PRINCETON ECOM CORP, S-1/A, 1999-05-13

PRINCETON ECOM CORP
S-1/A, 1999-05-13
BUSINESS SERVICES, NEC

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<PAGE>

As filed with the Securities and Exchange Commission on May 13, 1999

Registration No. 333-75385
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- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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AMENDMENT NO. 1

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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PRINCETON ECOM CORPORATION
(Exact name of registrant as specified in its charter)

Delaware 7374 22-2528267
(Primary standard (I.R.S. employer
(State or other industrial classification identification no.)
jurisdiction of code number)
incorporation or
organization)
165 Wall Street
Princeton, New Jersey 08540
(609) 924-1244
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

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Donald C. Licciardello
Chairman and Chief Executive Officer
Princeton eCom Corporation
165 Wall Street
Princeton, New Jersey 08540
(609) 924-1244
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

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Copies to
James P. Prenetta, Jr., Esq. Russell U. Schenkman, Esq. Ellen B. Corenswet, Esq.
Kelley Drye & Warren LLP Hale & Schenkman Brian B. Margolis, Esq.
101 Park Avenue 13 Roszel Road Brobeck, Phleger &
New York, New York 10178 Suite C-225 Harrison LLP
(212) 808-7800 Princeton, New Jersey 08540 1633 Broadway
(609) 452-0110 New York, New York 10019
(212) 581-1600
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Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this Registration Statement becomes
effective.
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, 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 of 1933, 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 of 1933, 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(d)
under the Securities Act of 1933, please 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
under the Securities Act of 1933, please check the following box. [_]

-------------------

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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<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any jurisdiction where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION, DATED MAY 13, 1999

[PRINCETON eCOM LOGO]

3,000,000 Shares

Common Stock

This is Princeton eCom's initial public offering. Princeton eCom has applied
for approval for quotation on the Nasdaq National Market under the symbol
"ECOM" for the shares we are offering. We anticipate that the initial public
offering price will be between $9.00 and $11.00 per share.

--------------

Investing in the common stock involves risks.
See "Risk Factors" beginning on Page 6.

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<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Public Offering Price........................................... $ $
Underwriting Discounts and Commissions.......................... $ $
Proceeds to Princeton eCom...................................... $ $
</TABLE>

The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.

Princeton eCom has granted the underwriters a 30-day option to purchase up to
an additional shares of common stock to cover over-allotments. BancBoston
Robertson Stephens Inc. expects to deliver the shares of common stock to
purchasers on , 1999.

--------------

BancBoston Robertson Stephens Donaldson, Lufkin & Jenrette

--------------

First Union Capital Markets Corp.

--------------

Online distribution by The undersigned is facilitating
Internet distribution

E*TRADE Securities DLJdirect Inc.

The date of this Prospectus is , 1999.
<PAGE>

You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell and seeking offers to
buy, shares of common stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of our common stock.

Until , 1999, all dealers that buy, sell or trade our common stock,
whether or not participating in this offering, may be required to deliver a
prospectus. This requirement is in addition to the dealers' obligation to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.

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TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Summary.................................................................. 4
Risk Factors............................................................. 6
Use of Proceeds.......................................................... 14
Dividend Policy.......................................................... 14
Capitalization........................................................... 15
Dilution................................................................. 16
Selected Financial Data.................................................. 17
Management's Discussion and Analysis of Financial Condition and Results
of Operations.......................................................... 18
Business................................................................. 27
Management............................................................... 42
Certain Transactions..................................................... 50
Principal Stockholders................................................... 51
Description of Capital Stock............................................. 52
Shares Eligible for Future Sale.......................................... 54
Underwriting............................................................. 56
Legal Matters............................................................ 58
Experts.................................................................. 58
Additional Information................................................... 58
Index to Financial Statements............................................ F-1
</TABLE>

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Digital Scanline, els Electronic Lockbox Service and 1-800-PayBill are our
registered trademarks. e-Collect is also a trademark of ours. All other
trademarks or trade names referred to in this prospectus are the property of
their respective owners.

3
<PAGE>

SUMMARY

This summary highlights information contained elsewhere in this prospectus.
You should read the entire prospectus, including "Risk Factors" and the
financial statements, carefully before making an investment decision.

The Company

According to Jupiter Communications, in 1998 approximately 15 billion
consumer paper bills were received by approximately 100 million U.S.
households. Creating and publishing a paper bill is a multiple-step process
that is costly and labor intensive for a biller. According to Gartner Group,
the average cost to a biller of creating and delivering a paper bill is $1.00.
The bill payment process is also time consuming for the consumer.

The Internet has provided the opportunity to dramatically simplify the bill
presentment and payment process, to greatly reduce the cost to billers and
improve the convenience for consumers. Most billers lack the expertise to cost-
effectively implement and maintain the hardware and software necessary to
present bills and process consumer payments through the Internet. Billers
choosing to use the Internet to facilitate the billing process must decide
whether to develop Internet bill presentment and payment capabilities
internally or to outsource the process.

Our services dramatically simplify the bill presentment and payment
process, providing the following key benefits to our customers:

. comprehensive, cost-effective outsourcing of the entire bill publishing
and payment process;

. broad distribution that provides consumers with numerous options of
where and when to access and pay their bills;

. fully customized Internet-based consumer billing interface that allows
billers, financial institutions and Internet portals to preserve the
existing look and feel of their web sites;

. reliable system architecture that is expandable at relatively low cost;

. enhanced network and data security; and
. ease of integration with billers' financial accounting systems.

As the Internet gains increased acceptance as a medium for financial
services, we believe that more billers will begin to utilize Internet bill
presentment and payment services to further reduce their costs and improve
consumer convenience. Although the Internet bill presentment and payment market
is in the early stages of development, we have leveraged our existing
electronic services to position ourselves as a market leader in this emerging
industry.

On January 25, 1984, we were incorporated in the State of Delaware under
the name Princeton TeleCom Corporation. On March 24, 1999, we changed our name
to Princeton eCom Corporation. Our principal office is located at 165 Wall
Street, Princeton, New Jersey 08540 and our telephone number is (609) 924-1244.
Our web site address is www.princetontele.com. The information on our web site
is not a part of this prospectus.

Prior to completion of this offering, we will effect a 3- for-1 stock
split. Unless otherwise noted, the information in this prospectus assumes that
the stock split has been effected and that the underwriters will not exercise
their over-allotment option.

4
<PAGE>

The Offering

<TABLE>
<S> <C>
Common stock offered by Princeton eCom...... 3,000,000 shares
Common stock to be outstanding after the
offering.................................. 14,344,002 shares
Use of proceeds............................. To invest in the further growth
and expansion of our business and
for working capital and other
general corporate purposes. See
"Use of Proceeds."
Proposed Nasdaq National Market symbol...... ECOM
</TABLE>

Summary Financial Data
(in thousands, except per share data)

The As Adjusted Balance Sheet Data summarized below reflects the
application of the net proceeds from the sale of the 3,000,000 shares of common
stock offered by Princeton eCom at an assumed initial public offering price of
$10.00 per share, after deducting the underwriting discounts and commissions
and our estimated offering expenses.

<TABLE>
<CAPTION>
Three
Months
Ended
Year Ended December 31 March 31
----------------------------------------- --------------
1994 1995 1996 1997 1998 1998 1999
------ ------ ------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Total revenues.......... $ 797 $2,235 $ 1,836 $ 3,032 $ 3,822 $ 831 $1,142
Operating loss.......... (764) (556) (2,184) (2,126) (3,341) (520) (1,075)
Net loss................ (546) (629) (2,191) (2,142) (3,355) (524) (1,077)
Basic and diluted net
loss per share........ $(0.07) $(0.08) $ (0.26) $ (0.25) $ (0.36) $(0.06) $(0.10)
Shares used in computing
net loss
per share............. 8,351 8,351 8,454 8,568 9,423 8,615 11,126
</TABLE>

<TABLE>
<CAPTION>
March 31, 1999
-------------------- ---
Actual As Adjusted
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<S> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalents.............................. $8,775 $35,475
Working capital (deficit).............................. (823) 25,877
Total assets........................................... 11,686 38,386
Long term debt, less current portion................... 44 44
Total stockholders' equity............................. 189 26,889
</TABLE>

5
<PAGE>

RISK FACTORS

Any investment in our common stock involves a high degree of risk. You
should carefully consider the risks described below, together with the other
information contained in this prospectus, before making an investment decision.
The risks and uncertainties described below are not the only ones faced by our
company. Additional risks and uncertainties not presently known to us or that
we currently deem immaterial may also impair our business operations. If any of
the following risks actually occur, our business, results of operations or
financial condition could be materially and adversely affected. In such case,
the trading price of our common stock could decline, and you may lose all or
part of your investment.

Risks Related To Our Business

We have a history of losses and expect to continue to incur losses

We have incurred net losses in each of the last five years and expect to
continue to incur losses from operations for the foreseeable future. We cannot
assure you that we will ever become profitable. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

We intend to expend significant resources on our sales, marketing and new
customer implementation operations. As a result, we will need to achieve
significant revenue increases to achieve and maintain profitability. We cannot
assure you that we will be able to achieve the necessary revenue growth. Our
number of customers or the number of services which our customers buy from us
may grow more slowly than we anticipate or may decrease in the future.

Our business model is unproven and is evolving

The electronic bill presentment and payment industry, which includes all
non-paper based mediums, is an evolving industry. To date, our business has
consisted primarily of providing electronic billing services to billers and
financial institutions through telephone accessed transactions. Although we
have expended and will continue to expend considerable resources in developing
our Internet service, we need to achieve critical mass in terms of number of
billers and consumers that use the service in order for it to succeed. Even
with the successful growth of Internet usage, our business model will not
succeed if consumers are not receptive to using the Internet to pay their
bills. If a significant number of billers fail to adopt our Internet bill
publishing and payment service or adopt this service more slowly than we
anticipate, or if we fail to retain new billers or further expand this service
to penetrate our existing non-Internet customer base, our business would be
materially and adversely affected. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and "Business -- The Princeton
eCom Strategy."

Our operating results may fluctuate significantly from quarter to quarter,
which may negatively impact our stock price

Our quarterly operating results may fluctuate significantly in the future
as a result of a variety of factors, many of which are outside of our control.
These factors include:

. the rate at which we increase . the loss of key employees and the
our customer base and their use time and expense needed to
of our various services; recruit, hire and train new
personnel, particularly service
. the amount and timing of costs development personnel;
related to our sales and
marketing efforts and other . our ability to upgrade, enhance
initiatives; and maintain our systems and
infrastructure and the timing and
. sales and implementation cycles cost of this;
of our customers;
. interest rate fluctuations; and
. the loss of a number of existing
customers; . economic conditions which may
affect the budgets of billers,
financial institutions and
consumers for technological
expenditures.
</TABLE>

6
<PAGE>

Because of these factors, we believe that comparisons of our quarterly
operating results are not necessarily meaningful. In addition, it is possible
that in some future quarters our operating results will be below the
expectations of research analysts and investors, and in that case, the price of
our common stock is likely to decline.

If we fail to respond to rapid technological change, our business will suffer

The electronic bill presentment and payment industry is characterized by
rapid technological change. As a result, the emergence of new industry
standards and practices could render our existing technologies and systems, and
thus our services, obsolete. The development of our technologies and necessary
service enhancements entails significant technical and business risks and
requires substantial lead-time and expenditures. We may not be able to keep
pace with the latest technological developments, successfully identify and meet
our customer demands, use new technologies effectively or adapt our services to
customer requirements or emerging industry standards. If we cannot adapt or
respond in a cost-effective and timely manner to technological changes, our
business, operating results and financial condition will be materially and
adversely affected.

If we do not develop relationships with significant Internet aggregators of
consumer bills, our business will suffer

We believe that in order to be successful in the Internet bill presentment
and payment industry, we must have relationships with a number of aggregators
that will enable our customers, through our Internet bill publishing and
payment service, to reach a significant portion of their consumer audience. An
aggregator is a company that consolidates bills from different billers and bill
publishers and then distributes the bills to web sites of financial
institutions and portals where consumers can go to pay their bills. We cannot
assure you that we will be able to achieve or maintain this minimum number of
relationships and our failure to do so would have a material and adverse effect
on our business, operating results and financial condition.

Increased competition in the electronic bill presentment and payment markets
could materially and adversely affect our business

Increased competition in the electronic bill presentment and payment market
could have a material and adverse effect on our business, operating results and
financial condition. We believe that the principal competitive factors are:

.ability to identify and respond to customer needs;

.technical expertise;

.quality of the service;

.price of the service;

.breadth of distribution; and

. possible preexisting relationships between companies that process paper
bills or lockbox service providers and our potential customers.

In addition to the foregoing, our Internet bill presentment services also
face competitive pressures from various third-party software vendors, which
provide some of the software necessary for the development of an integrated,
in-house Internet bill presentment and payment service. In addition, these
companies could potentially leverage their existing capabilities and
relationships to enter the outsourced Internet bill presentment and payment
market.

7
<PAGE>

than we do. In addition, some of these potential competitors may be able to
devote greater resources to the development, promotion and sale of their
services, adopt more aggressive pricing strategies and devote substantially
more resources to the development of technology and systems development than we
are able.

Increased competition may result in reduced operating margins, loss of
market share and diminished value of our services, as well as different
pricing, service and marketing strategies. We may not be able to compete
successfully against current and future competitors, and competitive pressures
we face could have a material and adverse effect on our business, operating
results and financial condition.

If we fail to successfully expand our sales and marketing activities, our
business will be materially and adversely affected

We intend to expand our sales and marketing activities by hiring a sales
and marketing director and additional sales and marketing personnel. Our
ability to expand our sales and marketing activities involves a number of risks
including:

. our ability to successfully integrate our new sales and marketing
director with our existing and future sales and marketing personnel; and

. our ability to hire, retain, integrate and motivate sales and marketing
personnel in a very competitive environment.

We cannot assure you that we will be successful in integrating a sales and
marketing director and expanding our sales and marketing personnel, and our
failure to do so would have a material and adverse effect on our sales and
marketing efforts and on our business, operating results and financial
condition.

A number of members of our management team have little experience working
together, and we depend on a few key employees

Our future success will depend upon the continued service of key management
and technical personnel. Ronald W. Averett, our President and Chief Operating
Officer, joined us in March 1999 and Christopher S. Sugden, our Vice President
and Chief Financial Officer, joined us in February 1999. Two other members of
our senior management team have joined us since April 1999. Given their limited
experience with our business and other members of management, it is possible
that these officers may not integrate well into our business. Their failure to
integrate well would have a material and adverse effect on our business,
operating results and financial condition.

We currently do not maintain key man life insurance policies on any of our
employees. We do not have employment agreements with any of our employees other
than Messrs. Averett and Sugden. The loss of the services of any of our key
employees or our inability to hire and retain additional key employees would
have a material and adverse effect on our business, operating results and
financial condition. See "Management -- Employment Agreements."

If we fail to effectively manage our internal growth, our business will be
materially and adversely affected

We recently began to significantly expand our operations and intend to
continue this expansion. We increased our employee base from 56 at December 31,
1997 to 84 at April 30, 1999. This expansion has placed, and is expected to
continue to place, a significant strain on our managerial, operational and
financial resources. We must hire additional managerial, and sales and
marketing employees. In addition, we cannot assure you that we can successfully
integrate any new management personnel into our existing management team. We
cannot assure you that current and planned personnel, systems, procedures and
controls will be adequate to support our future operations. If we are unable to
manage our growth effectively, the quality of our services, our ability to
train and retain key personnel, and our business, operating results and
financial condition will be materially and adversely affected.

8
<PAGE>

We will be dependent on our relationships with financial institutions to help
market our services and our business would be materially and adversely affected
if we were to lose some of these relationships

We will be dependent on our relationships with financial institutions to
help market our services to more billers. Our ability to increase revenues
depends partially upon our ability to market our services through new and
existing relationships. If we lose some of these relationships or fail to
develop new ones, our business will not meet growth expectations and our
business, operating results and financial condition will be materially and
adversely affected.

If our system security is breached, our business will be materially and
adversely affected

A fundamental requirement for Internet bill presentment and payment
services is the secure transmission of confidential information over public
computer networks. Third parties may attempt to breach our system security or
that of our customers. If they are successful, we may be liable to our billers
or their consumers for any breach in our system security and any breach could
harm our reputation.

Our computer servers are vulnerable to computer viruses, physical or
electronic break-ins and similar disruptions, which could lead to interruptions
or delays in processing transactions, or the manipulation or loss of data. We
may be required to expend significant capital and other resources to license
encryption technology and additional technologies to protect against system
security breaches or to alleviate problems caused by any breach. Our failure to
prevent system security breaches would have a material and adverse effect on
our business, operating results and financial condition.

Our operations are dependent upon systems which are located at a single site
and an interruption of our systems could materially and adversely affect our
business

Our success depends largely upon the efficient and uninterrupted operation
of our operating systems. All of our operating systems are located at a single
facility leased by us in Princeton, New Jersey. Our systems are vulnerable to
damage or interruption from fire, power loss, telecommunications failure,
break-ins and similar events. We cannot assure you that we will not experience
system failures in the future. The occurrence of a system failure or similar
event could have a material and adverse effect on our business, operating
results and financial condition.

A constraint in capacity to process transactions would materially and adversely
affect our business

Capacity constraints in processing transactions, due to a sharp increase in
traffic, may cause unanticipated system disruptions, impair quality and lower
the level of our service. If this were to happen, our business, operating
results and financial condition will be materially and adversely affected.

We do not have any long-term contracts with our billers or aggregators

All of our contracts with our billers and aggregators are short-term and
can be terminated without cause, generally upon 30 to 90 days' notice. Our
future success depends on our ability to retain our current billers and
aggregators and attract new billers and aggregators. The loss of several of our
larger existing billers or aggregators, or our inability to attract new billers
or a major aggregator, would have a material and adverse effect on our
business, operating results and financial condition.

If our services do not function as designed, we may incur significant liability

Our electronic bill presentment and payment services are designed to
provide payment management functions and to limit the billers' risk of fraud or
loss in effecting transactions with their consumers. As our electronic services
become more critical to our billers, there is a potential for significant
liability claims for the processing of fraudulent or erroneous transactions. If
a liability claim were brought against us, even if not

9
<PAGE>

successful, its defense would likely be time consuming and costly and could
injure our reputation. A successful liability claim may have a material and
adverse effect on our business, operating results and financial condition.

Our failure to successfully integrate any future acquisitions would strain our
managerial, operational and financial resources

As part of our business strategy, we intend to pursue strategic
acquisitions that would provide additional technologies, billers, services or
experienced personnel. Acquisitions present a number of potential risks that
would have a material and adverse effect on our business, operating results and
financial condition, including:

. difficulties in assimilating the acquired company's personnel,
operations and technologies;

. the potential loss of key employees of the acquired company;

. the distraction of our management's attention from other business
concerns; and

. potentially dilutive issuances of our common stock or the incurrence of
substantial amounts of debt.

Year 2000 problems would adversely affect our business

In order to accurately provide our services, we must rely on technology
supported by billers, financial institutions, aggregators, presenters and
consumers. Furthermore, our services rely on transmission of data over the
Internet, third party data and voice communication lines, and data transmission
through wire transfer systems, including the Federal Funds system. Failure by
us, our billers, aggregators, presenters or suppliers to adequately address
Year 2000 issues in a timely manner could impede our ability to provide our
services and have a direct impact on our ability to generate revenue. This, in
turn, could have a material and adverse impact on our business, financial
condition and results of operations.

If we are unable to protect our intellectual property rights, our business will
be materially and adversely affected

We protect our intellectual property rights through a combination of
trademark, copyright and trade secrets laws. We cannot assure you that the
steps we have taken to protect our intellectual property rights, however, will
be adequate to deter misappropriation of those rights. In addition, we cannot
be certain that our services do not infringe valid patents, copyrights and
intellectual property rights held by third parties. See "Business --
Proprietary Rights."

Our revenue could be negatively impacted by decreases in interest earned on
overnight investments

For the three months ended March 31, 1999, approximately 36% of our revenue
was generated from interest paid on amounts deposited overnight with financial
institutions pending payment. The interest earned is based on the prevailing
short-term interest rates. Accordingly, fluctuations in the short-term interest
rates will affect our revenues. Likewise, a decrease in revenue generated by
overnight investment may not be met by a corresponding decrease in any
borrowing costs which we may incur in the future. Thus, either a fall in the
prevailing short-term interest rates or an increase in future borrowing costs
could materially and adversely affect our business, operating results and
financial condition.

10
<PAGE>

Risks Related to Our Industry

We depend on the continued growth in the use of the Internet and the
development of the Internet infrastructure

The growth of our business would be materially and adversely affected if
Internet usage does not continue to grow rapidly. Internet usage may be
inhibited for a number of reasons, including:

. concerns about the security of confidential information;

. lack of reliability and ease of access;

. lack of cost-effective, high-speed service;

. inconsistent quality of service;

. inadequate network infrastructure; or

. adoption of onerous governmental regulations.

In addition, the Internet infrastructure may not be able to support the
demands placed on it by increased Internet usage and its performance and
reliability may decline. Internet web sites have experienced interruptions in
their service as a result of outages and other delays occurring throughout the
Internet network infrastructure. If these outages or delays frequently occur in
the future, Internet usage, as well as the use of our Internet Bill Publishing
service, could grow more slowly than projected or decline.

We may encounter Internet security concerns that would hinder Internet commerce

The secure transmission of confidential information over the Internet is an
important component of electronic commerce and communications over the
Internet. Because a number of our services involve the transfer of confidential
information, our business, operating results and financial condition could be
materially and adversely affected if Internet users significantly reduce their
use of the Internet because of system security concerns. We may also be
required to expend significant time and resources to protect our services
against the threat of security breaches or to alleviate problems caused by such
breaches.

Government regulation and the legal uncertainties relating to the Internet
would cause our business to suffer

Our management believes that we are not required to be licensed by the
Office of the Comptroller of the Currency, the Federal Reserve Board, or other
federal or state agencies that regulate or monitor banks or other types of
providers of electronic commerce services. We cannot assure you that a federal
or state agency will not attempt, either now or in the future, to require that
providers of services like ours be licensed. This would impede our ability to
do business in the areas within the regulator's jurisdiction. In conducting
several aspects of our business, we are subject to various laws and regulations
relating to commercial transactions generally, such as the Uniform Commercial
Code. We are also subject to the electronic funds transfer rules embodied in
Regulation E promulgated by the Federal Reserve Board. Given the expansion of
the electronic commerce market, it is possible that the Federal Reserve might
revise Regulation E or adopt new rules for electronic funds transfer affecting
users other than consumers. It is possible that Congress or individual states
could enact laws regulating the electronic commerce market. If enacted, these
laws, rules and regulations could be imposed on our business and industry and
would have a material and adverse effect on our business, operating results and
financial condition. In addition, any new laws or regulations relating to the
Internet would have a material and adverse effect on our business, operating
results and financial condition. See "Business -- Government Regulations."

11
<PAGE>

Risks Relating to this Offering

We are controlled by Donald C. Licciardello, our Chairman and Chief Executive
Officer, whose interests may differ from those of other stockholders

After this offering, Donald C. Licciardello, our Chairman and Chief
Executive Officer, will control, either directly or indirectly through the
Donald Licciardello Family Limited Partnership, approximately 48.8%, or 47.3%
if the underwriters' overallotment option is exercised in full, of our
outstanding common stock. As a result, he will have the ability to control our
management and affairs, and to control substantially all matters submitted to
our stockholders for approval, including the election and removal of directors
and any merger, consolidation or sale of all or substantially all of our
assets. This concentration of control may have the effect of deterring a change
in control of Princeton eCom, including impeding a merger, consolidation,
takeover or other business transaction involving us or discouraging a potential
acquirer from making a tender offer or otherwise attempting to obtain control
of Princeton eCom. Any of the foregoing results could, in turn, materially and
adversely affect the market price for our common stock. See "Principal
Stockholders."

Billing Concepts Corp. has the ability to appoint two members of our Board of
Directors

Pursuant to the terms of a voting agreement, as amended, entered into among
Billing Concepts, Donald C. Licciardello and the Donald Licciardello Family
Limited Partnership, of which Mr. Licciardello is the general partner, in
connection with Billing Concepts' purchase of shares of Princeton eCom in
September 1998, Billing Concepts, Mr. Licciardello and the Donald Licciardello
Family Limited Partnership have agreed to vote all of their respective shares
of common stock to elect to our board two individuals designated by Billing
Concepts and three individuals designated by Mr. Licciardello. As a result,
Billing Concepts, the holder of 18.3% of our common stock after this offering
(17.8% if the underwriters' overallotment option is exercised in full), can
designate 40% of the members of our board. Through this disproportionate voting
power, Billing Concepts may be able to influence the outcome of a decision
which may not be in the best interests of all stockholders. See "Certain
Transactions."

Certain provisions of Delaware law, our certificate of incorporation and our
by-laws may make a takeover of our company more difficult which could
materially and adversely affect the market price for our common stock

We are subject to the anti-takeover provisions of Section 203 of the
Delaware General Corporation Law. Section 203 could delay or prevent a third
party or a significant stockholder from acquiring control of us. In addition,
provisions of our certificate of incorporation and by-laws may have the effect
of discouraging, delaying or preventing a merger, tender offer or proxy contest
involving Princeton eCom, even if such transaction would be beneficial to our
stockholders. See "Description of Capital Stock."

Future sales of our common stock in the public market may depress our stock
price

The market price of our common stock could decline as a result of sales by
our existing stockholders of a large number of shares of common stock in the
market after this offering, or the perception that these sales may

12
<PAGE>

occur. These sales also might make it more difficult for us to sell equity
securities in the future and at a price that we deem appropriate. See "Shares
Eligible for Future Sale."

You will experience an immediate and substantial dilution in the book value of
your investment

Investors purchasing shares in this offering will incur immediate and
substantial dilution in net tangible book value per share. To the extent
outstanding options to purchase common stock are exercised, there will be
further dilution. See "Dilution."

Trading in our common stock could be subject to extreme price and volume
fluctuations and you could have difficulty trading your shares of common stock

We cannot predict the extent to which investor interest in Princeton eCom
will lead to the development of an active trading market or that the market
price of our common stock will not decline below the initial public offering
price. The stock market has experienced significant price and volume
fluctuations and the market prices of securities of technology companies,
particularly Internet-related companies, have been extremely volatile.
Investors may not be able to resell their shares at or above the initial public
offering price.

13
<PAGE>

USE OF PROCEEDS

The net proceeds we receive from this offering are estimated to be
approximately $26.7 million, $30.9 million if the underwriters' over-allotment
option is exercised in full, assuming an initial public offering price of
$10.00 per share, after deducting the underwriting discounts and commissions
and estimated offering expenses payable by us. The principal uses of the net
proceeds will be to invest in the further growth and expansion of our business
and for working capital and other general corporate purposes. In addition, we
may use a portion of the net proceeds from this offering to acquire or invest
in complementary businesses. However, we do not currently have commitments or
agreements to make such investment.

As of the date of this prospectus, we have not identified with certainty
the specific uses for the net proceeds from this offering. Consequently, our
management will have discretion over their use and investment. Pending their
use, the net proceeds will be invested in short-term, investment grade,
interest-bearing instruments, certificates of deposit or direct or guaranteed
obligations of the United States government.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock and
do not intend to pay any cash dividends in the foreseeable future. We currently
anticipate that all future earnings, if any, will be retained to finance the
further expansion and continued growth of our business. Any future
determination regarding the payment of cash dividends will be within the sole
discretion of our board of directors and will depend upon, among other things,
our earnings, operating results, financial condition and current and
anticipated cash needs.

14
<PAGE>

CAPITALIZATION

The following table sets forth our capitalization as of March 31, 1999 on
an actual basis and as adjusted to reflect the sale by us of the shares of
common stock to be sold in this offering at an estimated offering price of
$10.00 per share. The As Adjusted data is calculated after deducting the
estimated underwriting discounts and commissions and offering expenses payable
by us. See "Use of Proceeds." The capitalization information set forth in the
table below is qualified by and should be read in connection with the more
detailed financial statements and related notes thereto included elsewhere in
this prospectus.

<TABLE>
<CAPTION>
March 31, 1999
---------------------
Actual As Adjusted
-------- -----------
(in thousands)
<S> <C> <C>
Long-term debt, less current portion..................... $ 44 $ 44
-------- --------
Stockholders' equity:
Common stock, $0.01 par value; 50,000,000 shares
authorized; 11,284,002 shares issued and outstanding,
actual; and 14,284,002 shares issued and outstanding,
as adjusted.......................................... 113 143
Additional paid-in-capital............................. 14,587 41,257
Accumulated deficit.................................... (11,970) (11,970)
Subscriptions receivable............................... (188) (188)
Deferred compensation.................................. (2,353) (2,353)
-------- --------
Total stockholders' equity............................. 189 26,889
-------- --------
Total capitalization................................. $ 233 $ 26,933
======== ========
</TABLE>

The above capitalization table excludes (1) 2,697,900 shares of common
stock issuable upon the exercise of options outstanding under our stock option
plans, as of March 31, 1999, at a weighted average price of $1.87 per share and
(2) 2,361,150 shares of common stock reserved for issuance, and not
outstanding, under our existing stock option plans as of March 31, 1999.

15
<PAGE>

DILUTION

Our net tangible book value as of March 31, 1999 was $188,611, or $0.02 per
share of common stock. Net tangible book value per share represents the amount
of our total tangible assets less our total liabilities, divided by the number
of shares of our common stock outstanding. After giving effect to our sale of
3,000,000 shares of common stock in this offering at an estimated offering
price of $10.00 per share and the application of the estimated net proceeds of
this offering, our net tangible book value as of March 31, 1999 would have been
approximately $26,888,611, or $1.88 per share of common stock. This represents
an immediate increase in the net tangible book value of $1.86 per share to
existing stockholders and an immediate dilution in the net tangible book value
of $8.12 per share to new investors buying common stock in this offering. The
following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share.............. $10.00
Net tangible book value per share as of March 31, 1999..... $0.02
Increase attributable to new investors .................... 1.86
-----
Adjusted net tangible book value per share as of March 31,
1999....................................................... 1.88
------
Dilution per share to new investors.......................... $ 8.12
======
</TABLE>

The following table summarizes, as of March 31, 1999, the total number of
shares of common stock purchased from us, the total consideration paid to us
and the average price per share paid by existing stockholders and by new
investors:

<TABLE>
<CAPTION>
Shares Purchased Total Consideration
------------------ ------------------- Average Price
Number Percent Amount Percent Per Share
---------- ------- ----------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders..... 11,284,002 79% $10,956,000 27% $ 0.97
New investors............. 3,000,000 21 30,000,000 73 $10.00
---------- ----- ----------- -----
Total................... 14,284,002 100.0% $40,956,000 100.0%
========== ===== =========== =====
</TABLE>

The foregoing discussion excludes (1) 2,697,900 shares of common stock
issuable upon the exercise of options outstanding under our stock option plans,
as of March 31, 1999, at a weighted average price of $1.87 per share and (2)
2,361,150 shares of common stock reserved for issuance, and not outstanding,
under our existing stock option plans as of March 31, 1999.

16
<PAGE>

SELECTED FINANCIAL DATA

The following selected financial data has been derived from our financial
statements. The selected financial data as of December 31, 1997 and 1998 and
for each of the three years in the period ended December 31, 1998 are derived
from our financial statements that have been audited by Arthur Andersen LLP,
independent public accountants, and are included elsewhere in this prospectus.
The selected financial data as of December 31, 1996 has been derived from our
audited balance sheet which is not included in this prospectus. The selected
financial data as of December 31, 1994 and 1995 and for each of the two years
in the period ended December 31, 1995 are derived from our unaudited financial
statements not included in this prospectus. The selected financial data as of
March 31, 1999 and for the three-month periods ended March 31, 1998 and 1999
have been derived from our unaudited financial statements, which in our
opinion, include all adjustments necessary for a fair presentation of the
information below. The results of operations for the three months ended March
31, 1999 are not necessarily indicative of the results expected for the entire
year. The following financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements and the related notes included
elsewhere in this prospectus.

<TABLE>
<CAPTION>
Three Months
Ended
Year Ended December 31 March 31
------------------------------------------- ----------------
1994 1995 1996 1997 1998 1998 1999
------- ------- ------- ------- ------- ------ --------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Revenues:
Service fees........... $ 792 $ 1,868 $ 1,632 $ 2,333 $ 2,386 $ 583 $ 735
Interest............... 5 367 204 699 1,436 248 407
------- ------- ------- ------- ------- ------ -------
Total revenues........ 797 2,235 1,836 3,032 3,822 831 1,142
------- ------- ------- ------- ------- ------ -------
Operating expenses:
Cost of services....... 476 1,054 1,363 1,801 1,967 430 555
Development costs...... 216 410 834 820 895 216 332
Selling, general and
administrative....... 869 1,327 1,823 2,537 3,283 671 1,100
Amortization of
deferred
compensation......... -- -- -- -- 1,018 34 230
------- ------- ------- ------- ------- ------ -------
Total operating
expenses............ 1,561 2,791 4,020 5,158 7,163 1,351 2,217
------- ------- ------- ------- ------- ------ -------
Operating loss.......... (764) (556) (2,184) (2,126) (3,341) (520) (1,075)
Interest expense........ 84 73 7 16 14 4 2
------- ------- ------- ------- ------- ------ -------
Loss before
extraordinary item.... (848) (629) (2,191) (2,142) (3,355) (524) (1,077)
Extraordinary gain from
debt forgiveness...... 302 -- -- -- -- -- --
------- ------- ------- ------- ------- ------ -------
Net loss................ $ (546) $ (629) $(2,191) $(2,142) $(3,355) $ (524) $(1,077)
======= ======= ======= ======= ======= ====== =======
Basic and diluted net
loss per share........ $ (0.07) $ (0.08) $ (0.26) $ (0.25) $ (0.36) $(0.06) $ (0.10)
======= ======= ======= ======= ======= ====== =======
Shares used in computing
net loss per share.... 8,351 8,351 8,454 8,568 9,423 8,615 11,126
======= ======= ======= ======= ======= ====== =======
<CAPTION>
December 31
------------------------------------------- March 31
1994 1995 1996 1997 1998 1999
------- ------- ------- ------- ------- --------
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash
equivalents........... $ 443 $ 1,408 $ 523 $ 505 $ 6,362 $ 8,775
Working capital
(deficit)............. (2,463) (3,266) (5,635) (7,908) (308) (823)
Total assets............ 1,031 2,748 1,799 2,110 9,344 11,686
Long-term debt, less
current portion....... 20 26 121 75 50 44
Total stockholders'
equity (deficit)........ (2,425) (3,055) (5,244) (7,385) 278 189
</TABLE>

17
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our financial
statements and the related notes which are included elsewhere in this
prospectus. The following discussion contains forward-looking statements that
involve risks and uncertainties. Our actual results could differ significantly
from those discussed in these forward-looking statements as a result of various
factors, including, but not limited to, those set forth under "Risk Factors"
and elsewhere in this prospectus.

Overview

We provide comprehensive electronic bill presentment and payment services
to large businesses which generate a significant number of recurring bills, and
financial institutions. Our telephone service enables consumers to pay bills in
as few as five keystrokes and set up automatic payment of recurring bills. Our
Internet service allows billers to publish and present bills to consumers,
either directly through web sites of billers or indirectly through web sites of
financial institutions and Internet portals.

Our revenues are primarily derived from two sources.

. Service Fees. We derive revenue from contractual relationships with
billers and financial institutions. Service fee revenues, which
represent transaction fees charged by us for our services, are
recognized as the services are performed.

. Interest. We also derive revenue through the overnight investment of
funds received pending payment. These funds are invested overnight in
investment grade and government securities while we reconcile consumer
and financial institution payments with our customers' accounting
databases. Interest revenue is recorded as it is earned.

We intend to significantly increase our sales and marketing and new
customer implementation expenditures during 1999. We believe these expenditures
will enable us to grow our biller base and continue to expand our relationships
with aggregators. We also believe that we can increase our share of the
Internet bill presentment and payment market through the establishment or
expansion of strategic relationships with providers of paper-based billing
services and financial institutions that have existing relationships with our
targeted biller customer base.

We incur development costs in connection with developing our services. To
date, we have not capitalized any development costs. We expect to significantly
increase our development costs in the future as we enhance our current services
and develop new service offerings. This increase will primarily relate to the
hiring of additional employees performing technical support and computer
programming functions.

During 1998, we recorded an aggregate deferred compensation expense of
approximately $1.9 million in connection with the grant of stock options to our
employees and directors at exercise prices below the fair market value of our
common stock. We are amortizing this deferred compensation expense over the
vesting periods of the options, which range from immediate vesting to periods
of up to four years. Of the $1.9 million of deferred compensation expense
recorded, approximately $1.0 million was charged to expense during the year
ended December 31, 1998.

We have incurred significant losses since our inception and we expect to
continue to incur significant losses for the foreseeable future. As of December
31, 1998, we had an accumulated deficit of approximately $10.9 million and
approximately $8.6 million of net operating loss carryforwards for federal
income tax purposes. Our net loss carryforwards begin to expire in 2003.

18
<PAGE>

Results of Operations

The following table sets forth financial data as a percentage of revenues
for the periods indicated.

<TABLE>
<CAPTION>
Three Months
Year Ended Ended
December 31 March 31
---------------------- ---------------
1996 1997 1998 1998 1999
------ ----- ----- ------ ------
<S> <C> <C> <C> <C> <C>
Revenues:
Service fees...................... 88.9% 77.0% 62.4% 70.2% 64.4%
Interest.......................... 11.1 23.0 37.6 29.8 35.6
------ ----- ----- ------ ------
Total revenues................. 100.0 100.0 100.0 100.0 100.0
------ ----- ----- ------ ------
Operating expenses:
Cost of services.................. 74.2 59.4 51.5 51.7 48.6
Development costs................. 45.4 27.0 23.4 26.0 29.0
Selling, general and
administrative.................. 99.3 83.7 85.9 80.8 96.3
Amortization of deferred
compensation.................... 0.0 0.0 26.6 4.1 20.2
------ ----- ----- ------ ------
Total operating expenses....... 218.9 170.1 187.4 162.6 194.1
------ ----- ----- ------ ------
Operating loss...................... (118.9) (70.1) (87.4) (62.6) (94.1)
Interest expense.................... 0.4 0.5 0.4 0.5 0.2
------ ----- ----- ------ ------
Net loss............................ (119.3)% (70.6)% (87.8)% (63.1)% (94.3)%
====== ===== ===== ====== ======
</TABLE>

Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998

Revenues

Total revenues increased by $310,000 to $1.1 million for the three months
ended March 31, 1999 from $831,000 for the three months ended March 31, 1998,
an increase of 37%.

Service Fees. Service fees increased by $152,000 to $735,000 for the three
months ended March 31, 1999 from $583,000 for the three months ended March 31,
1998, an increase of 26%. This increase is primarily attributable to services
provided to new financial institutions implemented in the quarter as well as
increases in revenues from our Internet Bill Publishing service and 1-800-
Paybill service. Service fees represented 64% of total revenues for the three
months ended March 31, 1999 compared to 70% for the three months ended March
31, 1998.

Interest. Interest revenue increased by $159,000 to $407,000 for the three
months ended March 31, 1999 from $248,000 for the three months ended March 31,
1998, an increase of 64%. This increase is primarily attributable to an
increase in the number of transactions per existing customer, higher dollar
amounts associated with each transaction and the addition of new customers.
Interest represented 36% of total revenues for the three months ended March 31,
1999 compared to 30% of total revenues for the three months ended March 31,
1998.

Operating Expenses

Total operating expenses increased by $800,000 to $2.2 million for the
three months ended March 31, 1999 from $1.4 million for the three months ended
March 31, 1998.

Cost of Services. Cost of services consists primarily of data processing
costs, new customer implementation, customer service and technical support, as
well as third party transaction fees like automated clearinghouse transaction
charges. Cost of services increased by $125,000 to $555,000 for the three
months ended March 31, 1999 from $430,000 for the three months ended March 31,
1998, an increase of 29%. This increase was primarily attributable to the
corresponding increase in revenue, as well as an increase in the number of
employees in anticipation of future growth. Cost of services was 49% of total
revenues for the three months ended March 31, 1999 compared to 52% of total
revenues for the three months ended March 31, 1998.

19
<PAGE>

Development Costs. Development costs consist primarily of salaries for
software engineers and programming personnel. Development costs increased by
$116,000 to $332,000 for the three months ended March 31, 1999 from $216,000
for the three months ended March 31, 1998, an increase of 54%. This increase
was primarily attributable to increases in payroll associated with additional
headcount in anticipation of future growth. Development costs represented 29%
of total revenues for the three months ended March 31, 1999 compared to 26% of
total revenues for the three months ended March 31, 1998.

Selling, General and Administrative. Selling, general and administrative
expense consists primarily of salaries for sales and marketing personnel and
accounting and administrative personnel, as well as sales commissions and
public relations expense. Selling, general and administrative expense increased
by $429,000 to $1.1 million for the three months ended March 31, 1999 from
$671,000 for the three months ended March 31, 1998, an increase of 64%. This
increase was primarily attributable to an increase in the number of sales and
marketing and administrative personnel in anticipation of future growth.
Selling, general and administrative expense represented 96% of total revenues
for the three months ended March 31, 1999 compared to 81% of total revenues for
the three months ended March 31, 1998.

Amortization of Deferred Compensation. Amortization of deferred
compensation increased by $196,000 to $230,000 for the three months ended March
31, 1999 from $34,000 for the three months ended March 31, 1998. Deferred
compensation represents the difference between the exercise price of options
granted by us and the fair market value of our common stock on the grant date
of the options in cases where the exercise price was below fair market value on
the grant date. At March 31, 1999, we had $2.4 million of deferred compensation
that will be amortized over the remaining vesting periods of the options, which
range from one to four years.

Interest Expense. Interest expense consists of interest paid on leased
equipment. Interest expense decreased to $2,100 for the three months ended
March 31, 1999 from $3,700 for the three months ended March 31, 1998.

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

Revenues

Total revenues increased by $790,000 to $3.8 million in the year ended
December 31, 1998 from $3.0 million in the year ended December 31, 1997, an
increase of 26%.

Service Fees. Service fees were relatively unchanged at $2.3 million for
the year ended December 31, 1998 compared to $2.4 million for the year ended
December 31, 1997. Revenue was relatively flat because the increase in revenues
from our 1-800-PayBill service and Internet Bill Publishing service was offset
by a decrease in revenue from our payment services resulting from some
financial institutions electing to bring these services in-house. Service fees
represented 62% of total revenues for the year ended December 31, 1998 compared
to 77% of total revenues for the year ended December 31, 1997.

Interest. Interest revenue increased by $737,000 to $1.4 million for the
year ended December 31, 1998 from $699,000 for the year ended December 31,
1997, an increase of 105%. This increase is primarily attributable to an
increase in the use of our Balance Transfer Utility service during 1998 which
generates higher interest revenue because of the higher dollar amounts
associated with this service compared to our other services. Interest revenue
represented 38% of total revenues for the year ended December 31, 1998 compared
to 23% of total revenues for the year ended December 31, 1997.

Operating Expenses

Total operating expenses increased by $2.0 million to $7.2 million for the
year ended December 31, 1998 from $5.2 million for the year ended December 31,
1997, an increase of 38%.

20
<PAGE>

Cost of Services. Cost of services increased by $166,000 to $2.0 million
for the year ended December 31, 1998 from $1.8 million for the year ended
December 31, 1997, an increase of 9%. This increase was due primarily to
incremental costs associated with the increased use of our 1-800-PayBill
service and Internet Bill Publishing service in 1998 compared to 1997. Cost of
services was 52% of total revenues for the year ended December 31, 1998
compared to 59% of total revenues for the year ended December 31, 1997. This
percentage decrease is due to increased revenues during 1998 from our Balance
Transfer Utility service, which generates higher interest revenue without a
significant increase in cost because of the higher dollar amounts associated
with each transaction compared to our other services.

Development Costs. Development costs increased $75,000 to $895,000 for the
year ended December 31, 1998 from $820,000 for the year ended December 31,
1997, an increase of 9%. This increase was primarily attributable to the
addition of database and software development personnel during the fourth
quarter of 1998. Development costs were 23% of total revenues for the year
ended December 31, 1998 compared to 27% of total revenues for the year ended
December 31, 1997. This percentage decrease resulted from relatively flat
development costs being spread over a larger revenue base in 1998.

Selling, General and Administrative. Selling, general and administrative
expense increased $746,000 to $3.3 million for the year ended December 31, 1998
from $2.5 million for the year ended December 31, 1997, an increase of 30%.
This increase was primarily attributable to an increase in the number of sales
and marketing and administrative personnel in 1998. Selling, general and
administrative expense was 86% of total revenues for the year ended December
31, 1998 compared to 84% of total revenues for the year ended December 31,
1997.

Amortization of Deferred Compensation. Amortization of deferred
compensation expense was $1.0 million in the year ended December 31, 1998.
Deferred compensation is being amortized over the respective vesting periods of
the options. At December 31, 1998, we had $867,000 of deferred compensation
that will be amortized over the remaining vesting periods of the options which
range from one to four years.

Interest Expense. Interest expense consists of interest paid on leased
equipment. Interest expense was relatively unchanged from $16,000 for the year
ended December 31, 1997 to $14,000 for the year ended December 31, 1998.

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Revenues

Total revenues increased by $1.2 million to $3.0 million for the year ended
December 31, 1997 from $1.8 million for the year ended December 31, 1996, an
increase of 67%.

Service Fees. Service fees increased by $701,000 to $2.3 million for the
year ended December 31, 1997 from $1.6 million for the year ended December 31,
1996, an increase of 44%. This increase was primarily attributable to increased
use of our 1-800-PayBill service and our Balance Transfer Utility service in
1997. Service fees represented 77% of total revenues for the year ended
December 31, 1997 compared to 89% of total revenues for the year ended December
31, 1996.

Interest. Interest revenue increased by $495,000 to $699,000 for the year
ended December 31, 1997 from $204,000 for the year ended December 31, 1996, an
increase of 243%. This increase is primarily attributable to an increase in the
number of transactions processed in 1997 compared to 1996, in addition to an
increase in the dollar volume of transactions processed due to an increase in
use of our Balance Transfer Utility service. Interest revenue represented 23%
of total revenues for the year ended December 31, 1997 compared to 11% of total
revenues for the year ended December 31, 1996.

Operating Expenses

Total operating expenses increased by $1.1 million to $5.2 million for the
year ended December 31, 1997 from $4.0 million for the year ended December 31,
1996, an increase of 28%.

21
<PAGE>

Cost of Services. Cost of services increased by $438,000 to $1.8 million
for the year ended December 31, 1997 from $1.4 million for the year ended
December 31, 1996, an increase of 31%. This increase corresponds to the
increase in revenues generated from increased transaction processing in 1997.
Cost of services was 59% of total revenues for the year ended December 31, 1997
compared to 74% of total revenues for the year ended December 31, 1996. This
percentage decrease is due to increased revenues from our Balance Transfer
Utility service, which generates higher interest revenue without a significant
increase in cost because of the higher dollar amounts associated with each
transaction compared to our other services.

Development Costs. Development costs remained relatively unchanged at
$820,000 for the year ended December 31, 1997 compared to $834,000 for the year
ended December 31, 1996, due to the consistent number of personnel and payroll
expenses in this department. Development costs were 27% of total revenues for
the year ended December 31, 1997 compared to 45% of total revenues for the year
ended December 31, 1996. The percentage decrease is due to a similar amount of
development costs being spread over a larger revenue base in 1997.

Selling, General and Administrative. Selling, general and administrative
expense increased by $714,000 to $2.5 million for the year ended December 31,
1997 from $1.8 million for the year ended December 31, 1996, an increase of
40%. This increase is primarily attributable to an increase in payroll expense
resulting from headcount increases in several departments including sales,
accounting and system administration. Selling, general and administrative
expense was 84% of total revenues for the year ended December 31, 1997 compared
to 99% of total revenues for the year ended December 31, 1996.

Interest Expense. Interest expense increased by $9,000 to $16,000 for the
year ended December 31, 1997 from $7,000 for the year ended December 31, 1996,
an increase of 129%. This increase is attributable to a capital equipment lease
entered into in early 1997.

22
<PAGE>

Selected Unaudited Quarterly Results of Operations

The following table sets forth our unaudited quarterly results of
operations for each of the five quarters ended March 31, 1999. In management's
opinion, this unaudited information has been prepared on the same basis as our
audited financial statements included elsewhere in this prospectus and includes
all adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the unaudited quarterly results when read in conjunction with
our audited financial statements and notes thereto included elsewhere in this
prospectus. The results of operations for any quarter are not necessarily
indicative of future results of operations.

<TABLE>
<CAPTION>
Three Months Ended
--------------------------------------------------
Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31,
1998 1998 1998 1998 1999
-------- -------- --------- -------- --------
Statement of Operations
Data: (in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Service fees........... $ 583 $ 517 $ 623 $ 663 $ 735
Interest............... 248 186 486 516 407
------ ------ ------ ------- -------
Total revenues........ 831 703 1,109 1,179 1,142
------ ------ ------ ------- -------
Operating expenses:
Cost of services....... 430 490 466 580 555
Development costs...... 216 230 188 261 332
Selling, general and
administrative....... 671 768 740 1,104 1,100
Amortization of
deferred
compensation......... 34 14 55 916 230
------ ------ ------ ------- -------
Total operating
expenses............ 1,351 1,502 1,449 2,861 2,217
------ ------ ------ ------- -------
Operating loss.......... (520) (799) (340) (1,682) (1,075)
Interest expense........ 4 4 4 2 2
------ ------ ------ ------- -------
Net loss................ $ (524) $ (803) $ (344) $(1,684) $(1,077)
====== ====== ====== ======= =======
Basic and diluted net
loss per share........ $(0.06) $(0.09) $(0.04) $ (0.15) $ (0.10)
====== ====== ====== ======= =======
Shares used in computing
net loss per share.... 8,615 8,615 9,320 11,116 11,126
====== ====== ====== ======= =======
<CAPTION>
Percentage of Total Revenues
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Service fees........... 70.2% 73.5% 56.2% 56.3% 64.4%
Interest............... 29.8 26.5 43.8 43.7 35.6
------ ------ ------ ------- -------
Total revenues........ 100.0 100.0 100.0 100.0 100.0
------ ------ ------ ------- -------
Operating expenses:
Cost of services....... 51.7 69.7 42.0 49.2 48.6
Development costs...... 26.0 32.7 17.0 22.2 29.0
Selling, general and
administrative....... 80.8 109.3 66.7 93.6 96.3
Amortization of
deferred
compensation......... 4.1 2.0 5.0 77.7 20.2
------ ------ ------ ------- -------
Total operating
expenses............ 162.6 213.7 130.7 242.7 194.1
------ ------ ------ ------- -------
Operating loss.......... (62.6) (113.7) (30.7) (142.7) (94.1)
Interest expense........ 0.5 0.6 0.4 0.1 0.2
------ ------ ------ ------- -------
Net loss................ (63.1)% (114.3)% (31.1)% (142.8)% (94.3)%
====== ====== ====== ======= =======
</TABLE>

We have experienced year-to-year revenue growth with some seasonal
fluctuations during the second half of the year. These fluctuations relate
primarily to increases in interest revenue derived from our Balance Transfer
Utility service during the last two quarters of the year. These increases
result from direct marketing programs initiated by credit card issuers which
cause increased demand for our Balance Transfer Utility service. The increased
demand in Balance Transfer Utility services causes interest revenue to increase
because of the higher dollar amounts associated with this service compared to
our other services.

23
<PAGE>

Revenues decreased slightly from the first quarter of 1998 to the second
quarter of 1998 as a result of some financial institutions electing to bring
payment services provided by us in-house. Cost of services as a percentage of
revenue was higher in the second quarter of 1998 than in previous quarters as a
result of increases in payroll expense related to increased headcount during
this quarter. We increased the number of personnel in this quarter in
anticipation of future growth. Selling, general and administrative expense was
also high in this quarter due to increases in sales and marketing expenses
primarily attributable to the addition of personnel and tradeshow expenses
incurred during this quarter.

In addition to seasonal fluctuations, quarterly results of operations may
be subject to significant fluctuations due to several factors, including:

. the rate at which we increase our customer base and their use of our
various services;

. the amount and timing of costs related to our sales and marketing
efforts and other initiatives;

. sales and implementation cycles of our customers;

. the loss of a number of existing customers;

. the loss of key employees and time and expense needed to recruit, hire
and train new personnel, particularly service development personnel;

. our ability to upgrade, enhance and maintain our systems and
infrastructure and the timing and costs of this;

. interest rate fluctuations; and

. economic conditions which may affect the budgets of billers, financial
institutions and consumers for technological expenditures.

We anticipate that our operating expenses will continue to increase
significantly due to development and implementation costs associated with our
Internet service. These expenses will relate to personnel increases and
technological expenditures. We expect that revenues will increase due to biller
and consumer adoption of our Internet bill presentment and payment services. If
biller or consumer adoption is slower than expected, revenues may not increase
at the same rate as expenses in the future. If revenues in any quarter do not
increase correspondingly with increases to expenses, our results of operations
for that quarter would be materially and adversely affected. For the foregoing
reasons, we believe that quarter-to-quarter comparisons of our results of
operations are not necessarily meaningful and that our results of operations in
any particular quarter should not be relied upon as necessarily indicative of
future performance.

Liquidity and Capital Resources

Historically, we have experienced significant operating losses and working
capital deficits. Our working capital deficit was $5.6 million at December 31,
1996 and $7.9 million at December 31, 1997. In September 1998, we sold 831,290
shares of our common stock to Billing Concepts for $10.0 million. At December
31, 1998 our working capital deficit was $308,000 and as of March 31, 1999, our
working capital deficit was $823,000.

Net cash used in operating activities was $3.4 million for both the year
ended December 31, 1998, and the year ended December 31, 1996 and $414,000 for
the three months ended March 31, 1998. For the year ended December 31, 1997 and
the three months ended March 31, 1999, our operating activities generated cash
of $2.5 million and $2.3 million. Cash provided by operating activities in the
three months ended March 31, 1999 was primarily the result of increases in
customer deposits payable. The cash used in operating activities in 1998 was
primarily the result of our net loss and an increase in other current assets,
partially offset by an

24
<PAGE>

increase in accounts payable. For the year ended December 31, 1997, cash
provided by operating activities was primarily attributable to an increase in
customer deposits payable, in addition to increases in accounts payable and
accrued expenses. During 1996, cash used in operating activities was primarily
attributable to our net loss.

Net cash used in investing activities was $257,000, $373,000 and $298,000
for the years ended December 31, 1998, 1997 and 1996 and $36,000 and $483,000
for the three months ended March 31, 1998 and 1999. This cash was used
primarily for the purchase of computer equipment and software.

Net cash provided by financing activities was $9.5 million in the year
ended December 31, 1998 and $2.9 million in the year ended December 31, 1996.
Net cash used in financing activities was $2.2 million in the year ended
December 31, 1997. Net cash provided by financing activities was $585,000 and
$634,000 for the three months ended March 31, 1998 and 1999. The cash generated
in the three months ended March 31, 1999 resulted from the net proceeds from
the sale of shares of our common stock in March 1999. The cash generated in
1998 resulted from the net proceeds of $10.0 million from the sale of shares of
our common stock in September 1998, partially offset by decreases in bank
overdrafts and payments on long-term debt. The cash used in 1997 was primarily
due to a decrease in the bank overdraft. The cash generated in 1996 was
primarily attributable to an increase in the bank overdraft.

We believe that, based on our current business plan, the net proceeds from
this offering and existing cash and cash equivalents will be sufficient to meet
our operating activities, capital expenditures and other obligations for the
next twelve to eighteen months.

Year 2000 Considerations

Many currently installed computer systems and software products are coded
to accept and recognize only two-digit rather than four-digit entries to define
the applicable year. These systems may recognize a date using "00" as the year
1900 rather than the year 2000. As a result, computer systems and/or software
used by many companies, including our billers and financial institutions upon
which we rely to perform our services, may need to be upgraded to comply with
Year 2000 requirements or risk system failure or miscalculations causing
disruptions of normal business activities.

State of Readiness. We have completed our assessment of our services and
information technology systems. We believe that our mission critical systems
and a majority of our non-mission critical systems are Year 2000 compliant. We
anticipate that our systems will be Year 2000 compliant by October 1999. We
have also completed our initial survey of the information systems of our
principal vendors and service providers. Based on the oral representations of
these vendors and service providers, we believe that the information technology
systems of these third parties, as they relate to us, do not pose significant
operational issues. We have replaced any of our principal vendors that are
unable to certify that their products are Year 2000 compliant. Our assessment
is on-going and will continue with all principal vendors and service providers
with which we do business. In addition, we do not believe our embedded systems
pose Year 2000 concerns because we believe that we have identified all of our
software and hardware that require Year 2000 updates or modifications.

Costs. We currently anticipate that our total expenses for Year 2000
compliance will be less than $300,000. As of March 31,1999, we have spent
approximately $130,000 in personnel and other costs related to our Year 2000
risk assessment and remediation efforts.

Risks. In order to accurately provide our Internet Bill Publishing service,
we must rely on technology supported by billers, financial institutions,
aggregators, presenters and consumers. Furthermore, our services rely on
transmission of data over the Internet, third party data and voice
communication lines, and data transmission through wire transfer systems,
including the Federal Funds system. Failure by us, our billers, aggregators,
presenters or suppliers to adequately address Year 2000 issues in a timely
manner could impede our ability to provide our services and have a direct
impact on our ability to generate revenue. This, in turn,

25
<PAGE>

could have a material and adverse impact on our business, operating results and
financial condition. Accordingly, we plan to correct our remaining Year 2000
issues by October 1999. We believe that associated costs are adequately
budgeted for in our 1999 business plan. However, if our efforts or the efforts
of billers, aggregators, financial institutions and others with which we engage
in business, fail to adequately address their own Year 2000 issues, the most
likely worst case scenario would be a substantial loss of our revenue for some
period of time.

Contingency Plan. We are currently developing a contingency plan to address
situations that may result if we are unable to achieve complete Year 2000
compliance by October 1999. We cannot provide any assurance that the plan we
develop will be successful in addressing any remaining Year 2000 issues.

New Accounting Pronouncement

In March 1998, the American Institute of Certified Pubic Accountants issued
Statement of Position 98-1, "Accounting for the Cost of Computer Software
Developed or Obtained for Internal Use," or SOP 98-1. SOP 98-1 provides
guidance on accounting for computer software developed or obtained for internal
use, including the requirement to capitalize specified costs and amortization
of such costs. We adopted SOP 98-1 in January 1999. The adoption did not have a
material effect on our financial position or results of operations.

Market Risk

A significant portion of our revenue is generated from interest paid on
amounts deposited overnight with financial institutions pending payment. The
interest earned is based on prevailing short-term interest rates. Accordingly,
fluctuations in short-term interest rates will affect our revenues. Likewise, a
decrease in revenue generated by overnight investment may not be met by a
corresponding decrease in any borrowing costs which we may incur in the future.
Thus, either a fall in prevailing short-term interest rates or an increase in
future borrowing costs could materially and adversely affect our business,
operating results and financial condition. In the future, we may manage our
interest rate risk through interest rate hedging techniques. However, we
currently do not use such techniques and they may not be successful in reducing
or eliminating our interest rate risk in the future.

26
<PAGE>

BUSINESS

Company Overview

We provide comprehensive electronic bill presentment and payment services
to large businesses, which generate a significant number of recurring bills,
and financial institutions. We are a leading provider of electronic payment
services and a market leader in the emerging Internet bill presentment and
payment industry. Our telephone service enables consumers to pay bills in as
few as five keystrokes and set up automatic payment of recurring bills. Our
Internet service eliminates the need for billers to generate and mail paper
bills and eliminates the need for consumers to write and mail paper checks. Our
Internet service allows billers to publish and present bills to consumers,
either directly through web sites of billers or indirectly through web sites of
financial institutions and Internet portals. Using this service, consumers have
numerous options of where and when to access, analyze and pay their bills. Our
service increases the efficiency of the billing process by electronically
delivering payment information which automatically updates billers' financial
accounting systems. Concurrently, the consumer's bank account is electronically
debited to pay the bill. Upon our reconciliation of all daily payments per
customer, we then transfer funds to each customer's bank account on an
aggregate basis. We earn interest on these funds during the reconciliation
period. As of April 30, 1999, over 250 billers and financial institutions use
our electronic services.

Industry Background

Traditional Paper-Based Billing and Payment Process

According to Jupiter Communications, in 1998 approximately 15 billion
consumer paper bills were received by approximately 100 million U.S.
households. Most of these are recurring monthly or quarterly bills mailed to
consumers primarily by retailers, utilities and credit card companies. Paper
bills are prepared by either the biller itself or, more often, by an outsourced
bill fulfillment vendor. Creating and distributing a paper bill is a costly
multiple-step process that includes extracting relevant data from the internal
accounts receivable system of the biller, organizing the data into a billing
format, printing and separating the bills, stuffing envelopes, applying postage
and mailing the bill to the consumer. The bill payment process is also costly
and labor intensive. The biller must currently contract with a commercial
lockbox which receives consumer payments. The lockbox vendor opens the payments
and separates checks from the remittance stub. The lockbox vendor also sends
the biller reports which allow the biller to update both its accounts
receivable system and its accounting records. We estimate that the cost to the
biller of preparing and sending a paper bill and receiving and posting a bill
payment ranges from approximately $0.75 to $1.50 per bill. According to Gartner
Group, the average cost to the biller of creating and delivering a paper bill
is $1.00.

27
<PAGE>

Similarly, the paper-based billing and payment process is time-consuming
and can be costly for the consumer. Jupiter Communications currently estimates
that, during each 12-month period, U.S. households will spend an average of 24
hours on bill management, $46 on postage and $144 on check-writing fees to
handle an average of 12 recurring monthly bills. The graph below depicts the
steps involved in the traditional paper-based billing and payment process:

[GRAPHIC DEPICTING THE 11 STEPS INVOLVED IN THE TRADITIONAL PAPER-BASED BILLING
AND PAYMENT PROCESS APPEARS HERE, WITH THE FOLLOWING TEXT:]

Step 1 Biller prepares the paper bill

--In-house

--Out-sourced to bill fulfillment vendors

Step 2 Biller delivers the bill to the post office bulk mail center

Step 3 Post office delivers the bill to the consumer's mailbox

Step 4 Consumer reviews the bill, writes the check, and mails the check and
payment stub back to the biller

Step 5 Post office delivers the check and payment stub to the biller's mailbox
or traditional lockbox service

Step 6 Biller or lockbox service opens the envelope, separates the check and
the payment stub, records the payment and updates the biller's accounts
receivable system.

--In-house

--Out-sourced to traditional lock box service

Step 7 Biller or lockbox service encodes and deposits the check and the bank
forwards the check to the Federal Reserve

Step 8 The Federal Reserve sorts each individual check and forwards them to the
consumer's bank

Step 9 For each check, the Federal Reserve debits the account at the consumer's
bank and credits the reserve account at the biller's bank

Step 10 Consumer's bank account is debited and the biller's bank account is
credited; the consumer's bank receives the check from the Federal
Reserve

Step 11 Consumer's bank prepares a monthly statement and sends it with the
canceled paper checks to the consumer

[END OF GRAPHIC]

28
<PAGE>

Internet Bill Presentment and Payment Process

In the past, consumers were only able to access basic billing information
and process payments through the use of the telephone. With new technology,
consumers are able to obtain detailed billing information and process payments
through the Internet. These recent advances in technology have provided and
will continue to provide opportunities to dramatically simplify the bill
presentment and payment process, to greatly reduce the cost to the biller and
to improve the convenience for the consumer. The biller compiles relevant data
from its internal accounts receivable database and can either make its billing
information available through its own Internet web site, or indirectly through
Internet web sites of financial institutions and Internet portals. Consumers
are able to access their bill and account information whenever they wish and
may pay bills by clicking a payment symbol on the computer screen. Funds are
electronically transferred from the consumer's bank account, through a payment
network like the Federal Reserve System, to a concentration account of an
electronic lockbox service where all payments to a particular biller are
deposited and transferred to the biller's bank account. Bill and account
information is continuously updated to reflect consumer payments. We estimate
that the total cost to the biller and the consumer for our Internet Bill
Publishing Service ranges from $0.35 to $0.50 per transaction. The graph below
depicts the steps involved in the Internet bill presentment and payment
services process:

[GRAPHIC DEPICTING THE 4 STEPS INVOLVED IN THE INTERNET BILL PRESENTMENT AND
PAYMENT SERVICE PROCESS APPEARS HERE, WITH THE FOLLOWING TEXT:]

1 The biller creates an electronic bill with interactive bill analysis and
one-on-one marketing options. This is, either:

A Created In-house, or

B Out-sourced to internet bill publisher

2 The consumer accesses the bill at a web site, customizes the presentation
format, reviews the bill and initiates the payment by clicking on the
payment button

3 Money is electronically transferred from the consumer's bank account to the
biller's bank account; the biller's accounts receivable system is
electronically updated

4 The consumer's bank prepares a monthly statement and sends it to the
consumer or presents it electronically to the consumer.

All the electronic bills for a particular consumer are aggregated and
presented to web sites

[END OF GRAPHIC]

The Internet bill presentment process can be viewed as analogous to the
process of creating, distributing and selling books. A number of parties are
potentially involved in this process. The parties involved typically include
the following:

. Billers: The principal billers are retailers, utilities and financial
institutions that issue credit cards. Although there are thousands of
billers, we believe that a large portion of total bills generated are
produced by a concentrated number of billers. The biller would be
equivalent to the author in the book publishing analogy.

29
<PAGE>

. Publishers: The publisher compiles, formats and verifies the information
in the accounts receivable data base and then creates a bill for
presentment on the Internet. A publisher may be either the biller itself
or an entity, like us, that provides an outsourced publishing solution
for multiple billers. This publishing role is similar to the role of the
book publisher which takes the content provided by the author and
packages the book for distribution.

. Aggregators: An electronic biller is generally required to engage one or
more aggregators which collect consumer bills from numerous publishers
and sort and present these bills to consumers through the Internet.
These aggregators enable, through presenters, a consumer to access
account information regarding multiple billers on a single web site,
rather than having to go to each individual biller's web site to access
account information. The aggregator performs a role similar to that of a
book distributor, which has arrangements with multiple publishers and
retail outlets to facilitate the distribution of the publishers' books
to the retail outlets.

. Presenters: Once an aggregator has received and sorted bills created by
the publishers, these bills can be presented on the web sites of one of
two types of presenters: financial institutions or Internet portals.
These presenters are comparable to the retail outlets and other means by
which consumers directly purchase books.

The following chart shows the players involved in the Internet bill
presentment process.

[GRAPHIC DEPICTING PRINCETON ECOM'S VIEW OF THE FOLLOWING "LAYERS OF PLAYERS"
INVOLVED IN THE INTERNET BILL PRESENTMENT PROCESS APPEARS HERE]

CONSUMERS

PRESENTERS

AGGREGATORS

PUBLISHER

BILLERS

[END OF GRAPHIC]

30
<PAGE>

Growth of the Internet and Internet-based Financial Services

The Internet has experienced rapid growth and has developed into a
significant tool for global communications and commerce. Advances in online
security and payment mechanisms have encouraged businesses and consumers to
engage in electronic commerce. Forrester Research estimates that sales over the
Internet will increase from $7.8 billion in 1998 to $108 billion in 2003.
Internet-based financial services, like electronic brokerage and banking,
represent a significant portion of the electronic commerce market. The
attractiveness of Internet-based financial services stems in large part from
the speed of conducting financial transactions over the Internet, as well as
the ability of the Internet user to access extensive amounts of information.
Forrester Research estimates that the number of online brokerage accounts will
grow from 3.0 million in 1997 to 14.4 million by the year 2002 and that assets
managed online will reach $688 billion by the year 2002. Similarly, Forrester
Research estimates that online banking will grow from 2.4 million households in
1998 to 18 million in 2002. The Internet is also becoming a more significant
platform for broad consumer-based financial services like insurance, mortgages
and bill presentment and payment.

Outsourcing Opportunity

As the use of the Internet for bill presentment and payment grows, billers
choosing to accommodate customer demands must decide whether to develop
electronic bill presentment and payment capabilities internally or to outsource
the process entirely. Billers that choose to manage their own Internet bill
presentment and payment process may encounter a number of obstacles. To be in a
position to publish and achieve wide distribution of their bills, billers must
purchase, successfully integrate and maintain:

. software which enables the biller to parse and decode bill data print
streams;

. in-house servers which will update and display bill content;

. automated clearinghouse software which enables the biller to
electronically debit consumer accounts;

. messaging software which enables the biller to communicate with multiple
aggregators;

. a dedicated interface with a major bank which enables the biller to
receive funds and data through automated clearinghouse transactions; and

. lockbox software which enables the biller to update internal accounts
receivable files.

In addition, once billers are capable of publishing and handling payments,
they must then make arrangements with multiple aggregators or presenters that
present bills for multiple billers.

Many billers lack the expertise to cost-effectively implement, maintain,
scale, enhance and service the hardware and software necessary to provide their
own Internet bill presentment and payment system and to develop and maintain
multiple relationships with aggregators or presenters and financial
institutions. An outsourced solution is attractive to billers because it allows
them to focus on their core competencies and to accelerate the time in which
they can offer Internet bill presentment and payment services to their
customers.

The Princeton eCom Solution

Our Internet bill presentment and payment service provides a comprehensive,
cost-effective, outsourced process for billers desiring to reduce costs and to
provide their consumers with a convenient presentment and payment method. Our
Internet service allows billers to publish and present bills to consumers,
either directly through billers' own web sites or indirectly through web sites
of financial institutions and Internet portals. Our services dramatically
simplify the bill presentment and payment process, providing the following key
benefits:

Comprehensive, Cost-Effective Outsourcing. Our comprehensive solution
offers billers the full range of services necessary to outsource their entire
electronic bill presentment and payment process. Our services

31
<PAGE>

reduce the costs to and administrative burden on billers by eliminating the
need to develop and manage an in-house system and by capitalizing on our
economies of scale and implementation expertise.

Broad Distribution and Access. Our relationships with multiple aggregators
enable billers using our Internet billing service to publish their bills
through multiple presenters, thereby providing their consumers with numerous
options of where and when to access and/or pay their bills. In addition, our
technology allows consumers to access their bills through the telephone, the
computer, personal digital assistants and a variety of other devices.

Branding. In all aspects of our Internet bill presentment and payment
service, the Princeton eCom name is virtually invisible to the consumer. Our
fully customized Internet-based consumer billing interface allows billers,
financial institutions and Internet portals to preserve the existing look and
feel of their web sites.

Reliability and Ease of Expansion. Our system architecture is designed to
ensure reliability through the use of parallel processing and redundant
hardware and software components. Currently, our system supports over 80
million accounts receivable records monthly and can be easily expanded.

Enhanced Security. We have integrated third-party licensed and internally-
developed technology with sophisticated third-party hardware to reduce the
potential for network security breaches. We maintain network and data center
surveillance 24 hours a day, seven days a week.

Ease of Implementation. Our services can be easily integrated with a
biller's existing internal accounts receivable systems. We enable billers to
provide electronic bill presentment and payment to their consumers without
modifications to their existing systems or to their processing and
reconciliation procedures.

The Princeton eCom Strategy

Our goal is to become a leading provider of Internet bill publishing and
payment services. We plan to achieve this goal by implementing the following
key strategies:

Further Penetrate Our Existing Customer Base. We believe that our existing
base of billers and financial institutions which do not currently use our
Internet bill publishing and payment service provides substantial opportunities
for expansion of this service. To date, only 14 of our over 250 customers
utilize our Internet bill publishing and payment service. We intend to further
penetrate this existing customer base by substantially expanding our sales and
marketing efforts and service offerings.

Expand Our Sales and Marketing Efforts. We are developing a sales and
marketing plan directed towards the largest billers in the United States that
do not currently use any of our services. To implement this sales and marketing
plan, we are recruiting a number of experienced sales professionals. To date,
we have spent a nominal amount on our sales and marketing efforts. We intend to
substantially increase these expenditures during the next several years. In
addition, we intend to expand our indirect sales channels by establishing
strategic relationships with companies that process paper bills for billers,
which should enable us to gain access to the biller bases of these companies.

Expand Our Distribution Channels. We intend to expand our distribution
channels by developing relationships with additional aggregators. Because
aggregators rely upon bill publishers with significant biller relationships, we
believe that aggregators will find us more attractive as our biller base
expands. To date, we have relationships with a number of aggregators, including
TransPoint, a Microsoft/First Data Corporation/Citicorp joint venture, and
Intuit.

Introduce New Services and Service Enhancements. We seek to remain on the
forefront of the developing Internet bill presentment and payment industry by
continuing to develop more advanced services designed to address our customers'
needs. We use customer feedback, including surveys, to design service
enhancements that meet evolving customer needs. Examples of service
enhancements which we have

32
<PAGE>

previously developed include interactive data capability, which enables
consumer-initiated bill analysis on the Internet, one-to-one marketing direct
from the biller to the consumer and electronic commerce transaction capability.
In some circumstances, we also develop specific applications to meet the needs
of particular customers. For example, we developed a system for Sallie Mae that
electronically updates student loan information.

Pursue Strategic Acquisitions. We intend to pursue strategic acquisitions
that complement our business. We may acquire companies to obtain additional
technologies, billers, services or experienced personnel.

Our Services

Our services are targeted at large billers and financial institutions.
Depending on the services provided and transaction volume, we generally charge
our customers between $0.10 and $0.50 per transaction. Our current services are
as follows:

<TABLE>
<CAPTION>
Service Description Benefits
------- ----------- --------
<C> <C> <C> <S>
. 1-800-PayBill Service for paying bills by . Permits consumers to
telephone make a bill payment in
as few as five
keystrokes
. Provides accurate and
prompt posting of bill
payments
. Enables the consumer
to set up automatic
payment of recurring
bills without
additional consumer
intervention
. Synchronized with
Internet Bill
Publishing: a payment
made through one
device is immediately
reflected on the other
device
. Internet Bill Publishing Service for publishing and . Bills are accessible
paying bills using the through the web sites
Internet of billers, financial
institutions and
Internet portals
. Allows for the
consolidation of
consumer bills from
multiple billers on
one web site
. Provides additional
value-added
capabilities like
real-time billing
information and one-
to-one marketing
. Allows billers to
expand the number of
consumers using the
service without
additional
infrastructure
investment
. Maintains biller or
web site brand name
. Can be modified to
biller specifications
. els Clearinghouse service for . Reduces payment
Electronic Lockbox Service consumer-initiated payments accounting errors
that originate from a through consumer
computer or phone account validation
procedures
. Provides the consumer
real-time access to
data through
dedicated, dial-up
facilities or virtual
private networks
. Enables biller to
provide timely
response to consumer
status inquiries
. Compatible with our
Internet Bill
Publishing, 1-800-
PayBill and similar
services from other
payment originating
vendors
</TABLE>

33
<PAGE>

<TABLE>
<CAPTION>
Service Description Benefits
------- ----------- --------
<C> <C> <C> <S>
. BTU Service that electronically . Processes balance
Balance Transfer Utility transfers balances from one transfers rapidly,
credit card institution to accurately and cost-
another effectively
. Protects the identity
of the new credit card
institution
. Provides the new
credit card
institution with a
report detailing all
transactions which
have been effected
. Remits aggregate
dollar amounts to the
recipient credit card
institution
. e-Collect Service that collects . Facilitates rapid debt
outstanding balances collection
electronically
. Replaces manual
processing and
significantly reduces
collection costs and
human error
. Validates account
number information for
each collected payment
. Enables daily
reconciliation of the
collection process
. RDF Service that produces and . Enables payment
Remote Disbursement Facility disburses paper checks validation through an
electronic checkbook
that we maintain
. Provides consumers
with the information
on the front and back
of all checks,
including all
endorsements stamps
and notations
. Automatically
electronically
confirms addresses
with post office
databases
</TABLE>

Sales and Marketing

Historically, our sales and marketing efforts have involved specific face-
to-face meetings with a limited number of potential billers and financial
institutions and we have spent a nominal amount on these efforts. We are
developing a sales and marketing plan directed towards further penetrating our
existing base of billers that do not currently use our Internet bill publishing
and presentment service, while simultaneously targeting the largest billers in
the United States that do not currently use any of our services. To implement
this sales and marketing plan, we are recruiting a number of experienced sales
professionals. We intend to substantially increase our sales and marketing
efforts and expenditures over the next several years. In addition, we intend to
expand our indirect sales channels by establishing strategic relationships with
various financial institutions in order to enable us to gain access to the
biller bases of these companies. We also intend to further develop
relationships with aggregators in order to make our services more attractive to
billers.

We intend to use a variety of marketing programs to build market awareness
of Princeton eCom and our services and to generate new business. These programs
include:

. market research;
. service and strategy updates with industry analysts;
. public relations activities including press releases and featured news
articles;
. direct mail and relationship marketing;
. trade shows;
. speaking engagements; and
. web site marketing.

34
<PAGE>

Implementation Resources

Concurrent with our expanded sales and marketing efforts, we intend to
invest additional funds to strengthen our implementation resources. Our
implementation staff is responsible for all aspects of bringing a new customer
online and for resolving any technical issues which may arise. To date, this
process has been designed to meet our current sales volume. Additional
investment in implementation will enable us to meet the requirements of the
additional billers and financial institutions which we anticipate will result
from our expanded sales and marketing efforts. Our additional investment in
implementation resources will focus on additional programming and project
management resources and on new project management software.

Service Development

We use customer feedback, including surveys, to develop new services as
well as enhancements to our existing services. These new services and
enhancements are designed to meet the evolving needs of our customers. We also
develop, from time to time, specific services and service enhancements to meet
the needs of particular billers and financial institutions.

Our service development department currently consists of 14 software
developers who have extensive knowledge of, and practical experience with,
systems developed by Sun Microsystems, Microsoft and Oracle. Members of our
development team use hyper-text mark up language (HTML), along with desktop
tools such as Adobe PhotoShop and MicroSoft Image Composer.

We expense development costs as incurred. In 1998, we spent approximately
$895,000 on service development. We expect to significantly increase
expenditures in this area over the next several years.

Customers

As of April 30, 1999, we service over 250 billers and financial
institutions. Although only 14 of our customers use our Internet bill
publishing and payment service, we intend to continue to cross-market this
service to the balance of our existing customer base. No individual customer
accounted for more than 7% of our total revenues, or 11% of our service fee
revenues, as of March 31, 1999. The following is a representative list of our
customers:

Telecommunications Financial Services
- ------------------ ------------------
Bell Atlantic Mobile* Advanta Corporation
Lucent Technologies Consumer CFI
Products, L.P.* Chase Manhattan
Citibank Universal Card
Utilities Discover Card
- --------- Equifax
Adelphia Cable First Union
Ameren UE* First USA
Boston Gas Company GE Capital
Los Angeles Department of Water & Liberty Mutual Group
Power* Merchant Express
Metropolitan St. Louis Sewer M&I Data Services
District NationsBank
Michigan Consolidated Gas Sallie Mae
National Utility Investors (NUI)* Sears Payment Systems
Public Service Electric & Gas Washington Mutual
St. Louis Water Western Union
Southern California Edison*
Washington Gas*
Media
-----
Retailers Los Angeles Times
- ---------
Federated Department Stores
(Bloomingdales and Macy's)
Sears
- --------

*Customer currently using our Internet bill publishing and payment service.

35
<PAGE>

Technology

We have created a proprietary infrastructure by combining internal
expertise with advanced technology.

We have designed an environment which is reliable, flexible, and can be
easily expanded to meet growth demands without significant cost or change. Our
environment can handle an increase in transaction volume by simply making
additions to the core components such as data storage, central processing
units and other technological components. As of April 30, 1999, we support
over 80 million bills monthly. Our back-end systems have ample internal
redundancy to ensure reliability 24 hours a day, 7 days a week. Our
environment utilizes state-of-the-art technologies developed by Novell,
Oracle, Microsoft, Hewlett Packard and Sun Microsystems. We employ technology
such as mirrored storage devices and redundant power supplies. As a means of
protecting our data we have employed offsite storage facilities. We recently
established a Sungard hot site in Philadelphia, Pennsylvania where our
environment can be mirrored in the event of an equipment failure or a natural
disaster at our Princeton, New Jersey site.

We implement industry best practices for data security rather than relying
on any single vendor's solution. Our local and wide area networks are
connected via firewall technology which provides several custom security
services.

Our network includes three core systems -- our retail, wholesale and
Digital Scanline systems. These systems are based on open standards and
interface with many consumer input and output devices, financial institutions,
payment mechanisms and billing systems. The graph below outlines our
infrastructure as well as the interfaces with other systems:

[CIRCULAR DIAGRAM APPEARS HERE, SHOWING PRINCETON ECOM'S BILL PUBLISHING AND
PAYMENT INFRASTRUCTURE AND ITS VARIOUS INTERFACES WITH FINANCIAL INSTITUTIONS
AND BILLERS]

36
<PAGE>

Our retail system, which provides for the publishing of bills to consumers
and allows consumers to pay their bills electronically, houses millions of
bills each day from our billers' internal accounting databases. Our real-time
processing engine publishes the data to various devices. We reduce the risk of
technological obsolescence of our system by using device-independent
interfaces. Our retail system interfaces with web servers, interactive
telephony and customer service interfaces.

Web servers act as an open platform for several forms of communication
through:

. Hyper-Text Mark-up Language, or HTML, based Internet Bill Publishing
service that allows billers to offer Internet bill presentment and
payment directly on their own web sites or indirectly on the web sites
of presenters;

. Open Financial Exchange-based communication, or OFX, that allows access
to Intuit's Quicken and, with some modifications, Microsoft's Money
personal financial manager programs;

. Biller Interface System, BIS, that allows access to aggregators like
TransPoint; and

. Electronic collection systems that allow close integration between us
and our customers through the deployment of extranets across the web
using a dual-certificate secure-sockets layer.

The same technology and data that support our interactive telephony and
customer service systems also support our web servers. This standardization
gives our customers seamless integration across each of our three core systems.
Consequently, a bill paid by any of these methods is immediately reflected on a
bill accessed through any of the other methods.

Our retail system communicates with aggregators through custom interfaces
designed by us. For example, we have customized software created by TransPoint
to allow us to interface with this aggregator. These custom interfaces allow us
to publish bills and accept payment instructions through aggregators.

Our wholesale system disburses payments and funds to the billers' bank
accounts through the Federal Reserve System's Fed-wire or automated
clearinghouse system. Private networks are also used to make payments from a
consumer's checking account or credit card as necessary to complete the payment
process. Through els, our wholesale system also conveys both payments and
payment data information electronically to the respective biller, enabling the
biller to update its billing and accounts receivables systems.

The Digital Scanline system ensures the veracity of data that is
transmitted from the retail system to the wholesale system for payment. Our
technology uses account validation to reduce processing errors and fraud. In
addition, we provide other payment services for financial institutions. These
payments are tested with Digital Scanline before being loaded into our
wholesale database. This process is designed to ensure that every payment
accepted by our wholesale system will post when transmitted to the biller.

Operational Controls

We have developed our own set of operating procedures and proprietary
processing management applications, controls and practices designed to minimize
transmission and processing related errors. We believe that our current
controls provide reasonable assurance that our processing environment:

. is stable;

. processes the data promptly and accurately; and

. reconciles incoming remittance data and funds with all related outgoing
data and funds prior to each transmission.

We use internally developed proprietary reconciliation control applications
that are managed and operated independently from the actual processing
environment. By using this approach we can confirm the accuracy of

37
<PAGE>

the outcome of each transaction on both an aggregate customer level as well as
on an individual transaction basis. Our processes provide us with a real-time
control audit that is independent from any disruptions, disturbances, or
malfunctions of the live processing environment. Trained computer operators are
responsible for ensuring the accuracy of the data input to the system, and for
reconciling the remittance data and monetary transactions to the control
totals. Any reconciliation discrepancies are displayed on monitors and must be
resolved prior to transmission of remittance data and funds to billers and
their banks.

Customer Support

Our customer support program is designed to provide high quality,
personalized customer support on a timely basis. We strive to achieve this
objective through the use of both internally developed monitoring and training
systems as well as customer surveys which have been designed to identify areas
in need of improvement and solicit ideas for future service needs. We have also
implemented internal procedures that are designed to bring unusual customer
support issues to the attention of senior management. We provide customer
service free of charge for our financial institution customers. In addition, we
offer to our billers, on a fee basis, an outsourcing service whereby we act as
their consumer support operation.

Billers. Each of our billers is assigned an account representative who
provides a direct point of contact for general inquiries and service requests.
This representative is responsible for coordinating the availability of
appropriate business and technical resources to respond to that particular
biller's service and support requirements. Escalation procedures are designed
to assure the availability of technical personnel on a 24 hour a day, seven
days a week basis. For fast resolution of payment inquiries, we offer some
billers customized on-line customer service interfaces. These interfaces enable
the biller to access real-time payment information that is stored in our
payment disbursement warehouse.

Financial Institutions. Each of our financial institution customers is
assigned a customer service representative who responds to requests for
information about consumers and payments. This representative provides the
financial institution with documentation regarding payments in sufficient
detail to enable the financial institution to track payment disbursement and
respond to inquiries.

Consumers. We operate a call center that answers all 1-800-PayBill, els and
Internet Bill Publishing related consumer inquiries. Each of our billers is
offered the opportunity to outsource its customer service function to our
experienced customer service staff.

Competition

. ability to identify and respond to customer needs;

. technical expertise;

. quality of the service;

. price of the service;

. breadth of distribution; and

. possible preexisting relationships between companies that process paper
bills or lockbox service providers and our potential customers.

In addition to the foregoing, our Internet bill presentment service also
face competitive pressures from various third-party software vendors, which
provide some of the software necessary for the development of an integrated,
in-house Internet bill presentment and payment service. In addition, these
companies could

38
<PAGE>

potentially leverage their existing capabilities and relationships to enter the
outsourced Internet bill presentment and payment market.

Many of our actual and potential competitors have significantly greater
financial, marketing, technical, sales and customer support and other
resources, larger customer bases and longer relationships with customers than
we do. In addition, some of these potential competitors may be able to devote
greater resources to the development, promotion and sale of their services,
adopt more aggressive pricing strategies and devote substantially more
resources to the development of technology and systems development than we are
able to.

Increased competition may result in reduced operating margins, loss of
market share and diminished value of our services, as well as different
pricing, service and marketing strategies. We may not be able to compete
successfully against current and future competitors, and competitive pressures
we face could have a material adverse effect on our business, operating results
and financial condition.

Proprietary Rights

We have registered the trademarks Digital Scanline, els Electronic Lockbox
Service, and 1-800-PayBill. We have also applied for registration for the
trademark e-Collect. We protect our intellectual property rights through a
combination of trademark, copyright and trade secrets laws. We cannot assure
you that the steps we have taken to protect our intellectual property rights,
however, will be adequate to deter misappropriation of those rights. We may not
be able to detect unauthorized use of and take appropriate steps to enforce our
intellectual property rights. It may also be possible for unauthorized third
parties to copy certain portions of our proprietary information or reverse
engineer the proprietary information utilized in our services.

In order to limit access to and disclosure of our proprietary information,
all of our employees are subject to confidentiality and invention assignment
arrangements, and we enter into nondisclosure agreements with third-parties
with whom we do business. We cannot assure you that these arrangements or other
steps we have taken or will take in the future will be sufficient to protect
our technology from infringement or misappropriation or deter independent
development of similar or superior technologies by others.

Many parties are actively developing Internet billing and telephone
analysis systems technologies. We expect these developers to continue to take
steps to protect these technologies, including seeking patent protection. For
example, we are aware that a number of patents have been issued in the areas of
web-based information indexing and retrieval, online direct marketing and
telephone statistical analysis systems. As a result, we believe that disputes
over the ownership of these technologies are likely to arise in the future. We
anticipate that additional third-party patents will be issued in the future. We
cannot be certain that our services do not infringe valid patents, copyrights
or other intellectual property rights held by third parties.

Furthermore, we cannot assure you that third parties will not claim that we
have infringed upon their patents or other proprietary rights. From time to
time, we expect to be subject to claims by third parties in the ordinary course
of our business, including claims of alleged infringement of trademarks,
copyrights and other intellectual property rights of third parties. Although
there has not been any litigation relating to these claims to date, these
claims and any resultant litigation, should they occur, would subject us to
significant liability for damages and would result in the invalidation of our
proprietary rights. In addition, even if we prevail the litigation could be
time-consuming and expensive to defend and could result in diversion of our
time and attention, any of which would materially and adversely affect our
business, operating results and financial condition. Any claims or litigation
from third parties may also result in limitations on our ability to use the
trademarks and other intellectual property subject to these claims or
litigation, unless we enter into agreements with the third parties. However,
these agreements may be unavailable on commercially reasonable terms, or at
all.

39
<PAGE>

Government Regulation

Our management believes that we are not required to be licensed by the
Office of the Comptroller of the Currency, the Federal Reserve Board, or other
federal or state agencies that regulate or monitor banks or other types of
providers of electronic commerce service. We may, however, be periodically
audited by banking authorities since we are a supplier of services to financial
institutions. We cannot assure you that a federal or state agency will not
attempt, either now or in the future, to require that providers of services
like ours be licensed. This would impede our ability to do business in the
regulator's jurisdiction. A number of states have legislation regulating or
licensing check sellers or money transmitters, which may require us to register
under such legislation in specific instances. Management does not believe that
any state or federal legislation of this type would materially affect our
business. We may be subject to audit or examination under any of the foregoing
requirements. Violations by us of these requirements could limit or restrict
our access to the payment clearance systems or our ability to obtain access to
such systems from banks. Further, the Federal Reserve rules provide that we can
only access the Federal Reserve's automated clearinghouse system through a
bank. If the Federal Reserve rules were to change to further restrict access to
the automated clearinghouse system or limit our ability to provide automated
clearinghouse transaction processing services, our business would be materially
and adversely affected.

In conducting various aspects of our business, we are subject to laws and
regulations relating to commercial transactions generally, such as the Uniform
Commercial Code, and are also subject to the electronic funds transfer rules
embodied in Regulation E issued by the Federal Reserve Board. The Federal
Reserve's Regulation E implements the Electronic Fund Transfer Act, which was
enacted in 1978. Regulation E protects consumers engaging in electronic
transfers, and sets forth basic rights, liabilities and responsibilities of
consumers who use electronic money services and of financial institutions that
offer these services. For us, Regulation E sets forth disclosure and
investigative procedures. For consumers, Regulation E establishes procedures
and time periods for reporting unauthorized use of electronic money transfer
services and limitations on the consumer's liability if the notification
procedures are followed within prescribed periods. Such limitations on the
consumer's liability may result in liability to us.

Given the expansion of the Internet commerce market, it is possible that
the Federal Reserve might revise Regulation E or adopt new rules for electronic
funds transfer affecting users other than consumers. Because of growth in the
Internet commerce market, Congress has held hearings on whether to regulate
providers of services and transactions in the Internet commerce market. It is
possible that Congress or individual states could enact laws regulating the
Internet commerce market. If enacted, these laws, rules, and regulations could
be imposed on our business and industry and could have a material adverse
effect on our business, operating results and financial condition. Federal,
local and state laws and regulations may be adopted in the future to address
issues like:

. user privacy;

. pricing;

. online content regulation;

. taxation; and

. the characteristics and quality of online products and services.

Any new laws or regulations relating to the Internet could have a material
and adverse effect on our business, operating results and financial condition.

Legal Proceedings

We are not involved in any material legal proceeding nor are we aware of
any threatened legal action. We are involved, from time to time, in litigation
incidental to the conduct of our business. We believe that any potential
adverse determination in such litigation will not have a material and adverse
effect on our business, operating results and financial condition.

40
<PAGE>

Employees

As of April 30, 1999, we had 84 employees, employed in implementation,
sales and marketing, service development, finance and administration. We have
never experienced a work stoppage and none of our employees is represented by a
labor union. Except for certain members of management who will execute
employment agreements prior to the closing of this offering, our employees work
on an at-will basis. We consider our relations with our employees to be good.

Facilities

We currently lease approximately 11,000 square feet of space at our
headquarters in Princeton, New Jersey under a lease that expires on August 31,
2002. We believe that our existing facility is adequate for our current needs
and that suitable additional space will be available, on acceptable terms, when
additional space is needed.

41
<PAGE>

MANAGEMENT

Directors and Executive Officers

Our executive officers and directors, their respective ages and their
positions with us as of May 13, 1999 are as follows:

<TABLE>
<CAPTION>
Name Age Position
- ---- --- ---------------------------------------------------
<S> <C> <C>
Donald C. Licciardello.. 53 Chairman and Chief Executive Officer
Ronald W. Averett....... 42 President and Chief Operating Officer
C. Richard Corl......... 61 Executive Vice President, Secretary and Director
Christopher S. Sugden... 29 Senior Vice President and Chief Financial Officer
Donald Brenton.......... 43 Senior Vice President and Chief Information Officer
Steven D. Greenwood..... 34 Senior Vice President, Marketing
Lawrence Greenberg...... 32 Vice President, Relationship Management
Alexander Peterhans..... 40 Vice President and Director of Operations
Parris H. Holmes,
Jr.(1)................ 55 Director
Kelly E. Simmons(1)..... 44 Director
William C. Jennings..... 59 Director Nominee
</TABLE>
- --------
(1)Member of the Compensation Committee.

Within 90 days following the completion of this offering, we intend to
appoint two additional directors to our board who will be independent for
purposes of Nasdaq National Market listing requirements.

Donald C. Licciardello. Mr. Licciardello, one of our founders, has served
as our Chief Executive Officer and Chairman of the Board since our inception in
1984. From 1984 to March 1999, Mr. Licciardello also served as our President.
For seven years prior to our founding, Mr. Licciardello was a professor of
theoretical solid states physics at Princeton University. While at Princeton,
Mr. Licciardello co-authored a paper on two dimensional quantum diffusion which
was selected as one of the seminal works of the past 100 years by the American
Physical Society. From 1977 to 1984, Mr. Licciardello served as a technical
consultant in theoretical physics to IBM, Schlumberger, Bell Laboratories and
RCA Laboratories. From 1974 to 1976, Mr. Licciardello was also a Science
Research Council Fellow at the University of Birmingham, England. Mr.
Licciardello holds Ph.D., M.S. and B.S. degrees in Physics.

Ronald W. Averett. Mr. Averett has served as our President and Chief
Operating Officer since March 1999. Prior to joining us, from April 1998 to
December 1998 Mr. Averett was a Senior Vice President and Credit Card Division
Executive for Chevy Chase Bank's Credit Card Business. Mr. Averett contributed
to the spin-off of this division from Chevy Chase Bank in December 1998. From
January 1988 to April 1998, Mr. Averett held various executive positions in
Operations, Risk Management and Marketing with Advanta Corp, most recently as
the Senior Vice President and member of the Business Policy Committee of its
Credit Card unit. From June 1980 to December 1987, Mr. Averett held various
executive positions with Citibank, most recently as a Vice President and
Operations Consultant.

C. Richard Corl. Mr. Corl has served as our Executive Vice President since
June 1993, Secretary since May 1995, and as one of our directors since
September 1998. For more than 20 years, Mr. Corl held various executive
positions with TeleCheck Services, Inc., including Vice President of Franchise
Relations and Vice President of Marketing and Director of Strategic Planning.
Mr. Corl founded his own business in 1976 with the launch of part of the
TeleCheck Services, Inc. franchise network and served as its President and
Chief Executive Officer. In 1981, Mr. Corl sold this business to Tymshare,
Inc., which is now a part of First Data Corporation.

Christopher S. Sugden. Mr. Sugden has served as our Senior Vice President
since May 1999, and as our Chief Financial Officer since February 1999. Mr.
Sugden also served as one of our Vice Presidents from February 1999 to May
1999. Prior to joining us, from June 1996 to February 1999, Mr. Sugden was the

42
<PAGE>

Director of Finance and Operations of B.Y.O.B. Freedom Ventures, Inc.,
publishers of two magazines. From September 1992 to June 1996, Mr. Sugden held
various positions with Coopers & Lybrand LLP, now known as
PricewaterhouseCoopers LLP, including supervisor. Mr. Sugden is a certified
public accountant and a member of the American Institute of Certified Public
Accountants.

Donald Brenton. Mr. Brenton has served as Senior Vice President and Chief
Information Officer since May 1999. Prior to joining us, from September 1997 to
May 1999, Mr. Brenton was Director of Operations, Business Administration
Services of Towers Perrin. From September 1987 to September 1997, Mr. Brenton
was associated with ADVANTA Corp., most recently as Manager, Network Operations
and Engineering.

Steven D. Greenwood. Mr. Greenwood has served as Senior Vice President,
Marketing since April 1999. Prior to joining us, from October 1993 to April
1999, Mr. Greenwood was Senior Vice President, Marketing, of TeleBank. From
July 1990 to June 1993, Mr. Greenwood was a Financial Analyst, Corporate
Finance and Budgeting, for Bell Atlantic, Inc.

Lawrence Greenberg. Mr. Greenberg has served as Vice President,
Relationship Management since October 1992 and served as Chief Information
Officer from October 1992 to April 1999. Prior to joining Princeton eCom, Mr.
Greenberg founded Princeton Business Systems, a systems integration company and
served as its Managing Director. From 1988 to 1992, Mr. Greenberg also served
as the chief consultant on The New Owners, a HarperCollins book containing
detailed analysis of employee stock ownership in America's public companies,
and The Employee Stock Ownership Index published in the Wall Street Journal.

Alexander Peterhans. Mr. Peterhans has served as our Vice President and
Director of Operations since February 1999, and as our Director of Operations
since September 1995. From February 1995 to September 1995, Mr. Peterhans
served as our Marketing Manager. From January 1984 to September 1992, he held
several positions as a research scientist in biotechnology at the Swiss Federal
Institute of Technology, Zurich, Switzerland, and Ciba-Geigy AG, Switzerland,
and at The Rockefeller University, New York. Mr. Peterhans was honored by the
Swiss Federal Institute of Technology with the Silver Medal for achievement in
original research. Mr. Peterhans holds a Ph.D. degree in Biotechnology and a
M.B.A. degree.

Parris H. Holmes, Jr. Mr. Holmes has served as one of our directors since
September 1998. Mr. Holmes is currently Chairman of the Board and Chief
Executive Officer of Billing Concepts Corp., a significant stockholder of
Princeton eCom, which provides billing services to the telecommunications
industry, positions which he has held since May 1996. From September 1986 to
August 1996, Mr. Holmes served as Chief Executive Officer of USLD
Communications Corp., a long distance telecommunications provider, and from
September 1986 to June 1997, also served as its Chairman of the Board. Mr.
Holmes currently serves as Chairman of the Board of Tanisys Technology, Inc., a
developer, manufacturer and marketer of computer peripheral equipment, and as a
director of Sharps Compliance Corp., a provider of mail sharps disposal
services for certain types of medical sharps (needles, syringes and razors)
products. On December 18, 1996, the SEC filed a civil injunctive action in the
United States District Court for the District of Columbia alleging that Mr.
Holmes failed to file timely twelve Section 16(b) reports regarding certain
1991 and 1992 transactions in the stock of USLD Communications Corp. as
required by Section 16(a) of the Securities Exchange Act of 1934. Section 16(a)
requires officers and directors of public companies to file reports with the
SEC regarding their personal transactions in the securities of such public
companies. Mr. Holmes settled this action on December 18, 1996, without
admitting or denying the allegations of the complaint, by consenting to the
entry of an injunction with respect to these requirements and paying a civil
penalty of $50,000. The staff of the SEC also has notified Mr. Holmes of its
decision to terminate its investigation of trading in the securities of USLD
Communications Corp. and the securities of Value-Added Communications, Inc. (In
the Matter of Trading in the Securities of Value-Added Communications, Inc.
(HO-2765)).

Kelly E. Simmons. Mr. Simmons has served as one of our directors since
September 1998. Mr. Simmons is currently Executive Vice President of Billing
Concepts Corp., a position which he has held since October 1998, and Chief
Financial Officer, a position which he has held since May 1996. From May 1996
to

43
<PAGE>

September 1998, Mr. Simmons also served as Senior Vice President of Billing
Concepts Corp. and from May 1996 to February 1998, served as its Corporate
Secretary. From May 1996 to September 1997, Mr. Simmons was the Corporate
Treasurer of Billing Concepts Corp. From November 1988 until August 1996, Mr.
Simmons held various executive positions with USLD Communications Corp.,
including Vice President-Finance and Corporate Treasurer, Vice President of
Administration and Senior Vice President of Business Development.

Future Director

William C. Jennings. Mr. Jennings, currently a senior partner with
PricewaterhouseCoopers LLP, will become a director of the Company following his
expected retirement from PricewaterhouseCoopers LLP at the end of June 1999.
Mr. Jennings served as one of our directors from September 1998 until March 15,
1999 at which time he elected to resign as a result of uncertainty as to
PricewaterhouseCoopers LLP's current policy regarding the ability of its
partners to serve as directors of for-profit companies. Mr. Jennings has served
with predecessors of PricewaterhouseCoopers LLP from 1964 to 1985 and from 1992
to the present. He provides risk management and internal control consulting
services for clients. He has been featured on many risk and control forums, as
well as CNN, The New York Times, Forbes, Fortune, Business Week, CFO, American
Banker and many industry-specific publications. Until the recent merger with
Pricewaterhouse, Mr. Jennings led the development of Coopers & Lybrand LLP's
Internal Control Services practice into a $150 million business. During his
career at Coopers & Lybrand LLP, Mr. Jennings was the lead partner for some of
that firm's largest clients, including Philip Morris, Shearson Lehman Brothers,
Midlantic Bank, Lipton and New Jersey Bell. From 1988 to 1991, Mr. Jennings
served as Executive Vice President and Chief Financial Officer of Banker's
Trust. From 1985 to 1988, Mr. Jennings served as Senior Executive Vice
President, Administration of Shearson Lehman Brothers.

Board of Directors and Committees

Our Board is divided into three classes of directors serving staggered
three-year terms. As a result, approximately one-third of our board is elected
each year. Currently, the term of office of Messrs. Corl and Simmons expires at
the annual meeting of stockholders to be held in 2000 and the term of office of
Messrs. Licciardello and Holmes expires at the annual meeting to be held in the
year 2001. The director up for election at the 1999 annual meeting is currently
vacant. Our staggered board, together with advanced notice procedures which
will be added to our by-laws prior to the completion of this offering, may
deter a stockholder from removing incumbent directors and filling vacancies
with the stockholder's own nominees in order to gain control of our board. See
"Description of Capital Stock -- Certificate of Incorporation and By-law
Provisions."

We have established a compensation committee which reviews and approves the
compensation and benefits for our key executive officers, administers our
employee benefit plans and makes recommendations to our board regarding such
matters. The compensation committee currently consists of Messrs. Holmes and
Mr. Simmons.

We will establish an audit committee, consisting of at least two
independent directors, within 90 days following the completion of this
offering. Our audit committee will be responsible for reviewing our audited
financial statements and accounting practices, and considering and recommending
the employment of, and approving the fee arrangements with, independent
accountants for both audit functions and for advisory and other consulting
services.

Compensation Committee Interlocks and Insider Participation

Prior to October 20, 1998, our board did not have a compensation committee
and all compensation decisions were made by the full board. Messrs.
Licciardello and Corl did not participate in board deliberations with respect
to their individual compensation. Subsequent to October 20, 1998, the
compensation committee has made compensation decisions with respect to our key
executive officers, including the Chief Executive Officer and the President.
None of our executive officers serves as a member of the board of directors or
compensation committee of any entity that has one or more of its executive
officers serving as a member of our board or compensation committee. Our
compensation committee currently consists of Messrs. Holmes and Mr. Simmons.

44
<PAGE>

Director Compensation

Employee directors do not receive compensation for their service on our
board. Non-employee directors are awarded 10,000 stock options under our Non-
Employee Director Plan for each year of service on our board. See "--Non-
Employee Director Plan."

Executive Compensation

The following table sets forth the compensation paid, earned or accrued for
all services rendered to us in all capacities during the year ended December
31, 1998 by our Chief Executive Officer and our other most highly compensated
executive officers, other than our Chief Executive Officer, whose aggregate
cash and cash equivalent compensation exceeded $100,000.

Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Awards
-------------------- ------------
Securities
Other Annual Underlying
Name and Principal Position Year Salary Compensation Options
- --------------------------------------- ---- ------- ------------ ------------
<S> <C> <C> <C> <C>
Donald C. Licciardello,................ 1998 $52,000 $198,000(1) 90,000
President and Chief
Executive Officer
C. Richard Corl,....................... 1998 100,000 -- 60,000
Executive Vice President
and Secretary
Lawrence Greenberg,.................... 1998 100,000 -- 90,000
Vice President and
Chief Information Officer
</TABLE>
- --------
(1)Reflects personal expenses paid on Mr. Licciardello's behalf.

Stock Option Grants

The following table sets forth information regarding stock options granted
to the officers named in the Summary Compensation Table during 1998. No stock
appreciation rights were granted during 1998.

<TABLE>
<CAPTION>
Option Grants in Fiscal 1998

Individual Grants
------------------------------------------------- --------------------------
Percent Potential Realizable Value
Number of of Market At Assumed Annual
Securities Total Price Rates of Stock Price
Underlying Options On Date Appreciation For
Options Granted Exercise of Option Term (2)
Granted in Price Grant Expiration --------------------------
Name (#) 1998(1)($/Share) ($/Share) Date (0%) (5%) (10%)
- ------------------------ ---------- ------- -------- --------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donald C. Licciardello.. 90,000(3) 7.3% $0.03 $4.00 10/20/03 $357,000 $456,461 $576,784
C. Richard Corl......... 60,000(3) 4.9 0.03 4.00 10/20/03 238,000 304,308 384,522
Lawrence Greenberg...... 60,000(4) 4.9 0.03 0.70 03/01/03 40,000 51,604 65,641
30,000(4) 2.4 4.00 4.00 12/21/08 -- 75,467 191,249
</TABLE>

- --------

(1) We granted options to purchase a total of 1,225,500 shares of common stock
during the fiscal year ended December 31, 1998.
(2) Amounts reported in these columns represent amounts that may be realized
upon exercise of options immediately prior to the expiration of their term
assuming the specified compounded rates of appreciation

45
<PAGE>

(0%, 5% and 10%) on our common stock over the term of the options. These
assumptions are based on rules promulgated by the SEC and do not reflect
our estimates of future stock price appreciation. Actual gains, if any, on
the stock option exercises and common stock holdings are dependent on the
timing of the exercise and the future performance of our common stock. We
cannot assure you that the rates of appreciation assumed in this table can
be achieved or that the amounts reflected will be received by the option
holder.

(3) Options to purchase 30,000 shares of common stock vested on October 20,
1998 and options to purchase an additional 30,000 shares of common stock
will vest on each anniversary thereafter.

(4) These options vest and become fully exercisable as to 25% on the first
anniversary of the date of grant and as to an additional 25% on each
anniversary thereafter until all these options are fully vested and
exercisable.

Year-End Option Values

The following table sets forth information concerning the number and year
end value of unexercised options held by each of the officers named in the
Summary Compensation Table at December 31, 1998. None of the Named Executive
Officers exercised stock options or stock appreciation rights in the year
ended December 31, 1998.

Fiscal 1998 Year-End Option Values

<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised "In-the-Money" (1)
Options at Fiscal Options at Fiscal
Year-End Year-End
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Donald C. Licciardello..... 30,000 60,000 $119,000 $238,000
C. Richard Corl............ 30,000 30,000 119,000 119,000
Lawrence Greenberg......... 30,000 150,000 119,000 476,000
</TABLE>
- --------

(1) Options are "in-the-money" if the fair market value of the underlying
securities exceeds the exercise price of the options. The amounts set
forth represent the difference between $4.00 per share, the fair market
value of our common stock issuable upon exercise of options at December
31, 1998 (as determined by our board), and the exercise price of the
option, multiplied by the applicable number of options.

Stock Option Plan

Our Amended 1996 Stock Option Plan, which became effective on July 1, 1996
and was amended in December 1998, provides for the granting of incentive stock
options intended to qualify under Section 422 of the Internal Revenue Code
("incentive stock options"), and stock options not intended to qualify as
incentive stock options ("non-qualified stock options"). All of our officers,
key employees and consultants are eligible to participate in the Stock Option
Plan. The total number of shares of common stock which we may issue under the
Stock Option Plan is 4,500,000. Under present law, incentive stock options may
only be granted to our employees and employees of our subsidiaries.

The Stock Option Plan is administered by our compensation committee which
has the authority to:

. construe and interpret the plan;

. create, amend and rescind rules and regulations for the plan;

. determine the individuals entitled to participate in the plan;

. determine the timing of specific option grants, the number of options to
be granted, the vesting schedule for the options and their exercise
price;

46
<PAGE>

. determine whether the options granted will be incentive stock options or
non-qualified stock options; and

. make all other determinations which may be necessary or advisable for
the administration of the plan.

Our compensation committee may grant options at an exercise price less
than, equal to or greater than the fair market value of our common stock on the
date of grant. Under present law, incentive stock options and options intended
to qualify as performance-based compensation for purposes of Section 162(m) of
the Internal Revenue Code, may not be granted at an exercise price less than
the fair market value of our common stock on the date of grant or less than
110% of the fair market value of our common stock in the case of incentive
stock options granted to optionees holding more than 10% of our voting power.
Incentive stock options may not be assigned or transferred during the lifetime
of the holder except as may be required by law. The maximum term of each stock
option granted under the Stock Option Plan to persons other than 10%
stockholders is ten years from the date of grant.

The Stock Option Plan permits the optionee to determine how they will pay
the exercise price of their options. The plan provides that the option price
may be paid:

. in cash;

. with shares of common stock valued at the fair market value of the
common stock on the date of exercise;

. in cash by a broker-dealer to whom the holder of the option has
submitted an exercise notice consisting of a fully endorsed option;

. through the surrender of options then exercisable valued at the excess
of the aggregate fair market value of the common stock subject to such
option on the date of exercise over the aggregate option price of such
common stock;

. by directing us to withhold such number of shares of common stock
otherwise issuable upon exercise of the option having an aggregate fair
market value on the date of exercise equal to the exercise price of the
option; or

. by some other method of payment as may be authorized by our compensation
committee or any combination of the foregoing payment options as our
compensation committee may permit in its sole discretion.

No incentive stock option awards may be granted under the Stock Option Plan
after June 30, 2006. Our compensation committee may, at any time, terminate,
suspend or modify the Stock Option Plan, except that no amendment or revision
may, unless appropriate stockholder approval is obtained, increase the maximum
number of shares of common stock in the aggregate for which we may grant
options under the Stock Option Plan, change the minimum purchase price of an
incentive stock option, increase the maximum term of an incentive stock option,
or grant options to persons not then currently contemplated by the plan. In
addition, no termination, suspension or modification of the Stock Option Plan
may adversely affect any right acquired by an optionee before the date of any
termination, suspension or modification without the optionee's consent.

The Stock Option Plan provides that outstanding options vest in their
entirety and become exercisable in the event we undergo a change of control. A
change of control will be deemed to occur if:

. a person or group becomes the beneficial owner of more than 50% of the
total voting power of our outstanding stock; or

. there occurs a change in the majority of the members of our board from
one year to the next, except any changes approved by the former board of
directors.

As of May 13, 1999, there were (1) outstanding options under the Stock
Option Plan to purchase an aggregate of 2,442,900 shares of common stock at a
weighted average price of $2.06, (2) outstanding options under the Stock Option
Plan to purchase an aggregate of 350,100 shares of common stock at the initial
public offering price, and (3) 1,636,050 additional shares of common stock
reserved for future option grants.

47
<PAGE>

As soon as practicable following completion of this offering, we intend to
file with the SEC a registration statement on Form S-8 covering the shares of
common stock underlying options granted and reserve for future issuance under
the Stock Option Plan.

Non-Employee Director Plan

Our 1998 Non-Employee Director Plan, which was approved by our board on
October 20, 1998 and became effective on October 20, 1998. It provides for the
grant of non-qualified stock options to our directors. The Director Plan
provides for the issuance of up to 600,000 shares of common stock upon exercise
of options.

Under the terms of the Director Plan, each non-employee director who was a
director on the date the plan went into effect received options to purchase a
number of shares of common stock equal to the product of the number of years he
was elected to serve as a director multiplied by 10,000. These options vest as
to 10,000 shares on the date of grant and on each of the first two
anniversaries of the date of grant, subject to a maximum of two anniversaries.
Further, non-employee directors are also entitled to receive on the first
business day after each of our annual meetings of stockholders at which the
director is re-elected to the board options to purchase an additional number of
shares equal to the number of years he or she is elected to the Board
multiplied by 10,000. These options would vest under the same terms discussed
above. In addition to the automatic grants provided by the plan, non-employee
directors may also receive additional grants of options at the discretion of
our compensation committee. The exercise price of each option under the
Director Plan, other than options granted on October 20, 1998, will be 100% of
the fair market value of our common stock on the date of grant. Each option
will have a term of six years.

The Director Plan provides that outstanding options vest in their entirety
and become exercisable in the event we undergo a change of control. For
purposes of the Director Plan, change in control has the same meaning given
such term in the Stock Option Plan.

The exercise price may be paid in cash or with shares of common stock
valued at the fair market value of the stock on the exercise date.

As of May 13, 1999, there were outstanding options under the Director Plan
to purchase an aggregate of (1) 195,000 shares of common stock at a weighted
average price of $0.03 and (2) 375,000 additional shares of common stock
reserved for future option grants.

As soon as practicable following the completion of this offering, we also
intend to file a Registration Statement on Form S-8 covering the shares of
common stock underlying options granted, or to be granted, under the Director
Plan.

401(k) Plan

Our employees participate in our 401(k) profit sharing plan, a defined
contribution plan intended to qualify under Section 401 of the Internal Revenue
Code. All personnel who have completed one year of service with us are eligible
to participate and may enter the plan as of the first day of January or July.
Participants may make pre-tax contributions to the plan of up to 15% of their
eligible earnings, subject to a statutorily prescribed annual limit. We may
make matching contributions on a discretionary basis to the plan. Each
participant is fully vested in his or her contributions, and any investment
earnings thereon. Contributions by the participants or us, and the income
earned on such contributions, are generally not taxable to the participants
until withdrawn. Contributions by us, if any, are generally deductible by us
when made. Contributions are held in trust as required by law. Individual
participants may direct the trustee to invest their accounts in authorized
investment alternatives. In 1998, we did not make any matching contributions.
In 1999, we have begun to match 100% of all employee contributions up to 6% of
that employee's annual base salary.

Employment Agreements

We have entered into an employment agreement with Mr. Averett pursuant to
which Mr. Averett has agreed to serve full time as our President and Chief
Operating Officer until March 30, 2003, unless earlier

48
<PAGE>

terminated in accordance with the terms of his agreement. Mr. Averett's annual
base salary under the agreement is $200,000 per year. In addition, Mr. Averett
was granted options to purchase 300,000 shares of our common stock at $5.33 per
share, which options will vest as to 25% on each anniversary. Mr. Averett's
employment agreement also provides for vacation and reimbursement of business-
related expenses.

In addition, we have entered into an employment agreement with Mr. Sugden,
pursuant to which Mr. Sugden has agreed to serve full time as our Vice
President and Chief Financial Officer until February 15, 2003, unless earlier
terminated in accordance with the terms of his agreement. Mr. Sugden's annual
base salary under the agreement is $100,000 per year. In addition, under the
terms of his agreement Mr. Sugden was granted options to purchase 150,000
shares of our common stock at $4.00 per share, which options vest as to 25% on
each anniversary, and will be entitled to receive bonuses based on the
achievement of performance goals. Mr. Sugden's employment agreement also
provides for vacation and reimbursement of business-related expenses.

Pursuant to each employment agreement, if the executive is terminated for
"cause," as defined within the employment agreements, we will be required to
pay the executive, within ten days following this termination, any unpaid base
salary accrued through the date of termination and we will be required to
reimburse the executive for reasonable business expenses incurred prior to that
date. If we terminate Mr. Averett's employment without cause, we will be
required to pay him any unpaid base salary accrued through the date of
termination, plus an additional $200,000 (or $400,000 if he terminates his
employment as a result of a change in control). For purposes of the employment
agreements, a change in control has the same meaning as in the Stock Option
Plan. If we terminate Mr. Sugden's employment without cause, we will be
required to pay him any unpaid base salary accrued through the date of
termination, plus three months salary, at the then current rate, and his
options will vest as if his termination date was twelve months after the actual
termination date. After termination of Mr. Sugden's employment, he will be
entitled to exercise his exercisable options for a fifteen day period. We will
be required to reimburse Mr. Averett and Mr. Sugden for reasonable business
expenses incurred prior to the date of termination. We will be required to pay
the executives their unpaid base salary within 30 days following a termination
without cause, but can, at our option, pay Mr. Averett amounts in excess of his
base salary in equal monthly installments over the 12-month period following
the date of termination and pay Mr. Sugden amounts in excess of his base salary
in equal installments over three months.

Each of Messrs. Averett and Sugden's employment agreements also provides
that the executive will not, during a one year period after termination,
without our prior written consent, directly or indirectly conduct or engage in
or be associated with any person or entity which conducts or engages in
electronic bill payment, electronic bill publishing or electronic bill
presentment. Each of the employment agreements also provides that the
executives shall not disclose confidential information and may not interfere
with, disrupt or attempt to disrupt the relationship, contractual or otherwise,
between us or any of our subsidiaries and our respective customers or
employees.

49
<PAGE>

CERTAIN TRANSACTIONS

Stock Purchases

In September 1998, we sold 2,493,870 shares of our common stock to Billing
Concepts, a publicly traded corporation with stock listed on the Nasdaq Stock
Market, for an aggregate purchase price of $10.0 million. Under the terms of
the stock purchase agreement for this sale, the parties agreed, among other
things, that (1) in the event that Billing Concepts desires to sell its shares
of common stock, we have a right of first refusal to purchase such shares, (2)
in the event that we offer, sell or grant any option to purchase or otherwise
dispose of any of our equity-equivalent securities or promissory notes in a
transaction intended to be exempt or not subject to registration under the
Securities Act of 1933, except under any employee, officer or director stock
option plan or through mergers or acquisitions not designed to raise capital
approved by our stockholders, Billing Concepts shall have a right of first
refusal to purchase such securities, and (3) Billing Concepts has the right, so
long as it owns at least 10% of our common stock, to have two representatives
on our board of directors. In addition, the agreement provides that if our
working capital deficit at June 30, 1998 was in excess of $8.5 million, then
Billing Concepts had a right to purchase additional shares of our common stock
at a price of $4.01 per share. As a result of our June 30, 1998 working capital
deficit having exceeded $8.5 million, on March 30, 1999, we sold 134,376 shares
of common stock to Billing Concepts for $538,848. In connection with its
acquisition of our stock, Billing Concepts entered into a voting agreement with
Mr. Licciardello, our Chairman and Chief Executive Officer. Under the terms of
this voting agreement, as amended, Mr. Licciardello, the Donald Licciardello
Family Limited Partnership and Billing Concepts have agreed to vote all of
their respective shares of common stock to elect to our board the two
individuals designated by Billing Concepts and three members designated by Mr.
Licciardello. As a result of this voting agreement, Billing Concepts has
appointed two of its executive officers, Parris H. Holmes, Jr. and Kelly E.
Simmons, to serve as directors on our board. In addition, Mr. Licciardello and
the Donald Licciardello Family Limited Partnership agreed to have any
transferee or purchaser of any of their shares of common stock become a party
to the voting agreement, other than purchasers pursuant to sales in a
registered public offering or under Rule 144. The voting agreement
automatically terminates when Billing Concepts ceases to own 10% of our issued
and outstanding common stock. The total number of shares covered by the voting
agreement is 9,620,970.

Guarantee of Loan to Donald C. Licciardello

Until March 26, 1999, some of our certificates of deposit were pledged as
collateral for a guarantee we issued in connection with a loan obtained by Mr.
Licciardello. On March 26, 1999, the collateral and our guarantee were released
by First Union National Bank.

Loan to C. Richard Corl

Mr. Corl issued to us a demand note evidencing the outstanding purchase
price for shares of our common stock purchased by him in June 1996. This demand
note, in the amount of $210,308, bears interest at a rate of 6% annually.

50
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information known to us regarding
the beneficial ownership of our common stock, as of May 13, 1999, before and
after giving effect to this offering by (1) each person known by us to own
beneficially 5% or more of our common stock, (2) each of our directors, (3)
each of the Named Executive Officers, and (4) all of our current directors and
executive officers, as a group. All information with respect to beneficial
ownership has been furnished to us by our respective stockholders

<TABLE>
<CAPTION>
Shares
Beneficially Shares
Owned Prior to Beneficially
this Owned After the
Offering(1)(2) Offering(1)(2)
-------------------- --------------------
Name of Beneficial Owner Number Percent Number Percent
- ------------------------ --------- ------- --------- -------
<S> <C> <C> <C> <C>
Donald C. Licciardello (3)......... 6,992,724 61.6% 6,992,724 48.8%
Billing Concepts Corp. ............ 2,628,246 23.2 2,628,246 18.3
7411 John Smith Drive, Suite 200
San Antonio, Texas 78229
Patricia F. Corl................... 660,000 5.8 660,000 4.6
1107 Robin Road
Gladwyne, PA 19035
C. Richard Corl (4)................ 1,183,620 10.4 1,183,620 8.3
Lawrence Greenberg (5)............. 105,000 * 105,000 *
Parris H. Holmes, Jr .............. 60,000 * 60,000 *
Kelly E. Simmons (5)............... 37,500 * 37,500 *
All executive officers and
directors, as a group (10
persons)(6)...................... 8,468,844(1) 74.0% 8,468,844(1) 59.0%
</TABLE>
- --------
* Represents beneficial ownership of less than 1% of our outstanding shares
of common stock.

(1) Unless otherwise indicated above, the address for each executive officer
and director identified above is 165 Wall Street, Princeton, New Jersey
08540.

(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options and warrants held by that person
that are currently exercisable or exercisable within 60 days of May 13,
1999 are deemed outstanding. Such shares, however, are not deemed
outstanding for the purposes of computing the percentage ownership of any
other person. Except as indicated in the footnotes to this table, each
stockholder named in the table has sole voting and investment power with
respect to the shares set forth opposite such stockholder's name.

(3) This figure includes 5,100,000 shares held by the Donald Licciardello
Family Limited Partnership, of which Mr. Licciardello is the general
partner. Mr. Licciardello has voting and dispositive control over these
shares.

(4) Includes the 660,000 shares owned by Patricia F. Corl, Mr. Corl's wife, for
which Mr. Corl disclaims beneficial ownership.

(5) Includes the following number of shares of common stock which the officers
named in the Summary Compensation Table have the right to acquire through
the exercise of options within 60 days of May 13, 1999: Mr. Greenberg,
45,000 and Mr. Simmons, 30,000.

(6) Includes a total of 105,000 shares which may be purchased upon the exercise
of options.

51
<PAGE>

DESCRIPTION OF CAPITAL STOCK

Upon completion of this offering, our authorized capital stock will consist
of 50,000,000 shares of common stock, $0.01 par value per share, and 3,000,000
shares of preferred stock, $0.01 par value per share. As of May 13, 1999, there
were outstanding (1) 11,344,002 shares of our common stock held of record by 27
stockholders and (2) options to purchase an aggregate of 2,988,000 shares of
common stock.

The following summary of some provisions of our common stock, preferred
stock, certificate of incorporation and by-laws, as in effect on the closing
date of this offering, is not intended to be complete and is qualified by
reference to the provisions of the applicable law and our certificate of
incorporation and by-laws included as exhibits to the registration statement of
which this prospectus is a part.

Common Stock

Holders of our common stock are entitled to one vote per share on all
matters on which the holders of common stock are entitled to vote and do not
have cumulative voting rights. This means that the holders of more than 50% of
our shares of common stock voting for the election of directors can elect all
of the directors up for election if they choose to do so; if this event occurs,
the holders of the remaining holders of shares of our common stock will not be
able to elect any person to our board. Subject to rights of any holders of any
shares of our preferred stock, holders of our common stock are entitled to
receive ratably such dividends as may be declared by our board from time to
time out of funds legally available for this purpose. See "Dividend Policy."
Holders of our common stock are not entitled to any preemptive, conversion,
redemption, subscription or similar rights. In the event of a liquidation,
dissolution or winding-up of Princeton eCom, whether voluntary or involuntary,
holders of our common stock are entitled to share ratably in our assets legally
available for distribution, if any, remaining after the payment or provision
for the payment of all of our debts and other liabilities and the payment and
setting aside for payment of any preferential amount due to any holders of any
shares of our outstanding preferred stock. All of our outstanding shares of
common stock are, and all of our shares of common stock offered in this
offering when issued will be, upon payment, duly and validly issued, fully paid
and nonassessable. The rights, preferences and privileges of holders of our
common stock are subject to, and may be adversely affected by, the rights of
the holders of any series of our preferred stock which our board may designate
and issue in the future.

We have applied for listing of our common stock on the Nasdaq National
Market under the trading symbol ECOM.

The transfer agent for our common stock is Continental Stock Transfer &
Trust Company.

Preferred Stock

Prior to completion of this offering, our certificate of incorporation will
be amended to authorize our board to issue, from time to time and without any
further action of our stockholders, up to 3,000,000 shares of preferred stock,
in one or more series. The board will be authorized to fix or alter the
designations, preferences, rights and any qualifications, limitations or
restrictions of the shares of each of these series, including the voting
rights, dividend rights, dividend rates, conversion rights, terms of
redemption, redemption price or prices, liquidation, preferences and the number
of shares constituting any series or designations of these series. The issuance
of preferred stock, while providing flexibility in connection with possible
acquisitions and other corporate purposes could, among other things, have the
effect, under certain circumstances, of delaying, deferring or preventing a
change in control of Princeton eCom. We have no current plan to issue any
shares of our preferred stock. See "--Authorized But Unissued Shares."

Anti-Takeover Effects of Certain Provisions of Delaware Law

We are subject to the provisions of Section 203 of the Delaware General
Corporation Law, or the DGCL. Section 203 of the DGCL generally prohibits a
publicly-held Delaware corporation from engaging in a

52
<PAGE>

"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an
interested stockholder, unless the interested stockholder attained that status
with the approval of the board or unless the business combination is approved
in a prescribed manner. A "business combination" includes mergers, asset sales
and other transactions resulting in a financial benefit to the interested
stockholder. Subject to exceptions, an "interested stockholder" is a person
who, together with affiliates and associates, owns, or within three years did
own, fifteen percent (15%) or more of a corporation's voting stock. This
statute could prohibit or delay the accomplishment of mergers or other takeover
or change in control attempts with respect to us and, accordingly, may
discourage attempts to acquire us.

Certificate of Incorporation and By-law Provisions

Our by-laws currently divide the board into three classes with staggered
three year terms. This classified board could make it more difficult for a
third party to acquire, or discourage a third party from acquiring, control of
us. Our by-laws also currently authorize our board to fill vacant directorships
or increase the size of the board. This may deter a stockholder from removing
incumbent directors and simultaneously gaining control of the board by filling
the vacancies created by that removal with its own nominees. See "Management."

Prior to completion of this offering, our certificate of incorporation and
by-laws will be amended to include the provisions described in the following
paragraphs, which are intended to further enhance the likelihood of continuity
and stability in the composition of the board and which may have the effect of
delaying, deterring or preventing a future takeover or change in control of us
unless such takeover or change of control has been approved by our board.

Advanced Notice Provisions for Stockholder Proposals and Director
Nominations. Our by-laws will be amended to establish advance notice procedures
with regard to the nomination, other than by or at the direction of the board,
of candidates for election as directors and with regard to some matters to be
brought before an annual meeting of stockholders. In general, these provisions
will require that notice be received by us not less than 120 days prior to the
meeting and must contain specified information concerning the persons to be
nominated or the matter to be brought before the meeting and concerning the
stockholder submitting the proposal.

Stockholder Action; Special Meeting of Stockholders. Our by-laws will also
be amended to provide that stockholders may not take action by written consent,
but only at duly called annual or special meeting of stockholders. Our by-laws
will further be amended to provide that special meetings of our stockholders
may be called only by our Chairman of the Board, a majority of the directors or
a holder of a majority of our outstanding stock.

Authorized But Unissued Shares. Our authorized but unissued shares of our
common stock and preferred stock will be available for future issuance without
stockholder approval, subject to limitations imposed by the Nasdaq National
Market. These additional shares may be utilized for a variety of corporate
purposes, including future public offerings to raise additional capital,
acquisitions and employee benefit plans. The existence of authorized but
unissued and unreserved common stock and preferred stock could render it more
difficult or discourage an attempt to obtain control of us by means of a proxy
contest, tender offer, merger or otherwise.

Limitation of Liability and Indemnification of Directors

Our amended and restated certificate of incorporation provides that, except
to the extent prohibited by the DGCL, our directors shall not be personally
liable to us or our stockholders for monetary damages for any breach of
fiduciary duty as a director. Under the DGCL, our directors have a fiduciary
duty to us that is not eliminated by this provision of our amended and restated
certificate of incorporation and, in appropriate circumstances, injunctions and
other nonmonetary relief will remain available. This provision also does not
affect the directors' responsibilities under any other laws, including the
Federal securities laws or state or Federal environmental laws.

53
<PAGE>

Section 145 of the DGCL enables a corporation to indemnify its directors
and officers and to purchase insurance with respect to liability arising out of
their capacity or status as directors and officers. However, this provision
does not eliminate or limit the liability of a director:

. for any breach of the director's duty of loyalty to the corporation or
its stockholders;

. for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;

. for payments of dividends or approval of stock repurchases or
redemptions that are prohibited by the DGCL; or

. for any transaction from which the director derived an improper personal
benefit.

Our by-laws provide that we may fully indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeds, whether civil, criminal, administrative or
investigative, by reason of the fact that the person is or was one of our
directors, officers, employees or agents or is or was serving at our request as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, against
expenses, including attorney's fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by that person in connection with
any threatened, pending or completed action, suit or proceeding.

We intend to enter into indemnification agreements with our directors and
executive officers. We believe that the provisions of our by-laws and these
indemnification agreements are necessary to attract and retain qualified
directors and executive officers. We intend to secure insurance on behalf of
any officer, director, employee or other agent for any liability arising out of
his or her actions, regardless of whether the DGCL would permit
indemnification.

At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent for which indemnification will be required
or permitted under our by-laws. We are not aware of any threatened litigation
or proceeding that may result in a claim for indemnification.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, we will have outstanding an aggregate of
14,344,002 shares of common stock, assuming no exercise of the underwriter's
over-allotment option and no exercise of outstanding options. Of these shares,
all of the shares sold in this offering will be freely tradable without
restriction or further registration under the Securities Act of 1933, except
that shares purchased by our affiliates, as that term is defined in Rule 144
under the Securities Act of 1933, may generally only be sold in compliance with
the limitations of Rule 144 described below.

Sales of Restricted Securities

The remaining shares of our common stock are deemed "restricted securities"
under Rule 144. Of the restricted securities, approximately shares of
common stock, which are not subject to lock-up agreements with the
representatives for the underwriters, will be eligible for immediate sale in
the public markets pursuant to Rule 144(k) under the Securities Act of 1933.
Approximately an additional shares of common stock, which are not
subject to any lock-up agreement, will be eligible for sale in the public
market in accordance with Rule 144 or Rule 701 under the Securities Act of 1933
beginning 90 days from the date of this prospectus. Upon expiration of the
lockup agreements, approximately additional shares of common stock will
be available for sale in the public markets in accordance with the provisions
of Rule 144.

54
<PAGE>

Rule 144 and Rule 701

In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this prospectus, a person, including one of our affiliates, who has
beneficially owned his or her restricted securities for at least one year from
the later of the date such securities were acquired from us or, if applicable,
one of our affiliates, is entitled to sell, within any three-month period, a
number of shares that does not exceed the greater of:

. 1% of our then outstanding shares of common stock, which will equal
approximately 143,440 shares immediately after this offering; or

. the average weekly trading volume of our common stock on the Nasdaq
National Market during the four calendar weeks preceding the sale.

Sales under Rule 144 are also subject to certain requirements concerning
the availability of public information, manner of sale and notice. In addition,
under Rule 144(k), if a period of at least two years has elapsed between the
later of the date the restricted securities were acquired from us or, if
applicable, one of our affiliates, a stockholder who is not an affiliate at the
time of sale and has not been one of our affiliates for a period of three
months prior to the sale is entitled to sell the shares immediately without
compliance with the foregoing requirements of Rule 144.

Securities issued in reliance on Rule 701 prior to the completion of this
offering, like shares of common stock acquired pursuant to the exercise of
stock options issued by us, are also restricted securities and, beginning 90
days after the date of this prospectus is a part, may be sold by stockholders
who are not affiliates subject only to the manner of sale provisions of Rule
144 and by affiliates under Rule 144 without compliance with the one-year
holding period requirement of the rule.

Stock Options

Immediately following this offering, we intend to file registration
statements on Form S-8 under the Securities Act of 1933 to register all shares
of common stock issuable under the Stock Option Plan and the Directors Plan.
Shares issued upon exercise of stock options granted under the Stock Option
Plan and the Directors Plan after the effective date of the Form S-8
registration statements will be eligible for resale in the public markets
without restriction, subject to Rule 144 limitations applicable to affiliates
and subject to the lock-up agreements discussed above.

Effect of Sales of Shares

Prior to this offering, there has been no public trading market for our
common stock, and no prediction can be made as to the effect, if any, that
market sales of shares of common stock or the availability of shares for sale
will have on the market price of our common stock prevailing from time to time.
Nevertheless, sales of significant numbers of shares of our common stock in the
public markets could adversely affect the market price of our common stock and
could impair our ability to raise capital through an offering of our equity
securities.

55
<PAGE>

UNDERWRITING

The underwriters named below, acting through their representatives,
BancBoston Robertson Stephens Inc., Donaldson, Lufkin & Jenrette Securities
Corporation and First Union Capital Markets Corp. have severally agreed with
us, subject to the terms and conditions of the underwriting agreement, to
purchase from us the number of shares of common stock set forth opposite their
respective names below. The underwriters are committed to purchase and pay for
all shares if any are purchased.

<TABLE>
<CAPTION>
Number
Underwriter of Shares
----------- ---------
<S> <C>
BancBoston Robertson Stephens Inc. ...............................
Donaldson, Lufkin & Jenrette Securities Corporation...............
First Union Capital Markets Corp. ................................
E*TRADE Securities, Inc. .........................................
---------
Total........................................................... 3,000,000
=========
</TABLE>

The representatives have advised us that the underwriters propose to offer
the shares of common stock to the public at the public offering price set forth
on the cover page of this prospectus and to certain dealers at that price less
a concession of not in excess of $ per share, of which $ may be reallowed
to other dealers. After this offering, the public offering price, concession,
and reallowance to dealers may be reduced by the representatives. No reduction
shall change the amount of proceeds to be received by us as set forth on the
cover page of this prospectus. The common stock is offered by the underwriters
as stated in this prospectus, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part.

The following table summarizes the compensation to be paid to the
underwriters by us:

<TABLE>
<CAPTION>
Total
-----------------------------
Without With
Per Share over-allotment over-allotment
--------- -------------- --------------
<S> <C> <C> <C>
Underwriting discounts and
commissions..................... $ $ $
</TABLE>

Princeton eCom estimates that expenses payable by us in connection with
this offering, other than the underwriting discounts and commissions referred
to above, will be approximately $1,200,000.

DLJdirect Inc., an affiliate of Donaldson, Lufkin & Jenrette Securities
Corporation and a member of the selling group, is facilitating the distribution
of the shares sold in this offering over the Internet. The underwriters have
agreed to allocate a limited number of shares to DLJdirect Inc. for sale to its
brokerage account holders.

Over-Allotment Option. We have granted to the underwriters an option,
exercisable during the 30-day period after the date of this prospectus, to
purchase up to 450,000 additional shares of common stock at the same price per
share as we will receive for the 3,000,000 shares that the underwriters have
agreed to purchase. If the underwriters exercise their over-allotment option to
purchase any of the additional 450,000 shares of common stock, the underwriters
have severally agreed, subject to certain conditions, to purchase approximately
the same percentage thereof as the number of shares to be purchased by each of
them bears to the total number of shares of common stock offered in this
offering. If purchased, the additional shares will be sold by the underwriters
on the same terms as those on which the shares offered in this offering are
being sold. We will be obligated, pursuant to the over-allotment option, to
sell shares to the extent that the over-allotment option is exercised. The
underwriters may exercise the over-allotment option only to cover over-
allotments made in connection with the sale of the shares of common stock
offered in this offering.

56
<PAGE>

Indemnity. The underwriting agreement contains covenants of indemnity among
the underwriters and us against certain civil liabilities, including
liabilities under the Securities Act of 1933 and liabilities arising from
breaches of representations and warranties contained in the underwriting
agreement.

Lock-Up Agreements. Each executive officer and director of Princeton eCom
and each holder of more than 1% of our outstanding common stock has agreed,
during the period of 180 days after the effective date of this prospectus,
subject to exceptions, not to offer to sell, contract to sell, or otherwise
sell, dispose of, loan, pledge or grant any rights with respect to any shares
of common stock or any options to purchase any shares of common stock, or any
securities convertible into or exchangeable for shares of common stock owned as
of the date of this prospectus or thereafter acquired directly by such holders
or with respect to which they have the power of disposition, without the prior
written consent of BancBoston Robertson Stephens Inc. However, BancBoston
Robertson Stephens Inc. may, in its sole discretion, and at any time or from
time to time, without notice, release all or any portion of the securities
subject to those lock-up agreements. There are no existing agreements between
the representatives and any of our stockholders who have executed a lock-up
agreement providing consent to the sale of shares prior to the expiration of
the lock-up period.

Future Sales. In addition, we have agreed that during the lock-up period we
will not, without the prior written consent of BancBoston Robertson Stephens
Inc., subject to certain exceptions,

. consent to the disposition of any shares held by stockholders subject to
lock-up agreements prior to the expiration of the lock-up period, or

. issue, sell, contract to sell, or otherwise dispose of, any shares of
common stock, any options or warrants to purchase any shares of common
stock or any securities convertible into, exercisable for or
exchangeable for shares of common stock other than our sale of shares in
this offering, the issuance of our common stock upon the exercise of
outstanding options or warrants, and the issuance of options under
existing stock option and incentive plans provided that those options do
not vest prior to the expiration of the lock-up period. See "Shares
Eligible for Future Sale."

The underwriters do not intend to confirm sales of more than 5% of the
common stock offered in this offering to accounts over which they exercise
discretionary authority.

No Prior Public Market. Prior to this offering, there has been no public
market for the common stock. Consequently, the initial public offering price
for the common stock offered by this prospectus has been determined through
negotiations among the company and the representatives. Among the factors
considered in determining the public offering price were:

. prevailing market conditions;

. certain of our financial information;

. the present stage of the company's development;

. the market valuations of other companies that we and the representatives
believe to be comparable to us;

. estimates of our business potential;

. the present state of our development; and

. other factors deemed relevant.

Listing. We have applied to have shares of common stock approved for the
quotation on the Nasdaq National Market under the symbol "ECOM."

Stabilization. The representatives have advised us that, pursuant to
Regulation M under the Securities Act of 1933, some persons participating in
this offering may engage in transactions, including stabilizing bids,

57
<PAGE>

syndicate covering transactions or the imposition of penalty bids, that may
have the effect of stabilizing or maintaining the market price of the common
stock at a level above that which might otherwise prevail in the open market. A
stabilizing bid is a bid for or the purchase of common stock on behalf of the
underwriters for the purpose of fixing or maintaining the price of the common
stock. A syndicate covering transaction is the bid for or the purchase of
common stock on behalf of the underwriters to reduce a short position incurred
by the underwriters in connection with this offering. A penalty bid is an
arrangement permitting the representatives to reclaim the selling concession
otherwise accruing to an underwriter or syndicate member in connection with
this offering if the common stock originally sold by that underwriter or
syndicate member is purchased by the representatives in a syndicate covering
transaction and has therefore not been effectively placed by such underwriter
or syndicate member. The representatives have advised us that such transactions
may be effected on the Nasdaq National Market or otherwise and, if commenced,
may be discontinued at any time.

Directed Share Program. The underwriters have reserved up to five percent
(5%) of the common stock to be issued by us and offered for sale in this
offering, at the initial public offering price, to directors, officers,
employees, business associates and the family and friends of the directors,
officers and employees of Princeton eCom. The number of shares of common stock
available to the general public will be reduced to the extent these individuals
purchase reserved shares. Any reserved shares which are not purchased will be
offered by the underwriters to the general public on the same basis as the
other shares offered in this offering.

LEGAL MATTERS

The validity of the common stock offered hereby will be passed upon for us
by Kelley Drye & Warren LLP, New York, New York. Certain legal matters in
connection with this offering will be passed upon for the underwriters by
Brobeck, Phleger & Harrison LLP, New York, New York.

EXPERTS

The financial statements of Princeton eCom Corporation as of December 31,
1997 and 1998 and for the three years in the period ended December 31, 1998
included in this prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are included herein upon the authority of said firm as experts in
giving said reports.

ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form S-1 with
respect to the shares of common stock offered hereby. This prospectus, which is
a part of the registration statement, does not contain all of the information
included in the registration statement and the exhibits and schedules thereto.
You may review a copy of the registration statement, including exhibits, at the
SEC's public reference room at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 or Seven World Trade Center, 13th Floor, New York, New
York 10048 or Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Please call the SEC at 1-800-SEC-0330 for further information
on the operation of the public reference rooms.

We will also file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any reports,
statements or other information on file at the public reference rooms. You can
also request copies of these documents, for a copying fee, by writing to the
SEC.

Our SEC filings and the registration statement can also be reviewed by
accessing the SEC's Internet site at http://www.sec.gov, which contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the SEC.

We intend to distribute to our stockholders annual reports containing
audited consolidated financial statements. We also intend to make available to
our stockholders, within 45 days after the end of each fiscal quarter, reports
for the first three quarters of each fiscal year containing interim unaudited
financial information.

58
<PAGE>

PRINCETON ECOM CORPORATION

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants................................... F-2
Balance Sheets............................................................. F-3
Statements of Operations................................................... F-4
Statements of Stockholders' Equity (Deficit)............................... F-5
Statements of Cash Flows................................................... F-6
Notes to Financial Statements.............................................. F-7
</TABLE>

F-1
<PAGE>

After the recapitalization and 3-for-1 stock split of each outstanding share of
common stock, as discussed in Note 13 to the financial statements, are
effected, we expect to be in a position to render the following audit report.

/s/ ARTHUR ANDERSEN LLP

Philadelphia, Pa.,
March 30, 1999

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of Princeton eCom Corporation:

We have audited the accompanying balance sheets of Princeton eCom
Corporation (a Delaware corporation), formerly Princeton TeleCom Corporation,
as of December 31, 1997 and 1998, and the related statements of operations,
stockholders' equity (deficit) and cash flows for each of the three years in
the period ended December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Princeton eCom Corporation
as of December 31, 1997 and 1998, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1998,
in conformity with generally accepted accounting principles.

Philadelphia, Pa.,
March 30, 1999, except for
Note 13, for which the
date is .

F-2
<PAGE>

PRINCETON ECOM CORPORATION

BALANCE SHEETS

<TABLE>
<CAPTION>
December 31 March 31
------------------------- ------------
1997 1998 1999
----------- ------------ ------------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........... $ 504,844 $ 6,362,453 $ 8,774,968
Accounts receivable, net of
allowance of $52,941, $49,942 and
$49,942........................... 607,071 637,603 661,101
Prepaid expenses and other.......... 115,586 1,511,743 996,597
----------- ------------ ------------
Total current assets............. 1,227,501 8,511,799 10,432,666
Property and equipment, net........... 852,270 822,142 1,228,358
Other assets.......................... 29,839 10,217 25,280
----------- ------------ ------------
$ 2,109,610 $ 9,344,158 $ 11,686,304
=========== ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Bank overdraft...................... $ 843,548 $ 399,809 $ 419,521
Customer deposits payable........... 7,769,416 7,452,033 9,366,078
Current portion of long-term debt... 48,049 29,441 30,478
Accounts payable.................... 211,239 502,650 722,817
Accrued expenses.................... 263,541 435,913 716,414
----------- ------------ ------------
Total current liabilities........ 9,135,793 8,819,846 11,255,308
----------- ------------ ------------
Long-term debt........................ 75,392 49,614 43,949
----------- ------------ ------------
Other liabilities..................... 283,611 196,411 198,436
----------- ------------ ------------
Commitments and contingencies (Note 6)
Stockholders' equity (deficit):
Preferred stock, $.01 par value,
3,000,000 shares authorized, none
issued............................ -- -- --
Common stock, $.01 par value,
50,000,000 shares authorized,
8,614,806, 11,119,626, and
11,284,002
shares issued and outstanding..... 86,148 111,196 112,840
Additional paid-in capital.......... 334,366 12,194,183 14,586,878
Accumulated deficit................. (7,539,193) (10,893,829) (11,970,703)
Subscriptions receivable............ (266,507) (266,507) (187,893)
Deferred compensation............... -- (866,756) (2,352,511)
----------- ------------ ------------
Total stockholders' equity
(deficit)...................... (7,385,186) 278,287 188,611
----------- ------------ ------------
$ 2,109,610 $ 9,344,158 $ 11,686,304
=========== ============ ============
</TABLE>

The accompanying notes are an integral part of these statements.

F-3
<PAGE>

PRINCETON ECOM CORPORATION

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Year Ended December 31 Three Months Ended March 31
------------------------------------- ----------------------------
1996 1997 1998 1998 1999
----------- ----------- ----------- ------------- --------------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues:
Service fees.......... $ 1,632,200 $ 2,332,995 $ 2,385,587 $ 582,683 $ 735,347
Interest.............. 204,205 698,602 1,436,448 247,937 406,478
----------- ----------- ----------- ------------ --------------
Total revenues..... 1,836,405 3,031,597 3,822,035 830,620 1,141,825
----------- ----------- ----------- ------------ --------------
Operating expenses:
Cost of services...... 1,363,278 1,800,368 1,966,956 430,455 555,021
Development costs..... 833,899 820,335 895,152 216,395 331,581
Selling, general and
administrative...... 1,823,284 2,536,791 3,282,669 670,971 1,099,720
Amortization of
deferred
compensation........ -- -- 1,017,744 33,575 230,245
----------- ----------- ----------- ------------ --------------
Total operating
expenses......... 4,020,461 5,157,494 7,162,521 1,351,396 2,216,567
----------- ----------- ----------- ------------ --------------
Operating loss.......... (2,184,056) (2,125,897) (3,340,486) (520,776) (1,074,742)
Interest expense........ 6,467 15,687 14,150 3,683 2,132
----------- ----------- ----------- ------------ --------------
Net loss................ $(2,190,523) $(2,141,584) $(3,354,636) $ (524,459) $ (1,076,874)
=========== =========== =========== ============ ==============
Basic and diluted net
loss per share........ $ (0.26) $ (0.25) $ (0.36) $ (0.06) $ (0.10)
=========== =========== =========== ============ ==============
Shares used in computing
net loss per share.... 8,454,397 8,567,792 9,423,068 8,614,806 11,126,452
=========== =========== =========== ============ ==============
</TABLE>

The accompanying notes are an integral part of these statements.

F-4
<PAGE>

PRINCETON ECOM CORPORATION

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
Common Stock Additional
------------------- Paid-in Accumulated Subscriptions Deferred
Shares Amount Capital Deficit Receivable Compensation Total
---------- -------- ----------- ------------ ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1,
1996.................. 8,350,806 $ 83,508 $ 327,156 $ (3,207,086) $(258,157) $ -- $(3,054,579)
Sale of common stock... 174,000 1,740 5,110 -- (5,350) -- 1,500
Net loss............... -- -- -- (2,190,523) -- -- (2,190,523)
---------- -------- ----------- ------------ --------- ----------- -----------
Balance, December 31,
1996.................. 8,524,806 85,248 332,266 (5,397,609) (263,507) -- (5,243,602)
Sale of common stock... 90,000 900 2,100 -- (3,000) -- --
Net loss............... -- -- -- (2,141,584) -- -- (2,141,584)
---------- -------- ----------- ------------ --------- ----------- -----------
Balance, December 31,
1997.................. 8,614,806 86,148 334,366 (7,539,193) (266,507) -- (7,385,186)
Sale of common stock... 2,493,870 24,939 9,975,061 -- -- -- 10,000,000
Exercise of stock
options.............. 10,950 109 256 -- -- -- 365
Issuance of options to
purchase common stock
below fair market
value................ -- -- 1,884,500 -- -- (1,884,500) --
Amortization of
deferred
compensation......... -- -- -- -- -- 1,017,744 1,017,744
Net loss............... -- -- -- (3,354,636) -- -- (3,354,636)
---------- -------- ----------- ------------ --------- ----------- -----------
Balance, December 31,
1998.................. 11,119,626 111,196 12,194,183 (10,893,829) (266,507) (866,756) 278,287
Sale of common stock... 134,376 1,344 537,504 -- -- -- 538,848
Exercise of stock
options.............. 30,000 300 700 -- -- -- 1,000
Issuance of options to
purchase common stock
below fair market
value................ -- -- 1,716,000 -- -- (1,716,000) --
Issuance of options for
services............. -- -- 138,491 -- -- -- 138,491
Amortization of
deferred
compensation......... -- -- -- -- -- 230,245 230,245
Repayment of
subscription
receivable........... -- -- -- -- 78,614 -- 78,614
Net loss............... -- -- -- (1,076,874) -- -- (1,076,874)
---------- -------- ----------- ------------ --------- ----------- -----------
Balance, March 31, 1999
(unaudited)........... 11,284,002 $112,840 $14,586,878 $(11,970,703) $(187,893) $(2,352,511) $ 188,611
========== ======== =========== ============ ========= =========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-5
<PAGE>

PRINCETON ECOM CORPORATION

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Three Months Ended
Year Ended December 31 March 31
------------------------------------- ---------------------------
1996 1997 1998 1998 1999
----------- ----------- ----------- --------- -----------
(unaudited)
<S> <C> <C> <C> <C> <C> <C>
Operating activities:
Net loss.............. $(2,190,523) $(2,141,584) $(3,354,636) $(524,459) $(1,076,874)
Adjustments to
reconcile net loss to
net cash provided by
(used in) operating
activities--
Depreciation and
amortization....... 152,479 226,466 276,791 67,191 76,862
Amortization of
deferred
compensation....... -- -- 1,017,744 33,575 230,245
Provision for bad
debts.............. 25,165 27,776 15,500 9,103 --
Issuance of common
stock for
services........... 1,500 -- -- -- --
Loss on disposal of
assets............. -- -- 10,664 10,413 --
Changes in operating
assets and
liabilities--
Accounts
receivable....... 82,952 (231,481) (46,032) (54,762) (23,498)
Prepaid expenses
and other
assets........... 232,371 25,540 (1,376,535) 24,572 638,574
Customer deposits
payable.......... (1,676,315) 4,247,161 (317,383) (43,869) 1,914,045
Accounts payable... (76,578) 98,668 291,411 5,225 220,167
Accrued expenses... 10,526 196,608 76,372 56,283 280,501
Other liabilities.. -- 68,256 8,800 2,442 2,025
----------- ----------- ----------- --------- -----------
Net cash provided
by (used in)
operating
activities...... (3,438,423) 2,517,410 (3,397,304) (414,286) 2,262,047
----------- ----------- ----------- --------- -----------
Investing activities:
Purchases of property
and equipment....... (298,369) (372,818) (257,327) (36,352) (483,078)
----------- ----------- ----------- --------- -----------
Net cash used in
investing
activities...... (298,369) (372,818) (257,327) (36,352) (483,078)
----------- ----------- ----------- --------- -----------
Financing activities:
Net increase
(decrease) in bank
overdraft........... 2,879,337 (2,133,248) (443,739) 590,639 19,712
Payments on long-term
debt................ (26,810) (29,747) (44,386) (6,081) (4,628)
Proceeds from sale of
common stock........ -- -- 10,000,000 -- 538,848
Proceeds from
subscription
receivable.......... -- -- -- -- 78,614
Proceeds from exercise
of stock options.... -- -- 365 -- 1,000
----------- ----------- ----------- --------- -----------
Net cash provided
by (used in)
financing
activities...... 2,852,527 (2,162,995) 9,512,240 584,558 633,546
----------- ----------- ----------- --------- -----------
Net increase (decrease)
in cash and cash
equivalents.......... (884,265) (18,403) 5,857,609 133,920 2,412,515
Cash and cash
equivalents,
beginning of year.... 1,407,512 523,247 504,844 504,844 6,362,453
----------- ----------- ----------- --------- -----------
Cash and cash
equivalents, end of
year................. $ 523,247 $ 504,844 $ 6,362,453 $ 638,764 $ 8,774,968
=========== =========== =========== ========= ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-6
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)

1. Background:

On January 25, 1984, Princeton eCom Corporation (the "Company") was
incorporated in the State of Delaware as Princeton TeleCom Corporation. In
March 1999, the Company changed its name to Princeton eCom Corporation. The
Company is a provider of comprehensive electronic bill presentment and payment
services to financial institutions and large businesses which generate a
significant number of recurring bills. The Company's current customers consist
primarily of utilities and financial institutions.

The Company has incurred significant losses and expects to incur
significant losses on a quarterly and annual basis for the foreseeable future.
As of December 31, 1998, the Company had an accumulated deficit of $10,893,829
and during 1998 the Company incurred a net loss of $3,354,636. Since its
inception, the Company has incurred costs to develop and enhance its
technology, establish marketing and customer relationships and build its
administrative organization. The Company currently intends to substantially
increase its operating expenses to further develop its business. To the extent
that such expenses do not subsequently lead to increased revenues, the
Company's business, results of operations and financial condition will be
materially and adversely affected. In addition, the Company's business model is
unproven and evolving and is subject to possible changing governmental
regulations (see Note 6). Also, the Company may not realize the critical mass
necessary to achieve profitability.

The accompanying financial statements have been prepared in conformity with
principles of accounting applicable to a going concern. These principles
contemplate the realization of assets and the satisfaction of liabilities in
the normal course of business. Management believes that the Company's existing
cash and cash equivalents will provide sufficient funding for its operating
activities, capital expenditures and other obligations to at least January 1,
2000. Therefore, the accompanying financial statements do not include necessary
adjustments should the Company be unable to continue as a going concern.

2. Significant Accounting Policies:

Interim Financial Statements

The financial statements as of March 31, 1999 and for the three months
ended March 31, 1998 and 1999 are unaudited and, in the opinion of management,
include all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of results for those interim periods. The
results of operations for the three months ended March 31, 1998 and 1999 are
not necessarily indicative of the results to be expected for the entire year.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Revenue Recognition

Service fees are based on contractual rates with customers. Service fee
revenues, which represent transaction fees charged to billers and financial
institutions are recognized as services are performed. Interest income on the
overnight investment of funds received from consumers pending payment
processing is recorded as earned.

F-7
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments with original
maturities of three months or less and funds received from consumers pending
payment processing.

Prepaid Expenses and Other

In December 1998, the Company mistakenly made certain overpayments to
billers on behalf of consumers. Included in prepaid expenses and other at
December 31, 1998 is $862,906 of such overpayments, which were reimbursed to
the Company in early 1999. At December 31, 1998 and March 31, 1999, prepaid
expenses and other also included certificates of deposit in the aggregate of
$370,000 with original maturities greater than three months and certain related
party amounts (see Note 12).

Property and Equipment

Property and equipment are recorded at cost. Property and equipment
capitalized under capital leases are recorded at the present value of the
minimum lease payments due over the term of the lease. Depreciation and
amortization are provided using the straight-line method over the estimated
useful lives or the lease term, whichever is shorter. Expenditures for
maintenance, repairs and betterments that do not prolong the useful life of an
asset have been charged to operations as incurred. Additions and betterments
that substantially extend the useful life of the asset are capitalized. Upon
sale or other disposition of assets, the cost and related accumulated
depreciation and amortization are removed from the respective accounts, and the
resulting gain or loss, if any, is included in operating results.

The Company reviews its long-lived assets for possible impairment whenever
events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. When factors indicate that such assets should be
evaluated for possible impairment, the Company uses an estimate of the related
future undiscounted cash flow in measuring whether the asset should be written
down to fair value. As of March 31, 1999, management believes that there are no
material impairment losses or needed revisions to remaining useful lives.

Customer Deposits Payable

Customer deposits payable represents funds received from consumers that are
held by the Company pending payment processing.

Development Costs

Research and development costs are charged to expense as incurred. In
conjunction with the development of its services, the Company incurs certain
software development costs. No costs have been capitalized pursuant to
Statement of Financial Accounting Standards ("SFAS") No. 86, "Accounting for
the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed,"
since the development period is relatively short and software development costs
qualifying for capitalization have been relatively insignificant.

Income Taxes

Income taxes are accounted for using the liability method. Accordingly,
deferred income tax assets and liabilities are determined based on differences
between the financial statement carrying amounts of assets and liabilities and
their respective income tax basis, measured using enacted tax rates.

F-8
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)
Stock Compensation

The Company has elected to follow Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees," and related
interpretations in accounting for its employee stock options. Under APB No. 25,
if the exercise price of the Company's employee stock options equals or exceeds
the market price of the underlying stock on the date of the grant, no
compensation expense is recognized. If the exercise price of an option is below
the market price of the underlying stock on the date of grant, compensation
cost is recorded and is recognized in the statements of operations over the
vesting period (see Note 9).

Earnings Per Share

The Company follows SFAS No. 128, "Earnings Per Share," which requires a
dual presentation of "basic" and "diluted" earnings per share ("EPS") on the
face of the statements of operations. Basic EPS is computed by dividing net
income (loss) by the weighted average number of shares of common stock
outstanding for the period. Diluted EPS includes the dilutive effect, if any,
from the potential exercise or conversion of securities like stock options,
which would result in the issuance of additional shares of common stock. For
each of the three years in the period ended December 31, 1998 and the three
months ended March 31, 1998 and 1999, the impact of stock options was not
considered as their effect on EPS would be anti-dilutive (see Note 9).

Fair Value of Financial Instruments

Cash, accounts receivable, prepaid expenses, customer deposits payable,
accounts payable and accrued expenses are reflected in the accompanying
financial statements at fair value due to the short-term nature of those
instruments. The carrying amount of long-term debt obligations approximate fair
value at the balance sheet dates.

Recent Accounting Pronouncements

In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income." SFAS No. 130 is effective for fiscal years
beginning after December 31, 1997. SFAS No. 130 establishes standards for the
reporting and display of comprehensive income in a set of financial statements.
Comprehensive income is defined as the change in net assets of a business
enterprise during a period from transactions generated from non-owner sources.
It includes all changes in equity during a period except those resulting from
investments by owners and distributions to owners. The Company has no other
comprehensive income items, therefore, the adoption of SFAS No. 130 had no
impact on the financial statements.

In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information." SFAS No.
131 applies to all pubic companies and is effective for fiscal years beginning
after December 15, 1997. SFAS No. 131 requires that business segment financial
information be reported in the financial statements utilizing the management
approach. The management approach is defined as the manner in which management
organizes the segments within the enterprise for making operating decisions and
assessing performance. Management believes the Company operates in one business
segment, therefore, the adoption of SFAS No. 131 had no impact on the financial
statements.

In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position ("SOP") 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use."

F-9
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)

The Company adopted SOP 98-1 in January 1999. The adoption had no material
effect on the Company's financial position or results of operations.

3. Supplemental Cash Flow Information:

For the years ended December 31, 1996, 1997 and 1998 and the three months
ended March 31, 1998 and 1999, the Company paid interest of $6,467, $15,687,
$14,150, $3,683 and $2,132, respectively. During 1996 and 1997, the Company
financed equipment purchases of $129,624 and $4,445 with capitalized lease
obligations, respectively.

During the three months ended March 31, 1999, the Company issued options to
purchase common stock to a consultant in exchange for services provided during
the Company's planned initial public offering. The fair value of the options
using the Black-Scholes option pricing model of $138,491 was included in
prepaid expenses and other as of March 31, 1999 in the accompanying balance
sheets.

4. Property and Equipment:

<TABLE>
<CAPTION>
December 31 March 31
Useful ---------------------- ----------
Lives 1997 1998 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Computer and telephone
equipment.............. 5 years $1,372,184 $1,404,057 $1,869,451
Furniture and fixtures... 5 years 50,290 67,452 85,136
Leasehold improvements... Lease term 38,828 38,828 38,828
---------- ---------- ----------
1,461,302 1,510,337 1,993,415
Less--Accumulated
depreciation and
amortization........... (609,032) (688,195) (765,057)
---------- ---------- ----------
$ 852,270 $ 822,142 $1,228,358
========== ========== ==========
</TABLE>

Depreciation and amortization expense for the years ended December 31,
1996, 1997 and 1998 and the three months ended March 31, 1998 and 1999 was
$152,479, $226,466, $276,791, $67,191 and $76,862, respectively. At December
31, 1997 and 1998 and March 31, 1999, the Company had property and equipment
under capitalized lease obligations of $134,069, net of accumulated
amortization of $31,061, $57,874 and $65,271, respectively.

5. Long-Term Debt:

<TABLE>
<CAPTION>
December 31 March 31
------------------ --------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Note payable, repaid in 1998................ $ 20,293 $ -- $ --
Capitalized lease obligations............... 103,148 79,055 74,427
-------- -------- --------
123,441 79,055 74,427
Less--Current portion....................... (48,049) (29,441) (30,478)
-------- -------- --------
$ 75,392 $ 49,614 $ 43,949
======== ======== ========
</TABLE>

F-10
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)

6. Commitments and Contingencies:

Lease Commitments

The Company leases facilities and equipment under capital and noncancelable
operating leases with expiration dates through September 2003. Rent expense for
the years ended December 31, 1996, 1997 and 1998 and the three months ended
March 31, 1998 and 1999 was $106,753, $111,830, $119,216, $31,041 and $37,050,
respectively. Future minimum lease payments as of December 31, 1998 are as
follows:

<TABLE>
<CAPTION>
Operating Capital
Leases Leases
--------- --------
<S> <C> <C>
1999.................................................. $145,473 $ 38,666
2000.................................................. 141,348 38,666
2001.................................................. 141,704 16,375
2002.................................................. 100,148 --
2003.................................................. 5,691 --
-------- --------
Total minimum lease payments.......................... $534,364 93,707
========
Less--Amount representing interest.................... (14,652)
--------
Present value of future minimum lease payments........ 79,055
Less--Current portion................................. (29,441)
--------
$ 49,614
========
</TABLE>

Litigation

The Company is involved, from time to time, in various legal matters and
claims which are being defended and handled in the ordinary course of business.
None of these matters is expected, in the opinion of management, to have a
material adverse effect upon the financial position or results of operations of
the Company.

Employment Agreements

In early 1999, the Company entered into employment agreements with two
officers of the Company. The agreements provide for, among other things,
salaries, bonuses, severance payments and certain other payments payable upon a
change in control, as defined.

Government Regulation

Management believes that the Company is not required to be licensed by the
Office of the Comptroller of the Currency, the Federal Reserve Board or other
federal or state agencies that regulate or monitor banks or other providers of
electronic commerce. However, the Company may be periodically audited by
banking authorities since the Company is a supplier of services to financial
institutions. Laws regulating Internet commerce may be enacted to address
issues such as user privacy, pricing, content, taxation and the characteristics
and quality of online products and services, among other things. If enacted,
these laws could have a material adverse effect on the Company's business.

7. Common Stock:

On September 4, 1998, the Company entered into an agreement with Billing
Concepts Corp. ("BCC") whereby BCC acquired 2,493,870 shares of the Company's
common stock for $10,000,000. BCC was also given the right to purchase the
number of additional shares of the Company's common stock which is equal to the
Company's working capital deficit as of June 30, 1998 in excess of $8.5 million
divided by $4.01. On March 30, 1999, the Company sold BCC 134,376 shares for
$538,848 in full settlement of this provision. In addition, this agreement
provides for, among other things, the right of first refusal on certain equity
transactions.

F-11
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)

In February 1999, the Company's Chief Executive Officer sold 102,000 shares
of his holdings of the Company's common stock to certain BCC affiliates and to
a former director of the Company at $5.33 per share.

8. Income Taxes:
The reconciliation of the statutory federal income tax rate to the
Company's effective income tax rate is as follows:

<TABLE>
<CAPTION>
Year Ended
December 31
---------------------
1996 1997 1998
----- ----- -----
<S> <C> <C> <C>
Statutory federal income
tax rate.............. (34.0)% (34.0)% (34.0)%
State income taxes, net
of federal tax
benefit............... (6.3) (6.3) (6.3)
Nondeductible expenses.. -- 1.2 0.2
Valuation allowance..... 40.3 39.1 40.1
----- ----- -----
-- % -- % -- %
===== ===== =====
</TABLE>

Deferred taxes are determined based upon the estimated future tax effects
of differences between the financial statements and income tax basis of assets
and liabilities given the provisions of the enacted tax laws. The tax effect of
temporary differences that give rise to deferred taxes are as follows:

<TABLE>
<CAPTION>
December 31
----------------------
1997 1998
---------- ----------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards............. $2,145,851 $3,485,424
Deferred compensation........................ -- 410,151
Development costs............................ 567,476 446,454
Accruals and reserves not currently
deductible................................. 109,555 124,403
Property and equipment....................... 60,223 --
---------- ----------
2,883,105 4,466,432
---------- ----------
Deferred tax liabilities:
Property and equipment....................... -- (141,987)
Other........................................ -- (20,132)
---------- ----------
-- (162,119)
---------- ----------
2,883,105 4,304,313
Less--Valuation allowance...................... (2,883,105) (4,304,313)
---------- ----------
Net deferred tax asset......................... $ -- $ --
========== ==========
</TABLE>

Due to the uncertainty surrounding the realization of the net deferred tax
asset, the Company has provided a full valuation allowance. As of December 31,
1998, the Company has net operating loss carryforwards of approximately
$8,600,000 for federal tax purposes, which begin to expire in 2003, and
$7,200,000 for state tax purposes, which begin to expire in 1999. The Tax
Reform Act of 1986 contains provisions that may limit the net operating loss
carryforwards available in any given year in the event of a 50% cumulative
change in ownership over a three-year period.

F-12
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)

9. Stock Options:

Effective July 1, 1996, the Company adopted the 1996 Stock Option Plan (the
"Plan"). The Plan provides for the granting of incentive and non-qualified
stock options to employees and consultants of the Company. The Compensation
Committee of the Board of Directors administers the Plan and awards grants and
determines the terms of such grants at its discretion. The Company has reserved
4,500,000 shares of common stock for issuance pursuant to the Plan.

Effective October 20, 1998, the Company adopted the 1998 Non-Employee
Director Plan (the "Director Plan"). The Director Plan provides for the
granting of non-qualified stock options to non-employee directors of the
Company. The Director Plan provides for grants based on a formula, as defined,
and additional grants at the discretion of the Compensation Committee of the
Board of Directors. The Company has reserved 600,000 shares of common stock for
issuance pursuant to the Director Plan.

Information with respect to the options under the Company's plans is as
follows:

<TABLE>
<CAPTION>
Weighted
Average
Exercise Exercise
Shares Price Price
--------- ---------- --------
<S> <C> <C> <C>
Balance, January 1, 1996........................ -- $ -- $ --
Granted at fair market value.................. 512,700 0.03 0.03
--------- ---------- -----
Balance, December 31, 1996...................... 512,700 0.03 0.03
Granted at fair market value.................. 696,000 0.03 0.03
Canceled...................................... (115,500) 0.03 0.03
--------- ---------- -----
Balance, December 31, 1997...................... 1,093,200 0.03 0.03
Granted at fair market value.................. 492,000 4.00 4.00
Granted below fair market value............... 733,500 0.03 0.03
Exercised..................................... (10,950) 0.03 0.03
Canceled...................................... (140,850) 0.03 0.03
--------- ---------- -----
Balance, December 31, 1998...................... 2,166,900 0.03-4.00 0.93
Granted below fair market value............... 621,000 4.00-5.33 4.87
Exercised..................................... (30,000) 0.03 0.03
Canceled...................................... (60,000) 0.03 0.03
--------- ---------- -----
Balance, March 31, 1999......................... 2,697,900 $0.03-5.33 $1.87
========= ========== =====
Balance Exercisable, March 31, 1999............. 561,450 $ 0.03 $0.03
========= ========== =====
</TABLE>

All options have terms ranging from five to ten years and generally vest
over four years. The weighted average contractual life of options outstanding
as of March 31, 1999 was four years for options granted at $0.03 per share and
ten years for options granted at $4.00 and $5.33 per share. At March 31, 1999,
there were 2,361,150 shares available for future option grants under the plans.

In connection with certain options granted to employees during the year
ended December 31, 1998 and the three months ended March 31, 1998 and 1999, the
Company recorded $1,884,500, $159,000 and $1,716,000 of deferred compensation,
respectively. These amounts represent the difference between the fair market
value of the Company's common stock on the date of grant and the exercise price
of options to purchase 733,500, 238,500 and 576,000 shares, respectively, of
the Company's common stock. Deferred compensation is amortized over the vesting
periods of the options, which range from immediate vesting to periods of up to
four years. For the year ended December 31, 1998 and the three months ended
March 31, 1998

F-13
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)

and 1999, $1,017,744, $33,575 and $230,245 of deferred compensation,
respectively, was charged to expense. At March 31, 1999, the Company had
$2,352,511 of deferred compensation to be amortized over the remaining vesting
periods, which range from one to four years.

Pro forma information provided below has been determined as if the Company
had accounted for its employee stock options in accordance with SFAS No. 123,
"Accounting for Stock-Based Compensation." The determination of the fair value
of the options noted above was estimated at the date of grant using a Black-
Scholes option pricing model with the following weighted-average assumptions
for the years ended December 31, 1996, 1997 and 1998: risk free interest rate
of 6.2%, 5.8% and 4.9%, respectively, dividend yield of 0%, volatility factor
of the expected market price of the Company's common stock of 70%, and an
expected life of the options of four years.

The weighted average fair value of the options granted is as follows:

<TABLE>
<CAPTION>
Year Ended
December 31
-----------------
1996 1997 1998
----- ----- -----
<S> <C> <C> <C>
Granted at fair market value........................... $0.02 $0.02 $2.24
Granted below fair market value........................ -- -- 2.80
</TABLE>

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the option vesting periods. The Company's
pro forma information is as follows:

<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------------
1996 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
Net loss, as reported............. $(2,190,523) $(2,141,584) $(3,354,636)
Net loss per share, as reported... (0.26) (0.25) (0.36)
Pro forma net loss................ (2,191,728) (2,144,657) (3,364,955)
Pro forma net loss per share...... (0.26) (0.25) (0.36)
</TABLE>

10. Employee Benefit Plan:

The Company has a Section 401(k) retirement savings plan (the "401(k)
Plan"). The 401(k) Plan allows employees to contribute 2% to 15% of their
annual compensation subject to statutory limitations. Company contributions to
the 401(k) Plan are discretionary. Effective January 1999, the Company began
matching contributions of 100% of the first 6% of employee contributions.
Company contributions were $31,181 for the three months ended March 31, 1999.

11. Concentration of Credit Risk:

For the years ended December 31, 1996, 1997 and 1998 and the three months
ended March 31, 1998 and 1999, the Company had four, two, one, three and one
customer(s) which accounted for 61%, 22%, 12%, 35% and 11% of service fee
revenues, respectively. At December 31, 1997 and 1998 and March 31, 1999 these
customers had aggregate accounts receivable of $79,402, $63,675 and $79,612
respectively. The loss of one or more of these customers could have a
materially adverse effect on the Company's business.

12. Related Party Transactions:

Prepaid expenses and other at December 31, 1998 and March 31, 1999 includes
$64,000 and $63,000 of advances made to the Company's Chief Executive Officer,
respectively. At December 31, 1998, certificates of

F-14
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)

deposit in the aggregate of $370,000 were pledged as collateral for a guarantee
by the Company of a personal bank loan to this individual. In March 1999, the
certificates of deposit and loan guarantee were released.

13. Recapitalization and Public Offering Subsequent to December 31, 1998:

On March 30, 1999, the Company's Board of Directors authorized management
to file a Registration Statement with the SEC to permit the Company to commence
an initial public offering of 3,000,000 shares of its common stock, of which
none will be sold by current stockholders. In connection therewith, on March
30, 1999, the Company's Board of Directors approved an amendment to the
Company's Articles of Incorporation to be filed prior to the Offering
authorizing 3,000,000 shares of $.01 par value preferred stock and 50,000,000
shares of common stock and, on April 27, 1999, authorized a 3-for-1 split of
its common stock to be effected prior to the offering. The authorized preferred
stock and common stock and the stock split have been retroactively reflected in
the financial statements.

F-15
<PAGE>

After the recapitalization and 3-for-1 stock split of each outstanding
share of common stock, as discussed in Note 13 to the financial statements, are
effected, we expect to be in a position to render the following audit report.

/s/ ARTHUR ANDERSEN LLP

Philadelphia, Pa.,
March 30, 1999

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of Princeton eCom Corporation:

We have audited in accordance with generally accepted auditing standards,
the financial statements of Princeton eCom Corporation, formerly Princeton
TeleCom Corporation, included in this registration statement and have issued
our report thereon dated March 30, 1999. Our audit was made for the purpose of
forming an opinion on the basic financial statements taken as a whole. The
accompanying financial statement schedule is the responsibility of the
Company's management and is presented for purposes of complying with the SEC's
rules and is not part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, fairly states in all material
respects the financial data required to be set forth therein in relation to the
basic financial statements taken as a whole.

Philadelphia, Pa.,
March 30, 1999

S-1
<PAGE>

PRINCETON ECOM CORPORATION

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

Allowance for Doubtful Accounts:

<TABLE>
<CAPTION>
Balance at Charged to Balance at
Beginning Costs and End of
of Year Expenses Write-offs Year
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
December 31, 1998................... $52,941 $15,500 $(18,499) $49,942
December 31, 1997................... 25,165 27,776 -- 52,941
December 31, 1996................... -- 25,165 -- 25,165
</TABLE>

S-2
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered, other than
underwriting discounts and commissions. All the amounts shown are estimated
except the SEC registration fee, the National Association of Securities Dealers
filing fee and the Nasdaq National Market listing fee.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee........... $ 12,788
NASD filing fee............................................... 5,100
Nasdaq National Market listing fee............................ 85,000
Printing and engraving expenses............................... 175,000
Legal fees and expenses....................................... 500,000
Accounting fees and expenses.................................. 150,000
Blue Sky fees and expenses (including legal fees)............. 25,000
Transfer agent and registrar fees and expenses................ 10,000
Miscellaneous................................................. 237,112
----------
Total $1,200,000
==========
</TABLE>
- --------
* To be supplied by amendment.

Item 14. Indemnification of Directors and Officers

Section 102 of the Delaware General Corporation Law ("DGCL"), as amended,
allows a corporation to eliminate the personal liability of directors of a
corporation to the corporation or its stockholders for monetary damages for a
breach of fiduciary duty as a director, except where the director breached his
duty of loyalty, failed to act in good faith, engaged in intentional misconduct
or knowingly violated a law, authorized the payment of a dividend or approved a
stock repurchase in violation of Delaware corporate law or obtained an improper
personal benefit.

Section 145 of the DGCL provides, among other things, that we may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (other than an
action by or in our right) by reason of the fact that the person is or was a
director, officer, agent or employee of ours or is or was serving at our
request as a director, officer, agent, or employee of another corporation,
partnership, joint venture, trust or other enterprise, against expenses,
including attorneys' fees, judgment, fines and amounts paid in settlement
actually and reasonably incurred by the person in connection with such action,
suit or proceeding. The power to indemnify applies (a) if such person is
successful on the merits or otherwise in defense of any action, suit or
proceeding, or (b) if such person acted in good faith and in a manner he
reasonably believed to be in our best interest, or not opposed to our best
interest, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The power to indemnify
applies to actions brought by or in our right as well, but only to the extent
of defense expenses (including attorneys' fees but excluding amounts paid in
settlement) actually and reasonably incurred and not to any satisfaction of
judgment or settlement of the claim itself, and with the further limitation
that in such actions no indemnification shall be made in the event of any
adjudication of negligence or misconduct in the performance of his duties to
us, unless the court believes that in light of all the circumstances
indemnification should apply.

Section 174 of the DGCL provides, among other things, that a director, who
willfully or negligently approves of an unlawful payment of dividends or an
unlawful stock purchase or redemption, may be held liable for such actions. A
director who was either absent when the unlawful actions were approved or
dissented at the time, may avoid liability by causing his or her dissent to
such actions to be entered in the books containing the

II-1
<PAGE>

minutes of the meetings of the board of directors at the time such action
occurred or immediately after such absent director receives notice of the
unlawful acts.

Our Amended and Restated Certificate of Incorporation will include a
provision that eliminates the personal liability of its directors for monetary
damages for breach of fiduciary duty as a director, except for liability:

. for any breach of the director's duty of loyalty to Princeton eCom or
its stockholders;

. for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;

. under the section 174 of the Delaware General Corporation Law regarding
unlawful dividends and stock purchases; or

. for any transaction from which the director derived an improper personal
benefit.

Our Amended and Restated Bylaws provide that:

. we must indemnify our directors and officers to the fullest extent
permitted by Delaware law;

. we may indemnify our other employees and agents to the same extent that
we indemnified our officers and directors, unless otherwise determined
by our board of directors; and

. we must advance expenses, as incurred, to our directors and executive
officers in connection with a legal proceeding to the fullest extent
permitted by Delaware law.

Prior to the completion of this offering, we intend to enter into indemnity
agreements with each of our directors and executive officers to give them
additional contractual assurances regarding the scope of the indemnification
described above and to provide additional procedural protections. In addition,
we intend to obtain directors' and officers' insurance in the amount of $15.0
million providing indemnification for our directors, officers and certain
employees for certain liabilities. We believe that these indemnification
provisions and agreements are necessary to attract and retain qualified
directors and officers.

The limitation of liability and indemnification provisions in our Amended
and Restated Certificate of Incorporation and Amended and Restated Bylaws may
discourage stockholders from bringing a lawsuit against directors for breach of
their fiduciary duty. They may also have the effect of reducing the likelihood
of derivative litigation against directors and officers, even though such an
action, if successful, might otherwise benefit us and our stockholders.
Furthermore, a stockholder's investment may be adversely affected to the extent
we pay the costs of settlement and damage awards against directors and officers
pursuant to these indemnification provisions.

At present, there is no pending material litigation or proceeding involving
any of our directors, officers or employees regarding which indemnification is
sought, nor are we aware of any threatened litigation that may result in claims
for indemnification.

Item 15. Recent Sales of Unregistered Securities

In the last three years, we sold the following securities:

In June 1996, we amended a stock purchase agreement with C. Richard Corl
dated June 29, 1993. By the terms of this amended stock purchase agreement, an
adjustment was made for the issuance of an additional 9,000 shares of common
stock to Mr. Corl and an adjustment increasing the amount owed to us by Mr.
Corl under a promissory note for an additional $1,350. This sale of securities
was made under the exemption of (S)4(2) under the Securities Act of 1933.

In July 1996, we sold an aggregate of 120,000 shares of common stock, of
which 30,000 shares were sold to each of Lawrence Greenberg, Diane Hancharik,
Susan Hubbard-Walker, and Alex Peterhans at a purchase price of $1,000. The
consideration for each of these purchases was a promissory note with a
principal

II-2
<PAGE>

amount of $1,000 and 6% interest per annum. Each of these promissory notes was
satisfied in March 1999. In addition, in July 1996 we delivered 45,000 shares
to Benson Lapides in satisfaction of amounts which we owed Mr. Lapides for
consulting services which he performed for us. These sales of securities were
made under the exemption of (S)4(2) under the Securities Act of 1933.

In March 1997, we sold an additional 30,000 shares of common stock to Mr.
Peterhans for an aggregate purchase price of $1,000. The consideration for this
purchase was a promissory note with a principal amount of $1,000 and an
interest rate of 6% per annum.

In December 1997, we sold 60,000 additional shares of common stock, of
which an additional 30,000 shares were sold to Mr. Greenberg and 30,000 shares
were sold to Mrs. Hubbard-Walker, in each instance for an aggregate purchase
price of $1,000. The consideration for each of these purchases was a promissory
note with a principal amount of $1,000 and 6% per annum. Each of these
promissory notes was satisfied in March 1999. These sales of securities were
made under the exemption of (S)4(2) under the Securities Act of 1933.

On September 4, 1998, the Company sold 2,493,870 shares of common stock to
Billing Concepts Corp. for an aggregate purchase price of $10,000,000 in cash.
This sale of securities was made under the exemption of (S)4(2) and Rule 506 of
Regulation D under the Securities Act of 1933.

On March 30, 1999, the Company sold an additional 134,376 shares of common
stock to Billing Concepts Corp. for an aggregate purchase price of $538,848.
These shares were sold to Billing Concepts Corp. under the terms of an option
granted to Billing Concepts Corp. in connection with their September 1998
purchase, which option permitted the purchase of additional shares if the
Company's working capital deficit, as of June 30, 1998, exceeded $8.5 million.
These shares were sold to Billing Concepts Corp. under the exemptions of
(S)4(2) and Rule 506 of Regulation D under the Securities Act of 1933.

Item 16. Exhibits and Consolidated Financial Statement Schedules

(a) Exhibits

<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
Form of Underwriting Agreement between Princeton eCom Corporation
*1.1 and the Underwriters.
Certificate of Incorporation, as amended, of Princeton eCom
**3(i)(1) Corporation.
Amended and Restated Certificate of Incorporation of Princeton
*3(i)(2) eCom Corporation.
**3(ii)(1) Amended and Restated Bylaws of Princeton eCom Corporation.
*3(ii)(2) Second Amended and Restated Bylaws of Princeton eCom Corporation.
4.1 Specimen Stock Certificate.
*5.1 Opinion of Kelley Drye & Warren LLP (including the consent of such
firm) as to the validity of the securities being offered.
10.1 Employment Agreement between Princeton eCom and Ronald W. Averett.
Employment Agreement between Princeton eCom and Christopher S.
10.2 Sugden.
**10.3 Amended 1996 Stock Option Plan.
**10.4 1998 Non-Employee Director Plan.
*10.5 Form of Indemnification Agreement.
*10.6 Lease relating to 165 Wall Street, Princeton, New Jersey
Agreement.
10.7 Voting Agreement between Billings Concepts Corp., Princeton eCom
Corporation, Donald C. Licciardello and the Licciardello Family
Limited Partnership.
10.8 Stock Purchase Agreement between Princeton eCom Corporation and
Billing Concepts Corp.
*23.1 Consent of Kelley Drye & Warren LLP (included in Exhibit 5.1).*
23.2 Consent of Arthur Andersen LLP.
**23.3 Consent of William Jennings.
24.1 Power of Attorney (on the signature page).
27.1 Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment.

** Previously filed.

II-3
<PAGE>

(b) Financial Statement Schedules

Schedule II--Valuation and Qualifying Accounts

All other schedules are omitted because they are inapplicable or the
requested information is shown in the consolidated financial statements or
related notes.

Item 17. Undertakings

The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

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 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.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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-4
<PAGE>

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, as
amended, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York, State of New York, on the 13th day of May, 1999.

PRINCETON ECOM CORPORATION

By:

Donald C. Licciardello*
------------------------------
Donald C. Licciardello
Chairman and Chief Executive
Officer

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.

<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----

<S> <C> <C>
Donald C. Licciardello* Chairman and Chief Executive May 13, 1999
______________________________________ Officer
Donald C. Licciardello (Principal Executive Officer)

/s/ Christopher S. Sugden Senior Vice President and Chief May 13, 1999
______________________________________ Financial Officer (Principal
Christopher S. Sugden Financial and Accounting Officer)

C. Richard Corl* Executive Vice President, May 13, 1999
______________________________________ Secretary and Director
C. Richard Corl

Parris H. Holmes, Jr.* Director May 13, 1999
______________________________________
Parris H. Holmes, Jr.

Kelly E. Simmons* Director May 13, 1999
______________________________________
Kelly E. Simmons
</TABLE>

By: /s/ Christopher S. Sugden
-------------------------------

Christopher S. Sugden

Attorney-in-fact

II-5
<PAGE>

Exhibit List

<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
Form of Underwriting Agreement between Princeton eCom and the
*1.1 Underwriters.
Certificate of Incorporation, as amended, of Princeton eCom
**3(i)(1) Corporation.
Amended and Restated Certificate of Incorporation of Princeton
*3(i)(2) eCom Corporation.
**3(ii)(1) Amended and Restated Bylaws of Princeton eCom Corporation.
*3(ii)(2) Second Amended and Restated Bylaws of Princeton eCom Corporation.
4.1 Specimen Stock Certificate.
*5.1 Opinion of Kelley Drye & Warren LLP (including the consent of such
firm) as to the validity of the securities being offered.
10.1 Employment Agreement between Princeton eCom and Ronald W. Averett.
Employment Agreement between Princeton eCom and Christopher S.
10.2 Sugden.
**10.3 Amended 1996 Stock Option Plan.
**10.4 1998 Non-Employee Director Plan.
*10.5 Form of Indemnification Agreement.
*10.6 Lease relating to 165 Wall Street, Princeton, New Jersey.
10.7 Voting Agreement between Billing Concepts Corp., Princeton eCom
Corporation, Donald C. Licciardello and the Licciardello Family
Limited Partnership.
10.8 Stock Purchase Agreement between Princeton eCom Corporation and
Billing Concepts Corp.
*23.1 Consent of Kelley Drye & Warren LLP (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
**23.3 Consent of William Jennings.
24.1 Power of Attorney (on the signature page).
27.1 Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment.

** Previously filed.

<PAGE>

EXHIBIT 4.1

PRINCETON eCOM CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
P
COMMON STOCK

CUSIP 741876 10 6
SEE REVERSE FOR CERTAIN DEFINITIONS

This Certifies that
is the owner of

FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, PAR VALUE $.01 EACH,
OF

PRINCETON eCOM CORPORATION transferable on the books of the Corporation by the
holder hereof, in person or by a duly authorized attorney, upon surrender of
this certificate properly endorsed. This certificate is not valid until
countersigned by the Transfer Agent and registered by the Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.

Dated:

Executive Vice President and Secretary

Chairman and Chief Executive Officer

Countersigned and Registered:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
Transfer Agent
and Registrar
By
Authorized Officer
<PAGE>

THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS
THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR
OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF OF THE
CORPORATION, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH
PREFERENCES AND/OR RIGHTS. SUCH REQUEST MAY BE MADE TO THE CORPORATION OR THE
TRANSFER AGENT.

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM -as tenants in common
TEN ENT -as tenants by the entireties
JT TEN -as joint tenants with right of
survivorship and not as tenants
in common

UNIF GIFT MIN ACT-......................... Custodian ........................
(Cust) (Minor)
under Uniform Gifts to Minors
Act ................................
(State)
UNIF TRAN MIN ACT-......................... Custodian ........................
(Cust) (Minor)
under Uniform Transfers to Minors
Act ................................
(State)

Additional abbreviations may also be used though not in the above list.

For value received,___________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________
| |
________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

________________________________________________________________________________

__________________________________________________________________________Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint______________________________________________

________________________________________________________________________________

Attorney to transfer the said stock on the books of the within-named Corporation
with full power of substitution in the premises.

Dated,_________________________

_______________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH
THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN
EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR
ANY CHANGE WHATEVER.

_______________________________________________________
SIGNATURE(S) GUARANTEED: THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND
LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN
AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.

KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, MUTILATED OR
DESTROYED, THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO
THE ISSUANCE OF A REPLACEMENT CERTIFICATE.

<PAGE>

EXHIBIT 10.1

EMPLOYMENT AGREEMENT
--------------------

THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the
15th day of March, 1999 by and between Princeton TeleCom Corporation, a Delaware
corporation, with an office at 165 Wall Street, Princeton New Jersey 08540 (the
"Company"), and Ronald Averett, an individual currently residing at 54 Sandtrap
Circle, Ivyland, P.A. 18974 ("Executive").

RECITALS

The Company desires to provide certain incentive to Executive to remain in
the Company's employ. The Company and the Executive desire that Company employs
the Executive as President and Chief Operating Officer.

NOW THEREFORE, each of the Company and Executive, intending to be legally
bound, hereby mutually covenant and agree as follows:

ARTICLE I

Employment and Term
-------------------

1.1 Employment. The Executive shall be employed as President and Chief
----------
Operating Officer, and Executive hereby accepts such employment. In addition,
Executive agrees that he will serve in any similar capacity on behalf of any
existing or future subsidiary of the Company as reasonably requested by the CEO.

1.2 Term. The Term shall commence on the March 23, 1999 (the "Effective
----
Date") and shall end on the earlier of (i)one week after the fourth anniversary
of the Effective Date; and (ii) the date of any Termination.

1.3 Duties. The Executive shall serve as President and Chief Operating
------
Officer and shall be directly responsible for the duties and responsibilities
commensurate with his position as set forth in Section 1.1 hereof or as may be
assigned by the CEO from time to time; provided, however, that any such powers,
--------- -------
duties and responsibilities assigned by the CEO are commensurate with such
position. The Executive shall use his best efforts and devote all of his
business time, attention and energy in performing his duties hereunder.
Notwithstanding the foregoing, nothing in this Agreement shall restrict
Executive from managing his personal investments, personal business affairs and
other personal matters, or serving on civic or charitable boards or committees,
if such activities do not interfere with the performance of his duties hereunder
or conflict with the Company's interests.
<PAGE>

ARTICLE II

Compensation and Benefits
-------------------------

2.2 Stock Options. On this date, Executive is hereby granted an option to
-------------
purchase 100,000 shares of Common Stock of the Company, in accordance with the
terms of the stock option agreement ("Option Agreement") of even date.
Executive may be entitled to receive further grants of stock options in amounts
determined by the CEO in its sole and absolute discretion.

2.3 Other Benefits. In addition to the foregoing, Executive shall also be
--------------
entitled to the following:

(a) Participation in Benefit Plans. Executive shall be entitled to
------------------------------
participate in and receive benefits under all present and future life, accident,
disability, medical, pension, and savings plan and all similar benefits made
available to managers of the Company. Executive shall also be entitled to
participate in all other welfare and benefit plans maintained by the Company
and/or its subsidiaries, as the case may be, for their respective employees
generally.

(b) Vacation. Executive shall be entitled to vacation and
--------
paid holidays consistent with the Company's practices as adopted from time to
time (but in no event less than four weeks vacation).

ARTICLE III

Covenants and Representations
-----------------------------

3.1 Non-Interference. During the Term and a period of two years
----------------
thereafter, Executive agrees not to solicit or encourage any employee of the
Company who is employed in an employee, managerial, administrative or
professional capacity or who possesses Confidential Material to leave the
employment of the Company.

2
<PAGE>

practices, finances, developments, customers, affairs, marketing or purchasing
strategy or other secret information (collectively, clauses (i) and (ii) of this
Section 3.2(a) are referred to as the "Confidential Material").

(b) All Confidential Material shall be disclosed to Executive in
confidence. Except in performing his duties hereunder, Executive shall not,
during the Term and at all times thereafter, disclose or use any Confidential
Material.

(c) All records, files, drawings, documents, equipment and other
tangible items containing Confidential Material shall be the Company's exclusive
property, and upon termination of this Agreement, or whenever requested by the
Company, Executive shall promptly deliver to the Company all of the Confidential
Material (and copies thereof) that may be in Executive's possession or control.

(d) The foregoing restrictions shall not apply if (i) such
Confidential Material has been publicly disclosed (not due to a breach by
Executive of his obligations hereunder or by breach of any other person of a
fiduciary or confidential obligation to the Company) or (ii) Executive is
required to disclose Confidential Material by or to any court of competent
jurisdiction or any governmental or quasi-governmental agency, authority or
instrumentality of competent jurisdiction; provided, however, that Executive
--------- -------
shall, prior to any such disclosure. immediately notify the Company of such
requirement: provided, further, that the Company shall have the right, at its
--------- -------
expense, to object to such disclosures and to seek confidential treatment of any
Confidential Material to be so disclosed on such terms as it shall determine.

3.3 Non-Competition. (a) The Executive shall not, during the Term, Control
---------------
any Person which is engaged, directly of indirectly, or Participate in any
business that is competitive with the Company's electronic bill payment,
electronic bill presentment or electronic bill publishing business (including
the solicitation of any customer of the Company on behalf of any Competitor or
any other business, directly, indirectly on behalf of himself or any other
Person) (collectively, "Competitive Activities"); provided, however that nothing
--------- -------
in this Agreement shall preclude Executive from owning less than 5% of any class
of publicly traded equity of any Person engaged in any Competitive Activity.

(b) Upon Termination, the Executive shall not, for himself or any
third party, directly or indirectly, for a period of one year following the date
of such Termination engage in Competitive Activities. The foregoing sentence
shall not apply in the event that Executive's employment is terminated due to a
Change in Control.

3.4 Employee Inventions and Ideas
-----------------------------

(a) Executive hereby agrees to assign to the Company, without further

3
<PAGE>

consideration, his entire right, title and interest (within the United States
and all foreign jurisdictions), to any Intellectual Property created, conceived,
developed or reduced to practice by Executive (alone or with others) free and
clear of any lien or encumbrance. If any Intellectual Property shall be deemed
patentable or otherwise registrable, Executive shall assist the Company (at its
expense) in obtaining letters patent or other applicable registration therein
and shall execute all documents and do all things (including testifying at the
Company's expense) necessary or appropriate to obtain letters patent or other
applicable registration therein and to vest in the Company, or any affiliate
specified by the CEO.

(b) Should Company be unable to secure Executive's signature on any
document necessary to apply for, prosecute, obtain or enforce any patent,
copyright or other right or protection relating to any Intellectual Property for
any reason, Executive hereby irrevocably designates and appoints the Company and
each of its duly authorized officers and agents as Executive's agent and
attorney-in-fact to act for and on Executive's behalf and stead and to execute
and file any such document and to do all other lawfully permitted acts to
further the prosecution, issuance and other enforcement of patents, copyrights
or other rights or protections with the same effect as if executed and delivered
by Executive.

3.5 Enforcement.
------------

(a) Executive acknowledges that violation of any covenant or agreement
set forth in Sections 3.1, 3.2, 3.3 or 3.4 would cause the Company irreparable
damage for which the Company cannot be reasonably compensated in damages in an
action at law, and, therefore, upon any breach by Executive of this Sections
3.1, 3.2, 3.3 or 3.4, the Company shall be entitled to make application to a
court of competent jurisdiction for equitable relief by way of injunction or
otherwise (without being required to post a bond). This provision shall not,
however, be construed as a waiver of any of the rights which the Company may
have for damages, and all of the Company's rights and remedies shall be
unrestricted.

(b) If any provision of this Agreement, or application thereof to any
person, place or circumstance, shall be held by a court of competent
jurisdiction or be found in an arbitration proceeding to be invalid,
unenforceable or void, the remainder of this Agreement and such provisions as
applied to any other person, place and circumstance shall remain in full force
and effect. It is the intention of the parties hereto that the covenants
contained herein shall be enforced to the maximum extent (but no greater extent)
in time, area, and degree of participation as is permitted by the law of the
jurisdiction whose law is found to be applicable to the acts allegedly in breach
of this agreement, and the parties hereby agree that the court making any such
determination shall have the power to so reform the Agreement.

4
<PAGE>

contain reasonable limitations as to time and the scope of activity to be
restrained; and (iii) the consideration provided under this Agreement,
including, without limitation, any amounts or benefits provided under Article IV
hereof, is sufficient to compensate Executive for the restrictions contained in
this Article III. In consideration of the foregoing and in light of Executive's
education, skills and abilities, Executive agrees that he will not assert, and
it should not be considered, that any provisions of this Article III prevented
him from earning a living or otherwise are void, voidable or unenforceable or
should be voided or held unenforceable.

3.6. Resume. The statements in Executive's resume previously provided to
------
the Company are true and correct.

3.7 Each of the covenants and representations in this Article III is given
by Executive as part of the consideration for this Agreement and as an
inducement to the Company to enter into this Agreement and to accept the
obligations hereunder.

ARTICLE IV

Termination
-----------

4.1 Termination of Agreement. Except for those provisions of this
------------------------
Agreement that survive Termination, this Agreement shall terminate upon any
Termination.

4.2 Procedures Applicable to Termination.
------------------------------------

(a) Termination for Cause. The Executive may be terminated for Cause,
---------------------
upon at least 15 days prior written notice from the CEO to Executive.

(b) Resignation for Good Reason. The Executive may terminate his
---------------------------
employment for Good Reason upon at least 15 days' prior written notice from
Executive to the CEO and the Chief Financial Officer of his intent to resign for
Good Reason.

(c) Termination Without Cause. The Executive may be terminated
-------------------------
without Cause upon at least 15 days' prior written notice from the CEO to
Executive.

4.3 Obligations of the Company upon Termination.
-------------------------------------------

(a) Salary and Bonus and Other Benefits. Upon any Termination, the
-----------------------------------
Company shall pay to Executive, the following:

(i) all accrued but unpaid Salary in a lump sum within 10 days
after the date of Termination; and

(ii) all benefits accrued by Executive as of the date of
Termination under

5
<PAGE>

all qualified and nonqualified retirement, pension, profit sharing and similar
plans of the Company to such extent, in such manner and at such time as are
provided under the terms of such plans and arrangements.

(b) Termination without Cause or Resignation for Good Reason. If the
--------------------------------------------------------
Board terminates Executive's employment without Cause, or if Executive resigns
for Good Reason, in addition to the amounts payable under Section 4.3(a) hereof:
the Company shall pay Executive $200,000.00 in a lump sum within thirty (30)
days after the date of Termination, or in equal monthly installments over a 12
month period, in the Company's discretion. If the Executive terminates his
employment as a result of a Change in Control, the Company shall pay Executive
the sum of $400,000.00 (instead of $200,000.00 as set forth in the preceding
sentence) in a lump sum within thirty (30) days of Termination, or in equal
monthly installments over a 12 month period, in the Company's discretion.

(c) Termination for Cause or Resignation without Good Reason. If the
--------------------------------------------------------
Board terminates Executive's employment for Cause, or if Executive resigns
without Good Reason, Executive shall only be entitled to the amounts payable
under Section 4.3(a) hereof.

(d) Exclusivity. Any amount payable to Executive pursuant to this
-----------
Article IV and any rights of Executive under the Stock Option Agreement shall be
Executive's sole remedy upon a Termination, and Executive waives any and all
rights to pursue any other remedy at law or in equity; provided, however, that
--------- -------
Executive does not hereby waive any right provided under any federal, state or
local law or regulation relating to employment discrimination.

ARTICLE V

Definitions
-----------

The following terms used in this Agreement shall have the meanings set forth
below.

5.1 "Cause" shall mean Executive's (i) violation of Section 1.3 hereof,
which violation has not been cured within 15 days of the date that written
notice thereof is received by Executive from the CEO; (ii) repeated failure to
follow the directions of the CEO; (iii) violation of Section 3.1, 3.2, 3.3 or
3.4 hereof; (iii) a misrepresentation in Section 3.6 hereof: (iv) wilful
misconduct, gross negligence or dishonesty in the performance of his duties
hereunder; (vi) conviction or formal indictment of any felony or a misdemeanor
involving fraud, misrepresentation, dishonesty or moral turpitude; (vii)
Executive's failure to devote his full business time to the Company's business,
for any reason, including illness or disability; (viii) Executive's death, (ix)
a Termination by Executive other than for Good Reason; or (x) failure to meet or
exceed the standards, as set forth in resolutions of the Compensation Committee
of the Board of Directors.

6
<PAGE>

power of the then outstanding voting stock of the Company on a fully diluted
basis or (ii) individuals who at the beginning of any period of two consecutive
calendar years constituted the Board (together with any new directors whose
election by the Board or whose nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of those members of
the Board then still in office who either were members of the Board at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
members of the Board then in office.

5.3 "CEO" shall mean the Chief Executive Officer of the Company.

5.4 "Common Stock" shall mean the common stock par value $.01 a share, of
the Company.

5.5 "Control" (including, with correlative meanings, the terms
"controlling," "controlled by," and "under common control with"), as used with
respect to any Person shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through ownership of voting securities, by contract or
otherwise.

5.6 "Good Reason" shall mean any (i) reduction in Executive's Base Salary
or material diminution in Executive's authority, duty, responsibility, function
or position with the Company (which diminution continues after 15 days of the
date that written notice thereof is given by Employee), (ii) either the failure
by the Company to continue any material benefit or compensation plan, life
insurance plan, health and accident plan, disability plan (or plan providing
Executive with substantially similar benefits) in which Executive is
participating or the material reduction by the Company of Executive's benefits
under any such plan, or (iii) upon a Change in Control of the Company. Good
Reason shall not include the Company taking any of the above actions for
"Cause."

5.7 "Intellectual Property" shall mean any idea, process, trademark,
service mark, trade or business secret, invention, technology, computer program
or hardware, original work of authorship, design, formula, discovery, patent or
copyright, application, record, design, plan or specification and any
improvement, right or claim related to the foregoing.

5.8 "Participation" shall mean the direct or indirect participation in any
Competitive Activity, whether as an operator, manager, consultant, and whether
individually or jointly.

5.9 "Person" shall mean any individual or entity, whether a
governmental or other agency or political subdivision thereof or otherwise.

5.10 "Term" shall have the meaning set forth in Section 1.2 hereof and
shall include any renewal or extension as set forth therein.

5.11 "Termination" shall mean termination of Executive's employment
with the Company for any reason, including (i) with or without Cause, (ii)
resignation by Executive with or without

7
<PAGE>

Good Reason (including a voluntary resignation) or (iii) upon the expiration of
the Term.

ARTICLE VI

Miscellaneous
-------------

6.1 Employee Acknowledgment. The Executive acknowledges that he has
-----------------------
consulted with or has had the opportunity to consult with independent counsel of
his own choice concerning this Agreement and has been advised to do so by the
Company, and that he has read and understands the Agreement, is fully aware of
its legal effect, and has entered into it freely based on his own judgment.

6.2 Binding Effect. This Agreement shall be binding upon and inure to the
--------------
benefit of Executive's heirs and representatives and the Company's successors
and assigns. The Company shall require any successor (whether direct or
indirect, by purchase, merger, reorganization, consolidation, acquisition of
assets or stock, liquidation, or otherwise), by agreement in form and substance
reasonably satisfactory to Executive, to assume performance of this Agreement in
the same manner that the Company would have been required to perform this
Agreement if no such succession had taken place. Regardless of whether such
agreement is executed, this Agreement shall be binding upon any successor of the
Company in accordance with the operation of law.

6.3 Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be deemed to have been duly given as
follows: (i) upon delivery if notice is hand delivered; (ii) the next business
day if notice is sent by reliable guaranteed next business courier (e.g. federal
express) delivery charges prepaid; or (iii) upon receipt if notice is sent by
mail within the continental United States by first class certified mail, return
receipt requested, postage prepaid addressed Company, Attention CEO and Chief
Financial Officer, and the Executive at the addresses set forth on the first
page of this Agreement. Any such address may be changed by written notice sent
to the other party at the last recorded address of that party.

6.4 Tax Withholding. The Company shall provide for the withholding of any
---------------
taxes required to be withheld under federal, state and local law (other than the
employer's portion of such taxes) with respect to any payment in cash and/or
other property made by or on behalf of the Company to or for the benefit of
Executive under this Agreement or otherwise. The Company may, at its option; (i)
withhold such taxes from any cash payments owing from the Company to Executive,
(ii) require Executive to pay to the Company in cash such amount as may be
required to satisfy such withholding obligations and/or (iii) make other
satisfactory arrangements with Executive to satisfy such withholding
obligations.

6.5 No Assignment; No Third Party Beneficiaries. Except as otherwise
--------------------------------------------
expressly provided in Section 6.2 hereof, this Agreement is not assignable by
any party, and no payment to be made hereunder shall be subject to alienation,
sale, transfer, assignment, pledge, encumbrance or other charge. Except for the
Company and its existing and future subsidiaries, no Person shall be

8
<PAGE>

or deemed to be, a third party beneficiary of this Agreement.

6.6 Execution in Counterparts. This Agreement may be executed by the
-------------------------
parties hereto in one or more counterparts, each of which shall be deemed to be
an original, but all such counterparts shall constitute one and the same
instrument, and all signatures need not appear on any one counterpart.

6.7 Jurisdiction and Governing Law. Jurisdiction over disputes with
------------------------------
regard to this Agreement shall be exclusively in the courts of the State of New
Jersey, and this Agreement shall be construed and interpreted in accordance with
and governed by the laws of the State of New Jersey as applied to contracts
capable of being wholly performed in such State.

6.8 Entire Agreement: Amendment. This Agreement and the Schedules and
---------------------------
Exhibits attached hereto embody the entire understanding of the parties hereto,
and supersede all prior agreements regarding the subject matter hereof. No
change, alteration or modification hereof may be made except in a writing,
signed by both of the parties hereto.

6.9 Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not be construed as part of this Agreement or to limit
or otherwise affect the meaning hereof.

6.10 Survival. Notwithstanding anything to the contrary herein, Article
--------
III, Section 4.3 and Article VI of this Agreement shall survive termination of
this Agreement or Termination for any reason whatsoever.

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the day first written above.

Princeton TeleCom Corporation

By: /s/ Donald C. Licciardello
-----------------------------------
Donald C. Licciardello, CEO

Executive

By: /s/ Ronald W. Averett
-----------------------------------
Ronald W. Averett

<PAGE>

EXHIBIT 10.2
EMPLOYMENT AGREEMENT
--------------------

THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the
8th day of February, 1999 by and between Princeton TeleCom Corporation, a
Delaware corporation, with an office at 165 Wall Street, Princeton New Jersey
08540 (the "Company"), and Christopher S. Sugden, an individual currently
residing at 668 Greenwich Street, New York, New York ("Executive").

RECITALS

The Company desires to provide certain incentive to Executive to remain in
the Company's employ. The Company and the Executive desire that Company employs
the Executive as Vice President - Chief Financial Officer.

NOW THEREFORE, each of the Company and Executive, intending to be legally
bound, hereby mutually covenant and agree as follows:

ARTICLE I

Employment and Term
-------------------

1.1 Employment. The Executive shall be employed as Vice President -Chief
----------
Financial Officer, and Executive hereby accepts such employment. In addition,
Executive agrees that he will serve in any similar capacity on behalf of any
existing or future subsidiary of the Company as reasonably requested by the CEO
or COO.

1.2 Term. The Term shall commence on the February 8, 1999 (the "Effective
----
Date") and shall end on the earlier of (i)one week after the fourth anniversary
of the Effective Date; or (ii) the date of any Termination.

1.3 Duties. The Executive shall serve as Vice President-Chief Financial
------
Officer and shall be directly responsible for the duties and responsibilities
commensurate with his position as set forth in Section 1.1 hereof or as may be
assigned by the COO from time to time; provided, however, that any such powers,
--------- -------
duties and responsibilities assigned by the COO are commensurate with such
position. The Executive shall use his best efforts and devote all of his
business time, attention and energy in performing his duties hereunder.
Notwithstanding the foregoing, nothing in this Agreement shall restrict
Executive from managing his personal investments, personal business affairs and
other personal matters, or serving on civic or charitable boards or committees,
if such activities do not interfere with the performance of his duties hereunder
or conflict with the Company's interests.
<PAGE>

ARTICLE II

Compensation and Benefits
-------------------------

2.1 Base Salary and Bonus. For all services performed by Executive for the
---------------------
Company and its subsidiaries hereunder, the Company shall pay Executive an
annual base salary of $100,000.00 ("Base Salary") in accordance with the
Company's regular payroll practices. The Base Salary may be increased and future
bonuses may be given in the sole and absolute discretion of the COO. The
Executive shall also be granted a bonus ("Performance Bonus") under the terms
set forth in the resolutions of the Compensation Committee of the Board of
Directors and such other bonuses as the COO may decide, in his sole and absolute
discretion, from time to time.

Executive's salary and bonus will be reviewed on each anniversary of this
Agreement. Executive's salary increase will be reviewed on the basis of his
salary and bonus for the previous year.

2.2 Stock Options. On this date, Executive is hereby granted an option to
-------------
purchase shares of Common Stock of the Company, in accordance with the terms of
the stock option agreement ("Stock Option Agreement") attached to this
Agreement. Executive may be entitled to receive further grants of stock options
in amounts determined by the CEO in his sole and absolute discretion.

2.3 Other Benefits. In addition to the foregoing, Executive shall also be
--------------
entitled to the following:

(b) Vacation. Executive shall be entitled to vacation and
------------------
paid holidays consistent with the Company's practices as adopted from time to
time (commencing in the third year of this Agreement, vacation time shall be 3
weeks).

(c) Expenses. The Company shall reimburse Executive for reasonable
--------
travel, out of pocket business expenses incurred by Executive in the performance
of his duties hereunder, provided appropriate documentation supporting such
expenses is submitted in accordance with the Company's governing policies. The
Company will pay Executive's reasonable moving expenses (not to exceed $6,000)
in connection with moving his residence from New York to New Jersey.

2
<PAGE>

ARTICLE III

Covenants and Representations
-----------------------------

3.2 Nondisclosure of Confidential Material. (a) In the performance of
--------------------------------------
his duties hereunder, Executive shall have access to confidential records and
information, including, but not limited to, information relating to (i) any
Intellectual Property or (ii) the Company's business practices, finances,
developments, customers, affairs, marketing or purchasing strategy or other
secret information (collectively, clauses (i) and (ii) of this Section 3.2(a)
are referred to as the "Confidential Material").

(b) All Confidential Material shall be disclosed to Executive
in confidence. Except in performing his duties hereunder, Executive shall not,
during the Term and at all times thereafter, disclose or use any Confidential
Material.

3.3 Non-Competition. (a) The Executive shall not, during the Term, Control
---------------
any Person which is engaged, directly or indirectly, or Participate in any
business that is competitive with the Company's electronic bill payment,
electronic bill presentment or electronic bill publishing business (including
the solicitation of any customer of the Company on behalf of any Competitor or
any other business, directly, indirectly on behalf of himself or any other
Person) (collectively, "Competitive Activities"); provided, however that nothing
--------- -------
in this Agreement shall preclude Executive from owning less than 5% of any class
of publicly traded equity of any Person engaged in any

3
<PAGE>

Competitive Activity.

3.4 Employee Inventions and Ideas
-----------------------------

(a) Executive hereby agrees to assign to the Company, without further
consideration, his entire right, title and interest (within the United States
and all foreign jurisdictions), to any Intellectual Property created, conceived,
developed or reduced to practice by Executive (alone or with others) free and
clear of any lien or encumbrance. If any Intellectual Property shall be deemed
patentable or otherwise registrable, Executive shall assist the Company (at its
expense) in obtaining letters patent or other applicable registration therein
and shall execute all documents and do all things (including testifying at the
Company's expense) necessary or appropriate to obtain letters patent or other
applicable registration therein and to vest in the Company, or any affiliate
specified by the CEO or COO.

(b) Should Company be unable to secure Executive's signature on
any document necessary to apply for, prosecute, obtain or enforce any patent,
copyright or other right or protection relating to any Intellectual Property for
any reason, Executive hereby irrevocably designates and appoints the Company and
each of its duly authorized officers and agents as Executive's agent and
attorney-in-fact to act for and on Executive's behalf and stead and to execute
and file any such document and to do all other lawfully permitted acts to
further the prosecution, issuance and other enforcement of patents, copyrights
or other rights or protections with the same effect as if executed and delivered
by Executive.

3.5 Enforcement.
------------

(b) lf any provision of this Agreement, or application thereof to
any person, place or circumstance, shall be held by a court of competent
jurisdiction or be found in an arbitration proceeding to be invalid,
unenforceable or void, the remainder of this Agreement and such provisions as
applied to any other person, place and circumstance shall remain in full force
and effect. It is the intention of the parties hereto that the covenants
contained herein shall be enforced

4
<PAGE>

to the maximum extent (but no greater extent) in time, area, and degree of
participation as is permitted by the law of the jurisdiction whose law is found
to be applicable to the acts allegedly in breach of this agreement, and the
parties hereby agree that the court making any such determination shall have the
power to so reform the Agreement.

(c) The Executive understands that the provisions of this Article III
may limit his ability to earn a livelihood in a business similar to the business
of the Company but nevertheless agrees and hereby acknowledges that (i) such
provisions do not impose a greater restraint than is necessary to protect the
goodwill or other business interests of the Company; (ii) such provisions
contain reasonable limitations as to time and the scope of activity to be
restrained; and (iii) the consideration provided under this Agreement,
including, without limitation, any amounts or benefits provided under Article IV
hereof, is sufficient to compensate Executive for the restrictions contained in
this Article III. In consideration of the foregoing and in light of Executive's
education, skills and abilities, Executive agrees that he will not assert, and
it should not be considered, that any provisions of this Article III prevented
him from earning a living or otherwise are void, voidable or unenforceable or
should be voided or held unenforceable.

3.6. Resume. The statements in Executive's resume previously provided to
------
the Company are true and correct.

ARTICLE IV

Termination
-----------

4.1 Termination of Agreement. Except for those provisions of this
------------------------
Agreement that survive Termination, this Agreement shall terminate upon any
Termination.

4.2 Procedures Applicable to Termination.
------------------------------------

(a) Termination for Cause. The Executive may be terminated for Cause,
---------------------
upon at least 15 days prior written notice from the COO to Executive.

(b) Resignation for Good Reason. The Executive may terminate
---------------------------
his employment for Good Reason upon at least 15 days' prior written notice from
Executive to the CEO and COO of his intent to resign for Good Reason.

(c) Termination Without Cause. The Executive may be terminated
-------------------------
without Cause upon at least 15 days' prior written notice from the COO to
Executive.

5
<PAGE>

4.3 Obligations of the Company upon Termination.
-------------------------------------------

(a) Salary and Bonus and Other Benefits. Upon any Termination, the
-----------------------------------
Company shall pay to Executive, the following:

(i) all accrued but unpaid Salary in a lump sum within 10 days
after the date of Termination; and

(ii) all benefits accrued by Executive as of the date of
Termination under all qualified and nonqualified retirement, pension, profit
sharing and similar plans of the Company to such extent, in such manner and at
such time as are provided under the terms of such plans and arrangements.

(b) Termination without Cause or Resignation for Good Reason.
--------------------------------------------------------
If the COO terminates Executive's employment without Cause, or if Executive
resigns for Good Reason, in addition to the amounts payable under Section 4.3(a)
hereof, the Company shall pay Executive three months of Executive's then current
base salary in a lump sum within thirty (30) days after the date of Termination,
or in equal monthly installments over a three month period, in the Company's
discretion.

(c) Termination for Cause or Resignation without Good Reason.
--------------------------------------------------------
If the COO terminates Executive's employment for Cause, or if Executive resigns
without Good Reason, Executive shall only be entitled to the amounts payable
under Section 4.3(a) hereof.

ARTICLE V

Definitions
-----------

The following terms used in this Agreement shall have the meanings set
forth below.

5.1 "Cause" shall mean Executive's (i) violation of Section 1.3 hereof,
which violation has not been cured within 15 days of the date that written
notice thereof is received by Executive from the COO; (ii) repeated failure to
follow the directions of the COO; (iii) violation of Section 3.1, 3.2, 3.3 or
3.4 hereof; (iii) a misrepresentation in Section 3.6 hereof: (iv) wilful
misconduct, gross negligence or dishonesty in the performance of his duties
hereunder; (vi) conviction or formal indictment of any felony or a misdemeanor
involving fraud, misrepresentation, dishonesty or moral turpitude; (vii)
Executive's failure to devote his full business time to the Company's business,
for

6
<PAGE>

any reason, including illness or disability; (viii) Executive's death, or (ix) a
Termination by Executive other than for Good Reason.

5.2 "Change in Control" shall mean at such time as (i) a "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act),
becomes the ultimate "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of more than 50% of the total voting power of the then outstanding
voting stock of the Company on a fully diluted basis or (ii) individuals who at
the beginning of any period of two consecutive calendar years constituted the
Board (together with any new directors whose election by the Board or whose
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds of those members of the Board then still in office who
either were members of the Board at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the members of the Board then in office.

5.3 "CEO" shall mean the Chief Executive Officer of the Company and "COO"
shall mean the Chief Operating Officer of the Company.

5.4 "Common Stock" shall mean the common stock par value $.01 a share, of
the Company.

5.6 "Good Reason" shall mean any (i) reduction in Executive's Base Salary
or material diminution in Executive's authority, duty, responsibility, function
or position with the Company (which diminution continues after 15 days of the
date that written notice thereof is given by Executive), (ii) either the failure
by the Company to continue any material benefit or compensation plan, life
insurance plan, health and accident plan, disability plan (or plan providing
Executive with substantially similar benefits) in which Executive is
participating or the material reduction by the Company of Executive's benefits
under any such plan, or (iii) upon a Change in Control of the Company. Good
Reason shall not include the Company taking any of the above actions for
"Cause."

5.8 "Participation" shall mean the direct or indirect participation in any
Competitive Activity, whether as an operator, manager, consultant, and whether
individually or jointly.

5.9 "Person" shall mean any individual or entity, whether a
governmental or other agency

7
<PAGE>

or political subdivision thereof or otherwise.

5.10 "Term" shall have the meaning set forth in Section 1.2 hereof and
shall include any renewal or extension as set forth therein.

5.11 "Termination" shall mean termination of Executive's employment
with the Company for any reason, including (i) with or without Cause, (ii)
resignation by Executive with or without Good Reason (including a voluntary
resignation) or (iii) upon the expiration of the Term.

ARTICLE VI

Miscellaneous
-------------

6.3 Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be deemed to have been duly given as
follows: (i) upon delivery if notice is hand delivered; (ii) the next business
day if notice is sent by reliable guaranteed next business courier (e.g. federal
express) delivery charges prepaid; or (iii) upon receipt if notice is sent by
mail within the continental United States by first class certified mail, return
receipt requested, postage prepaid addressed Company, Attention CEO and COO,
and the Executive at the addresses set forth on the first page of this
Agreement. Any such address may be changed by written notice sent to the other
party at the last recorded address of that party.

8
<PAGE>

withholding obligations and/or (iii) make other satisfactory arrangements with
Executive to satisfy such withholding obligations.

6.8 Entire Agreement: Amendment. This Agreement and the Schedules
---------------------------
and Exhibits attached hereto embody the entire understanding of the parties
hereto, and supersede all prior agreements regarding the subject matter hereof.
No change, alteration or modification hereof may be made except in a writing,
signed by both of the parties hereto.

6.9 Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not be construed as part of this Agreement or to limit
or otherwise affect the meaning hereof.

9
<PAGE>

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the day first written above.

Princeton TeleCom Corporation

By: /s/ Donald C. Licciardello
-------------------------------
Donald C. Licciardello, CEO

Executive

By: /s/ Christopher S. Sugden
-------------------------------
Christopher S. Sugden

<PAGE>

EXHIBIT 10.7

AMENDED and RESTATED

VOTING AGREEMENT
----------------

This AMENDED and RESTATED VOTING AGREEMENT (the "Voting Agreement") is
entered into this 10th day of May, 1999, by and between Billing Concepts Corp.,
a Delaware corporation ("Billing"), Princeton eCom Corporation, a Delaware
corporation, formerly known as Princeton TeleCom Corporation (the "Company"),
Donald C. Licciardello ("Licciardello"); and the Donald Licciardello Family
Limited Partnership, a New Jersey limited partnership ("Partnership").

Recitals
--------

A. Billing and the Company entered into a certain Stock Purchase
Agreement (the "Purchase Agreement") on September 4, 1998 whereby on September
4, 1998 Billing purchased 831,290 shares of common stock, $0.01 par value
("Common Stock") of the Company, and on March 30, 1999 Billing purchased an
additional 44,792 shares of Common Stock of the Company pursuant to the terms of
the Purchase Agreement.

B. On September 4, 1998, Billing, the Company and Licciardello entered
into a Voting Agreement ("Original Voting Agreement") pursuant to Section 3.5 of
the Purchase Agreement as a condition to the closing of the Purchase Agreement.

C. On October 20, 1998, Billing, the Company and Licciardello entered
into an Amendment to the Original Voting Agreement.

D. Licciardello owns 630,908 shares of Common Stock of the Company and
the Donald Licciardello Family Limited Partnership owns 1,700,000 shares of
Common Stock of the Company. Licciardello is the general partner of the
Partnership and has voting and dispositive control of the Partnership.

E. The Company, Billing, Licciardello, and the Partnership desire to
enter into this Voting Agreement to amend and restate the Original Voting
Agreement in order to preserve continuity of management of the Company.

NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto agree as follows:

ARTICLE 1

VOTING
------

1.1 Nomination and Election of Directors. During the term of this Voting
------------------------------------
Agreement, each of Licciardello and Billing agrees to vote all of the shares of
capital stock of the Company owned by him or it, as applicable (whether such
shares are voted at a meeting of stockholders or by
<PAGE>

written consent), in a manner that will be in accordance with and will effect
and carry out the following provisions:

(a) For so long as Billing owns at least 10% of the issued and
outstanding shares of Common Stock, two (2) of the members of the Board of
Directors of the Company (the "Board") shall be individuals designated by
Billing (the "Billing Directors") and three (3) members of the Board shall
be individuals designated by Licciardello (the "Licciardello Directors").

(b) In the event a Billing Director is unable to serve on the Board by
reason of death, resignation, removal or otherwise, then a new director
nominated by Billing shall be elected by the Board or by the stockholders.

(c) Billing shall have the sole right to cause the replacement or
removal of a Billing Director by giving written notice to the Board. Upon
receipt of such notice, Billing, Licciardello and the Partnership shall
thereupon be obligated forthwith to vote all shares of capital stock of the
Company owned by it or him to remove the Billing Director sought to be
replaced and to elect a successor director designated by Billing.

(d) In the event a Licciardello Director is unable to serve on the
Board by reason of death, resignation, removal or otherwise, then a new
director nominated by Licciardello shall be elected by the Board or by the
stockholders.

(e) Licciardello shall have the sole right to cause the replacement or
removal of a Licciardello Director by giving written notice to the Board.
Upon receipt of such notice, Billing, Licciardello and the Partnership
shall thereupon be obligated forthwith to vote all shares of capital stock
of the Company owned by it or him to remove the Licciardello Director
sought to be replaced and to elect a successor director designated by
Licciardello.

1.2 Proxies. Neither Billing, Licciardello nor the Partnership shall give
-------
any proxy or power of attorney to any person that permits the holder thereof to
vote in his discretion on any matter that may be submitted to the Company's
stockholders for their consideration and approval, unless such proxy or power of
attorney is made subject to and is exercised in conformity with the provisions
of this Voting Agreement.

1.3 General Voting. Each of Billing, Licciardello and the Partnership
--------------
agrees to vote his or its respective shares of capital stock of the Company in
such a manner as to carry out and enforce the terms and intent of this Voting
Agreement.

1.4 Transfer of Stock. Licciardello and the Partnership agree that if
-----------------
they sell or transfer capital stock of the Company in any transfer other than a
registered public offering, or a sale under Rule 144, promulgated under the
Securities Act of 1933, as amended, Licciardello and Partnership, as the case
may be, will have the transferee or purchaser of such capital stock of the
Company become a party to and execute this Voting Agreement or a substantially
similar agreement.
<PAGE>

ARTICLE 2

MISCELLANEOUS
-------------

2.1 Termination of this Voting Agreement. This Voting Agreement shall
------------------------------------
continue until, and shall terminate automatically upon, the first to occur of
any of the following:

(a) execution of a written agreement of termination by the parties
hereto, or

(b) Billing ceasing to own at least 10% of the issued and outstanding
shares of Common Stock.

Upon termination of this Voting Agreement, as a result of the application
of Section 2.1(b), above, the Billing Directors shall resign as directors of the
Company at or before the Annual Meeting of Shareholders of the Company, next
following Billing ceasing to own at least 5% of the issued and outstanding
shares of Common Stock.

2.2 Equitable Remedies. In the event of a breach by any party of any of
------------------
the provisions of this Voting Agreement, each party acknowledges that the other
will suffer irreparable injury not fully compensable by money damages and,
therefore, will not have an adequate remedy available at law. Accordingly, each
party shall be entitled to obtain such injunctive relief or other equitable
remedy from any court of competent jurisdiction as may be necessary or
appropriate to prevent or curtail any such breach, threatened or actual. The
foregoing shall be in addition to and without prejudice to any other rights that
a party may have under this Voting Agreement, at law or in equity, including,
without limitation, the right to sue for damages.

2.3 Notices. All notices, requests, consents and other communications
-------
hereunder shall be in writing and shall be personally delivered or sent by
reliable overnight express delivery (such as Federal Express). Any such notice,
request, consent or other communication shall be deemed delivered at such time
as it is personally delivered on a business day, or on the date of actual,
prepaid delivery on a business day by a reliable overnight express delivery
service, as the case may be. The address for all notices, requests, consents
and other communications hereunder shall be as follows:

If to Billing: Billing Concepts Corp.
7411 John Smith Drive, Suite 200
San Antonio, Texas 78229
Telephone (210) 949-7007
Facsimile (210) 949-7014
Attention: Kelly E. Simmons
Executive Vice President and
Chief Financial Officer
<PAGE>

With copy to: W. Audie Long, Esq.
Senior Vice President and General Counsel
Billing Concepts Corp.
7411 John Smith Drive, Suite 200
San Antonio, Texas 78229
Telephone (210) 949-7022
Facsimile (210) 949-7024

If to the Company: Princeton eCom Corporation
165 Wall Street
Princeton, New Jersey 08540
Telephone (609) 609-683-3501
Facsimile (609) 924-1096
Attention: Donald C. Licciardello
Chairman and Chief Executive Officer

With copy to: Russell U. Schenkman, Esq.
Hale & Schenkman
Thirteen Roszel Road, Suite C-225
Princeton, New Jersey 08540
Telephone (609) 452-0110
Facsimile (609) 799-1555

If to Licciardello: Donald C. Licciardello
or the Partnership 165 Wall Street
Princeton, New Jersey 08540
Telephone (609) 609-683-3510
Facsimile (609) 924-1096

2.9 Amendments. This Voting Agreement may be amended, modified or
----------
supplemented only by a written instrument executed by the Company, Billing,
Licciardello and the Partnership. This Voting Agreement amends and restates the
Original Voting Agreement and all amendments prior to the date hereof.

2.10 Captions. The captions of this Voting Agreement are for convenience
--------
of reference only and shall not limit or otherwise affect any of the terms or
provisions hereof.

2.11 Pronouns. Any masculine personal pronoun shall be considered to mean
--------
the corresponding feminine or neuter personal pronoun, and vice versa, as the
context requires.
<PAGE>

IN WITNESS WHEREOF, the parties hereto have duly executed this Voting
Agreement as of the date first above written.

PRINCETON eCOM CORPORATION BILLING CONCEPTS CORP.

By: /s/ Donald C. Licciardello By: /s/ Kelly E. Simmons
------------------------------ --------------------------------
Name: Donald C. Licciardello Name: Kelly E. Simmons
---------------------------- ------------------------------
Title: President Title: Senior Vice President & CFO
--------------------------- -----------------------------

DONALD LICCIARDELLO FAMILY
LIMITED PARTNERSHIP

/s/ Donald C. Licciardello By: /s/ Donald C. Licciardello
- --------------------------------- -----------------------------------
Donald C. Licciardello Donald C. Licciardello, General
Partner

<PAGE>

EXHIBIT 10.8

STOCK PURCHASE AGREEMENT

Between

BILLING CONCEPTS CORP.

And

PRINCETON TELECOM CORPORATION

Dated as of September 4, 1998

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT (this "Agreement") dated as of September 4, 1998,
---------
between Princeton TeleCom Corporation, a Delaware corporation (the "Company"),
-------
and Billing Concepts Corp., a Delaware corporation (the "Purchaser").
---------

WHEREAS, subject to the terms and conditions set forth in this Agreement, the
Company desires to issue and sell to the Purchaser and the Purchaser desires to
purchase from the Company, shares of the Company's Common Stock, par value $0.01
per share (the "Common Stock").
------------

IN CONSIDERATION of the mutual covenants contained in this Agreement, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Company and the Purchaser agree as follows:

ARTICLE I
PURCHASE AND SALE OF CAPITAL STOCK

The Closing. (i) Subject to the terms and conditions set forth in this
- -----------
Agreement, the Company shall issue and sell to the Purchaser and the Purchaser
shall purchase 831,290 shares of Common Stock of the Company, representing 22%
of the issued and outstanding Common Stock of the Company at the Closing (as
defined below), taking into account vested stock options of the Company (the
"Shares"), subject to adjustment as set forth in Section 3.2 of this Agreement
------
for an aggregate purchase price of $10,000,000. The closing of the purchase and
sale of the Shares (the "Closing") shall take place at the offices of the
-------
Purchaser immediately following the execution hereof, which Closing is
anticipated to be September 3, 1998 or such later date as the parties shall
agree. The date of the Closing is hereinafter referred to as the "Closing Date."
------------

(ii) At the Closing, the parties shall deliver or shall cause to be delivered
such items as are required to be delivered by them in accordance with the terms
of this Agreement, including the following: (A) The Company shall deliver (1)
stock certificates representing the Shares, registered in the name of the
Purchaser, (2) the legal opinion of Hale & Schenkman, counsel to the Company,
substantially in the form of Exhibit A attached hereto, and (3) all other
---------
documents, instruments and writings required to have been delivered at or prior
to the Closing Date by the Company pursuant to this Agreement; and (B) the
Purchaser shall deliver (1) $10,000,000 in United Sates dollars in immediately
available funds by wire transfer to an account designated prior to the Closing
Date in writing by the Company for such purpose and (2) all documents,
instruments and writings required to have been delivered at or prior to the
Closing Date by the Purchaser pursuant to this Agreement.

<PAGE>

ARTICLE II
REPRESENTATIONS AND WARRANTIES

2.1 Representations, Warranties and Agreements of the Company. The Company
---------------------------------------------------------
hereby makes the following representations and warranties to the Purchaser:

(a) Organization and Qualification. The Company is a corporation duly
------------------------------
incorporated, validly existing and in good standing under the laws of the State
of Delaware, with the requisite corporate power and authority to own and use its
properties and assets and to carry on its business as currently conducted. The
Company has no subsidiaries. The Company is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction in which the
nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or result in a material adverse
effect on the results of operations, assets, prospects or condition (financial
or otherwise) of the Company taken as a whole.

(b) Authorization; Enforcement. The Company has the requisite corporate power
--------------------------
and authority to enter into and to consummate the transactions contemplated by
this Agreement and otherwise to carry out its obligations thereunder. The
execution and delivery of this Agreement by the Company and the consummation by
it of the transactions contemplated thereby have been duly authorized by all
necessary action on the part of the Company, and no further action is required
by the Company. This Agreement has been duly executed by the Company and, when
delivered in accordance with the terms hereof, will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms. The Company is not in violation of any of the provisions of its
respective certificate of incorporation, by-laws or other charter documents.

(c) Capitalization. The number of authorized, issued and outstanding capital
--------------
stock of the Company is set forth in Schedule 2.1(c). No shares of Common Stock
---------------
are entitled to preemptive or similar rights, nor is any holder of the Common
Stock entitled to preemptive or similar rights arising out of any agreement or
understanding with the Company. Except as disclosed in Schedule 2.1(c), there
---------------
are no outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or, except as a result of
the purchase and sale of the Shares, securities, rights or obligations
convertible into or exchangeable for, or giving any Person any right to
subscribe for or acquire any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
issue additional shares of Common Stock, or securities or rights convertible or
exchangeable into shares of Common Stock. A "Person" means an individual or
------
corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.

(d) Issuance of the Shares. The Shares are duly authorized and, when issued and
----------------------
paid for in accordance with the terms hereof, shall have been validly issued,
fully paid and nonassessable, free and clear of all liens, encumbrances and
rights of first refusal of any kind (collectively, "Liens"), other than as set
-----
forth herein.

2
<PAGE>

(e) No Conflicts. The execution, delivery and performance of this Agreement by
------------
the Company and the consummation by the Company of the transactions contemplated
thereby do not and will not (i) conflict with or violate any provision of its
certificate of incorporation, by-laws or other charter documents, (ii) conflict
with, or constitute a default under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, indenture or
instrument (evidencing a Company debt or otherwise) to which the Company is a
party or by which any property or asset of the Company is bound or affected as
could not, individually or in the aggregate, have or result in a material
adverse effect, or (iii) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company is subject (including Federal and
state securities laws and regulations), or by which any property or asset of the
Company is bound or affected, as could not, individually or in the aggregate,
have or result in a material adverse effect. The business of the Company is not
being conducted in violation of any law, ordinance or regulation of any
governmental authority, except for violations which, individually or in the
aggregate, could not have or result in a material adverse effect.

(f) Consents and Approvals. The Company is not required to obtain any consent,
----------------------
waiver, authorization or order of, give any notice to, or make any filing of
registration with, any court or other Federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of this Agreement, other than (i)
applicable Blue Sky filings and (ii) in all other cases where the failure to
obtain such consent, waiver, authorization or order, or to give such notice or
make such filing or registration could not have or result in, individually or in
the aggregate, a material adverse effect (the consents, waivers, authorizations,
orders, notices and filings referred to in (i) and (ii) of this section are,
collectively, the "Required Approvals").
------------------

(g) Litigation; Proceedings. Except as specifically disclosed in Schedule
----------------------- --------
2.1(g), there is no action, suit, notice of violation, proceeding or
- ------
investigation pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its properties before or by any court,
governmental or administrative agency or regulatory authority (Federal, state,
county, local or foreign) which (i) adversely affects or challenges the
legality, validity or enforceability of this Agreement or the Shares or (ii)
could, individually or in the aggregate, have or result in a material adverse
effect.

(h) Financial Statements. The financial statements, financial statement
--------------------
schedules and notes to such financial statements and schedules of the Company
("Company Financial Statements") for the year ended December 31, 1997 and the
six (6) months ended June 30, 1998, are complete and correct and were prepared
in accordance with the Company's internal accounting practices acceptable to the
Company applied on a consistent basis, except as noted in Schedule 2.1(h), and
---------------
fairly present the information purported to be shown therein. All such Company
Financial Statements have been prepared from the books and records of the
Company, which accurately and fairly reflect the transactions and dispositions
of the assets of the Company. The Company does not have any liabilities,
contingent or otherwise, whether due or to become due, known or unknown, other
than as indicated on the June 30, 1998 balance sheet included in the Company
Financial Statements and as set forth in this Agreement, which would,

3
<PAGE>

individually or in the aggregate, have a material adverse effect on the Company.
The Company has adequately funded all accrued employee benefit costs, and such
funding is reflected in the balance sheets included in the Company Financial
Statements.

(i) No Default or Violation. Except as specifically disclosed in Schedule
----------------------- --------
2.1(i), the Company (i) is not in default under or in violation of (and no event
- ------
has occurred which has not been waived which, with notice or lapse of time or
both, would result in a default by the Company under), nor has the Company
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound, (ii) is in violation of any order of any court, arbitrator or
governmental body, or (iii) is in violation of any statute, rule or regulation
of any governmental authority, except as could not individually or in the
aggregate, have or result in a material adverse effect.

(j) Working Capital at June 30, 1998. As stated on its June 30, 1998 balance
--------------------------------
sheet, the Company had, and the subsequent audit as described in Section 3.2 of
this Agreement will report, a deficit working capital of no more than $8.5
million at June 30, 1998.

(k) Taxes. Except as specifically disclosed in Schedule 2.1(k), all taxes,
----- ---------------
assessments and other governmental charges that the Company reasonably believes
are due and payable, other than those presently payable without penalty or
interest, have been timely paid, and the Company has timely filed all Federal,
state and other tax returns required by law to be filed by it. All such tax
reports or returns are true, complete and correct in all respects with regard to
the Company for the periods covered thereby.

(l) Private Offering. Assuming the accuracy of the representations and
----------------
warranties of the Purchaser set forth in Sections 2.2(b)-(g), the offer,
issuance and sale of the Shares to the Purchaser as contemplated hereby are
exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"). Neither the Company nor any Person acting on its
--------------
behalf has taken any action which could subject the offering, issuance or sale
of the Shares to the registration requirements of the Securities Act.

(m) Investment Company. The Company is not, and is not an Affiliate (as defined
------------------
in Rule 405 under the Securities Act) of, an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.

(n) Certain Fees. No fees or commissions will be payable by the Company to any
------------
broker, financial advisor or consultant, finder, placement agent, investment
banker or bank with respect to the transactions contemplated by this Agreement.
The Purchaser shall have no obligation with respect to any fees or with respect
to any claims made by or on behalf of other Persons for fees of a type
contemplated in this section that may be due in connection with the transactions
contemplated by this Agreement other than fees or commissions incurred by the
Purchaser. The Company shall indemnify and hold harmless the Purchaser, its
employees, officers, directors and agents, and their respective Affiliates, from
and against all claims, losses, damages, costs (including the reasonable costs
of preparation and reasonable attorneys' fees) and expenses suffered in respect
of any such claimed or existing fees, as such fees and expenses are incurred,
other than fees or commissions incurred by the Purchaser.

4
<PAGE>

(o) Solicitation Materials. Neither the Company nor any Person acting on the
----------------------
Company's behalf has (i) distributed any offering materials in connection with
the offering and sale of the Shares or (ii) solicited any offer to buy or sell
the Shares by means of any form of general solicitation or advertising.

(p) Exclusivity. The Company shall not issue and sell the Shares to any Person
-----------
other than the Purchaser.

(q) Seniority. No class of equity securities of the Company is senior to the
---------
Shares in right of payment, whether upon liquidation or dissolution or
otherwise.

(r) Patents and Trademarks. The Company has, or has rights to use, all, if any,
----------------------
patents, patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, licenses and rights (collectively, the "Intellectual
------------
Property Rights") which are necessary or material for use in connection with its
- ---------------
business, and which the failure to so have would have a material adverse effect.
To the best knowledge of the Company, all such Intellectual Property Rights are
enforceable and there is no existing infringement by another Person of any of
the Intellectual Property Rights.

(s) Registration Rights; Rights of Participation. The Company has not granted or
--------------------------------------------
agreed to grant to any Person any rights (including "piggy-back" registration
rights) to have any securities of the Company registered with the Securities and
Exchange Commission (the "Commission") or any other governmental authority which
----------
has not been satisfied, and no Person has any right of first refusal, preemptive
right, right of participation or any similar right to participate in the
transactions contemplated by this Agreement.

(t) Regulatory Permits. The Company possesses all certificates, authorizations
------------------
and permits issued by the appropriate Federal, state or foreign regulatory
authorities necessary to conduct its business, and the Company has not received
any notice of proceedings relating to the revocation or modification of any
material permit.

(u) Title. The Company has good and marketable title in fee simple to all, if
-----
any, real property and personal property owned by it which is material to the
business of the Company, in each case free and clear of all Liens, except for
liens, claims or encumbrances as do not materially, individually or in the
aggregate, interfere with the use made and proposed to be made of such property
by the Company. Any real property and facilities held under lease by the
Company are held by it under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company.

(v) Disclosure. The Company understands and confirms that the Purchaser shall be
----------
relying on the foregoing representations in the sale of the Shares pursuant to
this Agreement and in effecting transactions in securities of the Company. All
disclosure provided to

5
<PAGE>

the Purchaser regarding the Company, its business and the transactions
contemplated hereby, including the Schedules to this Agreement, furnished by or
on behalf of the Company are true and correct and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.

2.2 Representations and Warranties of the Purchaser. The Purchaser hereby
-----------------------------------------------
represents and warrants to the Company as follows:

(a) Organization and Qualification. The Purchaser is a corporation duly
------------------------------
incorporated, validly existing and in good standing under the laws of the State
of Delaware, with the requisite corporate power and authority to own and use its
properties and assets and to carry on its business as currently conducted. The
Purchaser is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
have or result in a material adverse effect on the results of operations,
assets, prospects or condition (financial or otherwise) of the Purchaser taken
as a whole.

(b) Authorization; Enforcement. The Purchaser has the requisite corporate power
--------------------------
and authority to enter into and to consummate the transactions contemplated by
this Agreement and otherwise to carry out its obligations thereunder. The
execution and delivery of this Agreement by the Purchaser and the consummation
by it of the transactions contemplated thereby have been duly authorized by all
necessary action on the part of the Purchaser, and no further action is required
by the Purchaser. This Agreement has been duly executed by the Purchaser and,
when delivered in accordance with the terms hereof, will constitute the valid
and binding obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms. The Purchaser is not in violation of any of the
provisions of its respective certificate of incorporation, by-laws or other
charter documents.

(c) Certain Fees. No fees or commissions will be payable by the Purchaser to any
------------
broker, financial advisor or consultant, finder, placement agent, investment
banker or bank with respect to the transactions contemplated by this Agreement.
The Company shall have no obligation with respect to any fees or with respect to
any claims made by or on behalf of other Persons for fees of a type contemplated
in this section that may be due in connection with the transactions contemplated
by this Agreement other than fees or commissions incurred by the Company. The
Purchaser shall indemnify and hold harmless the Company, its employees,
officers, directors and agents, and their respective Affiliates, from and
against all claims, losses, damages, costs (including the reasonable costs of
preparation and reasonable attorneys' fees) and expenses suffered in respect of
any such claimed or existing fees, as such fees and expenses are incurred, other
than fees or commissions incurred by the Company.

(d) Investment Intent. The Purchaser is acquiring the Shares for its own account
-----------------
for investment purposes only and not with a view to or for distributing or
reselling such Shares or any part thereof or interest therein, without
prejudice, however, to Purchaser's rights to sell such securities in compliance
with applicable state securities laws and under an exemption from such
registration under Federal securities laws.

6
<PAGE>

(e) Purchaser Status. At the time the Purchaser was offered the Shares, it was,
----------------
and at the date hereof it is, an "accredited investor" as defined in Rule 501(a)
under the Securities Act.

(f) Experience of the Purchaser. The Purchaser, either alone or together with
---------------------------
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Shares and has so evaluated the
merits and risks of such investment.

(g) Reliance. The Purchaser understands and acknowledges that (i) the Shares are
--------
being offered and sold to it as "restricted securities," without registration
under the Securities Act or any state securities laws in a private placement
that is exempt from the registration provisions of the Securities Act and may
not be transferred, offered or sold except pursuant to an effective registration
statement under the Securities Act or an available exemption from registration
under the Securities Act and in accordance with applicable state securities
laws, and (ii) the availability of such exemption depends in part on, and the
Company will rely upon the accuracy and truthfulness of, the foregoing
representations, and the Purchaser hereby consents to such reliance.

The Company acknowledges and agrees that the Purchaser makes no representations
or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in this Section 2.2.

ARTICLE III
OTHER AGREEMENTS OF THE PARTIES

3.1 Restrictions. The Purchaser agrees to the imprinting, so long as is required
------------
by this Section 3.1, of the following legend on the Shares:

THESE SHARES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND WERE ISSUED IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY
TO COUNSEL FOR THE COMPANY, THAT THE TRANSACTION IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.

7
<PAGE>

THESE SHARES ARE SUBJECT TO A RIGHT OF FIRST REFUSAL ON THE PART OF THE COMPANY
TO PURCHASE SUCH SHARES, AS MORE PARTICULARLY DESCRIBED IN SECTION 3.4 OF THE
STOCK PURCHASE AGREEMENT DATED SEPTEMBER 4, 1998 BETWEEN THE COMPANY AND BILLING
CONCEPTS CORP.

3.2 Audit of Working Capital Deficit; Option to Purchase Additional Shares of
-------------------------------------------------------------------------
Common Stock. The Company agrees to commence, within thirty (30) days of the
- ------------
Closing Date, an audit performed by a nationally recognized accounting firm,
based on generally accepted accounting principles, of its books and records at
June 30, 1998. The Company has warranted and represented in Section 2.1(j) of
this Agreement that the deficit working capital at June 30, 1998 will be no more
than $8.5 million. In the event the audit concludes that the deficit working
capital is in excess of $8.5 million, the Company then shall have a period of
thirty (30) days to obtain a second opinion from a national accounting firm. In
the event the second opinion differs from the audit determination concerning the
working capital, then in that event, the Company and the Purchaser agree to
employ a mutually acceptable third national accounting firm to arbitrate the
matter. In the event the Company does not elect to obtain a second opinion or in
the event the arbitration favors the Purchaser, the Purchaser, at its option,
shall have the right to purchase additional equity in the amount of the deficit
working capital in excess of $8.5 million at the same price per share as the
purchase of the 22% of the issued and outstanding capital stock of the Company
at the Closing set forth in Article I of this Agreement.

3.3 The Company's Right of First Refusal. In the event the Purchaser elects to
------------------------------------
sell some or all of the Shares, including any additional shares of Common Stock
purchased under the terms of Section 3.2, the Purchaser agrees to give written
notice to the Company describing in reasonable detail the proposed terms and
conditions of such sale, the person to whom the sale is to be made, and attached
to it shall be a term sheet or similar document relating thereto. The Company
shall have fifteen (15) business days after receipt of such notice to close the
proposed sale on substantially the terms and conditions disclosed in the
Purchaser's written notice. If the Company shall fail to close on the proposed
sale within such fifteen (15)-day period, the Purchaser may effect such sale
substantially on the terms and to the persons as set forth in the written notice
and in accordance with Section 3.1 herein. If the Purchaser should fail to close
its transaction within thirty (30) days of the Company's election not to, or
failure to, exercise its right of first refusal, then the Company shall again
have the right of first refusal set forth above in this paragraph.

3.4 Purchaser's Right of First Refusal. The Company shall not, directly or
----------------------------------
indirectly, without the prior written consent of the Purchaser, offer, sell,
grant any option to purchase or otherwise dispose of (or announce any offer,
sale, grant or any option to purchase or other disposition) any of its or its
affiliates' equity, equity-equivalent securities or promissory notes in a
transaction intended to be exempt or not subject to registration under the
Securities Act of 1933, as amended (a "Subsequent Placement"), for a period of
five (5) years after the Closing, except (i) the granting of options or warrants
to employees, officers and directors, and the issuance of shares upon exercise
of options granted, under any stock option plan heretofore or hereinafter duly
adopted by the Company, as shown in Exhibit B attached hereto, (ii) shares of
---------
Common Stock issued upon exercise of any currently outstanding warrants and upon
conversion

8
<PAGE>

of any currently outstanding convertible securities of the Company, in each case
as shown in Exhibit C attached hereto, and (iii) mergers or acquisitions not
---------
designed to raise capital, unless (A) the Company delivers to the Purchaser a
written notice (the "Subsequent Placement Notice") of its intention to effect
such Subsequent Placement, which Subsequent Placement Notice shall describe in
reasonable detail the proposed terms of such Subsequent Placement, the amount of
proceeds intended to be raised thereunder, the person with whom such Subsequent
Placement shall be effected, and attached to which shall be a term sheet or
similar document relating thereto, and (B) the Purchaser shall not have notified
the Company by 5:00 p.m. (Central Time) on the tenth (10th) business day after
its receipt of the Subsequent Placement Notice of its willingness to provide (or
to cause its sole designee to provide), subject to completion of mutually
acceptable documentation and closing within thirty (30) days of such Subsequent
Placement Notice, financing to the Company on substantially the terms set forth
in the Subsequent Placement Notice. If the Purchaser shall fail to notify the
Company of its intention to enter into such negotiations within such time period
or fail to close within such thirty (30)-day period, the Company may effect the
Subsequent Placement substantially upon the terms and to the persons (or
affiliates of such persons) set forth in the Subsequent Placement Notice;
provided that the Company shall provide the Purchaser with a second Subsequent
Placement Notice, and the Purchaser shall again have the right of first refusal
set forth above in this paragraph, if the Subsequent Placement subject to the
initial Subsequent Placement Notice shall not have been consummated for any
reason on the terms set forth in such Subsequent Placement Notice within ninety
(90) days after the date of the initial Subsequent Placement Notice with the
person (or an affiliate of such person) identified in the Subsequent Placement
Notice.

3.5 Board of Director Representation. At the Closing, the Company agrees that
--------------------------------
its Board of Directors shall consist of five (5) members, of which the Purchaser
shall have the right to appoint two (2) members, to serve for so long as the
Purchaser owns at least 10% of the issued and outstanding shares of the Company.
The other three (3) members of the Board of Directors shall be Donald C.
Licciardello, President, Chief Executive Officer and Chairman of the Board, and
those persons appointed by him, as they may be changed from time to time. At the
Closing, the Purchaser, the Company and Donald C. Licciardello shall enter into
a Voting Agreement in the form attached as Exhibit 3.5 hereto.

3.6 Furnishing of Information. So long as the Purchaser owns Shares, the Company
-------------------------
will prepare and furnish to the Purchaser annual and quarterly financial
statements, together with a discussion and analysis of such financial
statements.

3.7 Integration. The Company shall not, and shall use its best reasonable
-----------
efforts to ensure that no Affiliate shall, sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Shares in a manner that would require the registration under the
Securities Act of the sale of the Shares to the Purchaser.

3.8 Notice of Breaches. (a) Each of the Company and the Purchaser shall give
------------------
prompt written notice to the other of any breach by it of any representation,
warranty or other agreement contained in this Agreement discovered by either
party subsequent to the Closing Date. However, no disclosure by either party
pursuant to this section shall be deemed to cure any breach of any
representation, warranty or other agreement contained in this Agreement.

9
<PAGE>

(b) Notwithstanding the generality of Section 3.4(a), the Company shall promptly
notify the Purchaser of any notice or claim (written or oral) that it receives
from any lender of the Company to the effect that the consummation of the
transactions contemplated by this Agreement violates or would violate any
written agreement or understanding between such lender and the Company, and the
Company shall promptly furnish by facsimile to the purchaser of the Shares a
copy of any written statement in support of or relating to such claim or notice.

3.9 Use of Proceeds. The Company shall use the net proceeds from the sale of the
---------------
Shares hereunder for working capital purposes and not for the satisfaction of
any portion of Company debt to stockholders or their affiliates or to redeem any
Company equity or equity-equivalent securities. Pending application of the
proceeds of this placement in the manner permitted hereby, the Company will
invest such proceeds in interest bearing accounts and/or short-term, investment
grade interest bearing securities.

3.10 Transfer of Intellectual Property Rights. Except in connection with the
----------------------------------------
sale of all or substantially all of the assets of the Company, and except as set
forth in Schedule 3.10, the Company shall not transfer, sell or otherwise
-------------
dispose of any Intellectual Property Rights, or allow any of the Intellectual
Property Rights to become subject to any Liens, or fail to renew such
Intellectual Property Rights (if renewable and it would otherwise lapse if not
renewed) which would have, individually or in the aggregate, a material adverse
effect on the Company, without the prior written consent of the Purchaser.

3.11 Reimbursement. The Company shall reimburse the Purchaser for its reasonable
-------------
legal expenses and other reasonable expenses (including the cost of
investigation and preparation) as incurred by the Purchaser in any action,
proceeding or investigation brought by third parties, including stockholders of
the Company, against the Company or the Purchaser in connection with or as a
result of (i) any undertaking, act, omission or transaction of the Company or
(ii) as a result of the consummation of the transactions contemplated by this
Agreement, which constitutes a breach of the Company's representations under
this Agreement. In addition, other than with respect to any matter in which the
Purchaser is a named party, the Company will pay the Purchaser the charges, as
reasonably determined by the Purchaser, for the time of any officers or
employees of the Purchaser devoted to appearing and preparing to appear as
witnesses, assisting in preparation for hearings, trials or pretrial matters, or
otherwise with respect to inquiries, hearings, trials and other proceedings
relating to such claims. The reimbursement obligations of the Company under this
paragraph shall be in addition to any liability which the Company may otherwise
have, shall extend upon the same terms and conditions to any Affiliates of the
Purchaser who are actually named in such action, proceeding or investigation,
and directors, agents, employees and controlling persons (if any), as the case
may be, of the Purchaser and any such Affiliate, and shall be binding upon and
inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, the Purchaser and any such Affiliate and any
such Person. The Company also agrees that neither the Purchaser nor any such
Affiliates, directors, agents, employees or controlling persons shall have any
liability to the Company or any person asserting claims on behalf of or in right
of the
10
<PAGE>

Company in connection with or as a result of the consummation of this Agreement
except to the extent that any losses, claims, damages, liabilities or expenses
incurred by the Company result from the actions or conduct of the Purchaser or
entity in connection with the transactions contemplated by this Agreement.

ARTICLE IV
MISCELLANEOUS

4.1 Entire Agreement; Amendments. This Agreement, together with the Exhibits and
----------------------------
Schedules hereto, contains the entire understanding of the parties with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into this Agreement and the Exhibits and Schedules
hereto.

4.2 Notices. All notices, requests, consents and other communications hereunder
-------
shall be in writing and shall be personally delivered or sent by reliable
overnight express delivery (such as Federal Express). Any such notice, request,
consent or other communication shall be deemed delivered at such time as it is
personally delivered on a business day, or on the date of actual, prepaid
delivery on a business day by a reliable overnight express delivery service, as
the case may be. The address for all notices, requests, consents and other
communications hereunder shall be as follows:

If to the Purchaser: Billing Concepts Corp.
7411 John Smith Drive, Suite 200
San Antonio, Texas 78229
Telephone (210) 949-7007
Facsimile (210) 949-7014
Attention: Kelly E. Simmons
Senior Vice President
and Chief Financial Officer

If to the Company: Princeton TeleCom Corporation
165 Wall Street
Princeton, New Jersey 08540
Telephone (609) 683-3501
Facsimile (609) 924-1096
Attention: Donald C. Licciardello
President and Chief Executive Officer

11
<PAGE>

With copy to: Russell U. Schenkman, Esq.
Hale & Schenkman
Thirteen Roszel Road, Suite C-225
Princeton, New Jersey 08540
Telephone (609) 452-0110
Facsimile (609) 799-1555

Or such other address as may be designated in writing hereafter, in the same
manner, by such Person.

4.3 Amendments; Waivers. No provision of this Agreement may be waived or amended
-------------------
except in a written instrument signed, in the case of an amendment, by both the
Company and the Purchaser, or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter.

4.4 Headings. The headings herein are for convenience only, do not constitute a
--------
part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.

4.5 Successors and Assigns. This Agreement shall be binding upon and inure to
----------------------
the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchaser. The Purchaser may not assign
this Agreement or any of the rights or obligations hereunder without the prior
written consent of the Company, except that the Purchaser may assign its rights
hereunder to a wholly owned subsidiary.

4.6 No Third-Party Beneficiaries. This Agreement is intended for the benefit of
----------------------------
the parties hereto and their respective successors and permitted assigns, is not
for the benefit of, nor may any provision hereof be enforced by, any other
Person.

4.7 Governing Law. This Agreement shall be governed by and construed and
-------------
enforced in accordance with the internal laws of the State of Delaware without
regard to the principles of conflicts of law thereof. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of San Antonio, County of Bexar, State of Texas, for
the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.

12
<PAGE>

4.8 Survival. The representations, warranties, agreements and covenants
--------
contained herein shall survive the Closing and the delivery of the Shares.

4.9 Execution. This Agreement may be executed in two or more counterparts, all
---------
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.

4.10 Publicity. The Company and the Purchaser shall consult with each other in
---------
issuing any press releases or otherwise making public statements or filings and
other communications with the Commission, any regulatory agency, or stock market
or trading facility with respect to the transactions contemplated hereby, and
neither party shall issue any such press release or otherwise make any such
public statement, filings or other communications without the prior written
consent of the other, which consent shall not be unreasonably withheld or
delayed, except that no prior consent shall be required if such disclosure is
required by law, in which case the disclosing party shall provide the other
party with prior notice of such public statement, filing or other communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of the Purchaser, or include the name of the Purchaser in any filing with the
Commission, or any regulatory agency, trading facility or stock market, without
the prior written consent of the Purchaser, except to the extent such disclosure
is required by law, in which case the Company shall provide the Purchaser with
prior notice of such disclosure.

4.11 Severability. In case any one or more of the provisions of this Agreement
------------
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision which shall be a reasonable substitute
therefor, and upon so agreeing, shall incorporate such substitute provision in
this Agreement.

4.12 Remedies. In addition to being entitled to exercise all rights provided
--------
herein or granted by law, including recovery of damages, the Purchaser and the
Company will be entitled to specific performance of the obligations of each
under this Agreement. Each of the Company and the Purchaser agrees that monetary
damages may not be adequate compensation for any loss incurred by reason of any
breach of its obligations described in the foregoing sentence and hereby agrees
to waive, in any action for specific performance of any such obligation, the
defense that a remedy at law would be adequate.

13
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.

ATTEST: PRINCETON TELECOM CORPORATION

By: /s/ C. Richard Corl By: /s/ Donald C. Licciardello
--------------------------------- -------------------------------
C. Richard Corl, Secretary Name: Donald C. Licciardello
------------------------------
Title: President
-----------------------------

BILLING CONCEPTS CORP.

By: /s/ Kelly E. Simmons
-------------------------------
Name: Kelly E. Simmons
------------------------------
Title: Senior Vice President & CFO
-----------------------------

<PAGE>

Exhibit 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made a part of this
registration statement.

/s/ Arthur Andersen LLP

Philadelphia, Pa.,
May 11, 1999

<PAGE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S AUDITED AND UNAUDITED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C> <C> <C> <C> <C>
<PERIOD-TYPE> YEAR YEAR YEAR 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1997 DEC-31-1998 MAR-31-1998 MAR-31-1999
<PERIOD-START> JAN-01-1996 JAN-01-1997 JAN-01-1998 JAN-01-1998 JAN-01-1999
<PERIOD-END> DEC-31-1996 DEC-31-1997 DEC-31-1998 MAR-31-1998 MAR-31-1999
<CASH> 0 505 6,362 0 8,775
<SECURITIES> 0 0 0 0 0
<RECEIVABLES> 0 660 688 0 711
<ALLOWANCES> 0 53 50 0 50
<INVENTORY> 0 0 0 0 0
<CURRENT-ASSETS> 0 1,228 8,512 0 10,433
<PP&E> 0 1,461 1,510 0 1,993
<DEPRECIATION> 0 609 688 0 765
<TOTAL-ASSETS> 0 2,110 9,344 0 11,686
<CURRENT-LIABILITIES> 0 9,136 8,820 0 11,255
<BONDS> 0 123 79 0 74
0 0 0 0 0
0 0 0 0 0
<COMMON> 0 86 111 0 113
<OTHER-SE> 0 (7,471) 167 0 76
<TOTAL-LIABILITY-AND-EQUITY> 0 2,110 9,344 0 11,686
<SALES> 0 0 0 0 0
<TOTAL-REVENUES> 1,836 3,032 3,822 831 1,142
<CGS> 0 0 0 0 0
<TOTAL-COSTS> 1,363 1,800 1,967 430 555
<OTHER-EXPENSES> 2,657 3,357 5,196 921 1,662
<LOSS-PROVISION> 25 28 16 0 0
<INTEREST-EXPENSE> 6 16 14 4 2
<INCOME-PRETAX> (2,191) (2,142) (3,355) (524) (1,077)
<INCOME-TAX> 0 0 0 0 0
<INCOME-CONTINUING> (2,191) (2,142) (3,355) (524) (1,077)
<DISCONTINUED> 0 0 0 0 0
<EXTRAORDINARY> 0 0 0 0 0
<CHANGES> 0 0 0 0 0
<NET-INCOME> (2,191) (2,142) (3,355) (524) (1,077)
<EPS-PRIMARY> (0.26) (0.25) (0.36) (0.06) (0.10)
<EPS-DILUTED> (0.26) (0.25) (0.36) (0.06) (0.10)

</TABLE>