John Karnes, chief financial officer of CyberCash has written to New York stockmarket Nasdaq to explain the events leading up to its failure to consummate a proposed acquisition of Network 1 Financial and subsquent banruptcy filing.
Responding to a Nasdaq request for information regarding the company's suitability for a continued listing, Karnes writes: "Despite significant efforts by both CyberCash and Network 1 to obtain additional funds in the form of debt, equity financing or other cash infusion to fund operations through the closing of the merger, those efforts, to date, have been unsuccessful. As a result, the board of directors and the management of CyberCash concluded that the best alternative for maximising value to the Company's creditors and equity interest holders is through a Chapter 11 proceeding whereby CyberCash can sell its assets as a going-concern in an open, orderly and expedited format so as to minimise the risk of operational disruptions that could substantially impair one of CyberCash's most valuable assets, its brand name."
Karnes says that CyberCash has petitioned for authority to sell its assets to Network 1 Financial, or the highest bidder. Proceeds from the sale will be used to satisfy CyberCash's financial obligations and any residual would be available to stockholders, he says.
"We intend to cooperate fully with the Nasdaq in their deliberations concerning CyberCash's continued suitability for Nasdaq listing," states Karnes. "We cannot, however, offer any assurances that Nasdaq will resume trading of CyberCash's shares. We are actively exploring alternative markets to provide our stockholders liquidity for their CyberCash stock in the event that Nasdaq ultimately determines to delist CyberCash's shares."