CyberCash has failed in its bid to raise the financing for its proposed takeover of Network 1 Financial. The companies have instead entered into an asset purchase agreement under which Network 1 Financial will acquire all of CyberCash's operating assets and assume all of the company's operating liabilities. The transaction will be consummated under a Chapter 11 bankruptcy proceeding in a case commenced today in Delaware.
It marks the end of a sorry saga for CyberCash, which saw its stock market value plummet just before Christmas and lost its co-founder and CEO Bill Melton following a blazing row with creditors.
CyberCash will continue to support its existing customer base of more than 27,500 Internet merchants and more than 100,000 software users and maintain all normal business functions including marketing and sales activities, partner marketing programs and completing scheduled enhancements to its Internet payment processing service.
Dan Lynch, CyberCash's chief executive officer, says: "We are making this move now to ensure that CyberCash's obligations can be satisfied and to maximise any residual value for the company's stockholders."
Bill Wade, Network 1's chief executive officer, says his company will continue to support and provide service to the CyberCash merchant base, and continue without interruption the key processor relationships that contributed to the transaction growth of the CyberCash gateway.
Completion of the transaction is subject to numerous conditions as well as approval by the bankruptcy court. The parties hope to consummate the transaction in early April.