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FILED PURSUANT TO RULE 424(b)(4)
(REGISTRATION NUMBER 333-79943)
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JUNE 4, 1999)
CYBERCASH, INC.
WARRANT TO PURCHASE 472,254 SHARES
AND COMMON STOCK UNDERLYING THE WARRANT
Our common stock is listed for trading on The Nasdaq Stock Market's
National Market under the symbol "CYCH." On November 18, 1999, the last reported
sale price of our common stock on the Nasdaq National Market was $11.938.
SEE "RISK FACTORS" ON PAGES S-4 TO S-11 FOR FACTORS THAT YOU SHOULD
CONSIDER BEFORE PURCHASING THE SECURITIES OFFERED BY THIS PROSPECTUS.
--------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these offered securities or determined
if this prospectus is truthful or complete. It is illegal for any person to tell
you otherwise.
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The date of this prospectus supplement is November 19, 1999.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The prospectus, this prospectus supplement and the information incorporated by
reference contains, in addition to historical information, forward-looking
statements that reflect our current expectations. The forward-looking statements
we make about industry prospects and our future results of operations or
financial position involve risks and uncertainties. Our actual results could
differ significantly. Important risks and factors that could cause our actual
results to be materially different from our expectations include, without
limitation,
- - that CyberCash will not retain or grow its subscriber base,
- - that CyberCash will not be able to successfully integrate new subscribers
and/or assets obtained through acquisitions,
- - that CyberCash will fail to be competitive with existing and new
competitors,
- - that CyberCash will not be able to sustain its current growth,
- - that CyberCash will not adequately respond to technological developments
impacting the Internet, and
- - that financing will not be available to CyberCash as needed.
This list is intended to identify some of the principal factors that could cause
actual results to differ materially from those described in the forward-looking
statements included elsewhere in this prospectus supplement. These factors are
not intended to represent a complete list of all risks and uncertainties
inherent in CyberCash's business, and should be read in conjunction with the
more detailed cautionary statements included in the prospectus and this
prospectus supplement under the caption "Risk Factors."
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page Number
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<S> <C>
The Company.............................................. S-4
The Offering............................................. S-4
Risk Factors............................................. S-4
Where You Can Find More Information...................... S-12
Use of Proceeds.......................................... S-13
Description of Common Stock.............................. S-13
Description of Warrants.................................. S-13
Plan of Distribution..................................... S-14
Legal Matters............................................ S-14
Experts.................................................. S-14
</TABLE>
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THE COMPANY
CyberCash, Inc. is a leading provider of secure electronic commerce
payment technologies and services spanning the retail point of sale through the
Internet. We believe that we are well-positioned to capitalize on the emerging
market for electronic commerce because we offer a range of software products and
payment services that work with the existing transaction processing systems of
financial institutions. Our principal executive offices are located at 2100
Reston Parkway, 3rd Floor, Reston, Virginia 20191 and our phone number is
703/620-4200.
THE OFFERING
Securities offered.................. A warrant to purchase 472,254 shares and
the common stock underlying the warrant
Total shares outstanding after this
offering............................ 23,418,169 shares (1)(2)
Use of proceeds..................... For funding of the expansion of our
business, working capital, capital
expenditures, acquisitions and strategic
investments and other general corporate
purposes. See "Use of Proceeds."
Nasdaq National Market symbol....... CYCH
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(1) Assumes the exercise of the warrant offered by this prospectus.
(2) Excludes 7,731,651 shares of common stock issuable upon exercise of
outstanding options and warrants.
RISK FACTORS
In evaluating our business, you should carefully consider the following
factors, as well as other information in this prospectus before purchasing any
of our securities. This prospectus contains forward-looking statements relating
to future events or our future financial performance. These statements are only
predictions and actual events or results may be materially different from our
predictions. In evaluating these statements, you should consider the various
factors identified in this prospectus, including but not limited to the matters
set forth below, which could cause actual results to differ materially from
those indicated by such forward-looking statements.
WE HAVE A LIMITED OPERATING HISTORY AND HAVE NOT YET OPERATED PROFITABLY
We were founded in August 1994, and we have not yet operated at a profit.
Our limited operating history offers little information to serve as a basis for
evaluating us and our long-term prospects. You should consider our prospects in
light of the risks, expenses and difficulties that companies in their earlier
stage of development encounter, particularly companies in new and rapidly
evolving markets. Our success depends upon our ability to address those risks
successfully, which include, among other things:
- Whether we can continue to build and maintain a strong management
structure that can develop and execute our business strategy, and
respond effectively to changes in the markets for our services and
software products;
- Whether we can respond quickly and effectively to technological
changes and competitive forces in our markets;
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- Whether we will be able to assemble and maintain the necessary
resources, especially talented software programmers, we will need
to develop and upgrade our technology to meet evolving market
demands;
- Whether we will be successful in continuing to evolve and
successfully implement a sales and marketing strategy;
- Whether we will be able to develop and manage strategic
relationships to maximize widespread acceptance of our products
and services; and
- Whether the effect of the volatility of the market price of our
stock will adversely affect our ability to sell our products and
services, develop strategic relationships, attract and maintain
qualified employees, and raise additional capital if necessary.
If we do not succeed in addressing these risks, our business likely will
be materially and adversely affected.
WE MAY CONTINUE TO EXPERIENCE LOSSES, WHICH WOULD DEPRESS OUR STOCK PRICE
As of September 30, 1999, we had an accumulated deficit of $127,936,541.
Since we started our business, our revenues have been small compared to our
expenses. Our ability to generate significant revenue remains uncertain. We
expect to continue to incur operating losses at least through 1999, and perhaps
for some time thereafter. We may never achieve, or be able to sustain,
profitability.
THE DEVELOPMENT OF A MARKET FOR OUR PRODUCTS AND SERVICES IS UNCERTAIN
The market for our services is still immature and is evolving rapidly. An
increasing number of market entrants have introduced or are developing competing
products and services to enable payment transactions over the Internet. Critical
issues concerning the Internet (including security, reliability, cost, ease of
use and quality of service) remain unresolved and may limit the growth of
electronic commerce. Delays in the deployment of improvements to the
infrastructure for Internet access, including higher speed modems and other
access devices, adequate capacity and a reliable network backbone, also could
hinder the development of the Internet as a viable commercial marketplace. For
all of these reasons, it remains uncertain whether commerce over the Internet
will continue to grow, a significant market for our products and services will
emerge, or our products and services will become generally adopted. Even if such
a market does develop, competitive pressures may make it difficult, or
impossible, for us to operate profitably.
THE MARKET FOR OUR PRODUCTS AND SERVICES MAY NOT GROW FAST ENOUGH TO SUPPORT OUR
LEVEL OF INVESTMENT, ADVERSELY AFFECTING REVENUES AND PROFITABILITY
The growth of our business depends upon widespread acceptance of our
products and services. This is particularly true of our new InstaBuy service,
the deployment of which is a major element of our business strategy for 1999.
The success of this service will depend on our ability to obtain the agreement
of several large financial institutions to sponsor the issuance of InstaBuy
wallets, to have the service adopted by a substantial number of Internet
merchants, and to distribute InstaBuy wallets to large numbers of consumers.
Moreover, our ability to persuade merchants to use the service is dependent in
part on the number of consumers who are using wallets; and our ability to
motivate consumers to use wallets is dependent in part on the number and type of
merchants that are using the service. To succeed, we will have to motivate both
groups to adopt the service simultaneously, which is particularly difficult. We
have only recently commenced operating the InstaBuy service, and we cannot
assure you that we will succeed in accomplishing any of these goals. Our failure
to accomplish these goals, or our inability to accomplish them on the
anticipated schedule, would have a material adverse effect on our business.
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WE EXPECT OUR QUARTERLY OPERATING RESULTS TO FLUCTUATE
Our quarterly operating results have varied significantly and probably
will continue to do so in the future as a result of a variety of factors, many
of which are outside our control:
- Sales of our ICVERIFY payment software and our CashRegister
service are affected by the reluctance of merchants to modify
their payment systems during the fourth calendar quarter holiday
period and during the first calendar quarter accounting and
auditing period. Consequently, revenues from sales of our payment
software and sign-up fees for our CashRegister service are likely
to be lower during these periods than the balance of the year.
- In some cases our customers pay one-time licensing or consulting
fees in connection with acquiring our payment services. The timing
of the recognition of fees varies, which contributes to quarterly
fluctuations in revenues. In addition, many of our distribution
channels integrate our services with other electronic commerce
solutions. The timing for these channels to complete the
integration and deploy their solutions into their distribution
channel is unpredictable.
- Our InstaBuy service is new, and the pricing structures and timing
of the recognition of revenues for this service is unpredictable
at this time.
In addition to these factors, as a strategic response to changes in the
competitive environment, we may from time to time make pricing, marketing
decisions, licensing decisions or business combinations that adversely affect
our revenues or increase our costs. We also anticipate that revenues may decline
as customers focus their financial and technical resources on responding to year
2000 issues instead of adopting payment technologies such as our products and
services. Extraordinary events such as material litigation or acquisitions also
could result in fluctuations in our operating results from one reporting period
to the next.
For these reasons, period-to-period comparisons of our results of
operations are not necessarily a reliable indication of future performance.
Because of all of the foregoing factors, it is likely that our quarterly
operating results from time to time will be below the expectations of public
market analysts and investors. In that case, we expect that the price of our
common stock would be materially and adversely affected.
WE FACE INTENSE COMPETITION
The Internet payment services industry is new and evolving rapidly,
resulting in a dynamic, competitive environment. We expect competition to
persist, intensify and increase in the future. Many of our current and potential
competitors have longer operating histories, greater name recognition, larger
installed customer bases and significantly greater financial, technical and
marketing resources than us. In addition, many of our current or potential
competitors, such as Microsoft, have broad distribution channels that they may
use to bundle competing products directly to end-users or purchasers. If these
competitors were to bundle competing products for their customers, it could
adversely affect our ability to market our services.
Competitive pressures have led us on occasion to reduce our prices. We
expect that competition in our markets will continue to increase and may force
us to reduce prices for some of our products and services. Unless we can
increase our volume or reduce our costs, any such reductions would have an
adverse effect on our profitability.
WE MUST ACHIEVE MARKET ACCEPTANCE AND DEVELOP NEW PRODUCTS AND SERVICES TO
ADDRESS TECHNOLOGICAL CHANGE
Broad acceptance of our products and services and their use in large
numbers is critical to our success because a large portion of our revenues
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derive from one-time fees charged to customers buying our products and services.
In addition, our ability to earn significant revenues from our InstaBuy service
will depend in part on its acceptance by a substantial number of prominent
online merchants. One obstacle to widespread market acceptance for our products
and services is that widely adopted technological standards for accepting and
processing payments over the Internet have not yet emerged. As a result,
merchants and financial institutions have been slow to select which service to
use. Until one or more predominant standards emerge, we must design, develop,
test, introduce and support new services to meet changing customer needs and
respond to other technological developments. Our technologies have not been
accepted as standards. To be successful, we must obtain widespread acceptance of
our technologies, or modify our products and services to meet whatever industry
standards do ultimately develop. It is not certain that we will be able to do
either.
WE MAY EXPERIENCE SOFTWARE DEFECTS AND DEVELOPMENT DELAYS, DAMAGING CUSTOMER
RELATIONS
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. We may experience delays in the development of our software products
or the software and computing systems underlying our services. In addition,
despite testing by us and potential customers, it is possible that our software
may nevertheless contain errors, and this could have a material adverse effect
on our business.
WE MAY EXPERIENCE BREAKDOWNS IN OUR PAYMENT PROCESSING SYSTEM, HARMING OUR
BUSINESS
The operations for our payment and InstaBuy services depend on whether we
are able to protect our system from interruption by events that are beyond our
control. Events that could cause system interruptions are:
- fire,
- earthquake,
- power loss,
- telecommunications failure, and
- unauthorized entry or other events.
We have established two separate operations centers in Northern Virginia
that provide backup support for our services. If one of these sites should cease
operations because of a power outage, fire, or natural disaster, the others
should be able to take over with only a minimal disruption in service. We have
not, however, been able to test the transfer of operations under emergency
conditions, and we cannot be sure that the transfer would be successful. Also,
we have experienced growing transaction volumes that have from time to time
stressed the capacity of our systems. There is a possibility that our existing
systems may be inadequate and cause serious failures of our services. Finally,
although we regularly back up data from operations, and take other measures to
protect against loss of data, there is still some risk of such losses. A system
outage or data loss could materially and adversely affect our business.
Despite the security measures we maintain, our infrastructure may be
vulnerable to computer viruses, hackers, rogue employees or similar sources of
disruption. Any damage or failure that causes interruptions in our operations
could have a material adverse effect on our business. Any problem of this nature
could result in significant liability to customers or financial institutions and
also may deter potential customers from using our services. We attempt to limit
this sort of liability through back-up systems, contractual provisions and
insurance. However, we cannot assure you that these contractual limitations on
liability would be enforceable, or that our insurance coverage would be adequate
to cover any liabilities we did sustain.
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OUR OPERATIONS AND BUSINESS COULD BE DISRUPTED OR DAMAGED IF OUR SYSTEMS AND
PRODUCTS ARE NOT YEAR 2000 COMPLIANT
We use computer software, operating systems, and embedded processors
containing programs in the development of our products and services, in the
delivery of our services and in our administrative and management operations.
The software we use in our products and in the delivery of our services
contains, in addition to code written by our programmers, some software that we
license from third parties. In addition, we rely on equipment and services
provided by other vendors that are susceptible to year 2000 problems. We have
reviewed the critical programs, systems and services we use (including those
provided by third party vendors) to assure that they are all able to handle
properly the upcoming calendar year 2000. On the basis of our assessment and
remediation efforts, we do not anticipate that the so-called "year 2000 issue"
will have a material effect on our business. It is, however, possible that
problems will surface that have not yet been identified that will require
substantial time and resources to remedy. It is also possible that we could fail
to identify a problem with a resulting failure or disruption of our operations.
Either eventuality could have a material adverse effect on our business.
OUR RESULTS MAY SUFFER IF WE ARE UNABLE TO ATTRACT AND RETAIN QUALIFIED
MANAGEMENT AND TECHNICAL PERSONNEL
Our performance is substantially dependent on the performance of our
executive officers and key employees. We depend on our ability to retain and
motivate high quality personnel, especially our management and highly skilled
development teams. The loss of the services of any of our key employees could
have a material adverse effect on us. Our future success also depends on our
continuing ability to identify, hire, train and retain other highly qualified
technical and managerial personnel. Competition for these employees is intense
and increasing. We may not be able to attract, assimilate or retain qualified
technical and managerial personnel in the future, and the failure of us to do so
would have a material adverse effect on our business.
WE HAVE A LIMITED SALES FORCE; OUR DISTRIBUTION CHANNELS ARE NEW AND EVOLVING
We have only a limited number of sales and marketing employees and,
therefore, we rely heavily on distribution channels for sales of our products
and payment services. Because of the rapidly evolving nature of electronic
commerce, we are not certain that the distribution channels with which we are
working will provide an adequate distribution network for us to achieve our
goals, or that we will be able to develop alternative channels.
WE MAY BE UNABLE TO PROTECT OUR PROPRIETARY RIGHTS, PERMITTING COMPETITORS TO
DUPLICATE OUR PRODUCTS AND SERVICES
Our success and ability to compete is dependent in part upon our
proprietary technology. We rely primarily on copyright, trade secret and
trademark law to protect our technology. We hold one United States patent, and
have applied for several others in the United States and foreign countries. We
intend to continue to file patent applications on inventions that we 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.
WE MAY HAVE DIFFICULTIES PROTECTING OUR SOURCE CODE
The source code for our proprietary software is protected both as a trade
secret and as a copyrighted work. We generally enter into confidentiality and
assignment agreements with our employees, consultants and vendors, and generally
control access to and distribution of our software, documentation and other
proprietary information. Despite these precautions, it may be possible for a
third party to copy or otherwise obtain and use our products, services or
technology without authorization, or to develop similar products, services or
technology independently. In addition, effective copyright and trade secret
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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 our products or services. To license our products or services,
we often rely on "on-screen" licenses that are not manually signed by the
end-users and, therefore, may be unenforceable under some laws.
WE MAY BE REQUIRED TO ENGAGE IN LITIGATION TO ENFORCE OUR PROPRIETARY
RIGHTS
Despite our efforts to protect our proprietary rights, third parties may
attempt to copy aspects of our products and services or to obtain and use
information that we regard as proprietary. Policing unauthorized use of our
products and services is difficult, particularly in the global environment in
which we operate, and the laws of other countries may afford us little or no
effective protection of our intellectual property. We cannot assure you that the
steps that we have taken will prevent others from misappropriating our
technology or that these agreements will be enforceable.
We may engage in litigation related to our intellectual property for a
number of reasons, including to:
- Enforce our intellectual property rights,
- Protect our trade secrets,
- Determine the validity and scope of the proprietary rights of
others, or
- Defend against claims of infringement or invalidity.
This litigation, whether successful or unsuccessful, could result in
substantial costs and diversions of resources, either of which could have a
material adverse effect on our business, financial condition or operating
results.
OUR PRODUCTS AND SERVICES MAY INFRINGE CLAIMS OF THIRD-PARTY PATENTS,
WHICH COULD ADVERSELY AFFECT OUR BUSINESS AND PROFITABILITY
We are aware of various patents held by independent third parties in the
area of electronic payment systems. It is possible that the holders of rights
under these patents could assert them against us. In fact, we have already
received notices of claims of infringement of other parties' proprietary rights.
We cannot assure you that our products and services are not within the scope of
patents held by others, either now or in the future. If any such claims are
asserted, we 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. We may also decide to defend against a
claim of infringement, but litigation, even if successful, is costly and may
have a material adverse effect on us regardless of the eventual outcome.
WE RELY IN PART ON TECHNOLOGY LICENSES
We also rely on certain technology which we license from third parties,
including software which is integrated with internally developed software and
used in our software to perform key functions. We cannot assure you that third
party technology licenses will continue to be available to us 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 our services,
which could have a material adverse effect on our business, financial condition
or operating results.
WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATION, WHICH MAY CHANGE AND HARM OUR
BUSINESS
Our operations are subject to various state and federal regulations.
Because electronic commerce in general, and most of our products and services in
particular, are so new, the application of many of these regulations is
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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 burdens. Any
such change could lead to increased operating costs and could also reduce the
convenience and functionality of our products or services, possibly resulting in
reduced market acceptance. It is possible that new 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 our products or services
and increase our cost of doing business or could otherwise have a material
adverse effect on our business, financial condition or operating results.
WE MAY BE UNABLE TO OBTAIN ADDITIONAL CAPITAL NEEDED TO OPERATE AND GROW OUR
BUSINESS
We expect to have to raise additional capital to meet our working capital needs
and capital expenditure and to finance strategic investments. To fund these
efforts, we may raise up to an additional $45 million in one or more financings
over the next twelve months. If we do raise additional funds through the
issuance of equity securities, the percentage ownership of the stockholders of
record will be reduced, stockholders may experience additional dilution , or
equity securities issued may have rights, preferences or privileges senior to
those of common stockholders. We cannot give any assurance that we will, in
fact, be able to raise additional funds on desirable terms, or at all. If
adequate funds are not available, or are not available on acceptable terms, we
may be unable to develop or enhance our services, take advantage of future
opportunities, or respond to competitive pressures. This would be likely to
have a material adverse effect on our business.
WE HAVE EXTENSIVE INTERNATIONAL OPERATIONS AND CHANGES IN THESE MARKETS MAY
UNDERMINE OUR BUSINESS TRADE
A component of our strategy is to expand our operations into
international markets. We have created joint ventures in Japan and Germany and
have arranged with Barclays Bank for the delivery of certain of our services in
the United Kingdom. The majority of our revenues in 1997 were derived from
licensing fees and customization work charged to these joint ventures and
foreign strategic allies. We anticipate that revenues derived from customization
work and initial licensing fees from these international operations will
continue to decline over time. We also have subsidiaries in the United Kingdom
and Germany to customize and market our products in Europe. The deployment of
our products and services through our joint ventures, alliances and subsidiaries
in Japan and Europe is at an early stage, and revenues have so far have been
small. We do not know if our products and services will be commercially
successful in these markets, or will generate significant revenues for our
business.
WE MAY BE UNABLE TO SUCCESSFULLY ACQUIRE NEW BUSINESSES NEEDED TO EFFECTIVELY
COMPETE, OR TO MAKE THESE BUSINESSES PERFORM ONCE ACQUIRED
As our business evolves, we have acquired, and may acquire complementary
products, technologies, and businesses. Any significant acquisition would entail
a risk that we would not be successful in integrating and operating the acquired
business, product or technology. A failure to do so could have a material
adverse effect on us.
OUR STOCK PRICE IS VOLATILE
The price of our common stock has been and likely will continue to be
subject to wide fluctuations in response to a number of events and factors, such
as
- quarterly variations in operating results,
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- variances of our quarterly results of operations from securities
analyst estimates,
- announcements of technological innovations, new products,
acquisitions, capital commitments or strategic alliances by
CyberCash or our competitors,
- changes in financial estimates and recommendations by securities
analysts,
- the operating and stock price performance of other companies that
investors may deem comparable to us, and
- news reports relating to trends in our markets.
In addition, the stock market in general, and the market prices for
Internet-related companies in particular, have experienced significant price and
volume fluctuations that often have been unrelated to the operating performance
of the companies affected by these fluctuations. These broad market fluctuations
may adversely affect the market price of our common stock, regardless of our
operating performance. Securities class action litigation has often been
instituted against companies that have experienced periods of volatility in the
market price for their securities. If we were to become the target of this kind
of litigation, the cost in dollars and management attention could be
substantial, and the diversion of management's attention and resources could
have a material adverse affect on our business.
EFFECTING A CHANGE OF CONTROL OF CYBERCASH WOULD BE DIFFICULT, WHICH MAY
DISCOURAGE OFFERS FOR SHARES OF OUR COMMON STOCK
Our 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 rights of the
holders of our 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. We also have a stockholders rights plan. It provides for the issuance of
rights if an acquiror purchases 15 percent or more of our common stock without
the approval of our board of directors. The rights plan may have the effect of
delaying, deterring, or preventing changes in control or management of
CyberCash, which may discourage potential acquirors who otherwise might wish to
acquire CyberCash without the consent of the board of directors.
The certificate of incorporation provides for staggered terms for the
members of the board of directors. Certain provisions of our 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 our 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, or delay,
prevent or deter a merger, acquisition, tender offer or proxy contest for us.
THE COMMON STOCK UNDERLYING THE WARRANT SOLD IN THIS OFFERING AND ISSUABLE UPON
EXERCISE OF OTHER OUTSTANDING SECURITIES WILL INCREASE THE AMOUNT OF OUR COMMON
STOCK ON THE PUBLIC MARKET WHICH MAY CAUSE OUR STOCK PRICE TO DECLINE
As of November 18, 1999, (excluding the warrant offered in this
prospectus) we had issued and outstanding warrants, investment options and stock
options to acquire an aggregate of 7,731,651 shares of our common stock. We
granted these securities and entered into these commitments in connection with
acquiring technologies, raising capital in private placement transactions,
entering into strategic alliances and providing incentives to employees,
consultants and non-employee directors under our stock option plans. The
warrants, options and common stock have features that could result in
substantial dilution of public stockholders. The sales in the public market of
substantial amounts of shares acquired upon exercise of the foregoing warrants
and options, or the prospect of such sales, could adversely affect the market
price of our common stock.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may read and copy
materials that we have filed with the SEC, including the registration statement,
at the following SEC public reference rooms:
450 Fifth Street, N.W. 7 World Trade Center 500 West Madison Street
Room 1024 Suite 1300 Suite 1400
Washington, D.C. 20549 New York, New York 10048 Chicago, Illinois 60661
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms.
Our common stock is quoted on the Nasdaq National Market under the symbol
"CYCH," and our SEC filings can also be read at the following Nasdaq address:
Nasdaq Operations
1735 K Street, N.W.
Washington, D.C. 20006
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to these documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below:
- Annual Report on Form 10-K for the year ended December 31, 1998;
- Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999, June 30, 1999 and September 30, 1999;
- Current Reports on Form 8-K and 8-K/A filed on January 11, 1999,
February 5, 1999, April 6, 1999, July 6, 1999, July 29, 1999,
August 9, 1999 and August 19, 1999, August 23, 1999, August 31,
1999, November 18, 1999 and November 19, 1999; and
- The description of the Company's common stock contained in Form
8-A.
In addition to the documents listed above, we also incorporate by
reference any future filings we make with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 until we have sold all of the
offered securities to which this prospectus relates or the offering is otherwise
terminated.
To obtain a copy of these filings at no cost, you may write or telephone
us at the following address:
Corporate Secretary
CyberCash, Inc.
2100 Reston Parkway
Third Floor
Reston, Virginia 20191
(703) 620-4200
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus is accurate as of any
date other than the date on the front of the prospectus.
The CyberCash logo, ICVERIFY, PCVERIFY, NetVERIFY, PCAuthorize,
MacAuthorize, CyberCoin and PayNow Secure Electronic Check Service are
registered trademarks or
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service marks of CyberCash or its affiliates in the United States and other
countries. CyberCash, PayNow, InstaBuy, Agile Wallet and WebAuthorize are
trademarks of CyberCash in the United States and other countries. This
prospectus also includes names, trademarks, service marks and registered
trademarks and service marks of other companies.
USE OF PROCEEDS
We intend to use the proceeds from the exercise of the warrant offered by this
prospectusto fund expansion of our business, including for:
- additional working capital to fund development activities and
sales and marketing efforts,
- capital expenditures,
- acquisitions and strategic investments, and
- general corporate purposes.
Pending the application of the proceeds, we expect to invest the proceeds
in short-term, interest-bearing instruments or other investment-grade debt
securities.
The exercise price of the warrant is $13.345 per share. The exercise price of
the warrant may be adjusted in accordance with the terms of the warrant. See
"Description of Warrant."
DESCRIPTION OF COMMON STOCK
CyberCash's authorized capital stock consists of 40,000,000 shares of
common stock, $.001 par value, and 5,000,000 shares of preferred stock, $.001
par value.
COMMON STOCK
As of November 18, 1999, there were 22,945,915 shares of common stock
outstanding and held of record by 368 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 CyberCash, 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.
TRANSFER AGENT AND REGISTRAR
BankBoston N.A. is the transfer agent and registrar for CyberCash's
common stock.
DESCRIPTION OF WARRANT
GENERAL
The warrant offered by this prospectus is initially exercisable for an
aggregate of 472,254 shares of common stock. The warrant will expire on November
19, 2004. The exercise price is initially set at $13.345 per share. The exercise
price may be reset if CyberCash issues securities below the market price of
CyberCash's common stock. If an adjustment of the exercise price occurs, the
number of shares of common stock issuable upon exercise of the warrant would
proportionately
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increase. There is no public market for the warrant, and we do not expect that a
market for it will develop.
EXERCISE OF THE WARRANT
The warrant may be exercised in whole or in part at any time up to the
close of business on November 19, 2004. After the close of business on the
expiration date, the unexercised portion of the warrant will become void.
Upon receipt of payment and the warrant certificate properly completed
and duly executed at the corporate trust office of the warrant agent or any
other office indicated in the prospectus supplement, CyberCash will, as soon as
practicable, forward the shares of common stock purchasable upon exercise. If
less than all of the warrant represented by the warrant certificate is
exercised, a new warrant certificate will be issued for the unexercised portion
of the warrant.
PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in an agreement between
the Company and an institutional investor, the Company has agreed to sell
directly to the investor and the investor has agreed to purchase directly from
the Company all of the securities offered by this prospectus supplement.
LEGAL MATTERS
The validity of the offered securities will be passed upon for CyberCash
by Hogan & Hartson L.L.P., counsel to CyberCash.
EXPERTS
Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements of CyberCash, Inc. included in our Annual Report on Form
10-K for the year ended December 31, 1998, which are incorporated in this
prospectus by reference. These consolidated financial statements are
incorporated by reference in reliance on their reports, given on their authority
as experts in accounting and auditing.
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NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR
TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST NOT RELY ON ANY
UNAUTHORIZED INFORMATION OR REPRESENTATIONS. THIS PROSPECTUS IS AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ONLY THE SHARES OFFERED HEREBY, BUT ONLY
UNDER CIRCUMSTANCES AND IN JURISDICTIONS WHERE IT IS LAWFUL TO DO SO. THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS CURRENT ONLY AS OF ITS DATE.
CYBERCASH LOGO
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PROSPECTUS
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NOVEMBER 19, 1999
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