock), the Stated Value
Per Share plus an amount equal to 5% per annum for the period beginning August
5, 1997 and ending on the date of final distribution to the holder thereof (pro
rated for any portion of such period) (the "Preferred Stock Liquidation
Distribution"). After the Preferred Stock Liquidation Distribution has been
made, the holders of shares of Series C Stock shall not be entitled to any
further participation in any distribution of assets of the Company. If the
assets distributable upon such dissolution, liquidation or winding up (as
provided above) shall be insufficient to pay cash in an amount equal to the
amount of the Preferred Stock Liquidation Distribution to the holders of shares
of Series C Stock, then such assets or the proceeds thereof shall be
distributed among the holders of the Series C Stock ratably in proportion to
the respective amounts of the Preferred Stock Liquidation Distribution to which
they otherwise would be entitled. The merger or consolidation of the Company
into or with another corporation, a merger or consolidation of any other
corporation with or into the Company upon the completion of which the
stockholders of the Company prior to the merger or consolidation no longer hold
a majority of the outstanding equity securities of the Company or the sale,
conveyance, exchange or transfer of all or substantially all of the property or
assets of the Company (any such event, a "Reorganization Event") shall, at the
option of the holders of at least 50 % of the Series C Stock, be deemed to be a
Liquidation of the Company.
Voting Rights. The holders of the Series C Stock shall be entitled to
notice of all stockholders meetings in accordance with the Company's bylaws.
Except as otherwise provided by the Delaware General Corporation Law (the
"DGCL"), the holders of the Series C Stock have no voting power whatsoever.
Conversion. Each share of Series C Stock is convertible into the
number of shares of the Company's Common Stock equal to (i) the Stated Value
Per Share plus a premium of 5% of the stated value from the date of issuance of
the Series C Stock divided by (ii) the Conversion Price. The Conversion Price
is equal to the lowest closing price of the Company's Common Stock on Nasdaq
during a measurement period ending one trading day prior to the conversion
date. The measurement period initially is 10 consecutive trading days and will
increase by 2 trading days each month beginning January 16, 1998 and ending
June 16, 1998, when the measurement period will be 22 trading days.
The holders of the Series C Stock are subject to limits on the number
of shares they can convert at any one time. Unless the trading price of the
Common Stock on the date of conversion is greater than either $17 per share or
125% of the then applicable Conversion Price, the following limits apply: from
the date of issuance until January 3, 1998, the Series C Stock may not be
converted; beginning on January 3, 1998, each holder of Series C Stock may
convert up to 30% of its initial holding of Series C Stock into Common Stock
("Initial Holding"); beginning on February 2, 1998, it may convert up to 60% of
its Initial Holding; beginning on March 4, 1998, it may convert up to 90% of
its Initial Holding; and beginning on April 3, 1998, it may convert up to 100%
of its Initial Holding.
The Series C Stock will automatically convert into Common Stock, at the
then applicable Conversion Price, on August 4, 2002.
DELAWARE LAW AND CERTAIN ANTI-TAKEOVER CHARTER PROVISIONS
The Company is subject to the provisions of Section 203 of the DGCL. In
general, the statute prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date that the person became an interested
stockholder unless (with certain exceptions) the business combination or the
transaction in which the person became an interested stockholder is approved in
a prescribed manner. Generally, a "business combination" includes a merger,
asset or stock sale, or other transaction resulting in a financial benefit to
the stockholder. Generally, an "interested stockholder" is a person who,
together with affiliates and associates, owns (or within three years prior, did
own) 15% or more of the corporation's voting stock.
The Company's Certificate of Incorporation provides that any action
required or permitted to be taken by stockholders of the Company must be
effected at a duly called annual or special meeting of stockholders and may
-14-
<PAGE> 16
not be effected by any consent in writing. The Company's Certificate of
Incorporation also provides that the authorized number of directors may be
changed only by resolution of the Board of Directors, and that directors can
only be removed for cause by a majority vote of the stockholders and without
cause by a vote of the stockholders. In addition, the Company's Certificate of
Incorporation provides for the classification of the Board of Directors into
three classes, only one of which shall be elected at any given annual meeting.
These provisions, which require the vote of at least two-thirds of the
stockholders to amend, could have the effect of delaying, deterring or
preventing a change in control of the Company or depressing the market price of
Common Stock or discouraging hostile bids in which stockholders of the Company
could receive a premium for their shares of Common Stock.
TRANSFER AGENT AND REGISTRAR
BankBoston N.A. has been appointed as the transfer agent and registrar for
the Company's Common Stock.
LEGAL MATTERS
Certain legal matters with respect to the Common Stock offered hereby will
be passed upon for the Company by Robert Stankey, Assistant General Counsel.
EXPERTS
The consolidated financial statements of CyberCash, Inc. appearing in
CyberCash, Inc.'s Annual Report (Form 10-K), for the year ended December 31,
1996, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
-15-
<PAGE> 17
================================================================================
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE
HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
STOCKHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON OR BY ANYONE IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO
THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by
Reference . . . . . . . . . . . . . . . . . . . 2
Risk Factors . . . . . . . . . . . . . . . . . . 3
The Company . . . . . . . . . . . . . . . . . . . 11
Use of Proceeds . . . . . . . . . . . . . . . . . 11
Selling Stockholders . . . . . . . . . . . . . . 11
Plan of Distribution . . . . . . . . . . . . . . 11
Description of Capital Stock . . . . . . . . . . 13
Legal Matters . . . . . . . . . . . . . . . . . . 15
Experts . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
================================================================================
================================================================================
CYBERCASH, INC.
COMMON STOCK
---------------
PROSPECTUS
---------------
August 25, 1997
================================================================================
<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the fees and expenses in connection
with the issuance and distribution of the securities being registered
hereunder. Except for the SEC registration fee, all amounts are estimates.
<TABLE>
<S> <C>
SEC registration fee . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,429
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . . . . 5,000
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Blue Sky fees and expenses (including counsel fees) . . . . . . . . . . . . 1,000
Printing and engraving expenses . . . . . . . . . . . . . . . . . . . . . . 5,000
Transfer agent's and registrar's fees and expenses . . . . . . . . . . . . 2,000
Miscellaneous expenses, including Listing Fees . . . . . . . . . . . . . . 35,000
-------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $73,429
-------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court
to award, or a corporation's board of directors to grant, indemnity to
directors and officers under certain circumstances for liabilities incurred in
connection with their activities in such capacities (including reimbursement
for expenses incurred). Article SIXTH of the Registrant's Certificate of
Incorporation provides that the Registrant will indemnify its directors and
officers to the fullest extent permitted by law and that directors shall not be
liable for monetary damages to the Registrant or its stockholders for breach of
fiduciary duty, except to the extent not permitted under Delaware General
Corporation Law.
Section 145 of the Delaware General Corporation Law ("DGCL")
authorizes a court to award, or a corporation's board of directors to grant
indemnity to directors and officers under certain circumstances for liabilities
incurred in connection with their activities in such capacities (including
reimbursement for expenses incurred). The Registrant's Amended and Restated
Certificate of Incorporation provides that no director of the Registrant will
be personally liable to the Registrant or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Registrant or to its
stockholders, (ii) for acts or omissions not made in good faith or with
involved intentional misconduct or a knowing violation of the law, (iii) under
Section 174 of the DGCL, or (iv) for any transactions from which the director
derives an improper personal benefit. In addition, the Registrant's Amended
and Restated Bylaws provide that any director or officer who was or is a party
or is threatened to be made a party to any action or proceeding by reason of
his or her services to the Registrant will be indemnified to the fullest extent
permitted by the DGCL.
The Registrant has entered into agreements with each of its executive
officers and directors under which the Registrant has agreed to indemnify each
of them against expenses and losses incurred for claims brought against them by
reason of their being an officer or director of the Registrant. There is no
pending litigation or proceeding involving a director or officer of the
Registrant as to which indemnification is being sought, nor is the Registrant
aware of any pending or threatened litigation that may result in claims for
indemnification by any director or executive officer.
II-1
<PAGE> 19
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
3.01 Amended and Restated Certificate of Incorporation (1)
3.02 Bylaws (1)
3.03 Certificate of Designation (2)
4.01 Specimen Stock Certificate (1)
5.01 Legal Opinion
23.01 Consent of Robert Stankey (contained in Exhibit 5.01)
23.02 Consent of Ernst & Young LLP, independent auditors
24.01 Power of Attorney (contained in signature page)
</TABLE>
-----------------
(1) Incorporated by reference to the Company's Registration
Statement on Form S-1 (SEC File No. 33-80725).
(2) Incorporated by reference to Exhibit 99.2 of the Company's
Form 8-K filed with the Securities and Exchange Commission
on August 5, 1997.
(b) Financial Statement Schedules.
All schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable, and therefore have been omitted.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933.
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement.
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form
S-8, and the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities and Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-2
<PAGE> 20
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the County of Fairfax, Commonwealth of Virginia on August 25,
1997.
CYBERCASH, INC.
By: /s/ William N. Melton
-------------------------------
William N. Melton
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
William N. Melton, James J. Condon and Russell B. Stevenson, Jr., and each of
them, with full power of substitution and resubstitution and each with full
power to act without the other, his or her true and lawful attorney-in-fact and
agent, for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and all other documents in connection therewith, with the Securities and
Exchange Commission or any state, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their, his or her substitutes or substitute, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Date: August 25, 1997 /s/ William N. Melton
-------------------------------------------
William N. Melton
President and Chief Executive Officer
Date: August 25, 1997 /s/ James J. Condon
-------------------------------------------
James J. Condon
Chief Financial Officer
(Principal Financial Officer and Principal
Accounting Officer)
Date: August 25, 1997 /s/ Daniel C. Lynch
-------------------------------------------
Daniel C. Lynch
Chairman of the Board of Directors
Date: August 25, 1997 /s/ Michael Rothschild
-------------------------------------------
Michael Rothschild
Director
Date: August 25, 1997 /s/ Charles T. Russell
-------------------------------------------
Charles T. Russell
Director
Date: August 25, 1997 /s/ Garen K. Staglin
-------------------------------------------
Garen K. Staglin
Director
<PAGE> 1
EXHIBIT 5.01
LEGAL OPINION
Board of Directors
CyberCash, Inc.
2100 Reston Parkway, Third Floor
Reston, Virginia 20191
Gentlemen:
I am the Assistant General Counsel of CyberCash, Inc., a Delaware corporation
(the "Company"), and am furnishing this opinion in connection with the
Company's registration statement on Form S-3 (the "Registration Statement") to
register under the Securities Act of 1933, as amended, the sale of (i)
1,900,000 shares (the "Conversion Shares") of the Company's common stock, $.001
par value (the "Common Stock"), that may be issued upon conversion of the
Company's Series C Convertible Preferred Stock (the "Series C Stock"), (ii)
120,000 shares of the Common Stock that have been issued to Carnegie Mellon
University in an unregistered sale (the CMU Shares ), and (iii) 50,000 shares
of Common Stock that may be issued upon exercise of warrants granted to
Carnegie Mellon University (the "Warrant Shares").
I am of the opinion that (x) when issued in accordance with the terms of the
Series C Stock, the Conversion Shares will be validly issued, fully paid and
non-assessable, (y) the CMU Shares are validly issued, fully paid and
non-assessable, and (z) when issued in accordance with the Warrant Certificate
dated as of March 21, 1997 granted to Carnegie Mellon University and upon
receipt of the consideration as set forth in such Warrant Certificate, the
Warrant Shares will be validly issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the heading "Legal
Matters" contained in the prospectus that forms a part of the Registration
Statement. In giving this consent, I do not admit that I am an expert within
the meaning of the Securities Act of 1933.
Very truly yours,
Robert F. Stankey
Assistant General Counsel
<PAGE> 1
EXHIBIT 23.02
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-__________) and related Prospectus of
CyberCash, Inc. for the registration of 2,070,000 shares of its common stock
and to the incorporation by reference therein of our report dated January 23,
1997, with respect to the consolidated financial statements of CyberCash, Inc.
included in its Annual Report on Form 10-K for the year ended December 31,
1996, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Vienna, Virginia
August 21, 1997
