MAGNACASH INC, S-1, 2000-08-04

MAGNACASH INC
S-1, 2000-08-04

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As filed with the Securities and Exchange Commission on August 4, 2000
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________

MAGNACASH, INC.
(Exact name of registrant as specified in its charter)
______________________
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Delaware 7374 94-3370414
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification Number)
Incorporation or Organization) Classification Code Number)
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1330 Broadway, Suite 1535
Oakland, California 94612
(510) 808-3700
(Address and telephone number of principal executive offices and principal place
of business)
______________________

Barry C. McCarthy
President & Chief Operating Officer
MagnaCash, Inc.
1330 Broadway, Suite 1535
Oakland, California 94612
(510) 808-3700
(Name, address, and telephone number of agent for service)
______________________

Copies to:
John W. Campbell, Esq.
Mark W. Pearson, Esq.
Dante G. Corricello, Esq.
Morrison & Foerster LLP
425 Market Street
San Francisco, California 94105-2482
______________________

Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effective date of this Registration
Statement.

If any of the securities being registered on this Form are being 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, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.[_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[_]

If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box.[_]
______________________

CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum
Title of Each Class Amount to be Offering Price Aggregate Offering Amount of
of Securities to be Registered Registered (1) Per Share(2) Price(2) Registration Fee
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Common Stock, $0.001 par value 11,500,000 shares $.03 $408,585 $264
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(1) Based on an estimate of the maximum number of shares of Common Stock to be
issued in connection with the distribution described herein.

(2) Estimated solely for the purpose of determining the registration fee in
accordance with Rule 457(f) (2) under the Securities Act based on the
adjusted book value of the Common Stock after giving effect to the
distribution described herein. No consideration will be paid by the
recipients of the Common Stock.

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 that 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.
<PAGE>

SUBJECT TO COMPLETION, DATED ______ _, 2000

11,500,000 Shares of MagnaCash

Common Stock are being distributed
to the Stockholders of Cybergold, Inc.

_____

Cybergold, Inc. will distribute to the holders of record of Cybergold
Common Stock as of the close of business on August 3, 2000, approximately
11,500,000 shares of common stock of MagnaCash, Inc. Each such holder of
Cybergold Common Stock will receive one share of MagnaCash common stock for
every two shares of Cybergold Common Stock held. This distribution will be a
taxable distribution to the recipients, all or a portion of which may be taxable
as a dividend.

Prior to the distribution, there has been no public market for our common
stock. MagnaCash has not applied to have the MagnaCash common stock included
for quotation on the Nasdaq Stock Market's National Market or listed on any
exchange. Prior to the earliest of (i) the date that is the first anniversary
of the date that Cybergold ceases to be the sole holder of outstanding shares of
common stock, (ii) the date the Securities and Exchange Commission or successor
organization declares effective a registration statement on Form S-1 or Form S-3
or successor form regarding an offering of shares of common stock the issuance
of which would have the effect of increasing the number of shares of common
stock outstanding by eighty percent (80%) or more, or (iii) such date as
determined by the board of directors of MagnaCash in its sole discretion, common
stock may not be, directly or indirectly, sold, transferred, assigned, pledged,
exchanged, hypothecated, gifted or otherwise disposed of except: (A) by
Cybergold or its successor, in connection with the initial distribution by
Cybergold of common stock to the holders of Cybergold's common stock, as of the
record date of August 3, 2000, (B) from any holder of common stock that is a
natural person to (i) such stockholder's spouse or children, (ii) to any trust
solely for the benefit of such stockholder or the children or spouse of such
stockholder or (iii) to any party pursuant to applicable laws of descent and
distribution and (C) from any holder of common that is a corporation, limited
liability company, limited partnership or general partnership to any affiliate
(as defined under Rule 405 of the Securities Act of 1933, as amended).

Neither Cybergold nor MagnaCash will receive any proceeds from this
offering.

INVESTING IN MAGNACASH'S COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS"
ON PAGE 7.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Delivery of the shares of common stock will be made on or about September
29, 2000.

The date of this prospectus is ______ _, 2000.

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.
MAGNACASH AND CYBERGOLD HAVE NOT AUTHORIZED ANY OTHER PERSON TO PROVIDE YOU WITH
DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT OR INCONSISTENT
INFORMATION, YOU SHOULD NOT RELY ON IT. MAGNACASH AND CYBERGOLD ARE NOT MAKING
AN OFFER TO SELL THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS
NOT PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION APPEARING IN THIS
PROSPECTUS IS ACCURATE AS OF THE DATE ON THE FRONT COVER OF THIS PROSPECTUS
ONLY.

2
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MAGNACASH'S BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND
PROSPECTS MAY HAVE CHANGED SINCE THAT DATE.

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
CYBERGOLD AND MAGNACASH MAY NOT SELL OR DISTRIBUTE 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 STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.

3
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TABLE OF CONTENTS

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PAGE
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Summary................................................................................... 5
Risk Factors.............................................................................. 7
Forward Looking Statements................................................................ 15
Reasons for the Distribution.............................................................. 17
Tax Treatment............................................................................. 17
Business Of Magnacash..................................................................... 17
Selected Financial Data................................................................... 22
Management's Discussion and Analysis...................................................... 23
Management................................................................................ 29
Security Ownership Of Magnacash........................................................... 33
Arrangements Between Cybergold and MagnaCash.............................................. 34
Certain Relationships and Related Transactions............................................ 38
Material Federal Income Tax Considerations................................................ 39
Description of MagnaCash's Capital Stock.................................................. 40
Dividend Policy........................................................................... 41
Indemnification of Directors and Officers................................................. 41
Transfer Agent and Registrar.............................................................. 42
Legal Matters............................................................................. 42
Experts................................................................................... 42
Where You Can Find More Information....................................................... 42
Index to Financial Statements............................................................. F-1
Part II Information Not Required In Prospectus........................................... II-1
Exhibit Index............................................................................. II-5
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4
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SUMMARY

This summary highlights selected information contained elsewhere in this
prospectus and may not contain all the information important to you. To better
understand the distribution and MagnaCash, you should read the entire prospectus
carefully, including the risk factors and financial statements, including the
notes to the financial statements which are included elsewhere in this
prospectus.

MagnaCash is a provider of on-line payment infrastructure to on-line
businesses. We offer an on-line funds transfer system that
enables our clients to create individual accounts for their customer base.
These on-line accounts store value and can be credited by accepting transfers
from credit cards. Additionally, these accounts can accept cash awards earned
by users from promotional and other activities.

Users can apply funds from these accounts to a certain major credit card,
transmit them to bank accounts, or use them to make purchases directly from
merchants who participate in the Magna cash payment system.

Transfers between accounts within the system occur immediately. For
example, merchants receive immediate credit when accepting payment from a user.
Transfers of funds out of the system are credited immediately within the system,
but are subject to standard bank and credit card protocols for audit outside the
system.

We currently manage 9,000,000 accounts on behalf of one client, Cybergold,
Inc., our former corporate parent where our payment infrastructure business was
developed. Over 50 merchants and organizations currently participate in the
MagnaCash system.

Electronic commerce using the Internet has grown substantially over the
past several years. Consumers and businesses have adopted a variety of methods
to pay for goods and services obtained through the Internet. The two most common
on-line methods of payment--credit cards and direct bank payments made through
the Automated Clearing House (ACH) system present problems for users and
merchants. Importantly, some users are reluctant to provide credit card
information over the Internet.

The cost of accepting payment from credit cards and ACH can be high.
Merchants accepting credit cards over the Internet must pay transaction fees to
banks and credit card clearing organizations that are higher than fees payable
when a credit card is physically presented at the point of purchase. The cost of
accepting credit cards for on-line purchases can be particularly high for small
dollar sales. The marketplace for these Internet-based small dollar sales is
expected to increase as digital goods, such as recorded music, become more
available. Some users are also reluctant to use the ACH system for Internet
transactions because it requires users to enter their bank account numbers, bank
identification information and other personal information. In addition,
merchants may not receive credit for funds transfers using the ACH system for as
many as three days.

We offer a system that provides users with a secure, easy to use payment
method and merchants with immediate credit for fund transfers and lower
transaction fees. The system consists of software hosted by us on our servers on
which accounts are maintained for both users and merchants. Purchase
transactions are effected through entries in databases maintained by us and
electronic communication with the commerce systems of merchants. MagnaCash is
not a bank, and the accounts created using the MagnaCash system are not bank
accounts and are not FDIC-insured. User and merchant funds are maintained by us
on a commingled basis in an FDIC insured depository institution and can be
remitted to bank accounts or a major credit card.

We generate revenues by (i) assessing client fees for hosting accounts;
(ii) delivering customized design and installation services for these hosted
accounts; and (iii) processing transactions between merchants and users.
Presently, Cybergold is our only client, for which we manage 9,000,000 accounts
pursuant to a services agreement. We intend to pursue other clients and
merchants for our services.

5
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For a description of the potential risks MagnaCash faces, please see "Risk
Factors" on page 7.

MagnaCash, Inc. was incorporated in Delaware. Its offices are located at
1330 Broadway, Suite 1535, Oakland, CA 94612 and its telephone number is
(510) 808-3700.

Relationship between Cybergold and MagnaCash

80.1% of the MagnaCash common stock is being distributed to the Cybergold,
Inc. stockholders as described in this registration statement subsequent to the
merger of Cybergold with the Mygo Acquisition Corporation. Cybergold will own
19.9% of our common stock after the distribution. Cybergold will make a $5
million contribution to MagnaCash. Our board of directors will consist of three
to nine directors. At the outset, two of our three directors will be former
directors of Cybergold.

Reasons for the Distribution

The amended merger agreement among MyPoints, a wholly owned subsidiary of
MyPoints and Cybergold, contemplates distribution of MagnaCash to Cybergold's
stockholders subsequent to the merger. After thorough consideration, the board
of directors of Cybergold determined that a distribution of the shares of
MagnaCash common stock was in the best interests of the stockholders of
Cybergold. In the merger, Cybergold merged with a wholly-owned subsidiary of
MyPoints called the Mygo Acquisition Corporation. Cybergold survived that merger
as a wholly owned subsidiary of MyPoints.

Distribution

Each Cybergold stockholder will receive one share of MagnaCash common stock
for every two shares of Cybergold common stock held by such stockholder.
MyPoints.com, Inc., will be the beneficial owner of 2,786,000 shares of
MagnaCash common stock retained by Cybergold, or 19.9% of the outstanding shares
as of immediately after the distribution. No fractional shares will be
distributed. The number of shares distributed to each stockholder will be
rounded down to the nearest whole number where a stockholder would otherwise
receive a fractional share.

Prior to the earliest of (i) the date that is the first anniversary of the
date that Cybergold ceases to be the sole holder of outstanding shares of common
stock, (ii) the date the Securities and Exchange Commission or successor
organization declares effective a registration statement on Form S-1 or Form S-3
or successor form regarding an offering of shares of common stock the issuance
of which would have the effect increasing the number of shares of common stock
outstanding by eighty percent (80%) or more, or (iii) such date as determined by
the board of directors of MagnaCash in its sole discretion, common stock may not
be, directly or indirectly, sold, transferred, assigned, pledged, exchanged,
hypothecated, gifted or otherwise disposed of except: (A) by Cybergold or its
successor, in connection with the initial distribution by Cybergold of common
stock to the holders of Cybergold's common stock, as of the record date of
August 3, 2000, (B) from any holder of common stock that is a natural person to
(i) such stockholder's spouse or children, (ii) to any trust solely for the
benefit of such stockholder or the children or spouse of such stockholder or
(iii) to any party pursuant to applicable laws of descent and distribution and
(C) from any holder of common that is a corporation, limited liability company,
limited partnership or general partnership to any affiliate (as defined under
Rule 405 of the Securities Act of 1933, as amended).

Cybergold will realize a taxable gain on the distribution of the MagnaCash
business to the extent the fair market value of the distributed MagnaCash stock
exceeds Cybergold's basis in such stock. The distribution of the MagnaCash
business will be a taxable distribution to Cybergold stockholders, all or a
portion of which may be taxable as a dividend.

6
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RISK FACTORS

You should carefully consider the risks described below when evaluating
your ownership of MagnaCash common stock. The risks and uncertainties described
below are not the only ones we face. Additional risks and uncertainties we are
presently not aware of, or that we currently consider immaterial may also impair
our business operations.

If a major credit card company or the banking industry offers similar
services, the market for our services may be reduced or eliminated.

If a major credit card company changes strategy and offers Internet
transactional services at a lower price, and with similar ease of use to those
offered by us, we will lose our primary points of appeal to merchants and
consumers. As a result the market for our business may be significantly reduced
or eventually eliminated.

Competition in our industry is intense. If we are unable to compete
effectively, the demand for, and/or the prices of, our services may decline.

The market for our services is intensely competitive and characterized by
declining average selling prices and rapid technological change. Many consider
the on-line payment space to be embryonic with significant development still
pending. Our principal competitors and potential competitors, such as credit
card companies, may have more resources with which to compete and implement
technological change. Our principal competitors could change or grow because
the market for our services is emerging and undefined.

We may not be able to effectively respond to competition because of the
disparity in resources between ourselves and many of our competitors. Though
Cybergold has always faced competition, we may be less able to react quickly to
competitive threats without the added benefits we enjoyed through our
combination with Cybergold. These benefits included joint research and
development, Cybergold's sales force and financial stability. We compete with
companies including but not limited to:

. Ipin;

. PayPal/X.com;

. Qpass;

. Trivnet;

. Beenz;

. Flooz;

. Cybermoola;

. Cobalt Card;

. WebCertificates;

. RocketCash; and

. Internetcash.

7
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If our relationship with the First National Bank of Omaha were to deteriorate or
terminate or if the First National Bank of Omaha were to enter into similar
relationships with our competitors, our ability to deposit to and transfer funds
from a major credit card's accounts could be discontinued or it could face
increased competition.

MagnaCash has a contractual relationship with the First National Bank of
Omaha, an acquiring bank for major credit cards, that enables the transfer of
funds from individual Cybergold member accounts to credit card accounts, as well
as from credit card accounts to Cybergold accounts. This transaction processing
capability initially required re-engineering of the First National Bank of
Omaha's major credit card transaction processing system. The system and
capability would be difficult to replicate with another financial service
provider if the relationship with the First National Bank of Omaha were to
deteriorate or terminate. The First National Bank of Omaha can terminate the
contract at any time with 30 days notice. Currently, under the conditions of the
agreement with the bank, MagnaCash cannot enter into similar relationships with
other credit card providers. However, the First National Bank of Omaha can at
its own discretion freely offer similar services to existing and potential
competitors. If we were to lose this relationship with the First National Bank
of Omaha, or if the bank were to extend similar services to our competitors, it
could disrupt our operations and have a material adverse effect on our business,
results of operations and financial condition.

MagnaCash may incur losses as a result of operating independently from
Cybergold.

We have operated as a support division of Cybergold until recently. We
will incur losses operating as an independent company. Operating independently,
we cannot be sure that our operating results will not be adversely affected by
the loss of one or more attributes of operating as part of Cybergold. Operating
as part of Cybergold has allowed us, among other things:

. to develop as a business despite low initial revenues in 1999 for our
business;

. to have Cybergold as a captive client base that now may eventually cease
using our services; and

. to have a developed company administrative infrastructure.

We currently use Cybergold's information systems, for which Cybergold will
transfer or grant licenses to us to support our business as a stand-alone
entity.

We currently use Cybergold's systems to support our operations, including
systems to manage order processing, human resources, shipping, accounting,
telecommunications and computer networking. Any failure or significant downtime
in Cybergold's or our information systems could prevent us from taking customer
orders and billing customers and could harm our business. Many of the systems we
currently use are proprietary to Cybergold and are very complex. These systems
have been modified, and are in the process of being further modified, to enable
us to separately track items related to its business. These modifications,
however, may result in unexpected system failures or the loss or corruption of
data, which may disrupt our operating and have a material adverse effect on our
business, results of operations and financial condition.

We cannot assure you that we will be profitable because we have operated our
business only for a short period of time and have only limited operating history
upon which to evaluate our business.

We have only been operating since 1999, and during that time have operated
as past of Cybergold, with the key leadership of the organization joining us
within the last six months. The revenue and income potential of our business
and the markets for on-line payments through alternative mechanisms is unproven.
We will encounter risks and difficulties commonly encountered by early stage
companies in new and rapidly evolving markets.

To date we have derived substantially all of our product revenue from
transaction fees assessed merchants accepting direct payment from a Cybergold
account. Cybergold is our only current client through whom we have established
accounts for a limited number of merchants, other organizations and consumers.

8
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We may never achieve profitability.

We have accumulated net losses of approximately $1,867,000 from our
inception through June 30, 2000, and we expect such losses to continue for the
foreseeable future. We cannot predict if we will ever achieve profitability
and, if we do, we may not be able to sustain or increase our profitability. Our
ability to achieve and maintain profitability will depend on, among other
things, the market acceptance of our services. The commercial success of any of
our services will depend on:

. our ability to sell our services to clients, merchants, and consumers;
and

. our ability to induce merchants to install our software.

The market for alternate Internet payment mechanisms is relatively new and we
cannot be certain that a viable market for our products will emerge or be
sustainable.

We cannot assure you that the demand for and market acceptance of alternate
Internet payment services will develop to a sufficient level to support
continued operations or planned expansion, and also cannot assure you that
users, clients or merchants will utilize our system for payment transactions
over the Internet. Currently, Internet content and service providers typically
use a subscription model to charge for content or services they provide, if they
charge consumers directly for their content or services at all. We cannot assure
you that these entities will ever adopt a method for accepting small payments
for their content or services over the Internet. In addition, the development of
a market for payments on the Internet may depend on the eventual adoption of a
standard payment system. There can be no assurance that our payment system will
be the system adopted by users, clients or merchants. If a widespread demand for
on-line payments does not develop or if another method for on-line payments is
adopted as a standard, it may have a materially adverse effect on our business,
results of operations and financial condition.

We must continue to grow our revenue and diversify our revenue streams.

The long-term success of our business strategy will depend to a significant
extent on our ability to successfully grow our revenue and diversify our revenue
stream. Any expansion of service offerings or operations could damage our
reputation. Expansion into new business areas will also require significant
additional expenses and programming and other resources. It will also strain
our management, financial and operational resources.

From time to time, we may entertain new business opportunities and ventures
in a broad range of areas both within and outside the United States. Typically,
these opportunities require extended negotiations, the outcome of which cannot
be predicted. If we were to enter into such a venture, we could be required to
invest a substantial amount of capital, which could have a material adverse
effect on our financial condition and ability to implement our existing
business strategy. Such an investment could also result in large and prolonged
operating losses for us. Further, these negotiations or ventures could place
additional, substantial burdens on our management personnel and our financial
and operational systems. Such a venture may not ever achieve profitability, and
a failure by us to recover the substantial investment required to launch and
operate such a venture would have a material adverse effect on our business,
financial condition and operating results.

We may be unable to obtain additional capital needed to operate and expand our
business.

We believe that our available cash resources combined with funds from
operations and Cybergold's $5 million contribution will be sufficient to meet
our working capital and capital expenditure requirements for approximately one
year. We may be required to raise additional funds in order to expand
operations, finance acquisitions or to finance other activities we determine to
be beneficial to our business.

If adequate funds are not available or are not available on acceptable
terms, we may be unable to develop or enhance our products and services, take
advantage of future opportunities or respond to competitive pressures, which
could have material adverse effect on our business, financial condition or
operating results.

9
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If we raise additional funds through the issuance of equity securities, the
percentage ownership of the stockholders of record will be reduced, and
stockholders may experience additional dilution. It is also possible that new
equity securities may have rights, preferences or privileges senior to those of
the holders of our common stock. Moreover, we cannot assure you that additional
financing will be available as we need it.

We depend on continued growth in e-commerce and Internet infrastructure
development.

Use of the Internet by businesses and consumers as a medium for electronic
commerce is at an early stage of development and is subject to a level of
uncertainty. We depend on the growing use and acceptance of the Internet as an
effective medium of commerce by merchants and customers. The use of and,
interest in, the Internet are relatively recent developments. We cannot be
certain that acceptance and use of the Internet will continue to develop as a
medium for commerce or that a sufficiently broad base of merchants and
purchasers will adopt, and continue to use, the Internet as a medium of
commerce.

The emergence of the Internet as a commercial marketplace may occur more
slowly than anticipated for a number of reasons, including potentially
inadequate development of the necessary network infrastructure or delayed
development of enabling technologies and performance improvements. If the
number of Internet users or their use of Internet resources continues to grow it
may overwhelm the existing Internet infrastructure. Delays in the development
or adoption of new standards and protocols required to handle increased levels
of Internet activity could also have a detrimental effect. These factors could
result in slower response times or adversely affect usage of the Internet,
resulting in lower numbers of transactions through the Internet and lower demand
for our services.

Our success also depends on our ability to expand our systems to
accommodate increases in the volume of traffic, especially during peak periods
of demand. We may not be able to anticipate increases in the use services and
successfully expand the capacity of our network infrastructure. This could
result in system disruptions, slower response times and other difficulties in
providing services to merchants, consumers and clients.

The Internet is characterized by rapid technological changes, and we must adapt
quickly to these changes to compete effectively.

The market for Internet products and services is characterized by rapid
technological developments, evolving industry standards and customer demands,
and frequent new product introductions and enhancements. For example, to the
extent that real-time on-line payment mechanisms become more widely utilized and
offered, we may be required to make significant changes to the design and
content of our services to respond to merchant and customer needs and
competitive pressures. Failure to effectively adapt to these or any other
technological developments could have an adverse effect on our business, results
of operations and financial conditions.

MagnaCash is exposed to e-commerce security risks.

A requirement of the continued growth of e-commerce is the secure
transmission of confidential information over public networks. A party who is
able to circumvent our security measures could misappropriate proprietary
information, steal cash, damage records or interrupt our operations. Any such
compromise or elimination of our security could reduce demand for our services
and lower merchant and consumer confidence, harming our ability to grow and
subject us to liability.

We may be required to expend significant capital and other resources to
protect against these security breaches or to address problems caused by these
breaches. Concerns over the security of the Internet and other on-line
transactions and the privacy of users may also inhibit the growth of the
Internet and other on-line services generally, and the Internet in particular,
especially as a means of conducting commercial transactions. Since some of its
activities involve the storage and transmission of proprietary information, such
as account numbers, security breaches could damage our reputation and expose it
to a risk of loss or litigation and possible liability. Our security measures
may not prevent security breaches, and failure to prevent these security
breaches may disrupt our operations and have a material adverse effect on our
business, results of operations and financial condition.

10
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We may engage in future acquisitions that result in increased debt, assumption
of liabilities and other managerial challenges that may result in a negative
effect on operations.

As part of our overall strategy to enhance or accelerate our product
development efforts, we may acquire or invest in complementary companies,
products or technologies or enter into joint ventures or strategic alliances
with other companies. Risks commonly encountered in such transactions include:

. the difficulty of assimilating the operations and personnel of the combined
companies;

. the potential disruption of our ongoing business;

. the inability to retain key technical and managerial personnel;

. the inability of management to maximize our financial and strategic position
through the successful integration of the acquired business, decreases in
reported earnings as a result of charges for in-process research and
development and amortization of acquired intangible assets, dilution of
existing equity holders, difficulty in maintaining controls, procedures and
policies, and the impairment of relationships with employees and customers as
a result of any integration of new personnel.

We may not be successful in overcoming these risks or any other problems
encountered in connection with such business combinations, investments or joint
ventures. These transactions may have a material adverse effect on our business,
results of operations and financial condition.

We believe that we are not subject to federal or state laws or regulations as a
bank or branch of a bank and operate in conformity with any applicable
electronic payment and money transfers laws or regulations, but should we be
found subject to or in violation of any such laws or regulations we could be
subject to liability or forced to change our business practices.

We believe that we are not subject to federal or state laws or regulations
as a bank or branch of a bank, and that we operate in conformity with any
applicable electronic payment laws or regulations, but should we be found
subject to and/or in violation of any such laws or regulations we could be
subject to liability or forced to change our business practices. Such liability
or changes could have a material adverse effect on our business, results of
operations and financial condition.

We believe that we are not subject to or in violation of federal laws or
regulations, including the Electronic Funds Transfer Act and Federal Reserve
Board Regulation E, or state laws and regulations regarding money transfers.
However, should we be found to be subject to and in violation of such laws or
regulations, we could be subject to liability or forced to change our business
practices. Such liability or changes could have a material adverse effect on
our business, results of operations and financial condition.

We are subject to U.S. government regulation of the Internet, the impact of
which is difficult to predict.

There are currently few laws or regulations directly applicable to the
Internet. The application of existing laws and regulations to us relating to
issues such as banking, currency exchange, defamation, pricing, taxation,
quality of services, and intellectual property ownership and infringement can be
unclear. Moreover, we use encryption technology that may be or may become
subject to government regulation. In addition, we may also become subject to
new laws and regulations directly applicable to the Internet or our activities.
Any existing or new legislation applicable to us could expose us to substantial
liability, including significant expenses necessary to comply with these laws
and regulations, and dampen the growth in use of the Internet on which we
depend.

In 1998, the United States government enacted a three-year moratorium,
which has since been proposed to be extended through 2005, prohibiting states
and local governments from imposing new taxes on electronic commerce
transactions. Upon expiration of this moratorium, if it is not extended, states
or other governments may levy sales or use taxes on electronic commerce
transactions. An increase in the taxation of electronic commerce

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transactions may make the Internet less attractive for consumers and businesses
which could have a material adverse effect on our business, results of
operations and financial condition.

We will be dependent on Cybergold and MyPoints, which is acquiring Cybergold,
for virtually all of our business and technology for the immediate future.
MyPoints may exert an undue amount of influence on MagnaCash and the MagnaCash
business given its 19.9% stake in the company.

We will initially be dependent on Cybergold and its acquirer, MyPoints, for
virtually our entire customer base. Moreover, MyPoints will own 19.9% of
MagnaCash through Cybergold and thus could exert undue influence over us until
we can expand our customer base and increase our economic independence.

Our directors and executive officers may have conflicts of interest because of
their ownership of Cybergold common stock.

Many of our directors and executive officers have a substantial amount of
their personal financial portfolios in Cybergold common stock and options to
purchase Cybergold common stock. Ownership of Cybergold common stock, and
MyPoints common stock after the acquisition of Cybergold by MyPoints, by our
directors and officers after our separation from Cybergold could create, or
appear to create, potential conflicts of interest when directors and officers
are faced with decisions that could have different implications for Cybergold
and us. Specifically, these directors and officers might take action in their
own self interest that might not be the best possible action from our
perspective. For information regarding directors' and officers' ownership of
Cybergold common stock, see "Security Ownership of MagnaCash."

We are subject to the effective control of two stockholders and to anti-takeover
provisions.

Between them, A. Nathaniel Goldhaber and MyPoints after the acquisition of
Cybergold will hold 37.1% of MagnaCash common stock, an amount sufficient to
exercise effective control. In addition, because of anti-takeover provisions, a
third party may be reluctant to attempt to gain control of MagnaCash, even if a
change in control might be beneficial to our stockholders. This could adversely
affect the market price of our common stock. These anti-takeover provisions
include:

- division of the board of directors into three separate classes;

- elimination of cumulative voting in the election of directors;

- prohibitions on our stockholders from acting by written consent and
calling special meetings;

- procedures for advance notification of stockholder nominations and
proposals; and

- the ability of the board of directors to alter our bylaws without
stockholder approval.

MagnaCash's historical financial information may not be representative of its
results as a separate company.

Our historical financial information, as part of Cybergold, is shown in the
financial statements beginning on page F-1 and does not necessarily reflect what
our financial position, results of operations and cash flows would have been had
we been a separate, stand-alone entity during the periods presented. In
addition, the historical information is not necessarily indicative of what our
results of operations, financial position and cash flows will be in the future.
We have not made adjustments to reflect many significant changes that will occur
in our cost structure, funding and operations as a result of our separation from
Cybergold, including changes in our employee base, changes in our legal
structure, increased costs associated with reduced economies of scale, increased
marketing expenses related to establishing a new brand identity and increased
costs associated with being a public, stand-alone company.

For additional information, see "Proforma Financial Statements," "Selected
Financial Statements," as well as the notes thereto and "Management's Discussion
and Analysis."

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Public trading in our stock will be restricted for a period of time. This
restriction will almost certainly reduce the value of MagnaCash common stock.
Stockholders must use another source of funds to pay any taxes resulting from
this share distribution.

Seasonal trends may cause our quarterly operating results to fluctuate. In the
future after the stock is publicly traded, this fluctuation may adversely affect
the market price of its common stock.

A significant portion of our sales revenue comes from the consumer and
merchant markets, both of which are characterized by seasonal sales. Both
markets tend to experience higher sales in the third and fourth calendar
quarters due to holiday purchases and relatively weaker sales in the first and
second calendar quarters. Seasonal trends may cause our operating results to
fluctuate which may have an adverse effect on our stock price when our stock is
publicly traded.

In some cases clients pay one-time set-up fees in connection with acquiring
our services. The timing of the recognition of fees varies, which contributes
to quarterly fluctuations in revenues. In addition, many of our distribution
channels integrate our services with other electronic commerce solutions. The
timing for these channels to complete the integration and deploy their solutions
into their distribution channel is unpredictable.

There has never been a trading market for MagnaCash common stock which may cause
the stock price to be volatile. This volatility might keep you from reselling
your shares at or above any valuation at distribution once trading commences.

Prior to the distribution, there has been no public market for MagnaCash
common stock. In addition, we have made no formal presentations to potential
investors in anticipation of the distribution. Prior to the earliest of (i) the
date that is the first anniversary of the date that Cybergold ceases to be the
sole holder of outstanding shares of common stock, (ii) the date the Securities
and Exchange Commission or successor organization declares effective a
registration statement on Form S-1 or Form S-3 or successor form regarding an
offering of shares of common stock the issuance of which would have the effect
increasing the number of shares of common stock outstanding by eighty percent
(80%) or more, or (iii) such date as determined by the board of directors of
MagnaCash in its sole discretion, common stock may not be, directly or
indirectly, sold, transferred, assigned, pledged, exchanged, hypothecated,
gifted or otherwise disposed of except: (A) by Cybergold or its successor, in
connection with the initial distribution by Cybergold of common stock to the
holders of Cybergold's common stock, as of the record date of August 4, 2000,
(B) from any holder of common stock that is a natural person to (i) such
stockholder's spouse or children, (ii) to any trust solely for the benefit of
such stockholder or the children or spouse of such stockholder or (iii) to any
party pursuant to applicable laws of descent and distribution and (C) from any
holder of common that is a corporation, limited liability company, limited
partnership or general partnership to any affiliate (as defined under Rule 405
of the Securities Act of 1933, as amended). We believe the initial trading
volume after the expiration of the trading restriction in MagnaCash common stock
will be moderate as investors assess our progress as a public, stand-alone
company.

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MagnaCash common stock may be followed by few, if any, market analysts and
there may be no institutions acting as market makers for the common stock.
Furthermore, broad market and industry fluctuations may adversely affect the
trading price of the common stock, regardless of our actual operating
performance. Any of these factors could adversely affect the liquidity and
trading price of the MagnaCash common stock when it is freely tradable.

We may experience software defects and development delays, damaging customer
relations and decreasing our potential profitability.

Services based on sophisticated software and computing systems often
encounter development delays, and the underlying software may contain undetected
errors or failures when introduced or when the volume of services provided
increases. We may experience delays in the development of our software products
or the software and computing systems underlying our services. In addition,
despite testing by us, and potential clients, it is possible that our software
may nevertheless contain errors, and this could have a material adverse effect
on our business, results of operations and financial condition.

We rely on affiliate and third party technology that we need for our services.

We do not own our technology. We have an exclusive, global, royalty free
license from Cybergold to use our technology for operating a payment business.
We rely on technology which we license from Cybergold and third parties. Some
commercial software is integrated with internally developed and proprietary
software and used in our software to perform key functions. We cannot assure you
that technology licenses will continue to be available to us on commercially
reasonable terms or at all. If we lose or cannot maintain any of these
technology licenses, it could impede our provision of services and delay the
introduction of new services. Any delay resulting from the acquisition or use of
commercial software may have a material adverse effect on our business, results
of operations and financial condition.

We may experience difficulty attracting and retaining quality employees, who if
retained may not work well together, potentially limiting our ability to operate
our business effectively.

Our ability to grow will depend, in large part, on our ability to attract
and retain highly qualified technical and managerial personnel. The combination
of our business with the Cybergold business has resulted in faster growth and
greater scale. After the distribution, without these benefits of a combined
business, we may not experience the same success attracting quality employees.

Competition for qualified personnel is intense, especially in the Bay Area
where we are located. There is a risk that some key employees will depart as a
result of the distribution. Lack of success in attracting qualified new
employees could lead to lower than expected operating results, delays in the
introduction of new services and a negative effect on our ability to acquire and
support clients.

The management team has been in place only for a few months, and may not be
able to work as an effective team. Additionally, our performance is
substantially dependent on the performance of its executive officers and key
employees. We do not have "key person" life insurance policies on any of its
employees. The loss of the services of any key employees or directors,
particularly A. Nathaniel Goldhaber, Gary Fitts or Barry McCarthy, could have a
material adverse effect on our business, results of operations and financial
condition.

If we are unable to adequately protect our intellectual property, third parties
could use our intellectual property without our consent.

Our operating results depend, in part, on our ability to protect our
technology. Our products are primarily based on technology that was developed
internally which we protect through a combination of confidentiality agreements
and licensing arrangements. Unauthorized parties may attempt to obtain and use
our proprietary information which might negatively affect the value of our
stock. Policing unauthorized use of our proprietary information is difficult,
and we do not know whether the steps we have taken will prevent
misappropriation,

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particularly in foreign countries where the laws may not protect our proprietary
rights as fully as the laws of the United States.

Our operating results would suffer if we were forced to defend against a
protracted infringement claim or if a third party were awarded significant
damages.

There is a substantial risk of litigation regarding intellectual property
rights in the on-line cash account and transaction industry. A successful claim
of patent or other technology infringement against us and our failure or
inability to license the infringed or similar technology could harm our
business. Any claims, with or without merit, could:

. be time-consuming and costly to defend;

. divert management's attention and resources;

. cause delays in delivering services;

. require the payment of monetary damages which may be tripled if the
infringement is found to be willful;

. result in an injunction which would prohibit us from offering a particular
service; and

. require us to enter into royalty or licensing agreements which may not be
available on acceptable terms.

FORWARD LOOKING STATEMENTS

This prospectus contains forward-looking statements that are based on our
current expectations, assumptions, estimates and projections about MagnaCash and
its industry. When used in this prospectus, the words expects, anticipates,
estimates, intends and similar expressions are intended to identify forward-
looking statements. These statements include, but are not limited to, statements
under the captions "Risk Factors," "Management's Discussion and Analysis,"
"Business of Magnacash" and elsewhere in this prospectus.

These forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from those projected. The
cautionary statements made in this prospectus should be read as being applicable
to all related forward-looking statements wherever they appear in this
prospectus.

WHY THIS PROSPECTUS WAS SENT TO YOU

This prospectus is being delivered to you because you were an owner of
Cybergold common stock on August 3, 2000. This entitles you to receive a
distribution of one share of the common stock of our new company, MagnaCash,
Inc., a Delaware corporation, for every two shares of Cybergold common stock
owned by you on August 3, 2000. Although no action is required on your part to
cause this to happen and you do not have to pay cash or other consideration to
receive these shares, the distribution of these shares to you will have certain
tax and other consequences, so please read the information in this document
carefully. You do not need to surrender shares of Cybergold or MyPoints common
stock to receive MagnaCash common stock in the distribution. The number of
shares of Cybergold or MyPoints common stock you own will not change as a result
of the distribution.

This prospectus describes our business, the relationship between Cybergold
and us, and provides other information to assist you in evaluating the benefits
and risks of holding or disposing of your shares of MagnaCash common stock once
share transfer restrictions expire.

80.1% of MagnaCash's common stock is being distributed to the Cybergold
stockholders as described in this prospectus. Cybergold will have a 19.9%
ownership interest in us after the distribution. Our board of directors will
consist of up to nine directors. At the outset the board will consist of three
directors and two of the MagnaCash directors will be former directors of
Cybergold.

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The merger agreement pursuant to which MyPoints will acquire Cybergold
contemplates the distribution of MagnaCash in connection with the merger. After
thorough consideration, the board of directors of Cybergold determined that a
distribution of shares of MagnaCash was in the best interest of the stockholders
of Cybergold.

THE DISTRIBUTION

Each Cybergold stockholder will receive one share of MagnaCash common stock
for every two shares of Cybergold common stock held. Cybergold will retain
2,857,053 shares of MagnaCash common stock. As of July 31, 2000 Cybergold had
approximately 21,150,174 shares of common stock outstanding.

Distribution and Transfer Information. U.S. Stock Transfer Corporation
will act as the distribution and transfer agent for the distribution. The
distribution agent will mail stock certificates beginning on or about the
distribution date.

Record Date, Distribution Date. The record date for the distribution will
be the close of business on August 3, 2000.

No Fractional Shares. No fractional shares of MagnaCash common stock will
be distributed.

Trading Market. MagnaCash common stock will not be publicly traded for a
period of time following the distribution, as described herein.

The board of directors of Cybergold has declared a distribution to its
stockholders, of one share of MagnaCash common stock for every two shares of
Cybergold common stock held on August 3, 2000, the record date for the
distribution. As a result of the distribution, 80.1% of the then outstanding
MagnaCash common stock will be distributed to Cybergold's stockholders. The
remaining 19.9% will be held by Cybergold. See "Description of MagnaCash's
Capital Stock."

Before September 30, 2000, Cybergold will complete preliminary internal
restructuring transactions related to the MagnaCash business. On or before
September 30, 2000, the transfer agent will mail the shares to the Cybergold
stockholders of record as of the record date.

No fractional shares will be issued as part of the distribution. Each
person will receive one share of MagnaCash common stock for every two shares of
Cybergold the person holds, rounded down to the nearest whole number.

Cybergold stockholders will not be required to pay any cash or other
consideration for the MagnaCash common stock received in the distribution. The
distribution of the MagnaCash common stock to Cybergold stockholders will,
however, have certain tax and other consequences, as discussed in this document.

The general terms and conditions of the distribution and the arrangements
between MagnaCash and Cybergold will be set forth in the License, Assignment and
Assumption Agreement, the Tax Sharing Agreement, the Real Estate Matters
Disclosure Agreement and the Transitional Services and Joint Operating
Agreement. For more information regarding these agreements, please see
"Arrangements between Cybergold and MagnaCash." Cybergold will pay the costs and
expenses incurred in connection with the distribution, other than any corporate
level taxes, which shall be paid by MagnaCash.

INVESTOR CONTACT

MagnaCash and Cybergold stockholders with questions about the distribution
should contact Wayne Wooddell at Cybergold's principal executive offices at 1330
Broadway, 15th Floor, Suite 1535, Oakland, California 94612; telephone
(510) 808-3700. This contact information will remain the same after the
distribution.

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REASONS FOR THE DISTRIBUTION

The merger agreement pursuant to which MyPoints will acquire Cybergold
contemplates the sale or distribution of the MagnaCash business in connection
with the merger. After thorough consideration, the board of directors of
Cybergold determined that a distribution of the MagnaCash business was in the
best interest of the stockholders of Cybergold.

Cybergold believes that the distribution of MagnaCash will significantly
benefit Cybergold stockholders by:

. separating the risks associated with developing an on-line cash transaction
system from Cybergold's traditional focus on Internet rewards services; and

. allowing Cybergold's near-term financial results to continue to reflect
principally its traditional Internet consumer rewards business, as integrated
with merger parent MyPoints' on-line direct marketing and loyalty programs
business.

After reviewing Cybergold's goals and objectives and considering other
possible methods of enhancing the growth of MagnaCash and Cybergold, Cybergold's
management and board of directors concluded that enhancing this business through
the formation of MagnaCash and the distribution of MagnaCash would be in the
best interest of Cybergold stockholders. Cybergold's board of directors approved
the formation of MagnaCash and the distribution after consultation with
Cybergold's management.

TAX TREATMENT

For tax and legal purposes, Cybergold will report the distribution of
MagnaCash stock as a taxable event to Cybergold. In connection with the
distribution of the stock of MagnaCash, Cybergold will recognize taxable gain
generally equal to the difference between its tax basis in the shares of
MagnaCash stock distributed and the fair market value of such shares at the time
of the distribution.

BUSINESS OF MAGNACASH

MagnaCash is a newly formed company that contains the account management
and transaction enablement system developed by Cybergold, Inc., our corporate
parent. Currently the system is in use to manage and permit the spending of cash
awards earned by Cybergold members through their participation in Cybergold's
on-line consumer incentives business. MagnaCash has been capitalized by
Cybergold, and will initially continue to provide Cybergold account management
and transaction enablement. Shares of MagnaCash's stock are being distributed to
stockholders of record of Cybergold on August 3, 2000. The distribution of these
shares to Cybergold stockholders is being made on or about September 29, 2000,
pursuant to the merger agreement under which Cybergold will be acquired by
MyPoints.

MagnaCash is a provider of on-line payment infrastructure to on-line
businesses. We offer an on-line funds transfer system that enables our clients
to create individual accounts for their users. These on-line accounts store
value, and can be credited by accepting transfers from credit cards.
Additionally, these accounts can accept cash awards earned by users from
promotional and other activities.

Users can apply funds from these accounts to credit cards, transmit them to
bank accounts, or use them to make purchases directly from merchants who
participate in the MagnaCash payment system. Transfers between accounts within
the system occur immediately. For example, merchants receive immediate credit
when accepting

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payment from a consumer. Transfers of funds out of the system are credited
immediately within the system, but are subject to standard bank and credit card
protocols for audit outside the system.

We currently manage 9,000,000 accounts on behalf of one client, Cybergold,
Inc., our former corporate parent where the payment infrastructure business
conducted by us was developed. Over 50 merchants and organizations currently
participate in the MagnaCash system.

Industry Background

The Internet has emerged as a substantial vehicle for conducting commerce.
According to e-Marketeer, worldwide business to consumer e-commerce revenue is
projected to be nearly $200 billion by year 2003. Worldwide business to business
e-commerce revenue is projected to exceed $1.2 trillion by year 2003, according
to e-Marketeer. These revenue projections represent the total value of goods and
services sold across the Internet. This monetary value can be transferred
physically, by exchanges of cash, checks, money orders or the presentation of a
credit card or numerical information from it, or electronically, by such means
as wire transfers and payment mechanisms that use the electronic communications
networks, including the Internet, to transmit and effect a transfer of value.
MagnaCash believes that an increasing percentage of payments underlying e-
commerce are being made on-line and that this percentage will continue to grow.

Today, most on-line payment transactions are processed through two existing
electronic payment systems--the automated clearing house (ACH) and credit cards.
The ACH is a system operated by the nation's depository institutions through
which monetary transactions are transmitted electronically between financial
institutions. The ACH is a batch-processing, store-and-forward system.
Transactions received from a merchant during the day by a financial institution
are stored and processed later in a batch mode. Rather than sending each
transaction separately in real time, ACH transactions are accumulated and sorted
by destination for transmission during a pre-determined time. Users can access
the ACH system on-line by presenting merchants who choose to offer an ACH
payment option with sufficient checking account information to permit a merchant
to instruct its bank to debit the account of the user at the user's bank.
Because ACH information is processed only episodically and often must pass
through two financial institutions and the ACH system operator (the institution
where the deposit was made, the institution where the account is maintained and
the Federal Reserve Bank or other ACH operator), it can take up to 72 hours for
an ACH transaction to "clear," or result in the confirmation of available funds
to the merchant. ACH transactions typically require users to enter 20 or more
digits from the face of a physical check representing the user's account number
and bank identification numbers, as well as other personal information.

Credit cards are the dominant payment tool on the Internet today. Through
the major credit card networks, users can complete payment transactions with
virtually every on-line merchant. However, there are disadvantages for both
users and merchants in using credit cards in many situations:

. Some Internet users do not possess credit cards.

. Some Internet users are reluctant to use credit cards on-line because
of security concerns.

. Credit card usage can be cumbersome, requiring the typed entry of a 16
digit card number, four digit expiration date and personal information
such as street address, city, state, zip code and telephone number.

. Transaction costs associated with the acceptance of credit cards for
on-line payments are high. Merchants typically pay a fee to
process purchases using credit cards, ranging from as little as 1% to
as much as 4% of the purchase price. These fees compensate the bank
accepting a credit card deposit, the bank which issues the card and
collects payment from the user, and in many cases the organization
that provides clearing services between the various institutions.
Because a credit card is not physically presented to the merchant when
used on-line, the risk of fraudulent use is higher and,
correspondingly, so are transaction fees, which typically range from
2.5% to over 50% for on-line transactions. Total transaction fees for
"low value"

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purchases of less than $5.00 by credit card over the Internet have the
highest relative cost, and can, in some cases exceed 50% of the
aggregate purchase price.

We believe that opportunities for Internet users to make small dollar
purchases on the Internet will grow substantially as business models develop for
the sale of digital content, such as individual songs and movies, to individual
users. We believe that Internet portals and other Internet sites will find
increasingly compelling reasons to sponsor accounts for users in order to
capture revenue and transaction flow from this development.

The MagnaCash Solution

We offer an on-line payment infrastructure that allows its customer clients
to establish on-line "accounts" for Internet users. Users create balances in
these accounts by transferring funds from their bank account or a certain major
credit card, or perhaps by participating in activities sponsored or permitted by
our clients. Users can spend account balances over the Internet with any
merchant who participates in our payment system. Users can also transfer
account balances to a certain major credit card.

The MagnaCash system offers:

. Instantaneous payment and cost effectiveness for merchants. Our system
operates by establishing a notational account for each user and each
merchant who participates in the system. Funds or cash awards
deposited or received by users with accounts are deposited n
commingled FDIC insured accounts maintained at banks and are credited
to the user within our system. We are not a bank, and the notational
accounts are not bank accounts and are not FDIC-insured. When a user
spends funds with a member merchant, we debit the user's account and
credit the merchant's account instantaneously, charging the merchant a
small processing fee. Merchants receive credit for funds without the
delays of the ACH process. Because the system is simple, does not
require the transfer of custody of funds, and is self-contained, the
transaction fees associated with our service are substantially lower
than those associated with accepting credit cards for both large and
small value transactions. Over 50 merchants accept direct payments
from our system.

. New revenue opportunities for clients. The creation of on-line
accounts affords clients opportunities to increase revenues from their
users, and simultaneously save costs. Virtually any organization can
issue MagnaCash accounts and reap the associated rewards. Clients
implementing accounts with us: (i) share in transaction revenues
generated by its customers from merchants participating in our payment
system; (ii) increase the chance of capturing rebates or rewards
issued to users by making it easier to spend such rebates and awards
at the clients' own sites; (iii) realize an opportunity to reduce
costs by issuing rebates and awards on-line rather than through more
expensive methods like paper checks; and (iv) potentially increase
customer retention by providing customers with the ability to make
cash purchases on-line.

. Easy accessibility and easily customized features. We provide access
to our account management and payment system using an application
service provider, or ASP, model. We host the software necessary to
operate the basic payment system infrastructure on our servers and
interconnect with merchants and the ACH and credit card systems
through the Internet. Clients desiring to establish an account system
for users may do so through MagnaCash without any need to understand,
install or operate the complex systems necessary providing this
service. We offer our service on a private label basis, and can
customize its look and feel for individual clients. Our initial client
is Cybergold, for which we will manage approximately 9,000,000 user
accounts.

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. Simplicity for users. Our system uses the email addresses of users as
account names. Each user establishes a unique personal identification
number, or PIN, for the account. The PIN provides authentication when
the user logs into the system. Once logged on, a user may make view
account balances, make purchases or request remission of balances to a
credit card or to a bank account through the ACH with a few mouse
clicks, and add funds to their account using the ACH or credit card
transfers on a real time basis. We anticipate adding functions in the
near future that will permit credits and debits to accounts to be made
by mail as well.

Strategy

Our objective is to become a leading provider of on-line payment services
through executing the following strategies:

. Increase substantially the number of merchants accepting payment
through our system. The value of our payment system to clients and
users increases substantially as the number of merchants accepting
payment through it grows. We intend to establish an internal sales
force and create strategic alliances with others to increase the
number of merchants participating in our payment system.

. Increase the number of clients to which we provide on-line, private-
label account management services. We intend to invest in marketing
and sales efforts to form strategic alliances with other companies
which understand the value of enabling on-line purchases with cash
accounts.

Services and Technology

On-line account management

Our clients are typically Internet businesses. We enable our clients to
offer their users an on-line cash account. Magnacash manages the accounts and
provides all the customer service. We host the accounts and account information
on our servers, and provide security for the accounts using a combination of
internally developed and commercially available software.

We intend to provide account management services in exchange for a monthly
fee. We also anticipate charging customers for consulting and design fees in
connection with the implementation of a payment system for them. To date, our
client for account management services is Cybergold, which pays a monthly
management fee for our management of its accounts.

Our clients may be subject to applicable federal and state money transfer
laws and regulations regarding privacy and money transfers. While we believe
MagnaCash itself is not subject to such laws and regulations, it may alter its
account management services in response to regulations and laws affecting its
clients.

Payment system services

Over 50 merchants and organizations are currently part of our on-line
payment system and accept payments made directly from user accounts in that
system. The payment process is enabled through "The Mint," client software
installed on the servers of participating merchants. The Mint facilitates the
real-time transmission of merchant data necessary to process the payment portion
of a commerce transaction between a user of MagnaCash's system and the merchant.
The Mint is compatible with most major commerce systems installed at merchants,
and can be installed in most configurations in less than one day and in most
cases less than six hours. We provide technical assistance in connection with
such installations to merchants who request it, presently without charge.

Technology

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We have developed a scaleable technology infrastructure that manages on-
line cash accounts, and executes on-line incentive and payment transactions
between these accounts. We license this technology from Cybergold, and its
principal authors have moved from Cybergold to MagnaCash, where they will
continue its development. There are two proprietary components to this
technology infrastructure:

- The MagnaCash Mint is a distributed link to our electronic commerce
payment service. The Mint runs on our servers and on the servers of our clients
and merchants. One unique feature of the Mint is that it can generate both
incentive reward transactions and on-line payments for consumer purchases
(allowing merchants to offer rebates and incentives along with payments,
something not possible with credit cards). To make world-wide distribution
possible, the Mint employs a cryptographic system called HMAC-MD5 that offers
full 128-bit security without export controls.

- The MagnaCash Payment Servers are our real-time transaction processing
engine. This engine is optimized for high-volume financial transactions, and we
can process higher volumes of transactions by simply adding additional hardware
to our system. The Payment Servers communicate with consumer browsers using SSL,
the industry-standard Internet security protocol, to safeguard all private user
information.

Our Payment Servers include proprietary modules for handling:

. interactive transactions;
. background transactions for off-line incentive programs;
. consumer account management and on-line statements;
. Transfers from a major credit card and bank (ACH) transfers and charity
donations;
. transaction reversal and dispute management;
. real-time risk management with velocity checking and fraud detection;
. context-sensitive help; and
. automated customer assistance with escalation to our separate Customer Service
system.

Using our technology infrastructure, Internet merchants may offer MagnaCash
as one choice of payment method. Typical MagnaCash transactions begin when the
user encounters an opportunity to spend at an associated or affiliated internet
site. The merchant's internet servers use the Mint to generate payment
transaction details. These transactions are sent on-line to the MagnaCash
payment servers, which move funds from the user's accounts to the merchant's
account.

In addition to our proprietary technology discussed above, the MagnaCash
system incorporates third-party software including Sybase SQL Servers, Sun
Solaris platforms, and Apache Internet servers. Consumers access our system with
standard Internet browsers such as Netscape Navigator and Microsoft Internet
Explorer. We do not require consumers to download any software to process
payments or rewards.

Competition

The on-line payment industry is embryonic, intensely competitive and
characterized by declining average selling prices. Competition in our markets
is primarily affected by the ability to provide reliable service with a low
transaction cost and to secure merchant and client partnerships to provide user
bases and spending outlets.

We compete primarily with credit cards and other Internet payment
mechanisms such as gift certificate currencies (companies such as Flooz), stored
value cards or mechanisms (companies such as WebCertificates) and money-like
rewards units earned by visiting sites (companies such as Beenz). We expect
increased competition from existing competitors and from a number of companies
that may enter the on-line payment market, as well as future competition from
companies that may offer new or emerging technologies, such as wireless. In
addition, many of our current and potential competitors have significantly
greater financial, technical and marketing resources than we have. Our failure
to successfully compete in our markets would have a material adverse effect on
our business, financial condition and results of operations.

21
<PAGE>

Intellectual Property and Licenses

As of the effective date of this registration statement, we have issued no
United States or foreign patents and have no U.S. or foreign patent applications
pending. Moreover, while we, where appropriate, will apply for patents relating
to the design of our products, our products are based in part on standards and
MagnaCash does not hold patents or other intellectual property rights for such
standards. We intend to seek patents on this technology where appropriate. We
have applied for trademark protection for "MAGNACASH." Notwithstanding its
patent, trademark, and copyright position, we believe that, in view of the rapid
pace of technological change in the on-line payments industry, the technical
experience and creative skills of its engineers and other personnel are the most
important factors in determining our future technological success.

Intellectual Property and Licenses From Cybergold to MagnaCash

As of the separation date, Cybergold will grant MagnaCash an exclusive,
perpetual, royalty-free, fully paid, irrevocable worldwide license to use all
the Cybergold owned software necessary for the MagnaCash system to operate in
the payments marketplace, and a sublicense under the same terms for the
necessary intellectual property Cybergold does not own. Cybergold will assign
to MagnaCash the trademarks for "mint" and "The Mint."

Employees

As of August 1 we will have approximately 25 employees. Our employees are
not represented by any collective bargaining agreement, and we have never
experienced a work stoppage. We believe our employee relations are good.

Our future success is heavily dependent upon our ability to hire and retain
qualified technical, marketing and management personnel. We are currently
seeking certain additional engineering, marketing and management personnel. Our
success in the future will depend in part on the successful assimilation of such
new personnel.

Competition for qualified personnel in our industry and geographical
location is intense, and there can be no assurance that we will be successful in
attracting, retaining and motivating a sufficient number of qualified personnel
to conduct its business in the future.

Properties

Our headquarters occupy approximately 7,258 square feet of leased office
space at 1330 Broadway, Oakland, California. This space is sub-leased from
Cybergold, based on an initial lease that extends through July 30, 2005, with an
option to lease the space for an additional three-year term, and includes a
right of first refusal on additional sub-lease space, which may become available
from Cybergold in the building. We believe our office space is adequate to meet
our needs for the next 12 months, and we expect our growth for the next 24
months to be accommodated by our existing space plus our right of first refusal
on additional office space made available from Cybergold.

Legal Proceedings

From time-to-time MagnaCash may become party to certain litigation or legal
claims. MagnaCash is not currently party to any litigation or legal claims.

SELECTED FINANCIAL DATA

Selected Financial Data

The selected financial data set forth below with respect to our statements
of operations for the year ended December 31, 1999 and with respect to our
balance sheet as of December 31, 1999, are derived from our financial
statements, which have been audited by Arthur Andersen LLP, independent public
accountants, and which are

22
<PAGE>

included elsewhere herein. The selected financial data set forth below with
respect to our statements of operations for the six month periods ended June 30,
1999 and 2000, has not been audited. The selected financial data set forth below
is qualified in its entirety by, and should be read in conjunction with,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our financial statements and the notes to those statements
included elsewhere herein.

<TABLE>
<CAPTION>
Year Ended Six Months Ended June 30,
December 31, 1999 2000
1999 (Unaudited) (Unaudited)
<S> <C> <C> <C>
Net revenues.......................................... $ 4,347 $ 1,254 $ 7,725
Cost of revenues...................................... 36,109 17,345 26,452
----------- --------- ---------
Gross margin.......................................... (31,762) (16,091) (18,727)
Sales and marketing expenses.......................... 295,880 98,833 412,790
General and administrative expenses................... 122,500 36,185 115,233
Research and development expenses..................... 281,173 107,497 266,601
Amortization of deferred compensation................. 304,177 284,298 18,402
----------- --------- ---------
Operating loss........................................ (1,035,492) (542,904) (831,753)
----------- --------- ---------
Loss before income taxes.............................. (1,035,492) (542,904) (831,753)
----------- --------- ---------
Net loss.............................................. $(1,035,492) $(542,904) $(831,753)
=========== ========= =========
</TABLE>

<TABLE>
<CAPTION>
December 31,
------------
1999
-------
<S> <C>
Balance Sheet Data
Cash and cash equivalents.................................... $ 0
Working capital.............................................. (52,503)
Total assets................................................. 380,682
Total stockholders' equity................................... 328,179
</TABLE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

You should read the following discussion of the financial condition and
results of operations of MagnaCash together with the financial statements and
the notes to such statements included elsewhere in this report. This discussion
contains forward-looking statements based on our current expectations,
assumptions, estimates and projections about MagnaCash and our industry. These
forward-looking statements involve risks and uncertainties. MagnaCash's actual
results could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, as more fully described in the "Risk
Factors" section and elsewhere in this report. We undertake no obligation to
update publicly any forward-looking statements for any reason, even if new
information becomes available or other events occur in the future.

Overview

MagnaCash is a newly formed company that contains the account management
and transaction enablement system developed by Cybergold, Inc., its corporate
parent. Currently the system is in use to manage and permit the spending of
cash awards earned by Cybergold members through their participation in
Cybergold's on-line consumer incentives business.

23
<PAGE>

MagnaCash's operations were a division of Cybergold and not a separate legal
entity. The technology utilized by MagnaCash was developed by Cybergold for use
in its business. On or about January 1, 1999, the management of Cybergold
decided to develop MagnaCash into a separate business venture in addition to
being a servicing vehicle for Cybergold. As a result, the financial information
presented in this Registration Statement is for the period beginning January 1,
1999. MagnaCash has been capitalized by, and will initially continue to provide
account management and transaction enablement services to, Cybergold.

Our revenues consist primarily of fees paid to us for each payment
transaction between merchants and users through our transaction system. Users
normally earn rewards by responding to on-line advertisements with a specific
action such as filling out a survey or registering for services. Users spend
their cash rewards or use cash transferred to their account from a certain major
credit card to purchase services or products through our merchants' site or
other sites using our system. These transaction fees are not recognized until
the transaction has been completed.

Our transaction revenues are driven by a number of factors, including:

. the number of clients using our payment system;

. the size and growth of our clients' membership base that we manage;

. the number of transactions performed by each member; and

. the average revenue per transaction.

MagnaCash has generated transaction revenues of $4,347 for the year ended
December 31, 1999 and $1,254 and $7,725 for the six month periods ending June
30, 1999 and 2000, respectively.

The cost of revenues represent transaction fees paid to various banking
organizations for transferring balances to or from credit cards or bank
accounts. Gross margin on transaction revenues may fluctuate based on the nature
of the transactions processed in any given period.

We incurred a net loss of approximately $1,035,000 in the year ended
December 31, 1999. We plan to continue to build infrastructure and expand client
recruitment efforts which may contribute to losses in the future.

Our limited operating history makes it difficult to forecast future
operating results. Although we have experienced revenue growth in recent
quarters, we cannot be certain that revenues will increase at a rate sufficient
to achieve and maintain profitability. Even if we were to achieve profitability
in any period, we may not be able to sustain or increase profitability on a
quarterly or annual basis.

In connection with the granting of options to MagnaCash employees and
consultants to purchase Cybergold common stock during 1998 and 1999, we recorded
deferred compensation of $503,272 representing the difference between the
exercise price of options granted and the deemed fair market value of
Cybergold's common stock at the time of grant. We will amortize this deferred
compensation as an expense over the vesting periods of the related options.
Total deferred compensation expenses recognized during the year ended December
31, 1999 was $304,177.

Year Ended December 31, 1999

Revenues

Total Revenues, which consisted completely of transaction revenues, were
$4,347 for the year ended December 31, 1999. The Company had no revenue or
operations during the year ended 1998 as the inception of the Company was
January 1999. All transaction revenues earned for the year ended December 31,
1999 related to

24
<PAGE>

Cybergold members spending cash awards earned through their participation in
Cybergold's on-line consumer incentives business

Cost of Revenues

Overall cost of revenues were $36,109 for the year ended December 31, 1999.
The cost of revenues represent transaction fees paid to various banking
organizations for transferring balances to or from credit cards or bank
accounts. MagnaCash generated a negative gross margin of $31,762 or 731% for the
year ended December 31, 1999. We expect overall gross margin to continue to
fluctuate as a result of the overall variation in the mix transaction revenue
and new products MagnaCash plans to introduce.

Sales and Marketing Expenses

Sales and marketing expenses were $295,880 for the year ended December 31,
1999. Sales and marketing costs relate primarily to salaries for the sales and
marketing employees of MagnaCash. In addition, MagnaCash has allocated a portion
of Cybergold overhead costs to the operations of MagnaCash using various
allocation methodologies including headcount and payroll dollars. MagnaCash
allocated $76,385 or 47% of the Cybergold overhead costs allocated to MagnaCash
to sales and marketing expenses. We expect that sales and marketing expenses
will continue to increase as we expand our operations and sales efforts to
attract additional clients.

General and Administrative Expenses

General and administrative expenses were $122,500 for the year ended
December 31, 1999. General and administrative expenses consist primarily of
depreciation expense. In addition, MagnaCash has allocated a portion of
Cybergold overhead costs to the operations of MagnaCash using various allocation
methodologies including headcount and payroll dollars. MagnaCash allocated
$31,878 or 20% of the Cybergold overhead costs allocated to MagnaCash to general
and administrative expenses. We expect that general and administrative expenses
will continue to increase as we expand our operations and incur additional costs
related to being a public company.

Research and Development Expenses

Research and development expenses were $281,173 for the year ended December
31, 1999. Research and development expenses consist primarily of salaries for
the research and development employees of MagnaCash as well as third party
computer hosting costs. In addition, MagnaCash has allocated a portion of
Cybergold overhead costs to the operations of MagnaCash using various allocation
methodologies including headcount and payroll dollars. MagnaCash allocated
$52,937 or 33% of the Cybergold overhead costs allocated to MagnaCash to
research and development expenses. We expect product development costs to
continue to increase as we continue to build features and functionality into our
system.

Amortization of Deferred Compensation Expense

Income Taxes

We recorded a net loss of $1,035,492 for the year ended December 31, 1999.
For federal and state tax purposes, no provision for income taxes was recorded,
and no tax benefit has been recognized due to the uncertainty of realizing
future tax deductions for these losses.

25
<PAGE>

Six Months Ended June 30, 1999 and 2000

Revenues

Total Revenues were $1,254 and $7,725 for the six months ended June 30,
1999 and 2000, respectively, representing an increase of 6,471 or 516%. All
transaction revenues earned for the year ended December 31, 1999 related to
Cybergold members spending cash awards earned through their participation in
Cybergold's online consumer incentives business. Revenues increased
proportionally with the increase in the number of Cybergold members using our
service.

Cost of Revenues

Overall cost of revenues were $17,345 and $26,452 for the six month periods
ended June 30, 1999 and 2000, respectively, representing an increase of $9,107
or 53%. This increase relates directly to the increase in total revenues and the
increase in the number of Cybergold members spending cash awards earned through
their participation in Cybergold's online consumer incentives business. Cost of
revenues represent fees paid to various banking organizations as our client's
members transfer earned balances to a bank account or a certain major credit
card or spent in a payment transaction. MagnaCash generated negative gross
margins of $16,091 or 1,283%, and $18,727 or 242% for the six month periods
ended June 30, 1999 and 2000, respectively. We expect overall gross margin to
continue to fluctuate as a result of the overall variation in the mix
transaction revenue and new products MagnaCash plans to introduce.

Sales and Marketing Expenses

Sales and marketing expenses were $98,833 and $412,790 for the six month
periods ended June 30, 1999 and 2000, respectively, representing an increase of
$313,957 or 318%. Sales and marketing costs relate primarily to salaries for
the sales and marketing employees of MagnaCash. The increase in sales and
marketing expenses relates directly to the increased number of MagnaCash
employees in this department. In addition, MagnaCash has allocated a portion of
Cybergold overhead costs to the operations of MagnaCash using various allocation
methodologies including headcount and payroll dollars. MagnaCash allocated
$28,112 or 47%, and $32,697 or 50% of the Cybergold overhead costs allocated to
MagnaCash to sales and marketing expenses for the six month periods ended June
30, 1999 and 2000, respectively. We expect that sales and marketing expenses
will continue to increase as we expand our operations and sales efforts to
attract additional clients.

General and Administrative Expenses

General and administrative expenses were $36,185 and $115,233 for the six
month periods ended June 30, 1999 and 2000, respectively, representing an
increase of $79,048 or 218%. General and administrative expenses consist
primarily of depreciation expense. In addition, MagnaCash has allocated a
portion of Cybergold overhead costs to the operations of MagnaCash using various
allocation methodologies including headcount and payroll dollars. MagnaCash
allocated $11,482 or 20%, and $16,349 or 25% of the Cybergold overhead costs
allocated to MagnaCash to general and administrative expenses for the six month
periods ended June 30, 1999 and 2000, respectively. We expect that general and
administrative expenses will continue to increase as we expand our operations
and incur additional costs related to being a public company.

Research and Development Expenses

Research and development expenses were $107,497 and $266,601 for the six
month periods ended June 30, 1999 and 2000, respectively, representing an
increase of $159,104 or 148%. Research and development expenses consist
primarily of salaries for the research and development employees of MagnaCash as
well as third party computer hosting costs. The increase in research and
development expenses relates directly to the increased number of MagnaCash
employees in this department. In addition, MagnaCash has allocated a portion of
Cybergold overhead costs to the operations of MagnaCash using various allocation
methodologies including headcount and payroll dollars. MagnaCash allocated
$20,067 or 33%, and $16,349 or 25% of the Cybergold overhead costs allocated to
MagnaCash to research and development expenses for the six month periods ended
June 30, 1999 and

26
<PAGE>

2000, respectively. We expect product development costs to continue to increase
as we continue to build features and functionality into our system.

Amortization of Deferred Compensation Expense

In connection with the granting of options to purchase Cybergold common
stock to certain MagnaCash employees and consultants during the year ended
December 31, 1998 and 1999, we recorded deferred compensation representing the
difference between the exercise price of options granted and the deemed fair
market value of our common stock at the time of grant. Amortization of deferred
compensation amounted to $284,298 and $18,402 for the six month periods ended
June 30, 1999 and 2000, respectively, representing a decrease of $265,896 or
94%. The decrease in deferred compensation expense relates to the vesting,
during the six months ended June 30, 1999, of a significant portion of the
options granted during 1998 and 1999.

Income Taxes

We recorded net losses of $542,904 and $831,753 for the six month periods
ended June 30, 1999 and 2000, respectively. For federal and state tax purposes,
no provision for income taxes was recorded, and no tax benefit has been
recognized due to the uncertainty of realizing future tax deductions for these
losses.

Liquidity and Capital Resources

Since inception, we have been dependent upon and financed our operations
exclusively from funding provided by Cybergold.

Net cash used in operating activities was $209,207 and $705,125 for the six
month periods ended June 30, 1999 and 2000, respectively, and consisted of our
net loss, adjusted for amortization of deferred compensation, depreciation
expense and changes in accrued liabilities.

Net cash used in investing activities was $63,413 and $188,632 for the six
month periods ended June 30, 1999 and 2000, respectively, and consisted
primarily of the purchase of property and equipment.

Net cash provided by financing activities was $272,620 and $893,757 for the
six month periods ended June 30, 1999 and 2000, respectively, and consisted
entirely of capital contributions from Cybergold

We currently anticipate that our available cash resources will be
sufficient to meet our anticipated working capital and capital expenditure
requirements through August 2001. However, we may need to raise additional funds
sooner to fund more rapid expansion, to develop new or enhance existing services
or products, to respond to competitive pressures or to acquire complementary
products, businesses or technologies. If adequate funds are not available on
acceptable terms, our business, results of operations and financial condition
could be harmed. See "Risk Factors -- We may need more working capital to expand
our business, and our prospects for obtaining additional financing are
uncertain."

Recent Accounting Pronouncements

In April 1998, the Accounting Standards Executive Committee issued SOP 98-
5, "Reporting on the Costs of Start-Up Activities." This SOP provides guidance
on the financial reporting of start-up costs and organization costs. It requires
the costs of the start-up activities and organization costs to be expensed as
incurred. The SOP is effective for financial statements for fiscal years
beginning after December 15, 1998. The Company adopted the SOP during the year
ended December 31, 1999. The adoption of the SOP did not have a material impact
on our financial statements.

In March 1998, the American Institute of Certified Public Accountants
issued SOP No. 98-1, "Software for Internal Use." The adoption of SOP No. 98-1
has not had a material impact on our financial statements.

27
<PAGE>

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." We do not expect the adoption of SFAS No.
133 to have a material impact on our financial position or results of
operations.

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements." SAB 101 provides guidance on applying generally accepted accounting
principles to revenue recognition issues in financial statements. We will adopt
SAB 101 as required in the first quarter of 2000 and are evaluating the effect
that such adoption may have on our results of operations and financial position.

Liquidity and Capital Resources

Since inception, we have been dependent upon and financed our operations
exclusively from funding provided by Cybergold.

Net cash used in operating activities was $588,223 for the year ended
December 31, 1999 and consisted of our net loss, adjusted for amortization of
deferred compensation, depreciation expense and changes in accrued liabilities.

Net cash used in investing activities was $471,271 for the year ended
December 31, 1999 and consisted primarily of the purchase of property and
equipment.

Net cash provided by financing activities was $1,059,494 for the year ended
December 31, 1999 and consisted entirely of capital contributions from Cybergold

Year 2000 Issues

During 1999, the Company conducted an overall assessment of the software
underlying our Internet-based programs as well as our Internet site and related
technology infrastructure and determined it to be Year 2000 compliant. The
Company also contacted the vendors of third-party hardware and software we use
in order to gauge their Year 2000 compliance. Based on these vendors'
representations and the activities we have conducted, we believe that the third-
party hardware and software we use are Year 2000 compliant.

As of 12:01 AM January 1, 2000, we executed a full security check and
validation of our site, as well as our partner merchants. There were no Year
2000 issues found within our site or the sites of our partner merchants. In
cases where there was a potential Year 2000 problem, we removed the merchant
from our site until the potential problem was corrected. This affected less than
1 percent of our merchants.

Since January 1, 2000, we have not encountered any material issues relating
to the Year 2000. The costs associated with correcting reported issues have not
been and are not expected to be material. However, some Year 2000 issues may not
be discovered until well after January 1, 2000. The Company intends to continue
to prioritize reports of such issues and correct significant related problems.

Qualitative and Quantitative Disclosures About Market Risk

Disclosure Regarding Forward-Looking Statements

Certain statements contained in or incorporated by reference into this
prospectus, including, but not limited to, those regarding our financial
position, business strategy, acquisition strategy and other plans and objectives
for future operations and any other statements that are not historical facts
constitute "forward looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other important factors that
could cause our actual results, performance or achievements, or industry
results, to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements. Although
we believe that the expectations reflected in these forward-looking statements
are reasonable, there can be no assurance that the actual results or
developments that we anticipate will be realized or, even if substantially
realized, that they will have expected effects on our business or operations.
These forward-looking statements are based on management's expectations

28
<PAGE>

and beliefs concerning future events impacting our business and operations and
are subject to uncertainties and factors (including, but not limited to, those
specified under the heading "Risk Factors" below) that are difficult to predict
and, in many instances, are beyond our control. As a result, our actual results
may differ materially from those expressed or implied by any such forward-
looking statements.

MANAGEMENT

The following table lists the names, ages and positions of all directors
and executive officers of MagnaCash as of the distribution date. There are no
family relationships between any director or executive officer and any other
director or executive officer of MagnaCash. Executive officers serve at the
discretion of the board of directors.

<TABLE>
<CAPTION>
Name Age Position
------------------------------- ------- ----------------------------------------------------
<S> <C> <C>
A. Nathaniel Goldhaber 52 Chairman

Barry McCarthy 36 President and Chief Operating Officer; Director

Gary Fitts 54 Chief Technology Officer; Director

Eli Rosner 43 VP, Engineering Services

Neta Klein 54 VP, Operations
</TABLE>

Chairman--A. Nathaniel Goldhaber
--------------------------------

Nat Goldhaber is Founder and Chief Executive Officer of Cybergold, Inc. He is a
well-known innovator in commercial aspects of the Internet. Previously he
served as head of Centram Systems West, which developed TOPS, the first
IBM/MacIntosh local area network, and as Chief Executive Officer of Kaleida, the
multimedia joint venture between IBM and Apple. Mr. Goldhaber was also
President of Cole Gilburne Goldhaber & Ariyoshi Management, Inc., a venture
capital firm focused on high-technology development. He founded Cybergold in
1996 and continues to serve on the boards of several high-tech companies. He is
a frequent columnist, guest speaker, and a Director of the University of
California, Berkeley, College of Letters and Sciences.

President & COO; Director--Barry McCarthy
-----------------------------------------

Barry C. McCarthy joined Cybergold in March 2000 to lead the commercialization
of the payment business. Mr. McCarthy brings to MagnaCash more than 14 years of
Banking and Consumer Products experience. He joined Cybergold from Wells Fargo &
Company, San Francisco, where he started in 1998 and was most recently vice
president and general manager of ATM Banking group. During his time at Wells
Fargo, Mr. McCarthy created the first scaleable internet-connected ATMs and the
first ATM screen and receipt advertising program - Media Express ATM Network,
and lead the first broad deployment of talking ATMs for the blind. Before Wells
Fargo, Mr. McCarthy was at Procter & Gamble Company, Cincinnati, Ohio, for more
than 11 years, beginning in 1986, where he held positions of increasing
responsibility in Sales and Marketing Management. This included responsibilities
for several of Procter and Gamble's key products.

CTO; Director--Gary Fitts
-------------------------

Gary Fitts oversees the technical design of the MagnaCash system, and was the
original architect of the Cybergold systems which remain in operation powering
MagnaCash. Mr. Fitts has worked with Cybergold & MagnaCash founder Nat
Goldhaber since 1984, when the two developed the TOPS Local Area Network at
Centram Systems West. Mr. Fitts remained in charge of the TOPS product line
following Sun Microsystems Inc.'s acquisition of Centram in 1987. While at Sun
Microsystems, Gary was named a Sun Distinguished Engineer. In 1996, he rejoined
Nat Goldhaber to help launch Cybergold.

VP, Engineering--Eli Rosner
---------------------------

29
<PAGE>

Eli Rosner has almost 20 years of experience developing software and building
engineering teams, from inception and analysis through development to deployment
and customer support. Prior to joining MagnaCash, Mr. Rosner was CTO at The
Pathways Group where he designed Smart Card based applications and managed a
high volume transaction database system spread over multiple locations. As Vice
President Engineering at BuyerForce, Mr. Rosner participated in the strategy,
design and development of a business to business collaborative environment that
brings buyers and sellers together. He implemented cutting edge standards based
technologies like Enterprise Java Beans. As Vice President for Software
Development at SL Corporation, Mr. Rosner helped the company in pre-sales and
post sales support and helped the company secure multi-million dollar contracts.

VP Operations--Neta Klein
-------------------------

Neta Klein brings to MagnaCash more than 20 years of operations experience in
the Legal, Insurance, and Healthcare industries. Prior to joining MagnaCash Ms.
Klein was VP of Operations/Business Development and Regional Manager for the
Doctors' Company a nation wide professional liability carrier. During her
tenure with TDC, Ms. Klein spearheaded the company's strategic expansion through
merger and acquisition and most recently established and directed the first
stand-alone regional operation serving 8 mid-western states. Before joining TDC
in 1996, Ms. Klein was the Director of Risk Management and Insurance Services
for UniHealth, a self insured hospital management company, were she constructed
and directed an all inclusive claims and risk management operation for 12
hospitals in southern California. Ms. Klein spent over 13 years in Farmers/Truck
Insurance Exchange were she held positions of increasing responsibility in the
Insurance/Legal operations management, and where she designed and implemented
litigation management programs, agency- claims operations procedures and
tracking systems for fraud indicators and cost containment.

Compensation of Directors

We will reimburse directors for reasonable out-of-pocket expenses incurred
in attending meetings of the board of directors. Following the distribution our
non-employee directors will receive automatic annual grants of stock options
pursuant to our 000 Omnibus Equity Incentive Plan.

Board Committees

The full board of directors will act as the audit committee and the
compensation committee.

Election of Directors

The board of directors is divided into three classes, each of whose members
will serve for a staggered three-year term. Mr. Fitts will serve in the class
whose term expires in 2001; Mr. Goldhaber will serve in the class of directors
whose term expires in 2002; and Mr. McCarthy will serve in the class of
directors whose term expires in 2003. Upon the expiration of the term of a
class of directors, directors in that class will be eligible to be elected for a
new three-year term at the annual meeting of stockholders in the year in which
that term expires.

Compensation Committee Interlocks and Insider Participation

No interlocking relationship exist between any member of our board of
directors or compensation committee and the board of directors or compensation
committee of any other company, nor has any interlocking relationship existed in
the past.

Executive Compensation

Prior to the distribution Cybergold has paid the compensation provided to
our offices and employees. In addition, to date MagnaCash has not awarded
options under the MagnaCash 2000 Omnibus Equity Incentive Plan.

30
<PAGE>

2000 Omnibus Equity Incentive Plan
----------------------------------

Share Reserve. Our board of directors will adopt our 2000 Omnibus Equity
Incentive Plan on or about the date of the distribution. Our stockholders will
also approve this plan. We have reserved 5,000,000 shares of our common stock
for issuance under the 2000 Omnibus Equity Incentive Plan. On January 1 of each
year, starting with the year 2001, the number of shares in the reserve will
automatically increase by 5% of the total number of shares of common stock that
are outstanding at that time or, if less, by 1,500,000 shares. In general, if
options or shares awarded under the 2000 Omnibus Equity Incentive Plan are
forfeited, then those options or shares will again become available for awards
under the 2000 Omnibus Equity Incentive Plan. We have not yet granted any
options under the 2000 Omnibus Equity Incentive Plan.

Administration. A committee of our board of directors administers the 2000
Omnibus Equity Incentive Plan. The committee has the complete discretion to
make all decisions relating to the interpretation and operation of our 2000
Omnibus Equity Incentive Plan. The committee has the discretion to determine
who will receive an award, what type of award it will be, how many shares will
be covered by the award, what the vesting requirements will be (if any), and
what the other features and conditions of each award will be. The committee may
also reprice outstanding options and modify outstanding awards in other ways.

Eligibility. The following groups of individuals are eligible to
participate in the 2000 Omnibus Equity Incentive Plan:

- Employees,

- Members of our board of directors who are not employees, and

- Consultants.

Types of Award. The 2000 Omnibus Equity Incentive Plan provides for the
following types of award:

- Incentive stock options to purchase shares of our common stock,

- Nonstatutory stock options to purchase shares of our common stock,

- Restricted shares of our common stock,

- Stock appreciation rights, and

- Stock units.

Options. An optionee who exercises an incentive stock option may qualify
for favorable tax treatment under Section 422 of the Internal Revenue Code of
1986. On the other hand, nonstatutory stock options do not qualify for such
favorable tax treatment. The exercise price for incentive stock options granted
under the 2000 Omnibus Equity Incentive Plan may not be less than 100% of the
fair market value of our common stock on the option grant date. In the case of
nonstatutory stock options, the minimum exercise price is 85% of the fair market
value of our common stock on the option grant date. Optionees may pay the
exercise price by using:

- Cash,

- Shares of common stock that the optionee already owns,

- A full-recourse promissory note, except that the par value of newly
issued shares must be paid in cash,

- An immediate sale of the option shares through a broker designated by
us, or

31
<PAGE>

- A loan from a broker designated by us, secured by the option shares.

Options vest at the time or times determined by a committee. In most
cases, our options will vest over a four-year period following the date of
grant. Options generally expire 10 years after they are granted, except that
they generally expire earlier if the optionee's service terminates earlier. The
2000 Omnibus Equity Incentive Plan provides that no participant may receive
options covering more than 500,000 shares in the same year, except that a newly
hired employee may receive options covering up to 1,000,000 shares in the first
year of employment.

Restricted Shares. Restricted shares may be awarded under the 2000 Omnibus
Equity Incentive Plan in return for:

- Cash,

- A full-recourse promissory note, except that the par value of newly
issued shares must be paid in cash,

- Services already provided to us, and

- In the case of treasury shares only, services to be provided to us in
the future.

Automatic Option Grants to Directors

Initial Grants. Only the non-employee members of our board of directors
will be eligible for option grants under the automatic option grant program.
Each non-employee director who first joins our board after the effective date of
this offering will receive an initial option for 15,000 shares. That grant will
occur when the director takes office. The initial options vest in full on the
first year anniversary of the date of grant.

Annual Grants. At the time of each of our annual stockholders, meetings,
beginning in 2001, each non-employee director who will continue to be a director
after that meeting will automatically be granted an annual option for 7,500
shares of our common stock. However, a new non-employee director who is
receiving the 15,000-share initial option will not receive the 7,500-share
annual option in the same calendar year. The annual options vest in full on the
first year anniversary of the date of grant.

The exercise price of each non-employee director's option will be equal to
the fair market value of our common stock on the option grant date. A director
may pay the exercise price by using cash, shares of common stock that the
director already owns, or an immediate sale of the option shares through a
broker designated by us. The non-employee directors' options have a 10-year
term, except that they expire one year after a director leaves the board (if
earlier). If a change in control of Cybergold occurs, a non-employee director's
option will become fully vested unless the accounting rules applicable to a
pooling of interests preclude acceleration. Vesting may accelerate as
determined by the committee if the optionee retires after age 65, dies or is
disabled.

Stock Appreciation Rights. We may award stock appreciation rights under
the 2000 Omnibus Equity Incentive Plan. Each agreement evidencing stock
appreciation rights will inform the holder when such rights may be exercised.
Stock appreciation rights may be exercised for shares of common stock, cash or a
combination of cash and shares. No participant may receive stock appreciation
rights for more than 500,000 shares in the same year, except that a newly hired
employee may receive stock appreciation rights for up to 1,000,000 shares.

Stock Units. We may award stock units under the 2000 Omnibus Equity
Incentive Plan. The stock units may be subject to vesting. Stock units may be
settled for shares of common stock, cash or a combination of cash and shares.

Buy Outs. In our sole discretion, we may offer to buy out for cash an
option or authorize an optionee to cash out an option that was previously
granted.

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<PAGE>

Deferral of Awards. We may permit or require a participant to have cash
that would be paid to the participant for exercise of a stock appreciation right
or settlement of a stock unit credited to a deferred compensation account. We
may also permit shares that would be delivered for exercise of an option or
stock appreciation right converted into an equal number of stock units or
converted into amounts that would be credited to a deferred compensation
account.

Change in Control.

If a change in control of MagnaCash occurs, an option or other award under the
2000 Omnibus Equity Incentive Plan will become fully vested if the option or
other award is not assumed by the surviving corporation or its parent or if the
surviving corporation or its parent does not substitute another award on
substantially the same terms. A change in control will not cause accelerated
vesting even if outstanding awards are not assumed if such acceleration would
prevent a pooling of interest accounting treatment.

A change in control includes:

- A merger of MagnaCash after which our own stockholders own 50% or less
of the surviving corporation or its parent company,

- A sale of all or substantially all of our assets,

- A proxy contest that results in the replacement of more than one-third
of our directors over a 24-month period, or

- An acquisition of 50% or more of our outstanding stock by any person
or group, other than a person related to MagnaCash (such as a holding
company owned by our stockholders).

Amendments or Termination. Our board may amend or terminate the 2000
Omnibus Equity Incentive Plan at any time. If our board amends the plan, it
does not need to ask for stockholder approval of the amendment unless applicable
law requires it. The 2000 Omnibus Equity Incentive Plan will continue in effect
indefinitely, unless the board decides to terminate the plan earlier.

SECURITY OWNERSHIP OF MAGNACASH

Immediately prior to the distribution of MagnaCash common stock, all of the
outstanding MagnaCash shares will be held by Cybergold. The following table
sets forth the projected beneficial ownership of MagnaCash shares immediately
following the distribution by (i) each person known by the company to own
beneficially more than five percent (5%) of the outstanding Common Stock of the
company; (ii) each of the company's Directors; (iii) each of the our executive
officers of the Company and (iv) all Directors and executive officers as a
group.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
MAGNACASH SHARES PROJECTED TO BE BENEFICIALLY OWNED
---------------------------------------------------------------------------------------------------------------------
NAME NUMBER (1) PERCENT OF CLASS
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cybergold, Inc. 2,857,053 19.9%
1330 Broadway, 13th Floor
Oakland, CA
---------------------------------------------------------------------------------------------------------------------
A. Nathaniel Goldhaber 2,412,886 16.7%
261 Stonewall Road
Berkeley, CA 949705
---------------------------------------------------------------------------------------------------------------------
</TABLE>

33
<PAGE>

<TABLE>
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
Entities affiliated with Alta California 1,356,175 9.4%
Partners, L.P. (2)
One Embarcadero Center #4050
San Francisco, CA 94111
--------------------------------------------------------------------------------------------------
VantagePoint Venture Partners, 1996 (3) 1,115,008 7.7%
1001 Bayhill Drive #100
San Bruno, CA 94066
--------------------------------------------------------------------------------------------------
Garrett P. Gruener (2) 1,356,175 9.4%
--------------------------------------------------------------------------------------------------
Alan Salzman (3) 1,115,008 7.7%
--------------------------------------------------------------------------------------------------
Gary Fitts 100,375 0.6%
1121 High Court
Berkeley, CA 94708
--------------------------------------------------------------------------------------------------
Barry McCarthy -- 0.0%
1315 Hearst Drive
Pleasanton, CA 94538
--------------------------------------------------------------------------------------------------
Eli Rosner -- 0.0%
46 Lucas Park Drive
San Rafael, CA 94903
--------------------------------------------------------------------------------------------------
Neta Klein -- 0.0%
1743 Geary Road
Walnut Creek, CA 94596
--------------------------------------------------------------------------------------------------
All directors and executive officers as a group 2,513,261 17.5%
(5 persons)
--------------------------------------------------------------------------------------------------
</TABLE>

Less than 1%
(1) Except as otherwise noted, reflects, in each case, the number of shares of
MagnaCash common stock to be beneficially owned as of October 1, 2000.
(2) Includes 2,586,153 shares beneficially owned by Alta California Partners,
L.P., and 59,083 shares beneficially owned by Alta Embarcadero Partners
LLC. Of these shares, a total of 67,115 are issuable upon exercise of
warrants. Garrett P. Gruener, a Cybergold, Inc. Director, is a general
partner of the general partner Alta California Partners, L.P. and a member
of Alta Embarcadero Partners LLC. The address of Alta California Partners,
L.P. and Alta Embarcadero Partners LLC is One Embarcadero Center, Suite
4050, San Francisco, CA 94111. Mr. Gruener disclaims beneficial ownership
of the shares held by Alta California Partners, L.P. and Alta Embarcadero
Partners LLC, except to the extent of his pecuniary interest therein.
(3) Alan Salzman, a Cybergold, Inc. Director, is a managing partner of
VantagePoint Venture Partners, 1996. The address of VantagePoint Venture
Partners, 1996 is 1001 Bayhill Drive, Suite 100, San Bruno, CA 94066. Mr.
Salzman disclaims beneficial ownership of the shares held by VantagePoint
Venture Partners, 1996, except to the extent of his pecuniary interest
therein.

ARRANGEMENTS BETWEEN CYBERGOLD AND MAGNACASH

We have provided below a summary description of the master separation and
distribution agreement, agreement, and the key related agreements Cybergold and
MagnaCash intend to enter into. You should read the full text of these
agreements, which have been or will be filed with the Securities and Exchange
Commission as exhibits to the registration statement of which this prospectus is
a part.

Master Separation and Distribution Agreement
--------------------------------------------

The master separation and distribution agreement contains the key
provisions relating to the separation and the distribution. The separation is
scheduled to occur on or before September 30, 2000. Prior to the distribution,
Cybergold and MagnaCash plan to enter into the license, assignment and
assumption agreement which provides for the transfer to MagnaCash of assets and
liabilities from Cybergold and the license and assignment to MagnaCash of
certain intellectual property from Cybergold, effective on the separation date.
The ancillary agreements include:

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<PAGE>

. a license, assignment and assumption agreement;
. a transitional services and joint operation agreement;
. services agreement; and
. a tax sharing agreement.

To the extent that the terms of any of these ancillary agreements conflict
with the separation agreement, the terms of these agreements govern. These
agreements are described more fully below.

Cash to be transferred to MagnaCash. Cybergold will provide to MagnaCash
with a $5,000,000 contribution. However, prior to the separation date a reserve,
if necessary, shall be established in MyPoints favor to cover any and all taxes
which may be associated with the distribution and separation as well as
associated costs and this may be accomplished by adjusting the $5,000,000 cash
contribution.

The Distribution. On or about September 29, 2000, Cybergold intends to
distribute the common stock of MagnaCash by transferring the shares to the
distribution and transfer agent except for those shares of common stock
Cybergold shall retain. Cybergold may in its sole discretion determine the
distribution date. Cybergold intends to consummate the distribution only if the
following conditions are met (any of which may be waived by Cybergold):

. all required government approvals must be in effect; and
. no legal restraints must exist preventing the distribution.

License, Assignment and Assumption Agreement
--------------------------------------------

Cybergold and MagnaCash were previously a single company and intend to
enter into a License, Assignment and Assumption Agreement, or License Agreement,
for the purpose of allocating rights in intellectual and other property to
MagnaCash as appropriate to establish MagnaCash as a separate company, and
assigning property. Cybergold will continue the business of awarding incentives
for Internet activity, and MagnaCash will handle the consumer accounts and
provide methods of redeeming the incentives.

Pursuant to the License Agreement the parties intend to agree to the
following terms:

Cybergold will assign to MagnaCash all rights it now or may in the future
have in certain intellectual property relating to the new business of MagnaCash.
Cybergold further will assign to MagnaCash all merchant agreements, where the
merchants agreed to exchange goods or services for value, provided the merchants
agree to assignment in writing where necessary. Cybergold will also assign to
MagnaCash all of its rights in certain furniture and equipment and certain
third-party agreements with First National Bank of Omaha and Wells Fargo Bank.

Cybergold will grant to MagnaCash an exclusive, perpetual, fully-paid,
irrevocable, worldwide, royalty-free license to use certain proprietary
intellectual property in the payment marketplace. To the extent that Cybergold
has the right to sub-license non-owned proprietary intellectual property,
Cybergold will grant to MagnaCash a perpetual, irrevocable, worldwide, royalty-
free license to use such non-owned proprietary intellectual property. Any
derivative works that either party develops from the licensed intellectual
property discussed herein will be owned by the party which developed the work.

MagnaCash will agree not to use the relevant intellectual property to offer
goods or services relating to the business of awarding consumers incentives for
Internet or other on-line or off-line activity for ten (10) years commencing
from August 4, 2000. Except as a service to its membership, Cybergold will not
use the relevant intellectual property to offer goods or services relating to
the business of managing accounts which hold cash value or other value issued by
others.

35
<PAGE>

Cybergold may seek other business partners to deliver payment services as
an alternative to MagnaCash. However, Cybergold will first offer MagnaCash the
opportunity to offer the new services.

Services Agreement
------------------

Cybergold and MagnaCash intend to enter into a Services Agreement to
provide for MagnaCash to perform for Cybergold certain account management, fund
transfer, and cash value incentive redemption processing and other services.
Pursuant to the Services Agreement the parties intend to agree to the following
terms:

MagnaCash will operate that portion of Cybergold's consumer loyalty reward
system relating to the management, transfer and spending or other redemption of
incentive payments earned by Cybergold members. The parties will cooperate to
streamline any processes relating to this service agreement so as to create
minimal inconvenience to Cybergold's members. MagnaCash may make additional
services available to Cybergold for a negotiable fee, and if accepted, such
additional services will become services under this agreement.

MagnaCash will provide on-line facilities for users and merchants to manage
their accounts. MagnaCash will also facilitate transfers of cash value among
merchants, users, and related credit card and bank accounts. Cybergold will pay
to MagnaCash a fixed monthly service fee and fees based on account activity.
MagnaCash will pay to Cybergold a percentage of various transaction fees.

Cybergold will first consult with MagnaCash before obtaining additional
services relating to redemption or payment of incentives. If MagnaCash offers
the additional services on terms no less advantageous to Cybergold than are
available from other parties, Cybergold will obtain the additional services from
MagnaCash.

This agreement will be in effect for three years. It will thereafter be
renewed automatically for successive one year renewal terms unless either party
gives the other written notice of nonrenewal at least 120 days prior to the end
of the initial or any renewal terms. During the first six months of joint
operation, both parties agree to renegotiate the economic terms of this
agreement prior to the conclusion of the first six months if necessary and
appropriate.

Transitional Services and Joint Operation
------------------------------------------

MagnaCash will enter into a transitional services agreement with Cybergold
covering the provision of various transitional services, including phone
systems, accounting, computer facilities, technical support, human resources and
others by Cybergold to MagnaCash and, if necessary in certain circumstances,
vice versa. Certain infrastructure hardware and software (including, but not
limited to, networks, servers, desktop computers and enterprise applications,
unless prohibited by a third party) shall be separately owned and part of a
system jointly operated by the parties. The services to be provided will
generally be provided for a fee equal to the estimated costs of providing the
services as calculated by various methods, plus a 25% upcharge to cover overhead
and administrative costs. The transition services agreement will have an initial
term of six months from the date of separation.

The parties anticipate joint operation of certain equipment for a period of
six months commencing August 4, 2000. During this time, major system changes
will require mutual consent from the parties, costs for major changes in
hardware will be shared, and assistance from the other party's staff will be
available on a paid consulting basis.

36
<PAGE>

Tax Sharing Agreement
---------------------

Prior to the distribution, MagnaCash will enter into a tax sharing
agreement with MyPoints providing for, among other things, the allocation of tax
liabilities arising prior to, as a result of, and subsequent to the
distribution. MagnaCash will be required to pay its share of income taxes shown
as due on any consolidated, combined or unitary tax returns filed by MyPoints or
Cybergold for tax periods ending on or before or including the distribution
date. MyPoints will indemnify MagnaCash against liability for all taxes in
respect of consolidated, combined or unitary tax returns for periods as to which
MyPoints or Cybergold files group returns which include MagnaCash. MagnaCash
will be responsible for filing any separate tax returns for any taxable period,
including for tax periods of MagnaCash beginning on or after the date of the
distribution, at which time MagnaCash will no longer be a member of MyPoint's
group for federal, state or local tax purposes, as the case may be. MagnaCash
will be responsible for any tax liabilities, and entitled to any refunds or
credits of taxes, with respect to separately filed tax returns. MagnaCash will
indemnify MyPoints against any tax liability with respect to separately filed
tax returns. MagnaCash will also indemnify MyPoints against all federal, state,
local and foreign taxes related to the distribution of the MagnaCash stock.

The tax sharing agreement will allocate responsibility with respect to tax
matters including audits, and will provide for the exchange of information and
the retention of records which may affect the income tax liability of either
party.

37
<PAGE>

Cybergold has agreed to indemnify us and our affiliates, agents, successors
and assigns from all liabilities arising from:

- Cybergold' business other than the businesses transferred to us pursuant
to the separation; and

- any breach by Cybergold of the separation agreement or any ancillary
agreement.

The indemnifying party will make all indemnification payments net of
insurance proceeds that the indemnified party receives. The agreement also
contains provisions governing notice and indemnification procedures.

Insurance. In general, Cybergold has agreed to secure and pay for insurance
covering all liabilities and losses arising from

- management office Cybergold accounts

- failure of the jointly owned severance hardware.

The parties shall otherwise provide their own insurance.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions with Cybergold

MagnaCash has entered, or will enter into various arrangements with
Cybergold which set forth both companies' duties and responsibilities in the
separation and distribution. MagnaCash and Cybergold will continue to provide
services to each partner for at least six months from the date of distribution
and Cybergold will initially be MagnaCash's sole client. Please see
"Arrangements Between Cybergold and MagnaCash" beginning on page 32 for further
details. Cybergold will continue to hold a 19.9% interest in MagnaCash after the
distribution.

Cross-Ownership; Directors and Officers

A. Nathaniel Goldhaber will continue to own 22.2% of Cybergold until the
merger when he will exchange that stock for stock in MyPoints and will own 16.7%
of MagnaCash. Together with Cybergold, Goldhaber will own 36.6% of MagnaCash, a
combined percentage giving them significant control over MagnaCash.
Additionally, Mr. Goldhaber is a current Cybergold director and is a MagnaCash
director. Mr. Goldhaber will also be a vice-chairman director of MyPoints.

Restrictions on Transfer

38
<PAGE>

MATERIAL FEDERAL INCOME TAX CONSIDERATIONS

Material Federal Income Tax Considerations of the Distribution

The following discussion summarizes the material federal income tax
consequences of the distribution of interests in the MagnaCash business to the
Cybergold stockholders. This discussion is based on the Internal Revenue Code,
applicable Treasury Regulations, judicial authority and administrative rulings
and practice, all as of the date hereof. No ruling regarding the distribution
will be sought; therefore the IRS may disagree with the statements and
conclusions set forth herein. In addition, future legislative, judicial or
administrative changes or interpretations could adversely affect the accuracy of
the statements and conclusions set forth herein. Any such changes or
interpretations could be applied retroactively and could affect the tax
consequences of the distribution to Cybergold or its stockholders, or both.

Stockholders of Cybergold should be aware that the following
discussion does not deal with all federal income tax consequences that may be
relevant to Cybergold stockholders in light of their particular circumstances,
such as stockholders who are foreign persons, stockholders who acquired their
Cybergold stock in compensatory transactions, and stockholders who do not hold
Cybergold shares as capital assets. Accordingly, Cybergold stockholders are
urged to consult their own tax advisors as to the specific tax consequences to
them of the distribution of the MagnaCash business, including the applicable
federal, state, local and foreign tax consequences.

The distribution of the MagnaCash business will be a taxable
distribution to Cybergold. Cybergold will recognize any gain (but not loss) on
the distribution equal to the difference between its tax basis in the shares of
MagnaCash that it distributes and the fair market value of such stock on the
date of the distribution.

Cybergold stockholders will be treated as having received a
distribution of property with respect to their Cybergold shares equal to the
fair market value of the MagnaCash stock received in the distribution. The
distribution will be taxable as a dividend to the extent of Cybergold's current
and accumulated earnings and profits. Any amount not taxable as a dividend will
be applied against and reduce the adjusted basis of the stockholder's MyPoints
stock. To the extent that the fair market value of the portion of the
distribution which is not a dividend exceeds the stockholder's adjusted tax
basis in the MyPoints shares, the excess will be treated as gain from the sale
or exchange of property.

Cybergold does not have accumulated earnings and profits, and does not
expect to have current earnings and profits in its taxable year during which the
MagnaCash stock is distributed. However, whether Cybergold will have current
earnings and profits for its taxable year during which the distribution occurs
depends upon the date on which the merger is completed, the date of the
distribution, and the fair market value of the MagnaCash business at the time of
the distribution, among other things, none of which can be known with any
certainty at present. Therefore, it is possible that under certain circumstances
all or a portion of the distribution will be taxable as a dividend. Cybergold
will provide information to stockholders regarding the amount of the
distribution taxable as a dividend following the close of the calendar year in
which the distribution occurs.

Distribution of the MagnaCash stock may be subject to information
reporting to the IRS and possible backup withholding at a rate of 31%. Backup
withholding will not apply, however, to a Cybergold stockholder who furnishes a
correct taxpayer identification number and makes other required certifications
or is otherwise exempt from backup withholding. Amounts withheld under backup
withholding rules may be credited against a stockholder's tax liability, and a
stockholder may obtain a refund of any excess amounts withheld under the backup
withholding rules by timely filing the appropriate form for refund with the IRS.

39
<PAGE>

DESCRIPTION OF MAGNACASH'S CAPITAL STOCK

Following the distribution, MagnaCash authorized capital stock will consist
of 75,000,000 shares of common stock, $.001 par value, and 10,000,0000 shares of
preferred stock, $.001 par value. The description set forth below is incomplete
and is qualified by reference to the certificate of incorporation and the
bylaws, which are set forth in Exhibits 2.0 and 3.0.

Common Stock

The holders of common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of the stockholders. Except as
otherwise provided by law, the holders of common stock vote together with the
holders of preferred stock as one class. Subject to the rights of holders of any
shares of preferred stock which may at the time be outstanding, holders of
common stock will be entitled to such dividends as the board of directors may
declare out of funds legally available therefor. Subject to the prior rights of
creditors and holders of any preferred stock which may be outstanding from time
to time, the holders of common stock are entitled, in the event of liquidation,
dissolution or winding up of MagnaCash, to share equally in the distribution of
all remaining assets. The common stock is not liable for any calls or
assessments and is not convertible into any other securities. Prior to the
earliest of (i) the date that is the first anniversary of the date that
Cybergold ceases to be the sole holder of outstanding shares of common stock,
(ii) the date the Securities and Exchange Commission or successor organization
declares effective a registration statement on Form S-1 or Form S-3 or successor
form regarding an offering of shares of common stock the issuance of which would
have the effect of increasing the number of shares of common stock outstanding
by eighty percent (80%) or more, or (iii) such date as determined by the board
of directors of MagnaCash in its sole discretion, common stock may not be,
directly or indirectly, sold, transferred, assigned, pledged, exchanged,
hypothecated, gifted or otherwise disposed of except: (A) by Cybergold or its
successor, in connection with the initial distribution by Cybergold of common
stock to the holders of Cybergold's common stock, as of the record date of
August 3, 2000, (B) from any holder of common stock that is a natural person to
(i) such stockholder's spouse or children, (ii) to any trust solely for the
benefit of such stockholder or the children or spouse of such stockholder or
(iii) to any party pursuant to applicable laws of descent and distribution and
(C) from any holder of common that is a corporation, limited liability company,
limited partnership or general partnership to any affiliate (as defined under
Rule 405 of the Securities Act of 1933, as amended). In addition, there are no
redemption or sinking fund provisions applicable to the common stock.

Preferred Stock

The certificate provides that the board of directors is authorized to
provide for the issuance of shares of preferred stock, from time to time, in one
or more series. Prior to the issuance of shares in each series, the board of
directors is required by the certificate and the Delaware General Corporation
Law to adopt resolutions and file a Certificate of Designations, Preferences and
Relative, Participating, Optional and Other Special Rights of Preferred Stock
and Qualifications, Limitations and Restrictions Thereof or the "Certificate of
Designation" with the Secretary of State of Delaware, fixing for each such
series the designations, preferences and relative, participating, optional or
other special rights applicable to the shares to be included in any such series
and any qualifications, limitations or restrictions thereon, including, but not
limited to, dividend rights, dividend rate or rates, conversion rights, voting
rights, rights and terms of redemption (including sinking fund provisions), the
redemption price or prices, and the liquidation preferences as are permitted by
Delaware law.

Certain Charter and Bylaw Provisions and Delaware Law

After the distribution, provisions of our charter and bylaws may have the
effect of making it more difficult for a third party to acquire, or of
discouraging a third party from attempting to acquire, control of us. These
provisions are expected to discourage coercive takeover practices and inadequate
takeover bids and to encourage persons seeking to acquire control of MagnaCash
to first negotiate with us. These provisions could limit the price investors
might be willing to pay in the future for our common stock and could have the
effect of delaying or preventing a change in control. We believe that the
benefits of increased protection of our ability to negotiate with the proponent
of an unfriendly or unsolicited acquisition proposal outweigh the disadvantages
of discouraging these

40
<PAGE>

proposals because, among other things, negotiation will result in an improvement
of their terms. These provisions could limit the price that investors might be
willing to pay in the future for shares of our common stock. These provisions
include:

- division of the board of directors into three separate classes;

- elimination of cumulative voting in the election of directors;

- prohibitions on our stockholders from acting by written consent and
calling special meetings;

- procedures for advance notification of stockholder nominations and
proposals; and

- the ability of the board of directors to alter our bylaws without
stockholder approval.

In addition, subject to limitations prescribed by law, our board of
directors has the authority to issue up to 10,000,000 shares of preferred stock
and to determine the price, rights, preferences, privileges and restrictions,
including voting rights, of those shares without any further vote or action by
the stockholders. The issuance of preferred stock, while providing flexibility
in connection with possible financings or acquisitions or other corporate
purposes, could have the effect of making it more difficult for a third party to
acquire a majority of our outstanding voting stock.

MagnaCash is subject to the provisions of Section 203 of the Delaware
General Corporation Law, an antitakeover law. In general, the statute prohibits
a publicly held Delaware corporation from entering into a 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
business combination is approved in a prescribed manner. For purposes of Section
203, a business combination includes a merger, asset sale or transaction
resulting in a financial benefit to the interested stockholder, and an
interested stockholder is a person who, together with affiliates and associates,
owns (or within three years prior, did own) 15% or more of its voting capital
stock.

THE PROVISIONS OF THE CERTIFICATE, BYLAWS AND DELAWARE LAW ARE INTENDED TO
ENCOURAGE POTENTIAL ACQUIRERS TO NEGOTIATE WITH US AND ALLOW MAGNACASH'S BOARD
OF DIRECTORS THE OPPORTUNITY TO CONSIDER ALTERNATIVE PROPOSALS IN THE INTEREST
OF MAXIMIZING STOCKHOLDER VALUE. SUCH PROVISIONS, HOWEVER, MAY ALSO HAVE THE
EFFECT OF DISCOURAGING ACQUISITION PROPOSALS OR DELAYING OR PREVENTING A CHANGE
IN CONTROL, WHICH MAY HAVE AN ADVERSE EFFECT ON THE MARKET PRICE OF THE COMMON
STOCK.

DIVIDEND POLICY

MagnaCash has never declared or paid any cash dividends on its capital
stock. MagnaCash currently intends to retain all future earnings, if any, for
use in the operation and expansion of its business and does not anticipate
declaring or paying cash dividends.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

As permitted by the Delaware General Corporate Law, MagnaCash has included
in its certificate a provision to eliminate the personal liability of its
directors for monetary damages for breach or alleged breach of their fiduciary
duties as directors, subject to certain exceptions. In addition, the bylaws
require the companies to:

. indemnify their officers and directors under certain circumstances,
including those circumstances in which indemnification would otherwise
be discretionary; and

. advance expenses to their officers and directors as incurred in
connection with proceedings against them for which they may be
indemnified.

41
<PAGE>

MagnaCash has entered into indemnification agreements with its officers and
directors containing provisions that are in some respects broader than the
specific indemnification provisions contained in the Delaware General Corporate
Law. The indemnification agreements may require the companies, among other
things, to indemnify such officers and directors against certain liabilities
that may arise by reason of their status or service as directors or officers
(other than liabilities arising from willful misconduct of a culpable nature),
to advance expenses incurred as a result of any proceeding against them as to
which they could be indemnified, and to obtain directors' and officers'
insurance if available on reasonable terms. MagnaCash believes that these
charter provisions and indemnification agreements are necessary to attract and
retain qualified persons as directors and officers.

MagnaCash understands that the staff of the Securities and Exchange
Commission is of the opinion that statutory, charter and contractual provisions
as are described above have no effect on claims arising under the federal
securities laws.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the MagnaCash common stock is U.S.
Stock Transfer Corporation, 1745 Gardena Avenue, Glendale, CA 91204; telephone:
(818) 502-1404.

LEGAL MATTERS

The statements included in this prospectus under the caption "Material
Federal Income Tax Considerations" have been reviewed by and validity of the
securities offered hereby will be passed upon for us by Morrison & Foerster LLP,
San Francisco, California. Morrison & Foerster LLP is legal counsel to both
Cybergold and MagnaCash.

The Board of Directors of MagnaCash have not selected auditors for
MagnaCash for the period after the distribution of shares. Such selection will
be acted upon by the Audit Committee of the Board of Directors of MagnaCash
after the transaction contemplated in this document has been consummated.

EXPERTS

The financial statements included in this registration statement, to the
extent and for the period indicated in their report, have been audited by Arthur
Andersen LLP, independent public accountants, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.

WHERE YOU CAN FIND MORE INFORMATION

As a result of the distribution, the Securities Exchange Act of 1934
requires us to file annual, quarterly and other reports with the Securities and
Exchange Commission. We intend to provide annual reports containing audited
financial statements to its stockholders in connection with its annual meetings
of stockholders.

We filed with the Securities and Exchange Commission a registration
statement, which includes certain exhibits, under the Securities Act, for the
securities issued under this prospectus. This prospectus contains general
information about the contents of contracts and other documents filed as
exhibits to the registration statement. However, this prospectus does not
contain all of the information set forth in the registration statement and the
exhibits filed with the registration statement. You should read the registration
statement and the exhibits for further information about MagnaCash and the
distribution.

You should rely only on the information in this document or to which we
have referred you. We have not authorized anyone to provide you with information
that is different. If you are in a jurisdiction where offers to exchange or
sell, or solicitations of offers to exchange or purchase, the securities offered
by this document or the solicitation of proxies is unlawful, or if you are a
person to whom it is unlawful to direct these types of activities, then the
offer presented in this document does not extend to you. The information
contained in this document speaks only as of the date of this document unless
the information specifically indicates that another date applies.

42
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Financial Statements:
Report of Independent Public Accountants................. F-2
Balance Sheet............................................ F-3
Statements of Operations................................. F-4
Statements of Divisional Equity.......................... F-5
Statements of Cash Flows................................. F-6
Notes to Financial Statements............................ F-7
</TABLE>

_______________________________________________________________________________

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of Cybergold, Inc.:

We have audited the accompanying balance sheet of MagnaCash, Inc. (a division
of Cybergold, Inc. - Note 1) as of December 31, 1999 and the related statements
of operations, divisional equity and cash flows for the year then ended. 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 audit.

We conducted our audit in accordance with auditing standards generally
accepted in the United States. 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 audit provides 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 MagnaCash, Inc. as of December
31, 1999 and the results of its operations and its cash flows for the year then
ended in conformity with accounting principles generally accepted in the United
States.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to these
statements, the Company has an accumulated deficit of approximately $1,035,000
at December 31, 1999 and has continued to incur losses in 2000. Management's
plans with regard to these matters are also described in Note 3. These factors
raise substantial doubt as to the Company's ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

ARTHUR ANDERSEN LLP

San Francisco,
July 24, 2000

_______________________________________________________________________________

F-2
<PAGE>

MAGNACASH, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
JUNE 30,
DECEMBER 31, 2000
1999 (unaudited)
------------- -----------
<S> <C> <C>
ASSETS
Property
Computer equipment and licenses.............................. 416,127 702,891
Furniture and fixtures....................................... 55,144 55,144
Accumulated depreciation..................................... (90,589) (287,506)
----------- ----------
Property, net................................................. 380,682 470,529
----------- ----------
Total assets.................................................. $ 380,682 $ 470,529
=========== ==========

LIABILITIES AND DIVISIONAL EQUITY
Accrued liabilities
Payroll and benefits......................................... 52,503 61,944
----------- ----------
Total current liabilities..................................... 52,503 61,944
----------- ----------

Divisional equity
Cybergold, Inc. investment................................... 1,489,190 2,360,522
Deferred compensation........................................ (125,519) (84,692)
Accumulated deficit.......................................... (1,035,492) (1,867,245)
----------- ----------
Total divisional equity...................................... 328,179 408,585
----------- ----------
Total liabilities and divisional
equity....................................................... $ 380,682 $ 470,529
=========== ==========
</TABLE>

The accompanying Notes to the Financial Statements are an integral part of these
statements.

________________________________________________________________________________

F-3
<PAGE>

MAGNACASH, INC.

STATEMENTS OF OPERATIONS

YEAR ENDED SIX MONTHS ENDED JUNE 30,
DECEMBER 31, 1999 2000
1999 (UNAUDITED) (UNAUDITED)
-------------- -------------- --------------
<S> <C> <C> <C>
Net revenues.......................................... $ 4,347 $ 1,254 $ 7,725
Cost of revenues...................................... 36,109 17,345 26,452
------------ ----------- -----------
Gross margin.......................................... (31,762) (16,091) (18,727)

Sales and marketing expenses.......................... 295,880 98,833 412,790
General and administrative expenses................... 122,500 36,185 115,233
Research and development expenses..................... 281,173 107,497 266,601
Amortization of deferred compensation................. 304,177 284,298 18,402
------------ ----------- -----------

Net loss............................................. $ (1,035,492) $ (542,904) $ (831,753)
============ =========== ===========
</TABLE>

The accompanying Notes to the Financial Statements are an integral part of these
statements.

________________________________________________________________________________

F-4
<PAGE>

MAGNACASH, INC.

STATEMENTS OF DIVISIONAL EQUITY

<TABLE>
<CAPTION>
CYBERGOLD,
DEFERRED INC. ACCUMULATED TOTAL
COMPENSATION INVESTMENT DEFICIT
------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
BALANCES AT JANUARY 1, 1999.......... $(503,272) $ 503,272 $ -
-
Net loss............................ - - (1,035,492) (1,035,492)
Deferred compensation............... 73,576 (73,576) - -
Amortization of deferred comp....... 304,177 - 304,177
Capital contribution................ - 1,059,494 - 1,059,494
--------- ------------ ---------- ----------

BALANCES AT DECEMBER 31, 1999........ (125,519) 1,489,190 (1,035,492) 328,179

Net loss (1)........................ - - (831,753) (831,753)
Deferred compensation.(1) 22,425 (22,425) -
Amortization of deferred comp. (1) 18,402 - - 18,402
Capital contribution (1)............ - 893,757 893,757
--------- ---------- ------------ ----------
BALANCES AT JUNE 30, 2000 (1)........ $ (84,692) $2,360,522 $(1,867,245) $ 408,585
========= ========== ============ ==========
</TABLE>

(1) unaudited

The accompanying Notes to the Financial Statements are an integral part of these
statements.

_______________________________________________________________________________
F-5
<PAGE>

MAGNACASH, INC.
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED JUNE 30,
1999 2000
1999 (UNAUDITED) (UNAUDITED)
---------- ------------ ----------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss........................................... $ (1,035,492) $ (542,904) $ (831,753)
Adjustments for noncash charges
included in net loss:
Depreciation....................................... 90,589 24,670 98,785
Amortization of deferred compensation 304,177 284 18,402
Changes in current assets and
liabilities:
Increase in accrued liabilities................... 52,503 24,729 9,441
---------- --------- ---------
Net cash used in operating
activities........................................ (588,223) (209,207) (705,125)
---------- --------- ---------

INVESTMENT ACTIVITIES
Purchases of property and equipment................. (471,271) (63,413) (188,632)
---------- --------- ---------
Net cash used in investment
activities (471,271) (63,413) (188,632)
---------- --------- ---------
FINANCING ACTIVITIES
Cybergold capital contribution...................... 1,059,494 272,620 893,757
---------- --------- ---------
Net cash provided by financing
activities........................................ 1,059,494 272,620 893,757
---------- --------- ---------
Increase in cash and
equivalents........................................ 0 0 0
Cash and equivalents at beginning of
period............................................. 0 0 0
---------- --------- ---------
Cash and equivalents at end of
period............................................. $ 0 $ 0 $ 0
========== ========= =========
</TABLE>

The accompanying Notes to the Financial Statements are an integral part of these
statements.

_______________________________________________________________________________
F-6
<PAGE>

MAGNACASH, INC.

NOTES TO FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 1999 AND THE SIX MONTHS ENDED
JUNE 30, 2000 (UNAUDITED) AND JUNE 30, 1999 (UNAUDITED)

1.) OPERATIONS

MagnaCash, Inc. ("MagnaCash"or the "Company"), a division of Cybergold, Inc.
("Cybergold"), is a provider of on-line payment infrastructure to on-line
businesses and organizations. MagnaCash offers an on-line funds transfer system
that enables its customers to create individual accounts for consumers and
businesses with whom they have relationships. Transfers within accounts in the
system occur immediately. These accounts can be used to store value credited to
the accounts by transfers from bank accounts and credit cards or earned by users
from promotional and other activities performed by them on the Internet. Users
can apply funds from these accounts to credit cards, transmit them to bank
accounts, or use them to make purchases directly from merchants who participate
in the MagnaCash payment system. Transfers to accounts outside the system are
credited immediately within the system, but are subject to standard bank and
credit card protocols for audit outside the system. MagnaCash currently manages
9,000,000 accounts on behalf of Cybergold, Inc., its former corporate parent
where the payment infrastructure business conducted by MagnaCash was developed.
Over 50 merchants and organizations currently participate in the MagnaCash
system.

2.) BASIS OF PRESENTATION

On April 14, 2000, Cybergold entered into an agreement and plan of merger
and reorganization with MyPoints.com, Inc. ("MyPoints"). As outlined in the
merger agreement between Cybergold and MyPoints, Cybergold is to create an
independent company, MagnaCash, Inc. ("MagnaCash" or the "Company") comprised of
Cybergold's internet payments business. After completion of MagnaCash's initial
public offering, Cybergold will own 19.9% of MagnaCash's outstanding common
stock.

In connection with the creation of MagnaCash as a separate company,
Cybergold and MagnaCash will enter into a series of agreements (collectively
referred to as the "Separation Agreements") (See Note 10 of the financial
statements). Pursuant to the Separation Agreements, Cybergold will transfer to
MagnaCash up to $5 million in cash in addition to certain assets and liabilities
that relate to the MagnaCash business prior to the date of completion of
MagnaCash's initial public offering (the "separation date").

The accompanying financial statements of MagnaCash reflect the historical
results of operations and cash flows of the MagnaCash on-line payments business
of Cybergold for the year ended December 31, 1999. Under Cybergold's ownership,
MagnaCash's operations were a division of Cybergold and not a separate legal
entity. The technology utilized by MagnaCash was developed by Cybergold for use
in its business. On or about January 1, 1999, management of Cybergold decided to
develop MagnaCash into a separate business venture in addition to a servicing
vehicle for Cybergold. As a result, the financial information presented in this
Registration Statement is for the period starting January 1, 1999.

MagnaCash's historical financial information, as part of Cybergold, is shown
in the financial statements. As a result of the various allocations and lack of
specific identifiable historical divisional financial statements, the
accompanying statements do not necessarily reflect what the financial position,
results of operations and cash flows would have been had MagnaCash been a
separate, stand-alone entity during the periods presented. In addition, the
historical information is not necessarily indicative of what MagnaCash's results
of operations, financial position and cash flows will be in the future.
Management has not made adjustments to reflect many significant changes that
will occur in MagnaCash's cost structure, funding and operations as a result of
the separation from Cybergold, including changes in employee base, changes in
legal structure, increased costs associated with reduced

________________________________________________________________________________
F-7
<PAGE>

MAGNACASH, INC.

NOTES TO FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 1999 AND THE SIX MONTHS ENDED
JUNE 30, 2000 (UNAUDITED) AND JUNE 30, 1999 (UNAUDITED)

economies of scale, increased marketing expenses related to establishing a new
brand identity and increased costs associated with being a public, stand-alone
company.

The financial statements include allocations of applicable Cybergold
expenses, including accounting, real estate, human resources, and other
Cybergold corporate services and infrastructure costs. The expense allocations
have been determined on the basis that Cybergold and MagnaCash management
considered to be reasonable reflections of the utilization of services provided
by Cybergold.

3.) RISK FACTORS

Through December 31, 1999, MagnaCash had an accumulated deficit of
approximately $1,035,000 and has continued to incur losses in 2000. In addition,
under the terms of the Merger Agreement with MyPoints, should this Registration
Statement not be declared effective on or before September 30, 2000, MyPoints
has the option to dividend an amount equal to $5 million less any operating
expenses funded by MyPoints through the date of the distribution, less any taxes
payable upon the distribution of up to $5 million to the Cybergold stockholders
and MagnaCash would cease operations. These factors raise substantial doubt as
to the Company's ability to continue as a going concern.

In addition to these factors, MagnaCash is exposed to a number of other
risks including, but not limited to, intense competition, possible undue
influence of one customer, a new and unproven market, ability to raise
additional capital, rapidly changing technology, regulation, and lack of an
active public market for its stock.

4.) SIGNIFICANT ACCOUNTING POLICIES

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; the
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. Significant estimates include those related to the allocation
of expenses to MagnaCash. Actual results could differ from those estimates.

Interim financial information--The financial information as of June 30, 1999
and 2000 is unaudited and includes adjustments, consisting only of normal and
recurring adjustments, that management considered necessary for a fair
presentation of MagnaCash's financial position, operating results and cash
flows. Results for the six months ended June 30, 2000 are not necessarily
indicative of results to be expected for the full fiscal year or for any future
period.

Receivables--MagnaCash has no accounts receivable as the transaction fees
that it earns are credited to its account as soon as the transaction is
completed.

Property--Property and equipment are stated at cost less accumulated
depreciation. Depreciation is calculated on a straight line basis over the
estimated useful lives of the assets. All property and equipment is depreciated
over 3 years. Maintenance and repair costs are charged to earnings while
expenditures for major renewals and improvements are capitalized.

Research and development costs - The Company accounts for its development
costs in accordance with SOP 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use". Management determined that the
software was substantially complete and ready for its intended use in early 1999
and the costs incurred during 1999 and 2000 relate to maintenance and minor
enhancements. These costs have been expensed as incurred.

Divisional Equity--Payable to/receivable from Cybergold represents the net
amount due to or from Cybergold as a result of intercompany transactions between
MagnaCash and Cybergold. See Note 10 for a description of the relationship with
Cybergold.

________________________________________________________________________________
F-8
<PAGE>

MAGNACASH, INC

NOTES TO FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 1999 AND THE SIX MONTHS ENDED
JUNE 30, 2000 (UNAUDITED) AND JUNE 30, 1999 (UNAUDITED)

Revenue Recognition--Revenues are recognized at the time of the transaction,
which occurs when a customer completes a transaction that transfers value in
their personal on-line account to another merchant, their individual bank
account or personal credit card. MagnaCash earns a transaction fee based on a
percentage of the value transferred.

Cost of revenues-- Cost of revenues represent fees paid to various banking
organizations as client's members transfer earned balances to a bank account or
a VISA card or spend in a payment transaction.

Deferred Compensation--Employee stock options are accounted for under the
provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees" (APB No. 25). APB No. 25 requires the use of the intrinsic
value method, which measures compensation cost as the excess, if any, of the
quoted market price of the stock at grant over the amount an employee must pay
to acquire the stock. MagnaCash makes pro forma disclosures of net earnings as
if the fair value based method of accounting had been applied as required by
Statement of Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation" ("SFAS No. 123").

Income taxes--MagnaCash's operating results historically generated losses
that have been included in Cybergold's consolidated U.S. and state income tax
returns. As a result of the significant losses of Cybergold, the resulting net
deferred tax asset was fully reserved. In the future, MagnaCash will record a
provision for income taxes in its financial statements and will file separate
tax returns. Deferred tax assets and liabilities will be recognized for the
expected tax consequences of temporary differences between the tax bases of
assets and liabilities and their reported amounts to the extent that these
assets and liabilities are realizable.

Comprehensive income--There are no other comprehensive income items except
for net loss for any of the periods presented.

Segment information--Management believes that the Company operates in one
segment only.

5.) STOCK OPTIONS

CYBERGOLD STOCK BASED PLANS

STOCK OPTIONS-- MagnaCash employees participate in Cybergold's stock option
plan. Generally, the exercise price of each stock option was equal to 100% of
the market price of Cybergold's stock on the date of grant and has a maximum
term of 10 years. Options vest 25% after 12 months of service and then vest
ratably over the following three years. During 1999, Cybergold instituted a
broad-based stock option incentive program under which Cybergold granted
options, to essentially all full-time employees, including current MagnaCash
employees, to purchase a total of approximately 140,000 shares of Cybergold
common stock. A portion of the stock options granted was at exercise prices
below market price of Cybergold's stock on the date of grant. In connection with
the granting of these stock options, during 1999 Cybergold recorded deferred
compensation of $1,279,995, of which $370,068 related to MagnaCash employees or
a proportionate share of Cybergold employee deferred compensation relating to
time spent on the MagnaCash business.In addition, all remaining Cybergold
employees will receive one MagnaCash stock option for every four Cybergold stock
options they have been granted.

As of the effective date of MagnaCash's initial public distribution, the
vesting of all Cybergold stock options held by Magnacash employees will cease.

______________________________________________________________________________
F-9
<PAGE>

MAGNACASH, INC

NOTES TO FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 1999 AND THE SIX MONTHS ENDED
JUNE 30, 2000 (UNAUDITED) AND JUNE 30, 1999 (UNAUDITED)

A summary of options held by MagnaCash employees under the Cybergold option
plans follows:

<TABLE>
<CAPTION>
NUMBER OF WEIGHTED
CYBERGOLD AVERAGE
EXERCISABLE EXERCISABLE EXERCISE
OPTIONS SHARES PRICE
------------- ---------------- -----------------
<S> <C> <C> <C>
Outstanding at January 1, 1999.................... 141,599 141,599 $ 0.20
Granted......................................... 134,400 84,600 $ 4.43
Exercised....................................... (90,666) (90,666) $ 0.05
Canceled/Expired................................ (13,600) (13,600) $ 0.23
------- -------- ------
Outstanding at December 31, 1999.................. 171,733 121,933 $ 3.58

Granted......................................... 75,800 - $10.02
Exercised....................................... (58,545) (58,545) $ 0.41
Canceled/Expired................................ (17,490) (13,490) $ 3.36
------- -------- ------

Outstanding at June 30, 2000(unaudited) 171,498 49,898 $ 7.53
</TABLE>

The weighted average fair value of individual options granted during 1999 was
$1.25

The fair value of each MagnaCash employee option grant under the Cybergold
plans is estimated on the date of grant using the Black-Scholes option-pricing
model and the following weighted average assumptions:

1999
---------

Expected lives.................................. 4 years
Risk-free interest rate......................... 6.28%
Expected volatility............................. 0%
Dividend yield.................................. 0%

The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compenation." Had compensation expense been
determined based on the fair value at the grant dates, as prescribed in SFAS No.
123, the Company's net loss would have increased by approximately $13,000 for
the year ended December 31, 1999.

MAGNACASH STOCK BASED PLANS

STOCK OPTIONS. Concurrent with the initial public offering, MagnaCash
intends to establish a stock option plan for MagnaCash employees. No future
stock option grants will be made under the Cybergold plan to MagnaCash
employees; instead, future grants to MagnaCash employees will be made under the
MagnaCash plan.

_______________________________________________________________________________
F-10
<PAGE>

MAGNACASH, INC

NOTES TO FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 1999 AND THE SIX MONTHS ENDED
JUNE 30, 2000 (UNAUDITED) AND JUNE 30, 1999 ((UNAUDITED)

6.) EMPLOYEE STOCK PURCHASE PLAN (ESPP)

Cybergold maintains an ESPP that permits full-time MagnaCash employees to
purchase a limited number of Cybergold common shares at 85% of market value.
Under the plan, Cybergold sold 2,789 shares to MagnaCash employees in 1999.

7.) LEASES

MagnaCash will enter into a sublease agreement with Cybergold to lease
space consisting of 7,258 sq. ft. located at 1330 Broadway, Suite 1535 in
Oakland, California. The sublease is for a period of 60 months and requires
lease payments of $14,516 per month. Rent expense included in these financial
statements for the year ended December 31, 1999 was $50,402 and was allocated
based on headcount.

8.) EQUITY

Following the distribution, MagnaCash's authorized capital stock will
consist of 11,500,000 shares of common stock, $.001 par value, and 0 shares of
preferred stock, $.001 par value.

The holders of common stock are entitled to one vote for each share held.
Except as otherwise provided by law, the holders of common stock vote together
with the holders of preferred stock as one class. Subject to the rights of
holders of any shares of preferred stock which may at the time be outstanding,
holders of common stock will be entitled to such dividends as the board of
directors may declare out of funds legally available therefor. Subject to the
prior rights of creditors and holders of any preferred stock which may be
outstanding from time to time, the holders of common stock are entitled, in the
event of liquidation, dissolution or winding up of MagnaCash, to share equally
in the distribution of all remaining assets.

9.) CONTINGENCIES

MagnaCash is presently not a party to any pending legal proceeding or
claims.

10.) RELATIONSHIP WITH CYBERGOLD

MagnaCash's costs and expenses include allocations from Cybergold for
certain centralized accounting, human resources, benefits administration and
real estate leases. These allocations have been determined on a basis that
MagnaCash and Cybergold considered to be reasonable reflections of the
utilization of services provided or the benefit received by MagnaCash. The
allocation methods include relevant equipment, revenues and headcount. Allocated
costs included in Sales and Marketing, General and Administrative and Research
and Development expenses in the accompanying statement of operations for the
year ended 1999 are $63,755, 31,878 and 31,878, respectively. All revenues have
been generated by servicing Cybergold's accounts.

For purposes of governing certain of the ongoing relationships between
MagnaCash and Cybergold at and after the separation date and to provide for an
orderly

______________________________________________________________________________
<PAGE>

MAGNACASH, INC

NOTES TO FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 1999 AND THE SIX MONTHS ENDED
JUNE 30, 2000 (UNAUDITED) AND JUNE 30, 1999 (UNAUDITED)

transition, MagnaCash and Cybergold have entered or will enter into various
agreements, subject to change until finalized. A brief description of each of
the draft agreements follows:

SERVICES AGREEMENT

The Services Agreement governs the relationship between MagnaCash and
Cybergold for the management of Cybergold's consumer loyalty rewards system
related to the spending and other redemption of incentive payments earned by
Cybergold members. This agreement will be in effect for three years commencing
on August 1, 2000 and includes terms for the payment of a monthly base fee and
an active account fee which is based on the total number of active accounts
managed by MagnaCash. In addition, the agreement will be renewed automatically
for successive one year renewal terms unless either party give the other written
notice of nonrenewal at least 120 days prior to the end of the initial term. The
agreement also includes a provision to renegotiate the terms of this agreement
after six months due to the evolving business needs of MagnaCash and Cybergold.

LICENSE AND ASSIGNMENT AGREEMENT

The License and Assignment Agreement governs the use by MagnaCash of
Cybergold's intellectual and other property including the transaction system
MagnaCash uses to complete real-time, on-line cash transactions that enable the
movement of money between any combination of individuals, merchants and
businesses participating in the system. In addition, this agreement outlines the
proposed sharing of certain desktop and server software which will be used by
both MagnaCash and Cybergold for the foreseeable future. This agreement grants
MagnaCash an exclusive, perpetual, irrevocable, worldwide, royalty-free license
to use the above noted intellectual property. As a condition of this agreement,
certain third party banking agreements will be assigned to MagnaCash.

TRANSITIONAL SERVICES AND JOINT OPERATION

MagnaCash will enter into a transitional services agreement with Cybergold
covering the provision of various transitional services, including
telecommunications, accounting, computer facilities, technical support, human
resources and other services by Cybergold to MagnaCash and, if necessary in
certain circumstances, vice versa. The transitional services agreement will have
an initial term of six months from the date of separation.

TAX SHARING AGREEMENT

_______________________________________________________________________________
F-12
<PAGE>

MAGNACASH, INC

NOTES TO FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 1999 AND THE SIX MONTHS ENDED
JUNE 30, 2000 (UNAUDITED) AND JUNE 30, 1999 (UNAUDITED)

will be required to pay its share of income taxes shown as due on any
consolidated, combined or unitary tax returns filed by MyPoints or Cybergold for
tax periods ending on or before or including the distribution date. MyPoints
will indemnify MagnaCash against liability for all taxes in respect of
consolidated, combined or unitary tax returns for periods as to which MyPoints
or Cybergold files group returns which include MagnaCash. MagnaCash will be
responsible for filing any separate tax returns for any taxable period,
including for tax periods of MagnaCash beginning on or after the date of the
distribution, at which time MagnaCash will no longer be a member of MyPoint's
group for federal, state or local tax purposes, as the case may be. MagnaCash
will be responsible for any tax liabilities, and entitled to any refunds or
credits of taxes, with respect to separately filed tax returns. MagnaCash will
indemnify MyPoints against any tax liability with respect to separately filed
tax returns. MagnaCash will also indemnify MyPoints against all federal, state,
local and foreign taxes related to the distribution of the MagnaCash stock.

11.) RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998 and June 1999, the Financial Accounting Standards Board issued
SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities and
SFAS No. 137, Accounting for Derivative Instruments and Hedging Activities--
Deferral of the Effective Date of FASB Statement No. 133. These statements
outline the accounting treatment for all derivative activity. MagnaCash does not
presently use derivative instruments. As a result management believes that these
accounting statements will not have an effect on MagnaCash.

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in financial
Statements." SAB 101 provides guidance on applying generally accepted accounting
principles to revenue recognition issues in financial statements. The Company
has adopted SAB 101.

________________________________________________________________________________
F-13
<PAGE>

You may read and copy the registration statement and other materials that
MagnaCash files with the Securities and Exchange Commission at the Public
Reference Room of the Securities and Exchange Commission, 450 Fifth Street,
Washington, D.C. 20549 and at the Securities and Exchange Commission's regional
offices at 7 World Trade Center, Suite 1300, New York, New York 10048 and at 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. You can request
copies of these documents, upon payment of a duplication fee, by writing to the
Securities and Exchange Commission's Public Reference Section. Please call the
Securities and Exchange Commission at 1-800-SEC-0330 for further information on
the operation of the Public Reference Rooms. The Securities and Exchange
Commission filings of MagnaCash are also available to the public on the
Securities and Exchange Commission Internet site (http://www.sec.gov).

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth the costs and expenses payable by the
Registrant in connection with the sale of Common Stock being registered. All
amounts are estimates except the registration fee.

<TABLE>
<CAPTION>
Amount to be Paid
<S> <C>
SEC Registration Fee................................................. $ 264
Printing and Engraving............................................... 65,000
Legal Fees and Expenses.............................................. 175,000
Accounting Fees and Expenses......................................... 125,000
Blue Sky Qualification Fees and Expenses............................. not applicable
Transfer Agent Fees.................................................. 10,000
Miscellaneous........................................................ 9,000

Total.............................................................. 384,264
</TABLE>

Item 14. Indemnification of Directors and Officers

As permitted by Section 145 of the Delaware General Corporation Law, the
Registrant's certificate of incorporation includes a provision that eliminates
the personal liability of its directors for monetary damages for breach or
alleged breach of their duty of care to the Company or its stockholders. In
addition, as permitted by Section 145 of the Delaware General Corporation Law,
the certificate of incorporation of the Registrant provides, inter alia, that
each person who is made a party or is threatened to be made a party to or
otherwise involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason of the
fact that he or she is or was a director or officer of the Company or, while a
director or officer of the Company, is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan (hereinafter an "indemnitee"), whether the
basis of such proceeding is alleged action in an official capacity as a director
or officer or in any other capacity while serving as a director or officer, is
authorized to be indemnified and held harmless by the Company to the fullest
extent authorized by the Delaware General Corporation Law, as the same exists or
may hereafter be amended, against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement) reasonably incurred or suffered by such indemnitee in
connection therewith and such indemnification shall continue as to an
indemnitee's heirs, executors and administrators; provided, however, that,
except with respect to the proceedings brought by an indemnitee to enforce
rights to indemnification (subject to certain restrictions and as more fully
described in the Registrant's certificate of incorporation), the Company shall
indemnify any such indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Company. The right to
indemnification conferred in the Registrant's certificate of incorporation
includes the right to be paid by the Company the expenses incurred in connection
with any such proceeding in advance of its final disposition; provided, however,
that, if and to the extent that the Delaware General Corporation Law requires,
such an advancement of expenses incurred by an indemnitee

II-1
<PAGE>

in his or her capacity in which service was or is rendered by such indemnitee,
including, without limitation, service with respect to an employee benefit plan,
shall be made only upon delivery to the Company of an undertaking by or on
behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal that such indemnitee is not entitled to be indemnified
for such expenses under the Company's certificate of incorporation or otherwise.

The Registrant's policy is to enter into indemnification agreements with
each of its directors and executive officers that provide the maximum indemnity
allowed to directors and executive officers by Section 145 of the Delaware
General Corporation Law and the Bylaws, as well as certain additional procedural
protections. The indemnity agreements provide that directors and executive
officers will be indemnified to the fullest possible extent not prohibited by
law against all expenses (including attorney's fees) and settlement amounts paid
or incurred by them in any action or proceeding, including any derivative action
by or in the right of the Registrant, on account of their services as directors
or executive officers of the Registrant or as directors or officers of any other
company or enterprise when they are serving in such capacities at the request of
the Registrant. Pursuant to the indemnity agreements, the Company will not be
obligated to indemnify or advance expenses to an indemnified party with respect
to proceedings or claims initiated by the indemnified party and not by way of
defense, except with respect to proceedings specifically authorized by the Board
of Directors or brought to enforce a right to indemnification under such
indemnity agreement, the Company's certificate of incorporation, Bylaws or any
statute or law, or as otherwise required under Section 145 of the Delaware
General Corporation Law. Also under the indemnity agreements, the Company is
not obligated to indemnify the indemnified party for (i) any expenses incurred
by the indemnified party with respect to any proceeding instituted by the
indemnified party to enforce or interpret the agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
indemnified party in such proceeding was not made in good faith or was
frivolous, (ii) acts, omissions or transactions on the part of the indemnified
party from which such party may not be relieved of liability under applicable
law or (iii) expenses and the payment of profits arising from the purchase and
sale by the indemnified party of securities in violation of Section 16(b) of the
Exchange Act, or any similar or successor statute.

The indemnification provisions in the certificate of incorporation and the
indemnification agreements entered into between the Registrant and its directors
and executive officers, may be sufficiently broad to permit indemnification of
the Registrant's officers and directors for liabilities arising under the 1933
Act.

Reference is made to the following documents filed as exhibits to this
Registration Statement regarding relevant indemnification provisions described
above and elsewhere herein:

Item 15. Exhibits and Financial Schedules

(a) EXHIBITS

EXHIBIT DESCRIPTION
-------------------

3.1 Certificate of Incorporation of MagnaCash, Inc.
3.2 Bylaws of MagnaCash, Inc.
5.1 Form of Legal Opinion of Morrison & Foerster LLP*
10.1 Form of Master Separation and Distribution Agreement between Cybergold,
Inc. and MagnaCash, Inc.*
10.2 Form of Tax Sharing Agreement between MyPoints.com, Inc. and MagnaCash,
Inc.*
10.3 Form of License Assignment and Assumption Agreement between Cybergold,
Inc. and MagnaCash, Inc.*
10.4 Form of Transitional Services and Joint Operating Agreement between
Cybergold, Inc. and MagnaCash, Inc.*
10.5 Form of Services Agreement between Cybergold, Inc. and MagnaCash, Inc.
21.1 2000 Omnibus Equity Incentive Plan*
23.1 Independent Auditor's Consent
23.2 Consent of Morrison & Foerster LLP (included in Exhibit 5.1)*

__________________

*To be filed by amendment.

II-2
<PAGE>

24.1 Power of Attorney (included in signature pages to the Registration
Statement)

(b) FINANCIAL STATEMENT SCHEDULES

Independent Auditors' Report S-1

ITEM 16. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions referenced in Item 14 of this Registration
Statement 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 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 hereunder, 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 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 Act, 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 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 Act, 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.

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement on Form S-1 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oakland, State of
California, on the 4th day of August, 2000.

MagnaCash Inc.

By: /s/ Barry McCarthy
________________________________________
Barry McCarthy
COO, President and Director

Each person whose signature appears below constitutes and appoints Barry
McCarthy with full power of substitution and resubstitution; his true and lawful
attorney-in-fact agent, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this registration statement, and to file the same, with all exhibits thereto,
and all other documents in connection therewith, with the securities and
exchange commission or any state, granting unto said attorney-in-fact and agent
full power and authority to do and perform each and every act and thing
requisite and necessary to be in and about the premises, as

II-3
<PAGE>

fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agents or his
substitution many lawfully do or cause to be done by virtue hereof.

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.

<TABLE>
<CAPTION>
Signature Title Date
--------------------------------- -------------------------------- --------------------------------
<S> <C> <C>
/s/ Barry McCarthy Director, President and Chief August 4, 2000
_________________________________
BARRY MCCARTHY Operating Officer (Principal
Executive Officer)

/s/ A. Nathaniel Goldhaber Director August 4, 2000
_________________________________
A. NATHANIEL GOLDHABER

/s/ Gary Fitts Director, Chief Technical Officer August 4, 2000
_________________________________
GARY FITTS

/s/ Barry McCarthy August 4, 2000
_________________________________
BARRY MCCARTHY
(ATTORNEY-IN-FACT)
</TABLE>

II-4
<PAGE>

EXHIBIT INDEX

EXHIBIT DESCRIPTION

_______________________

3.1 Certificate of Incorporation of MagnaCash, Inc.
3.2 Bylaws of MagnaCash, Inc.
5.1 Form of Legal Opinion*
10.1 Form of Master Separation and Distribution Agreement between Cybergold,
Inc. and MagnaCash, Inc.*
10.2 Form of Tax Sharing Agreement between MyPoints.com, Inc. and MagnaCash,
Inc.*
10.3 Form of License Assignment and Assumption Agreement between Cybergold,
Inc. and MagnaCash, Inc.*
10.4 Form of Transitional Services and Joint Operating Agreement between
Cybergold, Inc. and MagnaCash, Inc.*
10.5 Form of Services Agreement between Cybergold, Inc. and MagnaCash, Inc.*
21.1 2000 Omnibus Equity Incentive Plan*
23.1 Independent Auditor's Consent
23.2 Consent of Morrison & Foerster LLP (included in Exhibit 5.1)*
24.1 Power of Attorney (included in signature pages to the Registration
Statement)

_________________________________
*To be filed by amendment.

II-5