##### Table of Contents









UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549


FORM 10-K



|    | 
|--- | 
|[X] | 



For the fiscal year ended December 31, 1999

OR

[   ]

| |                                                         
| | --------------------------------------------------------
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE



For the transition period from
          to

COMMISSION FILE NUMBER: 0-27470



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CYBERCASH, INC.

(Exact name of registrant as specified in its
charter)


|                                                                        |  |                                               
|----------------------------------------------------------------------- |  | ----------------------------------------------
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Delaware(State or other jurisdiction of
	incorporation or organization) |  | 54-1725021(I.R.S. Employer Identification No.)

2100 Reston Parkway

Third Floor


Reston, Virginia 20191


(Address of principal executive offices,
including zip code)


(703) 620-4200

(Registrants telephone number, including
area code)




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Securities pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the
Act:  Common Stock



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Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past 90 days.  [X]

Indicate by check mark if disclosure of delinquent
 filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of the
Registrants knowledge, in definitive proxy or information
statements incorporated by reference on Part III of this
Form 10-K or any amendment to this
Form 10-K.  [X]

The aggregate market value of the voting stock
held by non-affiliates of the Registrant, as of March 10,
2000, was approximately $238,665,132 based upon the last sale
price reported for such date on the Nasdaq National Market. For
purposes of this disclosure, shares of Common Stock held by
persons who hold more than 5% of the outstanding shares of Common
 Stock and shares held by officers and directors of the
Registrant have been excluded because such persons may be deemed
to be affiliates. This determination is not necessarily
conclusive.

The number of shares outstanding of the
Registrants Common Stock outstanding as of March 10,
2000 was 24,702,586.



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TABLE OF CONTENTS



|                                                                                              |  |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|PART I                                                                                       
|ITEM 2. PROPERTIES                                                                           
|ITEM 3. LEGAL PROCEEDINGS                                                                    
|ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|PART II                                                                                      
|ITEM 5. MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS            
|ITEM 6. SELECTED FINANCIAL DATA                                                              
|ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                           
|ITEM 8. FINANCIAL STATEMENTS                                                                 
|REPORT OF INDEPENDENT AUDITORS                                                               
|CONSOLIDATED BALANCE SHEETS                                                                  
|CONSOLIDATED STATEMENTS OF OPERATIONS                                                        
|CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY                                              
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                                        
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                   
|ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|PART III                                                                                     
|ITEM 10. DIRECTORS AND OFFICERS OF THE REGISTRANT                                            
|ITEM 11. EXECUTIVE COMPENSATION                                                              
|ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                      
|ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                      
|SIGNATURES                                                                                   



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PART I

ITEM 1.  BUSINESS

THIS ANNUAL REPORT CONTAINS, IN ADDITION TO HISTORICAL
INFORMATION, FORWARD-LOOKING STATEMENTS ABOUT OUR INDUSTRY, OUR
BUSINESS, AND OUR FUTURE PROSPECTS AND FINANCIAL PERFORMANCE.
THESE STATEMENTS REFLECT ONLY OUR CURRENT EXPECTATIONS, AND THEY
INVOLVE CONSIDERABLE RISK AND UNCERTAINTY. ACTUAL EVENTS OR
RESULTS MAY TURN OUT TO BE MATERIALLY DIFFERENT. IN EVALUATING
THESE STATEMENTS, YOU SHOULD CONSIDER THE VARIOUS FACTORS
IDENTIFIED THROUGHOUT THIS REPORT, INCLUDING BUT NOT LIMITED TO
THE MATTERS SET FORTH BELOW UNDER THE CAPTION RISK
FACTORS.

Overview

CyberCash, Inc. develops and provides a complete line of
Internet payment services and software products enabling a wide
variety of users to accept electronic payments and funds
transfers through a range of applications tailored to fit their
specific needs. Our online services and products are used
throughout the world by businesses, governments, universities,
non-profit organizations, and other enterprises that depend on us
 for secure, dependable, cost effective payment processing. We
are a Delaware corporation organized on August 29, 1994. We
completed our initial public offering in February 1996. We
currently operate principally in the United States but we are
committed to international expansion and have established joint
venture or licensing arrangements in Japan, Germany, the United
Kingdom, and the Asia Pacific Region. We operate large
development centers domestically as well as in Bangalore, India.

Until recently, merchants desiring to accept credit cards for the
 payment of goods and services had to rely almost exclusively on
expensive, hard-wired cash registers and proprietary credit card
reader terminals. The advent of the Internet and advances in
personal computing are making it increasingly convenient for
merchants to process credit card and payment transactions through
 flexible, inexpensive open architecture software-based solutions
 on personal computers or PC-based electronic cash registers.

Responding to this trend towards Internet commerce and flexible,
PC-based payment processing, in 1994 we began providing payment
services to Internet merchants, offering them a secure,
convenient means of accepting payments using credit cards,
checks, and other payment instruments. Our internet payment
service utilizes internally developed, proprietary technology,
including our own state-of-the-art encryption software that
ensures the integrity, security and privacy of all payment data.

In 1998 we added a line of software products to supplement our
payment processing service by acquiring ICVerify, Inc.
Through ICVerify, which offers such well-known payment software
products as ICVERIFY®, PCVERIFY and
EZCHARGE, we gained a software product targeting businesses
 that process their own payment transactions over a wide variety
of point-of-sale applications, including retail check-out
registers, mail order operations and telemarketing call centers.
In 1999, we expanded our ability to service the burgeoning
e-commerce industry by acquiring Tellan Software, Inc.
Through Tellan, which offers the Internet-based
WebAuthorize software product, we began to construct a
suite of software products that are specifically tailored to
facilitate e-commerce.

Business Strategy

Our business strategy is to expand the markets for, and maximize
the profitability of, our core online payment services and
software products businesses. Consistent with this strategy, we
will increasingly focus on marketing value-added
Transaction Management services and products, such as
 fraud detection, to our existing service subscribers and
software users. These value-added capabilities are marketed in
tandem with our core offerings to enhance the value and utility
of our online services and products and increase our revenue per
transaction, thereby generating more revenue for each transaction
 processed. Because of the architecture of our service delivery
system, in most cases we expect to be able to begin delivering
new services without any

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Principal Services and Products

Our Internet payment services and software payment products
provide a wide range of flexible, secure, cost effective payment
processing options to businesses, governments, universities and
non-profit organizations worldwide. We offer a proven solution
for virtually any application involving the electronic transfer
of credit or funds. Organizationally, we conduct our business in
three segments along functional lines: Internet payment services,
 software payment products, and customization engineering
services.

Certain financial information relating to each of these segments
is set forth in Note 13 to the Companys financial
statements contained elsewhere in this report.

Internet Payment Services

With over 20,000 merchant subscribers, our Internet payment
service is one of the leading online secure payment processing
services available today. By subscribing to our service, Internet
 merchants who do not process their own payments with our ICVERIFY® or WebAuthorize software products can
interface their websites directly with our processing servers
through an easily installed merchant connection kit
(MCK). Subscribing to our payment service is simple,
inexpensive and allows merchants to begin processing credit
payments quickly. Once installed, each subscribers MCK
routes all payment transactions to our secure, state-of-the-art
payment processing system where the transactions are authorized,
captured and settled with the cardholders bank directly
into the merchants designated bank account. Merchants are
charged a fee per transaction processed, subject to certain
minimums. The merchants MCK encrypts all payment
transactions using our proprietary DES 3 encryption
technology to ensure the integrity and privacy of all data.

Our Internet payment service is a simple, cost-effective solution
 for merchants that want to begin accepting payments over the
Internet with minimal up-front investment. Since most of the
functionality and storage is performed by our host servers, the
service simplifies the process for merchants to begin accepting
payment transactions and minimizes the number of software updates
 that a merchant needs to install on its client server. The
client software underlying our Internet payment service is
designed to integrate easily with storefront software packages,
and is scalable for various levels of transaction volumes. In
addition, the service accommodates multiple electronic
points-of-sale and allows commerce service providers to provide
payment processing functionality to multiple merchants as part of
 a merchant store hosting solution.

Our Internet payment service provides merchant subscribers with
the same functionality available through leading
merchant-operated software solutions such as WebAuthorize.
Subscribers can authorize, settle and capture VISA, MasterCard,
JCB, American Express, and Discover/ Novus transactions to their
bank accounts, in real-time or offline batch mode. Subscribers
can accept payments from consumers checking accounts using
the Automated Clearing House system. Through the system,
subscribers are provided connectivity with most U.S.-based
financial institutions and payment processors, including First
Data Corporation, American Express, Paymentech, Global Payment
Systems (Novus), NOVA, Vital Processing Services (VisaNet), NDC
and Wells Fargo Bank. Moreover, subscribers can access their
transaction data for reporting or tracking on a real-time basis.
The service also supports address verification services offered
by some payment processors to reduce the risk of fraudulent
transactions.

Revenues from our Internet payment service consist of transaction
 processing fees, monthly access fees, set up fees, and to a
lesser extent, fees for consulting and training services. We
derived approximately 40% of our 1999 revenue from our online
payment service, representing a growth rate over the prior year
of 90%.

Software Payment Products

Through the use of our software payment products, businesses and
other users can accept credit cards and other forms of payment
for the payment of goods or services, receive reporting on their
business transactions,

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| |                                            
| | -------------------------------------------
| | WebAuthorize: E-commerce Software Solution

The flagship of our e-commerce software offerings is
WebAuthorize. WebAuthorize was designed specifically
for use by either Internet commerce service providers who host
e-commerce sites for merchants or by large, highly sophisticated
merchants who host their own e-commerce sites. WebAuthorize
 users communicate directly with bank processing networks through
 the Internet instead of relying on slower and/or more expensive
dial-up or dedicated telephone lines. Communication on the
Internet allows WebAuthorize users to enjoy materially
faster response times and greater transaction processing
capacity. WebAuthorize operates on Windows and we offer a
MacAuthorize product which operates on MacIntosh personal
computers.



| |                                            
| | -------------------------------------------
| | ICVERIFY®: Physical World Software Solution

The platform for our general application product line is ICVERIFY®. ICVERIFY® is among the most
comprehensive payment processing software product offerings
available. Designed to be flexible, ICVERIFY®
operates on either a personal computer or an electronic cash
register, and functions equally well in point-of-sale checkout
applications as well as in mail order and telemarketing centers.
Using ICVERIFY®, merchants and other users can
communicate through a dial-up or dedicated line directly with the
 credit card processor of their choice to obtain real-time credit
 authorization and funds capture for all major credit cards,
ATM/debit cards, corporate purchase cards, and private label
cards.

Merchants can also integrate PCVERIFY, which
provides corporate purchasing data functionality, or NetVERIFY, which enables Internet communication directly
with bank processing networks. ICVERIFY®operates on a
 number of popular operating system platforms, including Windows,
 DOS, SCO, HP-UX, Solaris, and AIX; NetVERIFY
operates on Windows, Solaris and AIX; PCVERIFY
operates on Windows. The products also support a variety of open
platform magnetic stripe card readers, PIN pads and magnetic ink
check readers, as well as address verification services (AVS)
provided by some payments processors to reduce the risk of
fraudulent transactions. European translated versions of ICVERIFY® and PCVERIFY meeting European
processor specifications for credit and debit card transactions
are currently marketed in Germany and the United Kingdom.

Revenues from sales of software consist primarily of license fees
 and maintenance fees, and to a lesser extent from fees for
consulting and training services. We derived approximately 53% of
 our 1999 revenue from our software payment products,
representing a growth rate of 65% over 1998.

Customization Engineering Services

Our customization engineering services group performs development
 and application customization under contracts with our channel
partners and our domestic and international joint ventures. The
services which we provide are generally comprised of engineering
to customize the graphical interface viewed by the user of our
payment service to include a brand or special functionality, and
engineering to translate our services to accommodate foreign
languages and financial systems. In the future we intend to
increase our emphasis on standardization in order to allow us to
focus our resources on our core Internet payment service and
payment software.

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Revenues from our customization engineering services are
comprised principally of hourly fees charged for contract
services performed for third parties and related-party joint
ventures. We derived $1,469,000 in revenues from our engineering
activities during 1999. We anticipate that customization services
 will assume an increasingly minor role in our operations.

Other Products and Services



| |                         
| | ------------------------
| | Fraud-Detection Services

In a card not present transaction (like a call center
 or the Internet) merchants bear much of the loss resulting from
the fraudulent use of stolen or phony credit cards. The
increasing volume of commerce conducted over the Internet
increases a merchants financial exposure to credit card
fraud. We have contracted with HNC Software, Inc., a leader
in algorithmic fraud-detection metrics, to begin offering
participating subscribers to our online payment system an
optional fraud-detection scoring service. This service will
assess each payment processed with a score utilizing HNCs
proprietary algorithmic predictive models. The score assigned
each transaction is then compared against a sensitivity threshold
 predetermined by the submitting merchant to determine whether
the transaction represents an acceptable fraud risk.
Participating subscribers can adjust their exposure by increasing
 or decreasing their predetermined sensitivity threshold.
Although the service does not ensure the legitimacy of any
transaction in particular, it does afford participating
subscribers a systemic, statistically valid means of controlling
their overall exposure to fraud-related charge backs.
Participating merchants pay a per transaction fee for the
service, subject to certain minimums. We anticipate this
fraud-detection service to be available to merchants in the
second quarter of 2000.



| |                                       
| | --------------------------------------
| | Agile Wallet and InstaBuy
	 Services

We are continuing to develop applications of our Agile
Wallettechnology and InstaBuy service designed to
help subscribers to our Internet payment service increase their
sales and profitability. We are also exploring secondary
applications of our technology that, while not directly related
to our core software and payments service business, could allow
us to monetize portions of our investment in technology. Our
Agile Wallet technology is a stored consumer profile
application that streamlines the online purchase and payment
process by eliminating the need for the consumer to re-enter the
consumers name, address and credit card information for
each purchase. The technology is intended to make the purchase
process more convenient, allowing for more spontaneous consumer
purchases, thereby increasing the propensity of consumers to make
 purchases from merchant websites that have integrated our Agile
Wallet technology.

The ultimate success of the Agile Wallet technology and
InstaBuy service is contingent upon widespread merchant
integration of our technology into their websites and broad
consumer acceptance of electronic wallets as a secure, convenient
 purchasing tool. We are currently attempting to encourage
customer acceptance of wallet technology through pilot programs
with leading credit card issuing financial institutions. The
Agile Wallet offers financial institutions a way to provide
 customers with a convenient utility to make shopping easier and
to project their brand on the Internet. By making it easier for
consumers to shop, and by promoting the use of their credit cards
 within the branded user interface, credit card issuers may be
able to increase card usage and cardholder loyalty. Agile Wallets
 bearing the brands of the sponsoring financial institutions are
currently being offered to consumers by Visa U.S.A. and a
number of Visa member institutions including Peoples Bank,
BankOne, US Bank and The Associates Financial Group.
Sponsoring financial institutions typically pay us a set-up fee
for customizing their wallet, a usage fee that depends on the
number of wallets we are operating, and, in some cases, fees for
providing customer support to wallet users.

A limited number of merchants have integrated our InstaBuy
functionality into their websites in pilot programs. We intend to
 begin increased marketing of the service to merchants in 2000
and hope to have a more accurate understanding of the consumer
and merchant demand for the service by year-end.



| |                                        
| | ---------------------------------------
| | PayNow Secure Electronic Check Service

Introduced late in 1997, the PayNow Secure Electronic Check
 Service enables billers to accept real-time payment from
consumer checking accounts of bills presented on the Internet.
PayNow is built on the

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International Operations

We have small sales subsidiaries in Germany and the United
Kingdom that focus primarily on marketing our software in Europe.
 We also market our Internet payment services in the United
Kingdom through a relationship with Barclays Bank. We market our
transaction management services in Japan and Germany through
joint ventures in those countries. In 1999 we established a new
relationship with a company headquartered in Hong Kong that plans
 to market our services in China, Singapore, and elsewhere in
Asia.

Certain financial information relating to our international
operations is set forth in Note 13 to the Companys
financial statements contained elsewhere in this report.

Marketing and Distribution

We market our software products and services to merchants
directly and through the considerable number of marketing
channels we have established. Our marketing channels include:



| |   |                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Payment processors in the United States, including First Data
	Corporation (including CardNet, Envoy, FDR, NaBANCO and
	Telemoney), Paymentech, Global Payment Systems (including
	National Data Corporation, MAPP and Modular Data, Inc.),
	NOVA, Novus and Vital Processing Services;
|
| |  | Financial institutions and independent sales organizations, some
	of which resell our products and services, and others that sell
	the products and services under private label;                                                                                                      
|
| |  | Value-added resellers, hardware vendors and developers of
	store-builder software packages that integrate our
	payment capabilities into their products; and                                                                                                                         
|
| |  | Our own internal telemarketing and outside sales forces.                                                                                                                                                                                                                               

Competition

Although still relatively new, the market for Internet payment
services and software products is intensely competitive and
evolving rapidly. Moreover, the field in which we compete is
diverse and includes a growing number of alternative methods for
processing payment transactions. Although we manage our business
in distinct product segments, our services and products actually
compete against other applications, including to some extent
other CyberCash offerings, within the broader market of payment
solutions. Potential customers have a variety of options for
processing payment transactions, including proprietary,
closed-architecture systems, Internet payment services and
payment processing software.

A number of companies, including Verifone (a subsidiary of
Hewlett-Packard Company) and HyperCom Corporation, market
closed-architecture point-of-sale terminals that compete against
our services and products. While proprietary systems such as
Verifones often involve higher set-up costs and require
dedicated communication lines, they are well accepted, involve
little maintenance and are simple to operate.

Our direct competition in Internet payment services is highly
fragmented. For larger merchants wishing to establish direct
gateways to their payment processors, our competitors include
software vendors like Clear Commerce Corporation, IBM and Open
Market, Inc. Some larger merchants elect to develop their
own solutions for all or part of the transaction management
process. Whether or not they rely on software or services
developed by third parties, these solutions tend to be more
expensive, and require a greater investment in onsite maintenance
 than most small- to medium-sized merchants can afford. We have
numerous competitors in that segment of the market, including
CyberSource, Authorize.net, Signio (a subsidiary of

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Our principal competitors in the market for Internet payment
software are Go Software and Atomic Software. We also
compete to some extent with ClearCommerce and Paylinx, although
the solutions of these two companies are designed primarily for
the largest Internet merchants.

We expect competition from all of these channels to continue to
increase in the future. Many of our current and potential
competitors have longer operating histories, greater name
recognition, larger installed customer bases and significantly
greater financial, technical and marketing resources than we do.
In addition, some of our competitors have broad distribution
channels that enable them to bundle competing products and
services for delivery directly to end-users or purchasers. We
also compete against custom payment solutions built by in-house
information technology engineers. We cannot assure that we will
be able to compete effectively with current or future
competition, or that the competitive pressures we face will not
have a material adverse effect on our business, financial
condition or operating results.

Research and Development

We intend to remain competitive by continuing to invest in
research and development. In 2000, we expect to focus on
consolidating and simplifying the core architecture of our
payment products and developing enhancements to our transaction
management services. In addition, we intend to continue to adapt
our technologies to local processor specifications, currency and
other requirements for use in some non-U.S. markets,
including Canada, Europe and Asia; however, we intend to perform
only a limited amount of development consulting work. Our
programmers and software engineering facilities are located in
Reston, Virginia and Bangalore, India.

Research and development expenses were approximately $10,543,000,
 $9,066,000 and $9,656,000 for the years ended December 31,
1999, 1998, and 1997, respectively. To date, we have expensed all
 software development costs as incurred. We do not anticipate
that our research and development costs will increase
substantially in 2000.

Employees

As of December 31, 1999, we had a total of
330 employees, 203 of whom are based in the United States,
118 of whom are based in Bangalore, India and the remaining nine
are based in other international locations. None of our employees
 is represented by a labor union. We consider our relations with
our employees to be good.

Trademarks and Patents

The CyberCash logo, ICVERIFY®, PCVERIFY,
 NetVERIFY, PCAuthorize, WebAuthorize,
MacAuthorize, and PayNow Secure Electronic Check
Service are registered trademarks or service marks of CyberCash
or its affiliates in the United States and other countries.
CyberCash, PayNow, InstaBuy and Agile Wallet
are trademarks of CyberCash in the United States and other
countries. Any other trademarks, service marks and registered
trademarks and service marks that we reference in this report
belong to their respective owners.

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Risk Factors



| |                                                                           
| | --------------------------------------------------------------------------
| | We have a limited operating history and have not yet
	operated profitably.

We are a relatively new business and our revenues are not
currently sufficient for us to achieve profitability. We were
founded in August 1994 and we have not yet operated at a profit.
Our limited operating history offers little information to serve
as a basis for evaluating us and our long-term prospects. You
should consider our prospects in light of the risks, expenses and
 difficulties that companies in their earlier stage of
development encounter, particularly companies in new and rapidly
evolving markets. Our success depends upon our ability to address
 those risks successfully, which include, among other things:



| |   |                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Whether we can continue to build and maintain a strong management
	 structure that can develop and execute our business strategy,
	and respond effectively to changes in the markets for our
	services and software products;                                      
|
| |  | Whether we can respond quickly and effectively to technological
	changes and competitive forces in our markets;                                                                                                                                                    
|
| |  | Whether we will be able to assemble and maintain the necessary
	resources, especially talented software programmers, we will need
	 to develop and upgrade our technology to meet evolving market
	demands;                                                        
|
| |  | Whether we will be successful in continuing to evolve and
	successfully implement a sales and marketing strategy;                                                                                                                                                  
|
| |  | Whether we will be able to develop and manage strategic
	relationships to maximize widespread acceptance of our products
	and services;  and                                                                                                                       
|
| |  | Whether the effect of the volatility of the market price of our
	stock will adversely affect our ability to sell our products and
	services, develop strategic relationships, attract and maintain
	qualified employees, and raise additional capital if necessary.

If we do not succeed in addressing these risks, our business
likely will be materially and adversely affected.



| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| | We are incurring substantial losses and must significantly
	increase our revenue to become profitable.

Since our inception in 1994, our revenues have been substantially
 less than the fixed costs associated with marketing and
delivering our services and products. As a result, we have
incurred substantial losses in the past and anticipate continuing
 to incur losses for the next two years. At December 31,
1999, our accumulated deficit was $138,012,293 and our
accumulated other comprehensive loss was $487,432.

To become profitable, we must greatly increase the number of
transactions that we are processing in order to absorb our fixed
costs. Our payment processing systems are designed to process
many more transactions than we are currently handling.
Maintaining our payment services and software infrastructure
involves large fixed expenditures for staffing, development, and
customer support even though we are processing at only a fraction
 of our total capacity. Moreover, marketing our services and
software products involves substantial expenditures for sales
personnel and advertising. The payment processing and payment
software sectors in which we operate are becoming increasingly
competitive. In the future, we anticipate that it will become
increasingly difficult to increase our market share and that we
may experience erosion in the price of our services and products.
 It is, therefore, uncertain when we will attain a sufficient
volume of transactions on attractive terms to become profitable
and viable as a long-term enterprise.

We have limited capital resources and cannot ensure access to
 additional capital if needed.

Our historical operating losses have required us to seek
additional capital through the issuance of our Common Stock on a
number of occasions. If we continue to sustain operating losses
in future periods, we could be forced to seek additional capital
to fund our operations. We do not know whether we will be able to
 obtain additional capital if we need it or on what terms the
capital would be available. Depending on market

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| |                                                                                                   
| | --------------------------------------------------------------------------------------------------
| | Our services and products may become outdated, or may
	require large investments to remain viable.

The electronic payments area is evolving rapidly and new payment
technologies, products and methods are developing at an
increasing rate. Wide-scale implementation of a new technology or
 payment method, such as stored-value cards, electronic cash
equivalents or wireless communications, could force us to modify
our payment services or software to remain competitive, and could
 potentially render one or more of our services or products
obsolete. The cost of any adaptations or the loss of revenue from
 a displaced service or product would have a material adverse
effect on us. We are continuing to develop new products and
services such as our Agile Wallet and InstaBuy service that we
hope will ensure the continued usage of our offerings in the
future. However, no one can predict what new technologies and
payment methods may evolve in the future, or whether our current
products or systems will be compatible.



| |                                                                                                          
| | ---------------------------------------------------------------------------------------------------------
| | Our profitability is substantially dependent on continued
	expansion of the Internet, which is uncertain.

A substantial portion of our services and products require
connectivity through the Internet. Although online usage has
expanded rapidly in recent years, the Internet is still immature
and is evolving rapidly. Critical issues concerning the Internet
such as security, reliability, cost, ease of use and quality of
service, remain unresolved and may limit the growth of electronic
 commerce. Delays in the deployment of improvements to the
infrastructure for Internet access, including:



| |   |                                              
| | - | ---------------------------------------------
| |  | higher speed modems and other access devices,
|
| |  | adequate capacity, and                       
|
| |  | a reliable network backbone                  

also could hinder the development of the Internet as a viable
commercial marketplace. For all of these reasons, it remains
uncertain whether commerce over the Internet will continue to
grow, whether a significant market for our products and services
will emerge, or whether our products and services will become
generally adopted. Even if such a market does develop,
competitive pressures may make it difficult, or impossible, for
us to operate profitably.

The nature of our business makes it difficult
to predict our revenues and operating results, which may
negatively affect our stock price.

Our revenues and operating results have varied significantly from
 period to period. Although our earnings are becoming more
predictable as the market for our services and products begins to
 mature, our revenues and operating results can be expected to
fluctuate somewhat for a variety of reasons beyond our control:



| |   |                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The burgeoning e-commerce phenomenon is relatively new and
	rapidly evolving.                                                                                                                                                               
|
| |  | No reliable data exists upon which to budget for growth and
	seasonality, making planning very difficult.                                                                                                                                   
|
| |  | We are dependent for our planning purposes on sales and other
	information provided by a large number of intermediary
	resellers, many of whom account for transactions
	sporadically.                                                    
|
| |  | Many of our licensing arrangements involve large, one-time
	royalty payments or significant up-front custom engineering work
	the recognition of which varies and contributes to our
	fluctuations in revenues.                             
|
| |  | 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.

For these reasons, period-to-period comparisons of our results of
 operations are not necessarily a reliable indication of future
performance. Because of all of the foregoing factors, it is
possible that our quarterly

9



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##### Table of Contents







| |                                                                                 
| | --------------------------------------------------------------------------------
| | We face intense competition that may slow our growth and
	force our prices down.

We compete with a number of companies in both our Internet
payment services and payment software businesses. We expect this
competition to intensify in the future, with new competitors, and
 competitive services and products regularly entering the market.
 Many of these current and potential competitors have longer
operating histories, greater name recognition, larger installed
customer bases and significantly greater financial, technical and
 marketing resources than us. In addition, many of our current or
 potential competitors, such as Microsoft, have broad
distribution channels that they may use to bundle competing
products directly to end-users or purchasers. If these
competitors were to bundle competing products for their
customers, it could adversely affect our ability to market our
services.

This competitive environment will make it increasingly difficult
for us to increase our market share and may force us to reduce
the prices for some of our services and products. Unless we can
increase our volume or reduce our costs, any such reductions
would have an adverse effect on our profitability.



| |                                                                                                          
| | ---------------------------------------------------------------------------------------------------------
| | We must achieve market acceptance and develop new products
	and services to address technological change.

Broad acceptance of our products and services and their use in
large numbers is critical to our success because a large portion
of our revenues derive from one-time fees we charge to customers
buying our products and services. In addition, our ability to
earn significant revenues from our Agile Wallet or InstaBuy
services will depend in part on their acceptance by a substantial
 number of prominent online merchants. One obstacle to widespread
 market acceptance for our products and services is that widely
adopted technological standards for accepting and processing
payments over the Internet have not yet emerged. As a result,
merchants and financial institutions have been slow to select
which service to use. Until one or more dominant standards
emerge, we must design, develop, test, introduce and support new
services to meet changing customer needs and respond to other
technological developments. Our technologies have not been
accepted as standards. To be successful, we must obtain
widespread acceptance of our technologies, or modify our products
 and services to meet whatever industry standards do ultimately
develop. It is not certain that we will be able to do either.



| |                                                                                         
| | ----------------------------------------------------------------------------------------
| | We may experience software defects and development delays,
	damaging customer relations.

Services based on sophisticated software and computing systems
often encounter development delays, and the underlying software
may contain undetected errors or failures when introduced or when
 the volume of services provided increases. We may experience
delays in the development of our software products or the
software and computing systems underlying our services. In
addition, despite rigorous testing our software may nevertheless
contain errors. Any material development delays or errors could
damage the reputation of the service or software effected, as
well as our customer relations, which could have a material
adverse effect on our business.



| |                                                                                      
| | -------------------------------------------------------------------------------------
| | We may experience breakdowns in our payment processing
	system, harming our business.

We would be unable to deliver our payment processing services if
our system infrastructure breaks down or is otherwise
interrupted. Events that could cause system interruptions are:



| |   |                                    
| | - | -----------------------------------
| |  | fire,                              
|
| |  | earthquake,                        
|
| |  | power loss,                        
|
| |  | telecommunications failure, and    
|
| |  | unauthorized entry or other events.

10



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We maintain redundant systems within our operations center
designed to prevent data loss or other disruption as a result of
an internal system failure. Our operating center is located in a
secured, climate controlled area. These measures will not
necessarily ensure the continued, uninterrupted operation of our
processing capabilities in the event of a regional natural
disaster, power outage, communications interruption, or other
catastrophic event. We intend to establish an off-site back-up
data center during the second half of the year to provide an
additional level of protection against catastrophic risks. Also,
we have experienced growing transaction volumes that have from
time to time stressed the capacity of our systems. There is a
possibility that our existing systems may be inadequate and cause
 serious failures of our services. Finally, although we regularly
 back up data from operations, and take other measures to protect
 against loss of data, there is still some risk of such losses. A
 system outage or data loss could materially and adversely affect
 our business.

Despite the security measures we maintain, our infrastructure may
 be vulnerable to computer viruses, hackers, rogue employees or
similar sources of disruption. Any damage or failure that causes
interruptions in our operations could have a material adverse
effect on our business. Any problem of this nature could result
in significant liability to customers or financial institutions
and also may deter potential customers from using our services.
We attempt to limit this sort of liability through back-up
systems, contractual provisions and insurance. However, we cannot
 assure you that these contractual limitations on liability would
 be enforceable, or that our insurance coverage would be adequate
 to cover any liabilities we did sustain.



| |                                                                                  
| | ---------------------------------------------------------------------------------
| | Breach of our e-commerce security measures could reduce
	demand for our services.

The e-commerce industry is intensely focused on the need for
Internet security, particularly with respect to the transmission
and storage of confidential personal and financial data. Our
competitive position is largely dependent upon our existing and
potential customers confidence in our ability to safeguard
the data that we process. We rely on public key cryptography, an
encryption method that utilizes two keys, a public and a private
key, for encoding and decoding data, and digital certificate
technology, or identity verification, to provide the security and
 authentication necessary for secure transmission of confidential
 information. Regulatory and export restrictions may prohibit us
from using the strongest and most secure cryptographic protection
 available and thereby expose us to a risk of data interception.
Although our security measures are state-of-the-art, a party who
is able to circumvent our safeguards could misappropriate
proprietary information or interrupt our operations. Any
compromise or elimination of our security could erode customer
confidence in our systems and could result in lower demand for
our services.

We anticipate the ongoing need to expend significant capital and
other resources to address security issues and safeguard the
confidentiality of our customers data. Concerns over the
security of the Internet and other online transactions and the
privacy of users may also inhibit the growth of the Internet and
other online services generally, and the Web in particular,
especially as a means of conducting commercial transactions.



| |                                                                                 
| | --------------------------------------------------------------------------------
| | Our operations and business could be disrupted or damaged
	by latent Y2K issues.

We are dependent upon the operation of our software and computer
systems to provide our Internet payment services. Moreover, we
derive substantial revenue from our sale of payment software. As
a result, our operations are vulnerable to systemic defects, such
 as the well-publicized year 2000 date roll-over problem, or
 Y2K bug. Although we experienced no material
technical errors in any of our computer software, operating
systems, or embedded processors as a result of the year 2000
 roll over, we remain on guard for any delayed or latent systems
problems related to Y2K or related problems. We expended
significant financial and human resources during 1999 and early
2000 ensuring that our systems were year 2000 compliant and
would continue to operate after the roll over. Despite the
absence of material Y2K problems identified in our infrastructure
 to date, we cannot assure you that problems related to the roll
over, or some similar systemic shortcoming, will not manifest
itself in the future. Should a systemic defect disrupt our
operations or affect our software products in the future, it
could substantially disrupt our ability to generate revenue and
force us to expend substantial financial and managerial
resources, which could have a material adverse effect on our
business and prospects.

11



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##### Table of Contents



Our results may suffer if we are unable to
attract and maintain qualified management and technical
personnel.

Our performance is substantially dependent on the performance of
our executive officers and key employees. We depend on our
ability to retain and motivate high quality personnel, especially
 our management and highly skilled development teams. We do not
have key person life insurance policies on any of our
 employees. The loss of the services of any of our key employees,
 particularly our founder and chairman of the Board,
William N. Melton, or our president and chief executive
officer, James J. Condon, could have a material adverse
effect on us. Our future success also depends on our continuing
ability to identify, hire, train and retain other highly
qualified technical and managerial personnel. Competition for
these employees is intense and increasing. We may not be able to
attract, assimilate or retain qualified technical and managerial
personnel in the future, and the failure to do so would have a
material adverse effect on our business.



| |                                                                                                    
| | ---------------------------------------------------------------------------------------------------
| | We have a limited sales force, and rely on our distribution
	 channels, which are new and evolving.

We have only a limited number of sales and marketing employees
and, therefore, we rely heavily on distribution channels for
sales of our products and payment services. Because of the
rapidly evolving nature of electronic commerce, we are not
certain that the distribution channels with which we are working
will provide an adequate distribution network for us to achieve
our goals, or that we will be able to develop alternative
channels.

We may be unable to protect our proprietary
rights, permitting competitors to duplicate our products and
services.

Our success and ability to compete is dependent in part upon our
proprietary technology. We rely primarily on copyright, trade
secret and trademark law to protect our technology. We hold one
United States patent, and have applied for several others in the
United States and foreign countries. We intend to continue to
file patent applications on inventions that we may make in the
future. There can be no assurance that any of these patents will
be granted, or that if granted these patents would survive a
legal challenge to their validity, or provide meaningful levels
of protection.



| |                                                     
| | ----------------------------------------------------
| | We may have difficulties protecting our source code.

The source code for our proprietary software is protected both as
 a trade secret and as a copyrighted work. We generally enter
into confidentiality and assignment agreements with our
employees, consultants and vendors, and generally control access
to and distribution of our software, documentation and other
proprietary information. Despite these precautions, it may be
possible for a third party to copy or otherwise obtain and use
our products, services or technology without authorization, or to
 develop similar products, services or technology independently.
In addition, effective copyright and trade secret protection may
be unenforceable or limited in certain foreign countries, and the
 global nature of the Internet makes it difficult to control the
ultimate destinations of our products or services. To license our
 products or services, we often rely on on-screen
licenses that are not manually signed by the end-users and,
therefore, may be unenforceable under some laws.



| |                                                                               
| | ------------------------------------------------------------------------------
| | We may be required to engage in litigation to enforce our
	proprietary rights.

Despite our efforts to protect our proprietary rights, third
parties may attempt to copy aspects of our products and services
or to obtain and use information that we regard as proprietary.
Policing unauthorized use of our products and services is
difficult, particularly in the global environment in which we
operate, and the laws of other countries may afford us little or
no effective protection of our intellectual property. We cannot
assure you that the steps that we have taken will prevent others
from misappropriating our technology or that these agreements
will be enforceable.

12



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We may engage in litigation related to our intellectual property
for a number of reasons, including to:



| |   |                                                                          
| | - | -------------------------------------------------------------------------
| |  | enforce our intellectual property rights,                                
|
| |  | protect our trade secrets,                                               
|
| |  | determine the validity and scope of the proprietary rights of
	others, or
|
| |  | defend against claims of infringement or invalidity.                     

This litigation, whether successful or unsuccessful, could result
 in substantial costs and diversions of resources, either of
which could have a material adverse effect on our business,
financial condition or operating results.

Our products and services may infringe claims
of third party patents, which could adversely affect our business
 and profitability.

We are aware of various patents held by independent third parties
 in the area of electronic payment systems. It is possible that
the holders of rights under these patents could assert them
against us. In fact, we have already received notices of claims
of infringement of other parties proprietary rights. We
cannot assure you that our products and services are not within
the scope of patents held by others, either now or in the future.
 If any such claims are asserted, we may seek to obtain a license
 under a third partys intellectual property rights. There
can be no assurance that such a license would be available on
reasonable terms or at all. We may also decide to defend against
a claim of infringement, but litigation, even if successful, is
costly and may have a material adverse effect on us regardless of
 the eventual outcome.



| |                                                    
| | ---------------------------------------------------
| | We rely in part on third party technology licenses.

We also rely on certain technology which we license from third
parties, including software which is integrated with internally
developed software and used in our software to perform key
functions. We cannot assure you that third party technology
licenses will continue to be available to us on commercially
reasonable terms or at all. The loss of or inability to maintain
any of these technology licenses could result in delays in
introduction of our services, which could have a material adverse
 effect on our business, financial condition or operating
results.



| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | We are subject to extensive government regulation, which
	may change and harm our business.

Our operations are subject to various state and federal
regulations. Because electronic commerce in general, and most of
our products and services in particular, are so new, the
application of many of these regulations is uncertain and
difficult to interpret. The agencies responsible for the
interpretation and enforcement of these regulations could amend
those regulations or issue new interpretations of existing
regulations. It is also possible that new legislation may be
passed that imposes additional burdens. Any such change could
lead to increased operating costs and could also reduce the
convenience and functionality of our products or services,
possibly resulting in reduced market acceptance. It is possible
that new laws and regulations may be enacted with respect to the
Internet, covering issues such as user privacy, pricing, content,
 characteristics and quality of products and services. The
adoption of any such laws or regulations may decrease the growth
of the Internet, which could in turn decrease the demand for our
products or services and increase our cost of doing business or
could otherwise have a material adverse effect on our business,
financial condition or operating results.



| |                                                                              
| | -----------------------------------------------------------------------------
| | Changes in international markets may undermine our
	international operations.

A component of our strategy is to expand our operations into
international markets. We have created joint ventures in Japan
and Germany and have arranged with Barclays Bank for the delivery
 of certain of our services in the United Kingdom. The majority
of our revenues in 1999 were derived from licensing fees and
customization work charged to these joint ventures and strategic
allies located outside the United States. We anticipate that
revenues derived from customization work and initial licensing
fees from these international

13



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##### Table of Contents





We may be unable to successfully acquire new
businesses, products or technologies needed to effectively
compete, or to make these acquisitions profitable once acquired.

As our business evolves, we may acquire complementary products,
technologies, and businesses. Any significant acquisition would
entail a risk that we would not be successful in integrating and
operating the acquired business, product or technology. A failure
 to do so could have a material adverse effect on us.



| |                             
| | ----------------------------
| | Our stock price is volatile.

The price of our common stock has been and likely will continue
to be subject to wide fluctuations in response to a number of
events and factors, such as:



| |   |                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------
| |  | quarterly variations in operating results,                                                                                                           
|
| |  | variances of our quarterly results of operations from securities
	analyst estimates,                                                                 
|
| |  | announcements of technological innovations, new products,
	acquisitions, capital commitments or strategic alliances by
	CyberCash or our competitors,
|
| |  | changes in financial estimates and recommendations by securities
	analysts,                                                                          
|
| |  | the operating and stock price performance of other companies that
	 investors may deem comparable to us, and                                         
|
| |  | news reports relating to trends in our markets.                                                                                                      

In addition, the stock market in general, and the market prices
for Internet-related companies in particular, have experienced
significant price and volume fluctuations that often have been
unrelated to the operating performance of the companies affected
by these fluctuations. These broad market fluctuations may
adversely affect the market price of our common stock, regardless
 of our operating performance. Securities class action litigation
 has often been instituted against companies that have
experienced periods of volatility in the market price for their
securities. If we were to become the target of this kind of
litigation, the cost in dollars and management attention could be
 substantial, and the diversion of managements attention
and resources could have a material adverse affect on our
business.

Effecting a change of control of CyberCash
would be difficult, which may discourage offers for shares of our
 common stock and depress the value of our common stock.

Our certificate of incorporation authorizes our board of
directors to issue up to 5,000,000 shares of preferred stock
 and to determine the price, rights, preferences and privileges,
including voting rights, of those shares without any further vote
 or action by the stockholders. The rights of the holders of our
common stock will be subject to, and may be adversely affected
by, the rights of the holders of any preferred stock that may be
issued in the future. We also have a stockholders rights plan. It
 provides for the issuance of rights if an acquiror purchases
15 percent or more of our common stock without the approval
of our board of directors. The rights plan may have the effect of
 delaying, deterring, or preventing changes in control or
management of CyberCash, which may discourage potential acquirors
 who otherwise might wish to acquire CyberCash without the
consent of our board of directors. The certificate of
incorporation provides for staggered terms for members of
CyberCashs board of directors. Certain provisions
implicated in a change of control of the company in our bylaws,
capital stock, certificate of incorporation, warrants and other
derivative securities, as well as applicable provisions of
Delaware law could have a depressive effect on our stock price or
 discourage a hostile bid in which stockholders could receive a
premium for their shares. In addition, these provisions could

14



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##### Table of Contents





The common stock we are committed to issue and
may issue in the future will increase the amount of our common
stock on the public market, possibly causing our stock price to
decline.

As of March 10, 2000, there were no issued or outstanding
shares of preferred stock. As of March 10, 2000, we had
granted warrants, investment options and stock options to acquire
 an aggregate of 9,140,129 shares of our common stock. We
granted these securities and entered into these commitments in
connection with acquiring technologies, raising capital in
private placement transactions, entering into strategic alliances
 and providing incentives to employees, consultants and
non-employee directors under our stock option plans. The issuance
 of preferred stock, or sales in the public market of substantial
 amounts of shares acquired upon exercise of the foregoing
warrants and options, or the prospect of such sales, could
adversely affect the market price of our common stock.




ITEM 2.  PROPERTIES

The Companys corporate offices and processing facility is
located in Reston, Virginia. The Companys principal sales
office is located in Alameda, California. The Company also
maintains a development operation in Bangalore, India. In
addition, the Company maintains offices in Michigan, Florida,
Connecticut, Maryland, North Carolina, Massachusetts,
New York, Tennessee, Ohio, California, London, England, and
Munich, Germany.

The Company leases its office space and processing facilities.
The Company occupies approximately 52,000 square feet in
Reston, Virginia, under leases expiring through 2003. The Company
 occupies approximately 26,000 square feet in Alameda,
California, under a lease expiring 2004. The Company believes
that its existing Reston and Alameda facilities will be adequate
through at least 2000 and that sufficient additional space will
be available thereafter as needed on terms acceptable to the
Company.

The Companys processing facility presently has the capacity
 to process a substantially greater volume of transactions than
are currently being received. The system is physically housed in
secured, climate-controlled rooms. Payment processing is done on
redundant systems with frequent data backups. These redundant
systems are designed to provide an effective level of protection
against internal system failures but would not necessarily ensure
 continued operation in the case of a regional natural disaster,
power outage or telecommunication interruption. We intend to
establish an off-site back-up data center during the second half
of the year.




ITEM 3.  LEGAL PROCEEDINGS

Not applicable.




ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY
 HOLDERS

Not applicable.

15



---



##### Table of Contents






PART II








|        |                                                                           
|------- | --------------------------------------------------------------------------
|ITEM 5. | MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED
	STOCKHOLDER MATTERS

CyberCashs common stock is traded on the Nasdaq National
Market under the symbol CYCH. The following table
sets forth the high and low sales prices for our common stock for
 the indicated periods during 1999 and 1998 as reported by the
Nasdaq National Market. On March 10, 2000, the closing price
 of our common stock as reported by the Nasdaq National Market
was $13.6875 per share. As of March 10, 2000, there
were 325 holders of record of the common stock.

|               |  |              |         |     |  |   |         | 
|-------------- |  | ------------ | ------- | --- |  | - | ------- | 
|               |  |             
|               |  | Sales Prices
|               |  | Per Share   
|               |  |             
|               |  | High         |         | Low
|               |  |              |         |    
|1998           |  |              |         |     |  |   |         | 
|              
|              
|              
|              
|First Quarter  |  | $            | 17.0625 |     |  | $ | 10.4375 | 
|              
|              
|              
|              
|Second Quarter |  |              | 26.8750 |     |  |   | 12.1875 | 
|              
|              
|              
|              
|Third Quarter  |  |              | 14.5000 |     |  |   | 7.6250  | 
|              
|              
|              
|              
|Fourth Quarter |  |              | 22.1250 |     |  |   | 6.2500  | 
|              
|              
|              
|              
|              
|1999           |  |              |         |     |  |   |         | 
|              
|              
|              
|              
|First Quarter  |  | $            | 23.9375 |     |  | $ | 11.2500 | 
|              
|              
|              
|              
|Second Quarter |  |              | 24.0000 |     |  |   | 10.1875 | 
|              
|              
|              
|              
|Third Quarter  |  |              | 13.4375 |     |  |   | 6.6875  | 
|              
|              
|              
|              
|Fourth Quarter |  |              | 13.2500 |     |  |   | 7.2500  | 

We have never paid cash dividends on our capital stock. We
currently intend to retain earnings, if any, for use in our
business and do not anticipate paying any cash dividends in the
foreseeable future.

In 1999, the Company privately placed 914,634 Units, each
consisting of one share of common stock and a warrant to purchase
 0.75 of a share of common stock, for aggregate proceeds of
approximately $15 million. The initial exercise price of the
 warrants was $20.00, which was reset to $9.7656 on
January 6, 2000. As a result of the adjustment to the
exercise price, the warrants are now exercisable for 1,404,883
shares of common stock. Of these warrants, 936,588 expire on
January 6, 2004 and 468,295 expire on March 31, 2004.

In July 1999, the Company acquired all of the outstanding stock
of Tellan Software, Inc., which had a value of $11,260,000 for
$1,032,000 in cash and the issuance of 1,105,024 shares of common
 stock.

Also in 1999, Mr. Melton purchased 1,186,240 shares of
common stock for an aggregate purchase price of $10 million.

In consideration for certain advertising services provided in
1999, the Company issued 15,000 shares of common stock, valued at
 approximately $210,000 to Donino White & Partners, Inc.

All of the above transactions were made in reliance on the
exemption from registration provided by Section 4(2) of the
Securities Act.

16



---



##### Table of Contents






ITEM 6.  SELECTED FINANCIAL DATA

The following table summarizes selected financial data derived
from the Companys consolidated statements of operations for
 the fiscal years ended December 31, 1999, 1998, 1997, 1996
and 1995, and consolidated balance sheet at December 31,
1999, 1998, 1997, 1996 and 1995. This data should be read in
conjunction with all of the other financial and operational
information in this report, including the Companys
financial statements and the notes thereto, and the discussions
under the captions Managements Discussion and
Analysis of Financial Condition and Results of Operations
and Risk Factors. These are historical operating
results and are not necessarily indicative of future operating
results.

|                                                         |                                 |                         |             |            |  |      |             |            |  |      |             |           |  |   |             |            |  |   |             |           | 
|-------------------------------------------------------- | ------------------------------- | ----------------------- | ----------- | ---------- |  | ---- | ----------- | ---------- |  | ---- | ----------- | --------- |  | - | ----------- | ---------- |  | - | ----------- | --------- | 
|                                                         |                                 |                        
|                                                         |                                 | Year ended December 31,
|                                                         |                                 |                        
|                                                         |                                 | 1999(1)                 |             | 1998(2)    |  | 1997 |             | 1996       |  | 1995
|                                                         |                                 |                         |             |            |  |      |             |            |  |     
|Statements of Operations Data:                           |                                 |                         |             |            |  |      |             |            |  |      |             |           |  |   |             |            |  |   |             |          
|                                                        
|                                                        
|                                                        
|                                                        
|Total revenues                                           |                                 | $                       | 20,254,075  |            |  | $    | 12,587,603  |            |  | $    | 4,487,173   |           |  | $ | 127,439     |            |  | $ |            |          
|                                                        
|                                                        
|                                                        
|                                                        
|Less: returns                                            |                                 |                         | 473,634     |            |  |      | 312,045     |            |  |      |            |           |  |   |            |            |  |   |            |          
|                                                         |                                 |                         |             |            |  |      |             |            |  |      |             |           |  |   |             |            |  |   |             |          
|Net revenues                                             |                                 |                         | 19,780,441  |            |  |      | 12,275,558  |            |  |      | 4,487,173   |           |  |   | 127,439     |            |  |   |            |          
|                                                        
|                                                        
|                                                        
|                                                        
|Total cost of revenues                                   |                                 |                         | 11,697,431  |            |  |      | 7,517,061   |            |  |      | 3,658,196   |           |  |   | 2,207,725   |            |  |   |            |          
|                                                         |                                 |                         |             |            |  |      |             |            |  |      |             |           |  |   |             |            |  |   |             |          
|Gross profit (loss)                                      |                                 |                         | 8,083,010   |            |  |      | 4,758,497   |            |  |      | 828,977     |           |  |   | (2,080,286  | )          |  |   |            |          
|                                                        
|                                                        
|                                                        
|                                                        
|Costs and expenses:                                      |                                 |                         |             |            |  |      |             |            |  |      |             |           |  |   |             |            |  |   |             |          
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Research and development        |                         |             | 10,543,457 |  |      |             | 9,065,841  |  |      |             | 9,655,885 |  |   |             | 12,692,431 |  |   |             | 5,648,052 | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Sales and marketing             |                         |             | 22,649,914 |  |      |             | 14,651,584 |  |      |             | 9,603,299 |  |   |             | 9,414,656  |  |   |             | 1,772,365 | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | General and administrative      |                         |             | 8,440,836  |  |      |             | 7,026,469  |  |      |             | 5,840,100 |  |   |             | 4,564,644  |  |   |             | 2,728,673 | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Amortization of intangibles     |                         |             | 8,476,813  |  |      |             | 5,164,056  |  |      |             |           |  |   |             |            |  |   |             |           | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Restructuring charges           |                         |             | 774,992    |  |      |             | 608,755    |  |      |             | 344,242   |  |   |             |            |  |   |             |           | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Write-off of technology license |                         |             |           |  |      |             |           |  |      |             | 2,162,500 |  |   |             |           |  |   |             |          | 
|                                                         |                                 |                         |             |            |  |      |             |            |  |      |             |           |  |   |             |            |  |   |             |          
|Loss from operations                                     |                                 |                         | (42,803,002 | )          |  |      | (31,758,208 | )          |  |      | (26,777,049 | )         |  |   | (28,752,017 | )          |  |   | (10,149,090 | )        
|                                                        
|                                                        
|                                                        
|                                                        
|Interest income, net                                     |                                 |                         | 671,497     |            |  |      | 915,040     |            |  |      | 1,460,568   |           |  |   | 2,197,276   |            |  |   | 142,895     |          
|                                                        
|                                                        
|                                                        
|                                                        
|Loss from investments and equity in losses of affiliates |                                 |                         | (1,000,000  | )          |  |      | (101,280    | )          |  |      | (905,429    | )         |  |   |            |            |  |   |            |          
|                                                         |                                 |                         |             |            |  |      |             |            |  |      |             |           |  |   |             |            |  |   |             |          
|Net loss                                                 |                                 | $                       | (43,131,505 | )          |  | $    | (30,944,448 | )          |  | $    | (26,221,910 | )         |  | $ | (26,554,741 | )          |  | $ | (10,006,195 | )        
|                                                        
|                                                        
|                                                        
|                                                        
|Net loss available to common stockholders                |                                 | $                       | (43,131,505 | )          |  | $    | (31,667,512 | )          |  | $    | (26,504,649 | )         |  | $ | (26,554,741 | )          |  | $ | (10,006,195 | )        
|                                                         |                                 |                         |             |            |  |      |             |            |  |      |             |           |  |   |             |            |  |   |             |          
|Basic and diluted loss per share                         |                                 | $                       | (2.02       | )          |  | $    | (2.15       | )          |  | $    | (2.43       | )         |  | $ | (2.77       | )          |  | $ | (6.90       | )        
|                                                         |                                 |                         |             |            |  |      |             |            |  |      |             |           |  |   |             |            |  |   |             |          
|Weighted average shares outstanding                      |                                 |                         | 21,396,537  |            |  |      | 14,707,723  |            |  |      | 10,898,036  |           |  |   | 9,585,418   |            |  |   | 1,450,000   |          
|                                                         |                                 |                         |             |            |  |      |             |            |  |      |             |           |  |   |             |            |  |   |             |          

|                                       |  |              |              |         |  |      |             |      |  |      |             |   |  |   |             |   |  |   |             |  
|-------------------------------------- |  | ------------ | ------------ | ------- |  | ---- | ----------- | ---- |  | ---- | ----------- | - |  | - | ----------- | - |  | - | ----------- | -
|                                       |  |             
|                                       |  | December 31,
|                                       |  |             
|                                       |  | 1999(3)      |              | 1998(4) |  | 1997 |             | 1996 |  | 1995
|                                       |  |              |              |         |  |      |             |      |  |     
|Balance Sheet Data:                    |  |              |              |         |  |      |             |      |  |      |             |   |  |   |             |   |  |   |             |  
|                                      
|                                      
|                                      
|                                      
|Working capital                        |  | $            | 16,438,598   |         |  | $    | 10,781,597  |      |  | $    | 24,035,699  |   |  | $ | 31,842,308  |   |  | $ | 3,421,115   |  
|                                      
|                                      
|                                      
|                                      
|Total assets                           |  |              | 108,705,664  |         |  |      | 93,324,471  |      |  |      | 31,359,274  |   |  |   | 41,050,081  |   |  |   | 7,386,224   |  
|                                      
|                                      
|                                      
|                                      
|Total liabilities                      |  |              | 6,516,070    |         |  |      | 5,730,266   |      |  |      | 1,752,946   |   |  |   | 2,940,595   |   |  |   | 2,273,022   |  
|                                      
|                                      
|                                      
|                                      
|Redeemable convertible preferred stock |  |              |             |         |  |      |            |      |  |      | 13,013,772  |   |  |   |             |   |  |   | 16,094,692  |  
|                                      
|                                      
|                                      
|                                      
|Accumulated deficit                    |  |              | (138,012,293 | )       |  |      | (94,880,788 | )    |  |      | (63,936,340 | ) |  |   | (37,714,430 | ) |  |   | (11,159,689 | )
|                                      
|                                      
|                                      
|                                      
|Stockholders equity (deficit)         |  |              | 102,189,594  |         |  |      | 87,594,205  |      |  |      | 16,592,556  |   |  |   | 38,109,486  |   |  |   | (10,981,490 | )



---



|    |                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------
|(1) | Includes the results of operations of Tellan Software, Inc.
	commencing upon its acquisition on July 23, 1999.
|   
|(2) | Includes the results of operations of ICVerify, Inc.
	commencing upon its acquisition on April 30, 1998.      
|   
|(3) | Includes Tellan Software, Inc., acquired during 1999 and
	ICVerify, Inc., acquired during 1998.               
|   
|(4) | Includes ICVerify, Inc., acquired in 1998.                                                                    

17



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##### Table of Contents








|        |                                                                                       
|------- | --------------------------------------------------------------------------------------
|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
	CONDITION AND RESULTS OF OPERATIONS

Results of Operations

You should read the following discussion in conjunction with the
accompanying consolidated financial statements and the notes
thereto in this report. Our reported results for the year ended
December 31, 1999, and the relationship between those
results and the results for prior periods, are not necessarily
indicative of our results in the future. This discussion
contains, in addition to historical information, forward-looking
statements about our current plans and expectations for the
future. These forward-looking statements relate to our present
plans and reflect our assumptions about future events and
contingencies. They are, therefore, subject to numerous risks and
 uncertainties. The rapidly evolving industry in which we operate
 necessitates managements continuous re-evaluation of our
business plans. Moreover, the outcome of future events and our
actual results cannot be predicted and could differ significantly
 from our current expectations. The following discussion and the
section under the caption entitled Risk Factors
elsewhere in this report describe some, but not all, of the
factors that could cause these differences.

Overview

Although in its infancy, electronic commerce, or
e-commerce, is emerging as a viable industry and
continues to grow and change rapidly. In this environment, our
success will depend largely on our ability to continue to expand
our established Internet payment service and software payments
businesses, and to develop and successfully market new products
and services in a continuously evolving, increasingly competitive
 business environment. In order to become profitable, and emerge
as a viable long-term enterprise, our product and service
offerings must achieve a sufficiently widespread market
acceptance to generate an adequate return on the level of
investment made in our technology. Our future operating
performance will depend in large part on:



| |   |                                                                                               
| | - | ----------------------------------------------------------------------------------------------
| |  | the rate of growth and changes in the electronic commerce market;                             
|
| |  | our success in broadening our offerings by adding new products
	and services;                 
|
| |  | our ability to identify, develop, and deliver products and
	services that meet market demands;
|
| |  | our ability to maintain and expand our distribution channels;                                 
|
| |  | strategic decisions by major participants in the industry;                                    
|
| |  | competitive pricing pressures;                                                                
|
| |  | legal and regulatory developments;                                                            
|
| |  | general economic conditions; and                                                              
|
| |  | our ability to develop and maintain key strategic and channel
	partnerships.                  

Most of the Companys efforts from inception to 1998 were
devoted to business development and marketing in preparation for,
 and anticipation of, the growth in e-commerce. During 1998 and
1999, we made significant investments to expand our technological
 infrastructure to support the growth of our payment services and
 to ensure our systems were Year 2000 compliant. In
addition, we increased our marketing and sales expenditures, as
we concentrated on expanding our merchant base. As a result,
during 1999, the Company invested in an advertising and corporate
 branding campaign to promote merchant acquisition and CyberCash
name awareness. We continued our efforts during 1998 and 1999 to
establish a strong market position and expand our payment systems
 offerings by acquiring ICVerify, Inc. and Tellan
Software, Inc., companies that develop and market payment
software.

18



---



##### Table of Contents



Year Ended December 31, 1999 Compared to Year Ended
December 31, 1998



| |         
| | --------
| | Revenues

Our revenues for the year ended December 31, 1999 were
$20,254,000 compared with $12,588,000 for the year ended
December 31, 1998. During 1999, we generated 40% of our
revenue from our Internet services business, 53% from our payment
 software business and 7% from our customization Services
business. During 1998, we generated approximately 34% of our
revenues from our Internet services business, 52% from our
Payments Software business, and 14% from customization services.
We grew our revenue stream from our Internet payment service
business by approximately 90% from 1998. This growth was a
function of a 111% increase in our base of merchant customers and
 a 94% increase in our transaction volume during the year. Our
payment software business grew by 65% year over year, of which
30% was related to the acquisition of Tellan Software in July of
1999 and the remainder was related to the expansion of our
merchant base. In 1999 and 1998, we continued to reduce our
reliance on revenues from our customization services business,
which are comprised principally of licensing and development fees
 paid by our strategic allies or joint venture partners.

Our revenues from both Internet payment services and payment
software are subject to some seasonal variation. During the busy
year-end holiday season, merchants traditionally tend to focus
their attention on selling, making them reluctant to modify their
 payment systems. As a result, sales of payment services and
software are typically slower during that period. We anticipate
that revenues from sales of our payment software business will
continue to represent a substantial portion of our total revenue
for the foreseeable future even though the market for Internet
payment services is likely to grow faster than the market for
payment software products. Although we expect revenues from our
Internet payment services to grow as Internet commerce continues
to develop, we anticipate the growth rate of our Internet payment
 service business will be less than that the Internet industry as
 a whole due to substantial increases in competition in our
market. Increasing competitive pressures can be expected to
affect our market share and exert downward pressure on prices for
 our Internet payment services. We also expect our sales of
payment software to continue to grow, but at a rate more
consistent with growth of commerce in the physical brick
and mortar world than that of commerce on the Internet. We
do not expect revenues from our customization services to be a
significant portion of our overall revenues in the future.



| |                   
| | ------------------
| | Operating Expenses

Cost of Revenues.Cost of revenues consist primarily of
the cost of operations to provide transaction processing,
customer service and the software and hardware components for our
 software products. Cost of revenues increased by 56% in 1999,
from $7,517,000 for the year ended December 31, 1998 to
$11,697,000 for the year ended December 31, 1999. This
increase resulted primarily from higher costs incurred to produce
 and distribute our software products, higher compensation
expenses from expanding our customer service and network
operations staffs, and increased investment in computers,
networking systems and telecommunications equipment to support
our rapidly growing Internet payment service business and to
ensure that our systems were Year 2000 compliant.

Research and Development.Research and development
expenses consist primarily of compensation expense and consulting
 fees to support the development of our service and product
offerings and technologies. Research and development expenses
increased 16% over the prior year, from $9,066,000 for the year
ended December 31, 1998 to $10,543,000 for the year ended
December 31, 1999. This increase was due to enhancing our
technological offerings, adding the development team of Tellan
Software and ensuring Year 2000 compliancy. We plan to
continue to make significant investments in research and
development. To date, all of our software development costs have
been expensed as incurred. We will continue to expense similar
costs until we can demonstrate that we may realize future
benefits from costs incurred to develop our software.

Sales and Marketing.Sales and marketing expenses consist
primarily of compensation expense and advertising and marketing
costs. Sales and marketing expenses increased $7,998,000 from
$14,652,000 for the year ended December 31, 1998 to
$22,650,000 for the year ended December 31, 1999. A large
portion of 1999 and 1998 sales and marketing expense was related
to raising brand awareness of CyberCash through multi-media
campaigns. In addition during both years we increased the size of
 our direct sales force. We expect our

19



---



##### Table of Contents





General and Administrative.General and administrative
expenses consist primarily of compensation expense for management
 and support personnel and fees for professional services and
other expenses associated with our general management and
administration and not attributable to a particular source of
revenue, or type of expense. General and administrative expenses
increased $1,414,000 from $7,026,000 for the year ended
December 31, 1998 to $8,441,000 for the year ended
December 31, 1999. This increase primarily reflects an
increase in executive compensation, shareholder related and SEC
filing costs, and the acquisition of Tellan Software. We
anticipate that our general and administrative expenses will
continue to be significant as we continue to develop and expand
our operations.

Amortization of Intangibles.We accounted for the
acquisitions of ICVerify and Tellan Software as purchases.
Accordingly, we allocated the purchase price to the assets and
liabilities acquired at their estimated fair value as of the date
 of acquisition. Intangible assets are being amortized using the
straight-line method over their estimated useful lives. During
1998 and 1999, we recognized $5,164,000 and $8,477,000 in
amortization expense, respectively.

Restructuring Charges.We routinely evaluate and realign
our organizational structure in order to respond appropriately to
 the ever-changing electronic commerce market space and to take
advantage of cost-reduction opportunities related to
acquisitions. During 1998 and 1999, we recognized $609,000 and
$775,000 in restructuring charges, respectively.

Interest Income, Net.Interest income decreased $244,000
from $915,000 for the year ended December 31, 1998 to
$671,000 for the year ended December 31, 1999. We funded the
 acquisition of Tellan, the investment in Commission Junction,
the multi-media advertising campaigns and operating activities
out of cash generated from the Companys private placements
in 1999.

Loss from Investments and Equity in Losses of Affiliates.
For the year ended December 31, 1998, we recognized a loss
of $101,000 related to our share of the net losses of our
affiliates. For the year ended December 31, 1999 we
recognized a loss of $1,000,000 related to the write-off of an
investment that went out of business during 1999.

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



| |         
| | --------
| | Revenues

Our revenues for the year ended December 31, 1998 were
$12,588,000 compared to $4,487,000 for the year ended
December 31, 1997. During 1998, we generated approximately
34% of our revenues from our Internet payment services business,
52% from our payments software business, and 14% from
customization services. In contrast, the majority of our revenues
 in 1997 derived from our customization services business in
which we licensed our Internet payment technology and received
fees for development work associated with these licensing
activities. We grew our revenue stream from our Internet payment
service business by approximately 35% from 1997. This growth
resulted in part from increasing our base of merchant customers
by approximately 150% and in part from implementing a new fee
structure, under which we charge merchants a set-up and monthly
access fee in addition to transaction fees. During 1998, we
acquired ICVerify, Inc., which accounted for the new
business line of payment software.



| |                   
| | ------------------
| | Operating Expenses

Cost of Revenues.Cost of revenues increased by $3,859,000
 from $3,658,000 for the year ended December 31, 1997 to
$7,517,000 for the year ended December 31, 1998 primarily as
 a result of costs incurred to produce and distribute our
software products, increasing the size of our customer service to
 support our payment software business and expanding our
technological infrastructure to support growing transactions
volumes for our service offerings.

20



---



##### Table of Contents



Research and Development.Research and development
expenses decreased $590,000 from $9,656,000 for the year ended
December 31, 1997 to $9,066,000 for the year ended
December 31, 1998. This decrease was primarily due to our
ability to shift portions of our U.S.-based research and
development efforts to our Bangalore, India development
subsidiary, where the cost of labor is less expensive.

Sales and Marketing.Sales and marketing expenses
increased $5,049,000 from $9,603,000 for the year ended
December 31, 1997 to $14,652,000 for the year ended
December 31, 1998. A large portion of 1998 and 1997 sales
and marketing expense was related to raising brand awareness of
CyberCash through television and magazine advertisements. In
addition, during 1998, we almost tripled the size of our direct
sales force primarily through the acquisition of ICVerify.

General and Administrative.General and administrative
expenses increased $1,186,000 from $5,840,000 for the year ended
December 31, 1997 to $7,026,000 for the year ended
December 31, 1998. This increase primarily reflects an
increase in employees during 1998 as a result of acquiring
ICVerify and internal growth.

Amortization of Intangibles.We accounted for the
acquisition of ICVerify as a purchase. During 1998, the Company
had $5,164,000 in amortization expense.

Restructuring Charges.During 1998 and 1997, we recorded
restructuring charges of $609,000 and $344,000, respectively, as
a result of realigning our organization structure to respond to
changes in the electronic commerce market place.

Write-off of Technology License.In 1997, we entered into
a technology licensing agreement with Carnegie Mellon University
(CMU) whereby we acquired the exclusive worldwide
rights to CMUs NetBill technology for use in network-based
electronic commerce. Due to the uncertainty associated with the
realizability of the license acquired, we recorded a non-cash
charge to operations of $2,163,000 during 1997 for the cost of
this license.

Interest Income, Net.Interest income decreased $546,000
from $1,461,000 for the year ended December 31, 1997 to
$915,000 for the year ended December 31, 1998. We funded the
 acquisition of ICVerify and operating activities out of cash
generated from the Companys private placements in 1998.

Loss from Investments and Equity in Losses of Affiliates.
For the years ended December 31, 1998 and 1997, we
recognized losses of $101,000 and $905,000, respectively, related
 to our share of the net losses of our affiliates.



| |                                
| | -------------------------------
| | Liquidity and Capital Resources

At December 31, 1999, we had cash and cash equivalents of
$18,176,000 compared to December 31, 1998 when we had
$10,903,000 in cash and cash equivalents. The increase in cash of
 $7,273,000 was primarily a result of cash inflows from private
placements during 1999 which resulted in net cash proceeds of
$43,729,000, reduced by cash used in operating activities of
$25,609,000, and cash used to purchase investments and property
and equipment of $7,250,000 and $4,750,000, respectively. At
December 31, 1999, the Company had no material commitments
for capital expenditures.

We anticipate that our current available cash resources combined
with future cash flows from operations will be sufficient to meet
 our presently anticipated cash needs, including our working
capital requirements. As a result, we have rescinded our shelf
registration on file with the Securities and Exchange Commission.
 As the electronic commerce marketplace continues to emerge and
change and as we respond to the growth and the evolving nature of
 the market, we may need to raise additional funds in order to:



| |   |                                                  
| | - | -------------------------------------------------
| |  | fund more rapid expansion;                       
|
| |  | develop new or enhanced services;                
|
| |  | respond to competitive pressures; or             
|
| |  | acquire complementary businesses or technologies.

21



---



##### Table of Contents



If we do raise additional funds through the issuance of equity
securities, the percentage ownership of the stockholders will be
reduced, stockholders may experience additional dilution, or
equity securities issued may have rights, preferences or
privileges senior to those of common stockholders. We cannot
assure you that additional financing will be available now or in
the future. If adequate funds are not available or are not
available on acceptable terms, we may be unable to develop or
enhance our services, take advantage of future opportunities, or
respond to competitive pressures, which could have a material
adverse effect on our business, financial condition or operating
results. See Business  Risk Factors. The
common stock we are committed to sell and may sell in the future
will increase the amount of our common stock on the public
market, which could cause our stock price to decline.




ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE
ABOUT MARKET RISK

Not applicable.

22



---



##### Table of Contents






ITEM 8.  FINANCIAL STATEMENTS




REPORT OF INDEPENDENT AUDITORS

The Board of Directors



We have audited the accompanying consolidated balance sheets of
CyberCash, Inc. as of December 31, 1999 and 1998 and
the related consolidated statements of operations,
stockholders equity (deficit) and cash flows for each of
the three years in the period ended December 31, 1999. These
 financial statements are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with 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 audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to
 above present fairly, in all material respects, the consolidated
 financial position of CyberCash, Inc. at December 31,
1999 and 1998, and the consolidated results of its operations and
 its cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles
generally accepted in the United States.

/s/  Ernst & Young LLP

McLean, Virginia



23



---



##### Table of Contents



CYBERCASH, INC.






CONSOLIDATED BALANCE SHEETS


|                                                                                                                                                                                                                                            |                                                                                                 |                                            |              |            |             |  |             |            |            | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ------------------------------------------ | ------------ | ---------- | ----------- |  | ----------- | ---------- | ---------- | 
|                                                                                                                                                                                                                                            |                                                                                                 |                                           
|                                                                                                                                                                                                                                            |                                                                                                 | December 31,                              
|                                                                                                                                                                                                                                            |                                                                                                 |                                           
|                                                                                                                                                                                                                                            |                                                                                                 | 1999                                       |              | 1998      
|                                                                                                                                                                                                                                            |                                                                                                 |                                            |              |           
|ASSETS                                                                                                                                                                                                                                      |                                                                                                 |                                            |              |            |             |  |             |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|Current assets:                                                                                                                                                                                                                             |                                                                                                 |                                            |              |            |             |  |             |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                            | Cash and cash equivalents                                                                       |                                            | $            | 18,176,010 |             |  | $           | 10,902,532 |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                            | Restricted cash                                                                                 |                                            |              | 354,936    |             |  |             | 347,733    |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                            | Accounts receivable, net of allowance of $361,170 and $1,050,835
	at December 31, 1999 and 1998 |                                            |              | 3,394,091  |             |  |             | 4,661,574  |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                            | Prepaid expenses and other current assets                                                       |                                            |              | 1,029,631  |             |  |             | 600,024    |           
|                                                                                                                                                                                                                                            |                                                                                                 |                                            |              |            |             |  |             |           
|                                                                                                                                                                                                                                            |                                                                                                 | Total current assets                       |              |            | 22,954,668  |  |             |            | 16,511,863 | 
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|Property and equipment, net                                                                                                                                                                                                                 |                                                                                                 |                                            | 9,965,802    |            |             |  | 9,050,162   |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|Investments                                                                                                                                                                                                                                 |                                                                                                 |                                            | 7,242,941    |            |             |  | 242,947     |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|Other long-term assets                                                                                                                                                                                                                      |                                                                                                 |                                            | 1,215,514    |            |             |  | 2,346,184   |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|Goodwill and other intangibles, net                                                                                                                                                                                                         |                                                                                                 |                                            | 67,326,739   |            |             |  | 65,173,315  |           
|                                                                                                                                                                                                                                            |                                                                                                 |                                            |              |            |             |  |             |           
|                                                                                                                                                                                                                                            |                                                                                                 | Total assets                               |              | $          | 108,705,664 |  |             | $          | 93,324,471 | 
|                                                                                                                                                                                                                                            |                                                                                                 |                                            |              |            |             |  |             |           
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                                                        |                                                                                                 |                                            |              |            |             |  |             |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|Current liabilities:                                                                                                                                                                                                                        |                                                                                                 |                                            |              |            |             |  |             |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                            | Accounts payable                                                                                |                                            | $            | 1,714,934  |             |  | $           | 2,474,155  |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                            | Accrued employee benefits                                                                       |                                            |              | 1,268,047  |             |  |             | 1,432,060  |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                            | Other accrued expenses                                                                          |                                            |              | 2,320,242  |             |  |             | 853,268    |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                            | Deferred revenue                                                                                |                                            |              | 1,212,847  |             |  |             | 970,783    |           
|                                                                                                                                                                                                                                            |                                                                                                 |                                            |              |            |             |  |             |           
|                                                                                                                                                                                                                                            |                                                                                                 | Total current liabilities                  |              |            | 6,516,070   |  |             |            | 5,730,266  | 
|Commitments and contingencies                                                                                                                                                                                                               |                                                                                                 |                                            |              |            |             |  |             |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|Stockholders equity:                                                                                                                                                                                                                       |                                                                                                 |                                            |              |            |             |  |             |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|Common Stock, $.001 par value; 40,000,000 shares
	authorized, 24,701,542 shares issued and
	24,681,542 shares outstanding as of December 31, 1999
	and 19,129,722 shares issued and 19,109,722 shares
	outstanding as of December  31, 1998 |                                                                                                 |                                            | 24,702       |            |             |  | 19,130      |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|Additional paid-in capital                                                                                                                                                                                                                  |                                                                                                 |                                            | 241,053,526  |            |             |  | 183,265,162 |           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|Accumulated deficit                                                                                                                                                                                                                         |                                                                                                 |                                            | (138,012,293 | )          |             |  | (94,880,788 | )         
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|Treasury stock, 20,000 shares at cost                                                                                                                                                                                                       |                                                                                                 |                                            | (120,000     | )          |             |  | (120,000    | )         
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|Receivable from sale of common stock                                                                                                                                                                                                        |                                                                                                 |                                            | (268,909     | )          |             |  | (267,724    | )         
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|Accumulated other comprehensive loss                                                                                                                                                                                                        |                                                                                                 |                                            | (487,432     | )          |             |  | (420,750    | )         
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|Unearned compensatory stock options                                                                                                                                                                                                         |                                                                                                 |                                            |             |            |             |  | (825        | )         
|                                                                                                                                                                                                                                            |                                                                                                 |                                            |              |            |             |  |             |           
|                                                                                                                                                                                                                                            |                                                                                                 | Total stockholders equity                 |              |            | 102,189,594 |  |             |            | 87,594,205 | 
|                                                                                                                                                                                                                                            |                                                                                                 |                                            |              |            |             |  |             |           
|                                                                                                                                                                                                                                            |                                                                                                 | Total liabilities and stockholders equity |              | $          | 108,705,664 |  |             | $          | 93,324,471 | 
|                                                                                                                                                                                                                                            |                                                                                                 |                                            |              |            |             |  |             |           

See notes to consolidated financial statements.

24



---



##### Table of Contents



CYBERCASH, INC.






CONSOLIDATED STATEMENTS OF OPERATIONS


|                                                         |                                     |                         |             |            |            |      |             |            |            |   |             |           |           | 
|-------------------------------------------------------- | ----------------------------------- | ----------------------- | ----------- | ---------- | ---------- | ---- | ----------- | ---------- | ---------- | - | ----------- | --------- | --------- | 
|                                                         |                                     |                        
|                                                         |                                     | Year Ended December 31,
|                                                         |                                     |                        
|                                                         |                                     | 1999                    |             | 1998       |            | 1997
|                                                         |                                     |                         |             |            |            |     
|Revenues:                                                |                                     |                         |             |            |            |      |             |            |            |   |             |          
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Software product sales              |                         | $           | 10,736,309 |            |      | $           | 6,478,191  |            |   | $           |          |          
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Internet and customization services |                         |             | 9,517,766  |            |      |             | 6,109,412  |            |   |             | 4,487,173 |          
|                                                         |                                     |                         |             |            |            |      |             |            |            |   |             |          
|                                                         |                                     | Total revenues          |             |            | 20,254,075 |      |             |            | 12,587,603 |   |             |           | 4,487,173 | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Less: returns                       |                         |             | 473,634    |            |      |             | 312,045    |            |   |             |          |          
|                                                         |                                     |                         |             |            |            |      |             |            |            |   |             |          
|                                                         |                                     | Net revenues            |             |            | 19,780,441 |      |             |            | 12,275,558 |   |             |           | 4,487,173 | 
|                                                        
|                                                        
|                                                        
|                                                        
|Cost of revenues:                                        |                                     |                         |             |            |            |      |             |            |            |   |             |          
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Software product sales              |                         |             | 3,199,782  |            |      |             | 1,738,963  |            |   |             |          |          
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Internet and customization services |                         |             | 8,497,649  |            |      |             | 5,778,098  |            |   |             | 3,658,196 |          
|                                                         |                                     |                         |             |            |            |      |             |            |            |   |             |          
|                                                         |                                     | Total cost of revenues  |             |            | 11,697,431 |      |             |            | 7,517,061  |   |             |           | 3,658,196 | 
|                                                        
|                                                        
|                                                        
|                                                        
|Gross profit                                             |                                     |                         | 8,083,010   |            |            |      | 4,758,497   |            |            |   | 828,977     |          
|                                                        
|                                                        
|                                                        
|                                                        
|Costs and expenses:                                      |                                     |                         |             |            |            |      |             |            |            |   |             |          
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Research and development            |                         |             | 10,543,457 |            |      |             | 9,065,841  |            |   |             | 9,655,885 |          
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Sales and marketing                 |                         |             | 22,649,914 |            |      |             | 14,651,584 |            |   |             | 9,603,299 |          
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | General and administrative          |                         |             | 8,440,836  |            |      |             | 7,026,469  |            |   |             | 5,840,100 |          
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Amortization of intangibles         |                         |             | 8,476,813  |            |      |             | 5,164,056  |            |   |             |          |          
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Restructuring charges               |                         |             | 774,992    |            |      |             | 608,755    |            |   |             | 344,242   |          
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Write-off of technology license     |                         |             |           |            |      |             |           |            |   |             | 2,162,500 |          
|                                                         |                                     |                         |             |            |            |      |             |            |            |   |             |          
|Loss from operations                                     |                                     |                         | (42,803,002 | )          |            |      | (31,758,208 | )          |            |   | (26,777,049 | )        
|                                                        
|                                                        
|                                                        
|                                                        
|Interest income, net                                     |                                     |                         | 671,497     |            |            |      | 915,040     |            |            |   | 1,460,568   |          
|                                                        
|                                                        
|                                                        
|                                                        
|Loss from investments and equity in losses of affiliates |                                     |                         | (1,000,000  | )          |            |      | (101,280    | )          |            |   | (905,429    | )        
|                                                         |                                     |                         |             |            |            |      |             |            |            |   |             |          
|Net loss                                                 |                                     | $                       | (43,131,505 | )          |            | $    | (30,944,448 | )          |            | $ | (26,221,910 | )        
|                                                         |                                     |                         |             |            |            |      |             |            |            |   |             |          
|Basic and diluted loss per share                         |                                     | $                       | (2.02       | )          |            | $    | (2.15       | )          |            | $ | (2.43       | )        
|                                                         |                                     |                         |             |            |            |      |             |            |            |   |             |          

See notes to consolidated financial statements.

25



---



##### Table of Contents



CYBERCASH, INC.






CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY


|                                                                                                        |                                         |              |            |            |  |             |        |          |  |         |             |               |   |      |             |             |   |   |          |   |  |   |          |   |  |   |          |          |  
|------------------------------------------------------------------------------------------------------- | --------------------------------------- | ------------ | ---------- | ---------- |  | ----------- | ------ | -------- |  | ------- | ----------- | ------------- | - | ---- | ----------- | ----------- | - | - | -------- | - |  | - | -------- | - |  | - | -------- | -------- | -
|                                                                                                        |                                         |              |            |            |  |             |        |          |  |         |             | Receivable    |   |     
|                                                                                                        |                                         |              |            |            |  |             |        |          |  | from    |             | Accumulated  
|                                                                                                        |                                         | Common Stock |            | Additional |  |             |        |          |  | Sale of |             | Other        
|                                                                                                        |                                         |              |            | Paid-in    |  | Accumulated |        | Treasury |  | Common  |             | Comprehensive
|                                                                                                        |                                         | Shares       |            | Amount     |  | Capital     |        | Deficit  |  | Stock   |             | Stock         |   | Loss
|                                                                                                        |                                         |              |            |            |  |             |        |          |  |         |             |               |   |     
|Balance at December  31,
        1996                                                                   |                                         |              | 10,732,262 |            |  | $           | 10,732 |          |  | $       | 77,201,462  |               |   | $    | (37,714,430 | )           |   | $ | (120,000 | ) |  | $ | (820,233 | ) |  | $ | (87,569  | )       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Sale of Common Stock                                                                                    |                                         |              | 10,000     |            |  |             | 10     |          |  |         | 132,490     |               |   |      |            |             |   |   |         |   |  |   |         |   |  |   |         |         
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Exercise of Common Stock options                                                                        |                                         |              | 94,377     |            |  |             | 95     |          |  |         | 530,540     |               |   |      |            |             |   |   |         |   |  |   |         |   |  |   |         |         
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Common Stock and Warrants issued in Connection with acquisition
        of NetBill technology license   |                                         |              | 120,000    |            |  |             | 120    |          |  |         | 2,162,380   |               |   |      |            |             |   |   |         |   |  |   |         |   |  |   |         |         
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Common Stock issued in connection with Employee Stock Purchase
        Plan                             |                                         |              | 35,451     |            |  |             | 35     |          |  |         | 441,533     |               |   |      |            |             |   |   |         |   |  |   |         |   |  |   |         |         
|Common Stock issued in connection with the conversion of
        Series C                               |                                         |              |            |            |  |             |        |          |  |         |             |               |   |      |             |             |   |   |          |   |  |   |          |   |  |   |          |         
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Preferred Stock                         |              |            | 83,156     |  |             |        | 83       |  |         |             | 1,507,109     |   |      |             |            |   |   |          |  |  |   |          |  |  |   |          |         |  
|Accretion of Series  C                                                                                  |                                         |              |            |            |  |             |        |          |  |         |             |               |   |      |             |             |   |   |          |   |  |   |          |   |  |   |          |         
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Preferred Stock                         |              |            |           |  |             |        |         |  |         |             | (282,739      | ) |      |             |            |   |   |          |  |  |   |          |  |  |   |          |         |  
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Repayment of receivable from sale of Common Stock                                                       |                                         |              |           |            |  |             |       |          |  |         |            |               |   |      |            |             |   |   |         |   |  |   | 64,227   |   |  |   |         |         
|Accrued interest on receivable from sale of Common Stock                                                |                                         |              |           |            |  |             |       |          |  |         |            |               |   |      |            |             |   |   |         |   |  |   | (47,332  | ) |  |   |         |         
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Compensation expense in connection with stock options                                                   |                                         |              |           |            |  |             |       |          |  |         | 274,571     |               |   |      |            |             |   |   |         |   |  |   |         |   |  |   |         |         
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Amortization of deferred compensation                                                                   |                                         |              |           |            |  |             |       |          |  |         | (70,814     | )             |   |      |            |             |   |   |         |   |  |   |         |   |  |   |         |         
|Comprehensive loss                                                                                      |                                         |              |            |            |  |             |        |          |  |         |             |               |   |      |             |             |   |   |          |   |  |   |          |   |  |   |          |         
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Net loss                                |              |            |           |  |             |        |         |  |         |             |              |   |      |             | (26,221,910 | ) |   |          |  |  |   |          |  |  |   |          |         |  
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Foreign currency translation adjustment |              |            |           |  |             |        |         |  |         |             |              |   |      |             |            |   |   |          |  |  |   |          |  |  |   |          | (244,719 | )
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Comprehensive loss                      |              |            |            |  |             |        |          |  |         |             |               |   |      |             |             |   |   |          |   |  |   |          |   |  |   |          |          |  
|                                                                                                        |                                         |              |            |            |  |             |        |          |  |         |             |               |   |      |             |             |   |   |          |   |  |   |          |   |  |   |          |         
|Balance at December  31,
        1997                                                                   |                                         |              | 11,075,246 |            |  |             | 11,075 |          |  |         | 81,896,532  |               |   |      | (63,936,340 | )           |   |   | (120,000 | ) |  |   | (803,338 | ) |  |   | (332,288 | )       
|                                                                                                        |                                         |              |            |            |  |             |        |          |  |         |             |               |   |      |             |             |   |   |          |   |  |   |          |   |  |   |          |         
|Balance at December  31,
        1997                                                                   |                                         |              | 11,075,246 |            |  |             | 11,075 |          |  |         | 81,896,532  |               |   |      | (63,936,340 | )           |   |   | (120,000 | ) |  |   | (803,338 | ) |  |   | (332,288 | )       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Sale of Common Stock                                                                                    |                                         |              | 376,701    |            |  |             | 377    |          |  |         | 3,799,623   |               |   |      |             |             |   |   |          |   |  |   |          |   |  |   |          |         
|Issuance of Common Stock in connection with the acquisition
        of ICVerify,
        Inc.           |                                         |              | 2,300,000  |            |  |             | 2,300  |          |  |         | 54,228,654  |               |   |      |            |             |   |   |         |   |  |   |         |   |  |   |         |         
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Exercise of Common Stock options                                                                        |                                         |              | 336,426    |            |  |             | 336    |          |  |         | 649,483     |               |   |      |            |             |   |   |         |   |  |   |         |   |  |   |         |         
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Common Stock issued in connection with Employee Stock Purchase
        Plan                             |                                         |              | 54,829     |            |  |             | 55     |          |  |         | 442,855     |               |   |      |            |             |   |   |         |   |  |   |         |   |  |   |         |         
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Common Stock issued in connection with the conversion of
        Series C and Series  D Preferred Stock |                                         |              | 4,986,520  |            |  |             | 4,987  |          |  |         | 42,994,227  |               |   |      |            |             |   |   |         |   |  |   |         |   |  |   |         |         
|Accretion of Series  C and D                                                                            |                                         |              |            |            |  |             |        |          |  |         |             |               |   |      |             |             |   |   |          |   |  |   |          |   |  |   |          |         
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Preferred Stock                         |              |            |           |  |             |        |         |  |         |             | (723,064      | ) |      |             |            |   |   |          |  |  |   |          |  |  |   |          |         |  
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Repayment of receivable from sale of Common Stock                                                       |                                         |              |           |            |  |             |       |          |  |         |            |               |   |      |            |             |   |   |         |   |  |   | 558,978  |   |  |   |         |         
|Accrued interest on receivable from sale of Common
        Stock                                        |                                         |              |           |            |  |             |       |          |  |         |            |               |   |      |            |             |   |   |         |   |  |   | (23,364  | ) |  |   |         |         
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Amortization of deferred compensation                                                                   |                                         |              |           |            |  |             |       |          |  |         | (23,148     | )             |   |      |            |             |   |   |         |   |  |   |         |   |  |   |         |         
|Comprehensive loss                                                                                      |                                         |              |            |            |  |             |        |          |  |         |             |               |   |      |             |             |   |   |          |   |  |   |          |   |  |   |          |         
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Net loss                                |              |            |           |  |             |        |         |  |         |             |              |   |      |             | (30,944,448 | ) |   |          |  |  |   |          |  |  |   |          |         |  
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Foreign currency translation adjustment |              |            |           |  |             |        |         |  |         |             |              |   |      |             |            |   |   |          |  |  |   |          |  |  |   |          | (88,462  | )
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Comprehensive loss                      |              |            |            |  |             |        |          |  |         |             |               |   |      |             |             |   |   |          |   |  |   |          |   |  |   |          |          |  
|                                                                                                        |                                         |              |            |            |  |             |        |          |  |         |             |               |   |      |             |             |   |   |          |   |  |   |          |   |  |   |          |         
|Balance at December  31,
        1998                                                                   |                                         |              | 19,129,722 |            |  | $           | 19,130 |          |  | $       | 183,265,162 |               |   | $    | (94,880,788 | )           |   | $ | (120,000 | ) |  | $ | (267,724 | ) |  | $ | (420,750 | )       
|                                                                                                        |                                         |              |            |            |  |             |        |          |  |         |             |               |   |      |             |             |   |   |          |   |  |   |          |   |  |   |          |         

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                                                        |                                         |              |         |           |   |  |            |             |  
|------------------------------------------------------------------------------------------------------- | --------------------------------------- | ------------ | ------- | --------- | - |  | ---------- | ----------- | -
|                                                                                                        |                                         | Unearned     |         |          
|                                                                                                        |                                         | Compensatory |         | Total    
|                                                                                                        |                                         | Stock        |         | Equity   
|                                                                                                        |                                         | Options      |         | (Deficit)
|                                                                                                        |                                         |              |         |          
|Balance at December  31,                                                                                |                                         |              |         |           |   |  |            |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | 1996                                    |              | $       | (360,476  | ) |  | $          | 38,109,486  |  
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Sale of Common Stock                                                                                    |                                         |              |        |           |   |  | 132,500    |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Exercise of Common Stock options                                                                        |                                         |              |        |           |   |  | 530,635    |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Common Stock and Warrants issued in Connection with acquisition
        of NetBill technology license   |                                         |              |        |           |   |  | 2,162,500  |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Common Stock issued in connection with Employee Stock Purchase
        Plan                             |                                         |              |        |           |   |  | 441,568    |            
|Common Stock issued in connection with the conversion of
        Series C                               |                                         |              |         |           |   |  |            |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Preferred Stock                         |              |         |          |   |  |            | 1,507,192   |  
|Accretion of Series  C                                                                                  |                                         |              |         |           |   |  |            |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Preferred Stock                         |              |         |          |   |  |            | (282,739    | )
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Repayment of receivable from sale of Common Stock                                                       |                                         |              |        |           |   |  | 64,227     |            
|Accrued interest on receivable from sale of Common
        Stock                                        |                                         |              |        |           |   |  | (47,332    | )          
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Compensation expense in connection with stock options                                                   |                                         |              |        |           |   |  | 274,571    |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Amortization of deferred compensation                                                                   |                                         |              | 237,391 |           |   |  | 166,577    |            
|Comprehensive loss                                                                                      |                                         |              |         |           |   |  |            |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Net loss                                |              |         |          |   |  |            | (26,221,910 | )
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Foreign currency translation adjustment |              |         |          |   |  |            | (244,719    | )
|                                                                                                        |                                         |              |         |           |   |  |            |            
|                                                                                                        | Comprehensive loss                      |              |         |           |   |  |            | (26,466,629 | )
|                                                                                                        |                                         |              |         |           |   |  |            |            
|Balance at December  31,                                                                                |                                         |              |         |           |   |  |            |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | 1997                                    |              |         | (123,085  | ) |  |            | 16,592,556  |  
|                                                                                                        |                                         |              |         |           |   |  |            |            
|Balance at December  31,                                                                                |                                         |              |         |           |   |  |            |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | 1997                                    |              |         | (123,085  | ) |  |            | 16,592,556  |  
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Sale of Common Stock                                                                                    |                                         |              |         |           |   |  | 3,800,000  |            
|Issuance of Common Stock in connection with the acquisition
        of ICVerify,                        |                                         |              |         |           |   |  |            |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Inc.                                    |              |         |          |   |  |            | 54,230,954  |  
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Exercise of Common Stock options                                                                        |                                         |              |        |           |   |  | 649,819    |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Common Stock issued in connection with Employee Stock Purchase
        Plan                             |                                         |              |        |           |   |  | 442,910    |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Common Stock issued in connection with the conversion of
        Series C and Series  D Preferred Stock |                                         |              |        |           |   |  | 42,999,214 |            
|Accretion of Series  C and D                                                                            |                                         |              |         |           |   |  |            |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Preferred Stock                         |              |         |          |   |  |            | (723,064    | )
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Repayment of receivable from sale of Common Stock                                                       |                                         |              |        |           |   |  | 558,978    |            
|Accrued interest on receivable from sale of Common                                                      |                                         |              |         |           |   |  |            |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Stock                                   |              |         |          |   |  |            | (23,364     | )
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|Amortization of deferred compensation                                                                   |                                         |              | 122,260 |           |   |  | 99,112     |            
|Comprehensive loss                                                                                      |                                         |              |         |           |   |  |            |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Net loss                                |              |         |          |   |  |            | (30,944,448 | )
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Foreign currency translation adjustment |              |         |          |   |  |            | (88,462     | )
|                                                                                                        |                                         |              |         |           |   |  |            |            
|                                                                                                        | Comprehensive loss                      |              |         |           |   |  |            | (31,032,910 | )
|                                                                                                        |                                         |              |         |           |   |  |            |            
|Balance at December  31,                                                                                |                                         |              |         |           |   |  |            |            
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | 1998                                    |              | $       | (825      | ) |  | $          | 87,594,205  |  
|                                                                                                        |                                         |              |         |           |   |  |            |            

26



---



##### Table of Contents



CYBERCASH, INC.


CONSOLIDATED STATEMENTS OF STOCKHOLDERS
EQUITY  (Continued)

|                                                                                 |                                         |              |            |            |  |             |        |          |  |         |             |               |  |      |              |             |   |   |          |   |  |   |          |   |  |   |          |         |  
|-------------------------------------------------------------------------------- | --------------------------------------- | ------------ | ---------- | ---------- |  | ----------- | ------ | -------- |  | ------- | ----------- | ------------- |  | ---- | ------------ | ----------- | - | - | -------- | - |  | - | -------- | - |  | - | -------- | ------- | -
|                                                                                 |                                         |              |            |            |  |             |        |          |  |         |             | Receivable    |  |     
|                                                                                 |                                         |              |            |            |  |             |        |          |  | from    |             | Accumulated  
|                                                                                 |                                         | Common Stock |            | Additional |  |             |        |          |  | Sale of |             | Other        
|                                                                                 |                                         |              |            | Paid-in    |  | Accumulated |        | Treasury |  | Common  |             | Comprehensive
|                                                                                 |                                         | Shares       |            | Amount     |  | Capital     |        | Deficit  |  | Stock   |             | Stock         |  | Loss
|                                                                                 |                                         |              |            |            |  |             |        |          |  |         |             |               |  |     
|Balance at December  31,
        1998                                            |                                         |              | 19,129,722 |            |  | $           | 19,130 |          |  | $       | 183,265,162 |               |  | $    | (94,880,788  | )           |   | $ | (120,000 | ) |  | $ | (267,724 | ) |  | $ | (420,750 | )      
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Sale of Common Stock                                                             |                                         |              | 4,231,964  |            |  |             | 4,232  |          |  |         | 43,926,350  |               |  |      |              |             |   |   |          |   |  |   |          |   |  |   |          |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Issuance of Common Stock in connection with the acquisition of
        Tellan    |                                         |              | 1,105,024  |            |  |             | 1,105  |          |  |         | 9,944,111   |               |  |      |             |             |   |   |         |   |  |   |         |   |  |   |         |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Common Stock issued in connection with Stock
        Bonus Plan                  |                                         |              | 22,800     |            |  |             | 23     |          |  |         | 285,877     |               |  |      |             |             |   |   |         |   |  |   |         |   |  |   |         |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Common Stock issued in connection with Employee Stock Purchase
        Plan      |                                         |              | 48,233     |            |  |             | 48     |          |  |         | 431,417     |               |  |      |             |             |   |   |         |   |  |   |         |   |  |   |         |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Exercise of Common Stock Options                                                 |                                         |              | 163,799    |            |  |             | 164    |          |  |         | 1,459,297   |               |  |      |             |             |   |   |         |   |  |   |         |   |  |   |         |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Amortization of compensatory stock options                                       |                                         |              |           |            |  |             |       |          |  |         | 1,141,312   |               |  |      |             |             |   |   |         |   |  |   |         |   |  |   |         |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Expense incurred by principal shareholder for the benefit of the
        Company |                                         |              |           |            |  |             |       |          |  |         | 600,000     |               |  |      |             |             |   |   |         |   |  |   |         |   |  |   |         |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Repayment of receivable from sale of Common Stock                                |                                         |              |           |            |  |             |       |          |  |         |            |               |  |      |             |             |   |   |         |   |  |   | 14,170   |   |  |   |         |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Accrued interest on
        receivable from sale of
        Common Stock         |                                         |              |           |            |  |             |       |          |  |         |            |               |  |      |             |             |   |   |         |   |  |   | (15,355  | ) |  |   |         |        
|Comprehensive loss                                                               |                                         |              |            |            |  |             |        |          |  |         |             |               |  |      |              |             |   |   |          |   |  |   |          |   |  |   |          |        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Net loss                                |              |            |           |  |             |        |         |  |         |             |              |  |      |              | (43,131,505 | ) |   |          |  |  |   |          |  |  |   |          |        |  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Foreign currency translation adjustment |              |            |           |  |             |        |         |  |         |             |              |  |      |              |            |   |   |          |  |  |   |          |  |  |   |          | (66,682 | )
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Comprehensive loss                      |              |            |            |  |             |        |          |  |         |             |               |  |      |              |             |   |   |          |   |  |   |          |   |  |   |          |         |  
|                                                                                 |                                         |              |            |            |  |             |        |          |  |         |             |               |  |      |              |             |   |   |          |   |  |   |          |   |  |   |          |        
|Balance at December  31,
        1999                                            |                                         |              | 24,701,542 |            |  | $           | 24,702 |          |  | $       | 241,053,526 |               |  | $    | (138,012,293 | )           |   | $ | (120,000 | ) |  | $ | (268,909 | ) |  | $ | (487,432 | )      
|                                                                                 |                                         |              |            |            |  |             |        |          |  |         |             |               |  |      |              |             |   |   |          |   |  |   |          |   |  |   |          |        

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                                 |                                         |              |      |           |  |   |            |             |  
|-------------------------------------------------------------------------------- | --------------------------------------- | ------------ | ---- | --------- |  | - | ---------- | ----------- | -
|                                                                                 |                                         | Unearned     |      |          
|                                                                                 |                                         | Compensatory |      | Total    
|                                                                                 |                                         | Stock        |      | Equity   
|                                                                                 |                                         | Options      |      | (Deficit)
|                                                                                 |                                         |              |      |          
|Balance at December  31,
        1998                                            |                                         | $            | (825 | )         |  | $ | 87,594,205 |            
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Sale of Common Stock                                                             |                                         |              |      |           |  |   | 43,930,582 |            
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Issuance of Common Stock in connection with the acquisition of
        Tellan    |                                         |              |     |           |  |   | 9,945,216  |            
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Common Stock issued in connection with Stock
        Bonus Plan                  |                                         |              |     |           |  |   | 285,900    |            
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Common Stock issued in connection with Employee Stock Purchase
        Plan      |                                         |              |     |           |  |   | 431,465    |            
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Exercise of Common Stock Options                                                 |                                         |              |     |           |  |   | 1,459,461  |            
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Amortization of compensatory stock options                                       |                                         |              | 825  |           |  |   | 1,142,137  |            
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Expense incurred by principal shareholder for the benefit of the
        Company |                                         |              |     |           |  |   | 600,000    |            
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Repayment of receivable from sale of Common Stock                                |                                         |              |     |           |  |   | 14,170     |            
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Accrued interest on
        receivable from sale of
        Common Stock         |                                         |              |     |           |  |   | (15,355    | )          
|Comprehensive loss                                                               |                                         |              |      |           |  |   |            |            
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Net loss                                |              |      |          |  |   |            | (43,131,505 | )
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Foreign currency translation adjustment |              |      |          |  |   |            | (66,682     | )
|                                                                                 |                                         |              |      |           |  |   |            |            
|                                                                                 | Comprehensive loss                      |              |      |           |  |   |            | (43,198,187 | )
|                                                                                 |                                         |              |      |           |  |   |            |            
|Balance at December  31,                                                         |                                         |              |      |           |  |   |            |            
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | 1999                                    |              | $    |          |  |   | $          | 102,189,594 |  
|                                                                                 |                                         |              |      |           |  |   |            |            

See notes to consolidated financial statements.

27



---



##### Table of Contents



CYBERCASH, INC.






CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                                  |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |           |            |             |  
|--------------------------------------------------------------------------------- | ------------------------------------------------------------------------------ | ----------------------------------------- | ----------------------------------------- | --------- | --------- | ----------- | ----------- | --------- | ---------- | ----------- | ----------- | --------- | ---------- | ----------- | -
|                                                                                  |                                                                                |                                          
|                                                                                  |                                                                                | Year Ended December 31,                  
|                                                                                  |                                                                                |                                          
|                                                                                  |                                                                                | 1999                                      |                                           | 1998      |           | 1997       
|                                                                                  |                                                                                |                                           |                                           |           |           |            
|Operating activities                                                              |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Net loss                                                                          |                                                                                | $                                         | (43,131,505                               | )         |           | $           | (30,944,448 | )         |            | $           | (26,221,910 | )        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Adjustments to reconcile net loss to net cash used in operating
	activities:      |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Depreciation                                                                   |                                           |                                           | 3,860,832 |           |             |             | 3,152,584 |            |             |             | 2,403,259 |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Amortization of intangibles                                                    |                                           |                                           | 8,476,813 |           |             |             | 5,164,056 |            |             |             |          |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Provision for doubtful accounts receivable                                     |                                           |                                           | 474,090   |           |             |             | 236,068   |            |             |             |          |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Loss from write-off of investments                                             |                                           |                                           | 1,000,000 |           |             |             |          |            |             |             | 2,162,500 |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Loss from investments in affiliates                                            |                                           |                                           |          |           |             |             | 101,280   |            |             |             | 905,429   |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Loss on disposal of property and equipment                                     |                                           |                                           | 163,601   |           |             |             | 208,716   |            |             |             | 4,679     |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Accrued interest on receivable from sale of common stock                       |                                           |                                           | (15,355   | )         |             |             | (23,364   | )          |             |             | (47,332   | )         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Compensation expense related to issuance of stock, stock options
	and warrants |                                           |                                           | 2,055,316 |           |             |             | 99,112    |            |             |             | 441,152   |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Changes in operating assets and liabilities, net of effect of
	acquisitions:   |                                           |                                           |           |           |             |             |           |            |             |             |           |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                                                                | Restricted cash                           |                                           |           | (7,203    | )           |             |           | (84,601    | )           |             |           | (13,132    | )          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                                                                | Accounts receivable                       |                                           |           | 1,169,806 |             |             |           | (1,392,759 | )           |             |           | (2,555,011 | )          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                                                                | Prepaid expenses and other current assets |                                           |           | (386,570  | )           |             |           | 348,710    |             |             |           | (122,668   | )          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                                                                | Other long-term assets                    |                                           |           | 380,670   |             |             |           | (176,333   | )           |             |           | 80,390     |            
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                                                                | Accounts payable and accrued expenses     |                                           |           | 172,702   |             |             |           | 2,011,040  |             |             |           | (1,307,455 | )          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                                                                | Deferred revenue                          |                                           |           | 177,554   |             |             |           | 237,639    |             |             |           | 119,806    |            
|                                                                                  |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|                                                                                  |                                                                                |                                           | Net cash used in operating activities     |           |           | (25,609,249 | )           |           |            | (21,062,300 | )           |           |            | (24,150,293 | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Investing activities                                                              |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Sale (purchase) of short-term investments                                         |                                                                                |                                           |                                          |           |           |             | 8,779,773   |           |            |             | (8,779,773  | )        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Acquisitions, net of cash received                                                |                                                                                |                                           | (685,021                                  | )         |           |             | (15,690,498 | )         |            |             |            |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Investments in affiliates                                                         |                                                                                |                                           |                                          |           |           |             | (2,072      | )         |            |             | (1,247,584  | )        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Purchase of investments                                                           |                                                                                |                                           | (7,249,994                                | )         |           |             | (1,500,000  | )         |            |             |            |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Purchases of property and equipment                                               |                                                                                |                                           | (4,749,685                                | )         |           |             | (7,470,220  | )         |            |             | (1,449,628  | )        
|                                                                                  |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|                                                                                  |                                                                                |                                           | Net cash used in investing activities     |           |           | (12,684,700 | )           |           |            | (15,883,017 | )           |           |            | (11,476,985 | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Financing activities                                                              |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Proceeds from issuance of common stock                                            |                                                                                |                                           | 43,729,013                                |           |           |             | 3,800,000   |           |            |             | 132,500     |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Proceeds from exercise of stock options                                           |                                                                                |                                           | 1,459,461                                 |           |           |             | 649,819     |           |            |             | 530,635     |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Proceeds from issuance of common stock through the Employee Stock
	 Purchase Plan |                                                                                |                                           | 431,465                                   |           |           |             | 442,910     |           |            |             | 441,568     |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Proceeds from receivable from sale of common stock                                |                                                                                |                                           | 14,170                                    |           |           |             | 558,978     |           |            |             | 64,227      |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Proceeds from issuance of Series D Preferred Stock                                |                                                                                |                                           |                                          |           |           |             | 29,262,370  |           |            |             | 14,238,225  |          
|                                                                                  |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|                                                                                  |                                                                                |                                           | Net cash provided by financing activities |           |           | 45,634,109  |             |           |            | 34,714,077  |             |           |            | 15,407,155  |  
|                                                                                  |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|Effect of exchange rate changes on cash and cash equivalents                      |                                                                                |                                           | (66,682                                   | )         |           |             | (88,462     | )         |            |             | (244,719    | )        
|                                                                                  |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|Net increase/(decrease) in cash and cash equivalents                              |                                                                                |                                           | 7,273,478                                 |           |           |             | (2,319,702  | )         |            |             | (20,464,842 | )        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Cash and cash equivalents at beginning of year                                    |                                                                                |                                           | 10,902,532                                |           |           |             | 13,222,234  |           |            |             | 33,687,076  |          
|                                                                                  |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|Cash and cash equivalents at end of year                                          |                                                                                | $                                         | 18,176,010                                |           |           | $           | 10,902,532  |           |            | $           | 13,222,234  |          
|                                                                                  |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|Supplemental disclosure of non-cash investing and financing
	activities:          |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Issuance of common stock and stock options for acquisitions                       |                                                                                | $                                         | 9,945,216                                 |           |           | $           | 54,230,954  |           |            | $           |            |          
|                                                                                  |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|Accrued milestone payment for acquisitions                                        |                                                                                | $                                         | 335,000                                   |           |           | $           |            |           |            | $           |            |          
|                                                                                  |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|Conversion of preferred stock to common stock                                     |                                                                                | $                                         |                                          |           |           | $           | 42,999,214  |           |            | $           | 1,507,192   |          
|                                                                                  |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|Accretion of stated value of preferred stock                                      |                                                                                | $                                         |                                          |           |           | $           | 723,064     |           |            | $           | 282,739     |          
|                                                                                  |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|Supplemental disclosure of acquisitions:                                          |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Assets and intangibles acquired                                                   |                                                                                | $                                         | 11,741,972                                |           |           | $           | 72,489,536  |           |            | $           |            |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Less: liabilities assumed                                                         |                                                                                |                                           | 482,338                                   |           |           |             | 1,728,649   |           |            |             |            |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Common stock and stock options issued                                             |                                                                                |                                           | 9,945,216                                 |           |           |             | 54,230,954  |           |            |             |            |          
|                                                                                  |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|                                                                                  |                                                                                |                                           | 1,314,418                                 |           |           |             | 16,529,933  |           |            |             |            |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Less: cash received                                                               |                                                                                |                                           | 629,397                                   |           |           |             | 839,435     |           |            |             |            |          
|                                                                                  |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          
|Cash paid                                                                         |                                                                                | $                                         | 685,021                                   |           |           | $           | 15,690,498  |           |            | $           |            |          
|                                                                                  |                                                                                |                                           |                                           |           |           |             |             |           |            |             |             |          

See notes to consolidated financial statements.

28



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##### Table of Contents



CYBERCASH, INC.






NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.  Organization and Nature of Operations

CyberCash, Inc. (CyberCash or the
Company) was incorporated on August 29, 1994, in
 the state of Delaware. CyberCash is the worlds leading
provider of Internet payment services and electronic payment
technologies, enabling e-commerce for merchants operating either
in the physical brick and mortar world or the virtual
 world of the Internet.

2.  Summary of Significant Accounting Policies



| |                            
| | ---------------------------
| | Principles of Consolidation

The accompanying financial statements include the accounts of
CyberCash and its subsidiaries. All significant inter-company
transactions have been eliminated in consolidation.

Investments in unconsolidated joint ventures and affiliates in
which the Company has the ability to exercise significant
influence over the investee but has less than a controlling
interest are accounted for using the equity method. The Company
records its share of net losses in its unconsolidated joint
ventures accounted for under the equity method to the extent of
its investment balance.

Investments in affiliates in which the Company does not have the
ability to exercise significant influence over the investee and
has less than a controlling interest are accounted for using the
cost method. The Company has no further investment obligations or
 guarantees to its unconsolidated joint ventures and affiliates.



| |                                     
| | ------------------------------------
| | Cash Equivalents and Restricted Cash

The Company considers all highly liquid financial instruments
purchased with original maturities of three months or less to be
cash equivalents. Cash equivalents at year end consisted of
investments in highly rated corporate debentures and commercial
paper having maturities of less than three months, and in a money
 market mutual fund invested in U.S. government agency
obligations and highly rated corporate debentures having
maturities of less than three months. These securities are
recorded at cost, which approximates fair market value. The
Company has not experienced any losses on these investments.
Restricted cash at year-end consisted of certificates of deposit
securing Company credit cards held by employees for business
expenses and a stand-by letter of credit issued as security on
leased property.



| |                    
| | -------------------
| | Accounts Receivable

The carrying amount of the Companys accounts receivable
approximated their fair value at year-end. The Company recorded a
 provision for doubtful accounts receivable of $474,000 and
$236,000 for the years ended December 31, 1999 and 1998,
respectively. The Company also had write-offs of $1,164,000
during the year ended December 31, 1999. During 1998 the
Company recorded an allowance for doubtful accounts of $815,000
in connection with the acquisition of ICVerify.



| |                       
| | ----------------------
| | Property and Equipment

Property and equipment are stated at cost, net of accumulated
depreciation. Depreciation of property and equipment is
calculated using the straight-line method over the assets
estimated useful life ranging from 3 to 5 years, not to
exceed the lease term in the case of leasehold improvements.



| |            
| | -----------
| | Investments

Investments consist of investments in affiliates and investments
accounted for using the cost method. The Company has classified
all debt and equity securities accounted for using the cost
method as available-for-sale. Available-for-sale securities are
carried at fair value, with unrealized gains and losses reported
as a

29



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##### Table of Contents



CYBERCASH, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)



2.  Summary of Significant Accounting
Policies  (Continued)


separate component of stockholders equity net of applicable
 income taxes. Realized gains and losses and declines in value
judged to be other-than-temporary on available-for-sale
securities are included in interest income, net. The cost basis
for realized gains and losses on available-for-sale securities is
 determined on a specific identification basis. See Note 11
for a discussion of the accounting for investments in affiliates.



| |                 
| | ----------------
| | Asset Impairment

Each year, management determines whether any property, equipment
or any other long-lived asset has been impaired based on the
criteria established in SFAS No. 121, Accounting for
the Impairment of Long-Lived Assets and Long-Lived Assets
Disposed of. During 1999, the Company wrote-off a
$1,000,000 investment in a business which filed for
bankruptcy and was dissolved during the year.



| |                      
| | ---------------------
| | Financial Instruments

The carrying amount for the Companys cash and cash
equivalents, other receivables, certain other financial assets,
trade accounts payable, accrued expenses and liabilities and
other liabilities approximate fair market value. The fair market
value is based on quoted market prices where available.



| |                                     
| | ------------------------------------
| | Goodwill and Other Intangible Assets

Intangible assets are recorded at cost and amortized using the
straight-line method over the following estimated useful lives:

|                         |  |  |            | 
|------------------------ |  |  | ---------- | 
|                        
|                        
|                        
|                        
|Developed technology     |  |  | 3 years    | 
|                        
|                        
|                        
|                        
|Assembled workforce      |  |  | 5 years    | 
|                        
|                        
|                        
|                        
|Trademark and trade name |  |  | 10 years   | 
|                        
|                        
|                        
|                        
|Goodwill                 |  |  | 7-10 years | 

The Company evaluates the recoverability of goodwill and other
intangible assets based on estimated, undiscounted operating
income over the amortization periods, giving consideration to
sales and cost benefits expected to be realized by the
consolidated entity from the acquisition and integration of
acquired entities.



| |                             
| | ----------------------------
| | Foreign Currency Translation

Results of operations for foreign entities are translated to
U.S. Dollars using average exchange rates during the year.
Assets and liabilities are translated to U.S. Dollars using
the exchange rate in effect at the balance sheet dates. Resulting
 translation adjustments are reflected in stockholders
equity as accumulated other comprehensive income/(loss).



| |                    
| | -------------------
| | Revenue Recognition

The Company recognizes transaction processing revenues, merchant
set-up and account fees, hardware and software product sales,
software development and technology license fees as the related
services are performed or products are shipped, assuming
collectability is probable, fees are fixed, and persuasive
evidence of an arrangement exits.

In those cases where customers have duplication rights for the
software products, revenue is recognized upon receipt of reports
of units produced by the customers. Revenues from the sale of
product maintenance and support is recognized ratably over the
term of the agreement, which in most cases is one year. In sales
agreements that include more than one element, the Company
allocates the total fee among each deliverable based upon their
relative fair value as determined by vendor-specific objective
evidence.

30



---



##### Table of Contents



CYBERCASH, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)



2.  Summary of Significant Accounting
Policies  (Continued)




| |                               
| | ------------------------------
| | Research and Development Costs

The Company has expensed its product development costs as
research and development costs. It will continue to expense such
costs until the realizability of the Companys technologies
can be established.



| |                  
| | -----------------
| | Advertising Costs

All costs related to advertising the Companys products are
expensed in the period incurred. During 1999, 1998 and 1997
advertising costs were $8,217,000, $716,000, and $2,135,000,
respectively.



| |                      
| | ---------------------
| | Restructuring Charges

The Company evaluates and realigns its organizational structure
in order to respond to changes in the market and to take
advantage of cost-reduction opportunities. Costs related to
corporate reorganizations resulting from the Companys
comprehensive review of its key business lines have been
classified as restructuring charges. These charges include costs
for severance and lease termination charges related to downsizing
 the workforce. The restructuring charges of $609,000 and
$344,000 incurred during the years ended December 31, 1998
and 1997, respectively, were paid in the year they were incurred.
 As of December 31, 1999, $587,000 of the $775,000
restructuring charge incurred in 1999 remained unpaid and is
included in other accrued expenses. This amount represents
termination benefits for employees involuntary terminated in
November 1999.



| |             
| | ------------
| | Income Taxes

The Company provides for income taxes in accordance with the
liability method. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to
 be realized.



| |                         
| | ------------------------
| | Stock Based Compensation

The Company accounts for its stock-based compensation in
accordance with the provisions of APB No. 25. The Company
presents pro forma disclosures of net loss and net loss per share
 in accordance with SFAS No. 123, Accounting for
Stock-Based Compensation, (SFAS No. 123)
which established the fair value method of accounting for
employee stock options.



| |                 
| | ----------------
| | 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. The estimates involve judgments with respect to, among
other things, various future factors which are difficult to
predict and are beyond the control of the Company. Actual results
 could prove the estimates and assumptions used in preparing the
financial statements to be incorrect, thereby affecting the
amounts and disclosures in the Company financial statements and
notes thereto.



| |                      
| | ---------------------
| | Concentration of Risk

The Company acts as an intermediary and facilitator for automated
 clearinghouse and credit card transactions. The Company is
exposed to risks associated with returned transactions, merchant
fraud and transmission of erroneous information related to these
transactions. The Company has not incurred significant losses for
 these risks to date.

31



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##### Table of Contents



CYBERCASH, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)



2.  Summary of Significant Accounting
Policies  (Continued)


The Company performs ongoing credit evaluations of its
customers financial conditions and generally does not
require collateral with regards to its accounts receivable. The
Company maintains reserves for credit losses and such losses have
 been within managements expectations.



| |                 
| | ----------------
| | Reclassification

Certain reclassifications have been made to the 1998 and 1997
financial statements to conform with the 1999 presentation.

3.  Property and Equipment

Property and equipment consists of the following at
December 31:

|                              |  |      |            |      |  |   |            | 
|----------------------------- |  | ---- | ---------- | ---- |  | - | ---------- | 
|                              |  | 1999 |            | 1998
|                              |  |      |            |     
|Computer equipment            |  | $    | 14,569,000 |      |  | $ | 11,013,000 | 
|                             
|                             
|                             
|                             
|Furniture and fixtures        |  |      | 1,369,000  |      |  |   | 1,216,000  | 
|                             
|                             
|                             
|                             
|Office equipment              |  |      | 1,596,000  |      |  |   | 1,338,000  | 
|                             
|                             
|                             
|                             
|Leasehold improvements        |  |      | 2,753,000  |      |  |   | 2,241,000  | 
|                              |  |      |            |      |  |   |            | 
|                              |  |      | 20,287,000 |      |  |   | 15,808,000 | 
|                             
|                             
|                             
|                             
|Less accumulated depreciation |  |      | 10,321,000 |      |  |   | 6,758,000  | 
|                              |  |      |            |      |  |   |            | 
|                              |  | $    | 9,966,000  |      |  | $ | 9,050,000  | 
|                              |  |      |            |      |  |   |            | 

4.  Acquisitions



| |                      
| | ---------------------
| | Tellan Software, Inc.

On July 23, 1999, CyberCash acquired all the outstanding
shares of the capital stock of Tellan Software, Inc.
(Tellan). The cost of the acquisition was
approximately $11,260,000, including fees and expenses. The
purchase price at closing consisted of $1,032,000 in cash and
1,105,024 shares of CyberCash Common Stock valued at
$9.00 per share. The Company paid approximately $282,000 in
transaction costs related to the acquisition. In addition, Tellan
 shareholders will be entitled to additional contingent cash
payments aggregating up to $1,100,000 through 2002 subject to the
 achievement of specific performance criteria during the period.
As of December 31, 1999, Tellan shareholders were entitled
to contingent payments aggregating $335,000, which amount is
included in goodwill and other accrued expenses. The consolidated
 financial statements include the results of operations of Tellan
 since the date of acquisition.

The acquisition has been accounted for as a purchase and,
accordingly, the purchase price has been preliminarily allocated
to the assets and liabilities acquired at their estimated fair
value as of the date of acquisition. The purchase price was
allocated as follows:

|                     |  |   |           | 
|-------------------- |  | - | --------- | 
|                    
|                    
|                    
|                    
|Net assets           |  | $ | 986,000   | 
|                    
|                    
|                    
|                    
|Developed technology |  | $ | 1,050,000 | 
|                    
|                    
|                    
|                    
|Goodwill             |  | $ | 9,224,000 | 

The table below summarizes the Companys unaudited pro forma
 consolidated condensed statements of income for the year ended
December 31, 1999 assuming the acquisition of Tellan was
effected at the

32



---



##### Table of Contents



CYBERCASH, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)



4.  Acquisitions  (Continued)


beginning of the period, and for the year ended December 31,
 1998 assuming the acquisition of Tellan and ICVerify were
effected at the beginning of the period.

|                                          |  |                    |             |                    |  |   |             |  
|----------------------------------------- |  | ------------------ | ----------- | ------------------ |  | - | ----------- | -
|                                          |  | For the Year Ended |             | For the Year Ended
|                                          |  | December 31, 1999  |             | December 31, 1998 
|                                          |  |                    |             |                   
|Revenue                                   |  | $                  | 21,573,000  |                    |  | $ | 16,809,000  |  
|                                         
|                                         
|                                         
|                                         
|Net loss                                  |  | $                  | (43,417,000 | )                  |  | $ | (37,081,000 | )
|                                         
|                                         
|                                         
|                                         
|Net loss available to Common Stockholders |  | $                  | (43,417,000 | )                  |  | $ | (37,804,000 | )
|                                         
|                                         
|                                         
|                                         
|Weighted average shares outstanding       |  |                    | 22,014,000  |                    |  |   | 16,569,000  |  
|                                         
|                                         
|                                         
|                                         
|Basic and diluted earnings per share      |  | $                  | (1.97       | )                  |  | $ | (2.28       | )

This pro forma information does not purport to be indicative of
the results which may have been obtained had the acquisition been
 consummated at the dates assumed.



| |               
| | --------------
| | ICVerify, Inc.

On April 30, 1998, CyberCash acquired all the outstanding
shares of common stock of ICVerify, Inc.
(ICVerify) for $70,700,000, including fees and
expenses. The purchase price included $16,250,000 in cash,
2,300,000 shares of CyberCash Common Stock valued at
$20.50 per share, the conversion of outstanding vested and
unvested stock options under ICVerifys 1995 Employee Stock
Option Plan into stock options exercisable under the CyberCash
1995 Employee Stock Option Plan for $7,000,000 and transaction
costs of $279,000. The consolidated financial statements include
the results of operations of ICVerify since the date of
acquisition.

The acquisition has been accounted for as a purchase and,
accordingly, the purchase price has been allocated to the assets
and liabilities acquired at their estimated fair value as of the
date of acquisition. Of the purchase price, $400,000 was
allocated to ICVerifys net assets, and the remainder was
allocated to intangible assets, as follows:

|                         |  |   |            | 
|------------------------ |  | - | ---------- | 
|                        
|                        
|                        
|                        
|Developed technology     |  | $ | 2,700,000  | 
|                        
|                        
|                        
|                        
|Assembled workforce      |  | $ | 800,000    | 
|                        
|                        
|                        
|                        
|Trademark and trade name |  | $ | 1,500,000  | 
|                        
|                        
|                        
|                        
|Goodwill                 |  | $ | 65,300,000 | 

Accumulated amortization of goodwill and other intangible assets
was $5,164,000 and $13,640,000 at December 31, 1998 and
1999, respectively.

5.  Commitments

The Company has entered into various operating lease agreements
for office space, property and equipment. The leases generally
contain renewal options. Future minimum lease payments under
non-cancelable operating lease agreements, with initial or
remaining terms in excess of one year, as of December 31,
1999, are as follows:

|           |  |   |            | 
|---------- |  | - | ---------- | 
|          
|          
|          
|          
|2000       |  | $ | 2,293,000  | 
|          
|          
|          
|          
|2001       |  |   | 2,330,000  | 
|          
|          
|          
|          
|2002       |  |   | 1,905,000  | 
|          
|          
|          
|          
|2003       |  |   | 1,202,000  | 
|          
|          
|          
|          
|2004       |  |   | 854,000    | 
|          
|          
|          
|          
|Thereafter |  |   | 1,446,000  | 
|           |  |   |            | 
|           |  | $ | 10,030,000 | 
|           |  |   |            | 

33



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##### Table of Contents



CYBERCASH, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)



5.  Commitments  (Continued)


During the years ended December 31, 1999, 1998 and 1997, the
 Company recognized rent expense of $1,632,000, $2,346,000 and
$1,751,000, respectively. During 1999, 1998 and 1997, the Company
 recognized sub-lease rental income of $137,000, $123,000, and
$257,000, respectively.

On August 11, 1998, in connection with one of the
Companys office space leases, the Company entered into a
one-year standby letter of credit for $70,000 on behalf of the
landlord. This letter of credit was renewed for an additional
one-year term during 1999.

During 1998, the Company entered into an agreement with an
affiliated company for a five-year sublease of office space. This
 lease was revised in 1999 to increase the square footage to be
subleased. Minimum future sublease receipts to be received as of
December 31, 1999 are approximately $835,000.

6.  Acquisition of Technology License

On March 21, 1997, the Company entered into a technology
licensing agreement with Carnegie Mellon University
(CMU) for exclusive worldwide rights to CMUs
NetBill technology for use in network-based electronic commerce.
The consideration for the license included 120,000 shares of
 Common Stock, plus warrants to purchase an additional
50,000 shares of the Companys Common Stock at an
exercise price of $16.45 per share. The Warrants are divided
 into 25,000 Class A Warrants and 25,000 Class B
Warrants. Each class will become exercisable in five equal annual
 installments of 5,000 shares each, beginning on
March 21, 1998, and will expire on March 21, 2007. The
exerciseability of the Class B Warrants is conditioned upon
the achievement of certain financial conditions which, as of
December 31, 1999, have not been met. The Company is
obligated to pay annual cash royalties of $75,000 annually on the
 warrants through the year 2000. The Company will expense
these royalty payments in the year paid. Due to the uncertainty
associated with the realizability of the license acquired, the
Company recorded a non-cash charge to operations during 1997 of
$2,162,500 for the fair value of the Common Stock and
Class A Warrants issued in the acquisition of the NetBill
technology license.

7.  Stockholders Equity

On August 5, 1997, the Company completed the private
placement of 15,000 shares of the Companys
Series C redeemable convertible Preferred Stock
(Series C Preferred Stock), with a stated value
of $1,000 per share, resulting in net proceeds of
approximately $14,200,000. During 1998 and 1997, holders of
Series C Preferred Stock converted 13,500 and
1,500 shares, respectively, resulting in the issuance of
1,303,244 and 83,156 shares of Common Stock, respectively.

During 1998, the Company completed the private placement of
30,000 shares of $.001 par value Series D
Convertible Preferred Stock, with a stated value of
$1,000 per share (Series D Preferred
Stock), and options to purchase up to an aggregate of
708,382 shares of the Companys Common Stock
(Investment Options) for net proceeds of $29,209,000.
 During 1998, all Series D Preferred Stock was converted
into Common Stock, resulting in the issuance of
3,683,276 shares. The Investment Options may be exercised
through February 5, 2003, at an exercise price of
$12.80 per share.

During 1998, dividends of approximately $154,000 and $569,000
were accreted on the Series C and Series D Preferred
Stock, respectively. During 1997, dividends of approximately
$283,000 were accreted on the Series C Preferred Stock.

On November 15, 1999, the Company entered into an agreement
with a holder of Investment Options pursuant to which the holder
agreed to exercise 472,254 options at the reduced exercise price
of $8.27 per share, resulting in net proceeds to the Company
 of $3,905,540. As additional consideration for the financing,

34



---



##### Table of Contents



CYBERCASH, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)



7.  Stockholders Equity  (Continued)


CyberCash issued the institutional investor an additional 472,254
 Investment Options with an exercise price of $13.345 that expire
 on November 15, 2004.

In 1998, Garen Staglin, a director of the Company, bought
16,701 shares of CyberCash Common Stock from the Company for
 an aggregate purchase price of $200,000. In 1998,
William N. Melton, Chairman of the Board of the Company,
bought 350,000 shares of CyberCash Common Stock from the
Company for an aggregate purchase price of $3.5 million. In
addition, Michael L. Rothschild, a director of the Company,
bought 10,000 shares of CyberCash Common Stock from the
Company for an aggregate purchase price of $100,000. The price
that Messrs. Melton and Rothschild paid the Company for
their shares represented a premium to the then-current fair
market value of Common Stock. Mr. Staglin paid the Company
the then-current fair market value of Common Stock.

During 1999, the Company completed the private placement of
914,634 Units, consisting of one share of the Companys
Common Stock and a Warrant to purchase 0.75 shares of
Common. The price of each Unit was $16.40 and the net proceeds
were approximately $14,779,000. The initial exercise price of the
 Warrants was originally $20.00 per share. The Warrants
provide that if the average closing bid price (the Reset
Price) of the Common Stock over the 10 trading days
preceding January 6, 2000, January 6, 2001 or
January 6, 2002 is less than the exercise price then in
effect, the exercise price will be changed to the Reset Price. If
 an adjustment of the exercise price occurs, the terms of the
Warrants require that the number of shares of Common Stock that
can be issued upon exercise of the Warrants will also be
proportionately increased. In January 2000 the Warrant exercise
price was reset to $9.7656 and an additional 718,907 Warrants
were issued. As a result of this reset, there are now outstanding
 936,588 Warrants expiring January 6, 2004, and 468,295
Warrants expiring March 31, 2004.

On August 19,1999, CyberCash issued and sold, pursuant to
the Companys Registration Statement on Form S-3, an
aggregate of 1,643,836 shares of the Companys Common
Stock, par value $.001 per share, and Warrants to purchase
164,384 shares of Common Stock, for net proceeds of
$14.9 million. The purchase price for the Common Stock was
$9.125 per share, and the initial exercise price for the
Warrants is $11.40622 per share (125 percent of the
purchase price). If the average of the closing bid prices of the
Common Stock for the ten trading days immediately preceding
August 19, 2000 (the One Year Price) is
less than $9.125 per share, the Company may elect to either
make a cash payment to the purchaser in an amount equal to the
price difference multiplied by the number of shares purchased or,
 alternatively, issue additional shares with a market value equal
 to that amount (Reset Provision). In addition, the
exercise price of the warrants would be reduced to the
One Year Price. If the Company elects to issue additional
shares, the purchaser may instead elect to receive an equal
number of additional warrants at an exercise price of
$.01 per share. The initial Warrants will expire on
August 19, 2004.

On November 19, 1999, Mr. Melton purchased
1,186,240 shares of CyberCash Common Stock from the Company
for an aggregate purchase price of $10.0 million. These
shares were purchased at the then-current fair market value of
the Common Stock that CyberCash was able to receive from third
parties. As of March 10, 2000, the Company had not
registered for resale any of the shares acquired by
Mr. Melton.

In consideration for certain advertising services performed
during 1999, the Company issued 15,000 shares of its Common
Stock, valued at approximately $210,000, to Donino
White & Partners, Inc.



| |                
| | ---------------
| | Preferred Stock

The Company is authorized to issue up to 5,000,000 shares of
 Preferred Stock in one or more series with such rights,
preferences and privileges as determined by the Board of
Directors.

35



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##### Table of Contents



CYBERCASH, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

8.  First USA Warrants

In November 1998, the Company issued 2.2 million warrants to
 First USA Bank (the FUSA Warrants) in
connection with an Operating Agreement (Operating
Agreement) entered into in October 1998. Under the
Operating Agreement, the Company has agreed to license its Agile
Wallet technology to and operate a branded version of its
InstaBuy service for First USA, which will be promoted by
both companies. The warrants were fully vested and
non-forfeitable as of January 1, 1999. All of the FUSA
Warrants expire on September 30, 2003, and as of
January 1, 2000, have an exercise price of $32.00.

The warrants are accounted for in accordance with the provisions
of EITF 96-18, Accounting for Equity Instruments that
are Issued to Other than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services. As a result,
the FUSA Warrants were valued in November 1998 at approximately
$5.6 million. This amount will be expensed over the
remaining term of the Operating Agreement, which extends to
October 2003. During the year ended December 31, 1999, the
Company recognized $1,080,000 of expense related to these
warrants.

9.  Common Stock Options



| |                                 
| | --------------------------------
| | CyberCash 1995 Stock Option Plan

The Companys 1995 Stock Option Plan (Employee Stock
Option Plan) provides for incentive and non-statutory stock
 option grants at the discretion of the Compensation Committee of
 the Board of Directors to employees, officers, employee
directors and consultants. The exercise price of the incentive
stock options and the non-statutory stock options cannot be less
than 100% and 85%, respectively, of the fair market value of the
Common Stock on the date of grant. The maximum number of shares
of Common Stock that may be issued pursuant to options that are
granted under the Employee Stock Option Plan is 7,500,000.

Stock options issued under the plan generally vest as to 7.5% of
the shares subject to option three months after the date of grant
 and 2.5% of such shares at the end of each month thereafter, so
that the option is fully vested 40 months after grant. The
terms of stock options granted under the Employee Stock Option
Plan may not exceed 10 years.

During the year ended December 31, 1995, employees exercised
 500,000 options in exchange for notes receivable totaling
$1,130,000. As of December 31, 1999, approximately $248,000
of the notes receivable balance and approximately $21,000 of
interest accrued on the notes receivable balance remained
outstanding. During 1999, 1998 and 1996, the Company received
approximately $14,000 in cash, $559,000 in cash and
20,000 shares of treasury stock, and $225,000 in cash,
respectively, in satisfaction of employees notes
receivable.

During 1995, the Company recognized deferred compensation expense
 of $752,000 for the difference between the exercise price and
the deemed fair market value on the date of grant of stock
options. The Company amortized this amount ratably over the
vesting period of the options, which were 40 to 64 months. During
 the years ended December 31, 1999, 1998 and 1997, the
Company recognized approximately $1,000, $99,000 and $441,000,
respectively, of compensation expense related to stock options.
Included in the compensation expense for 1998 and 1997 is $23,000
 and $275,000, respectively, related to accelerated vesting of
stock options for terminated employees. In addition, during 1999,
 the Company recognized $62,000 in compensation expense related
to the issuance of stock options to consultants.



| |                                                          
| | ---------------------------------------------------------
| | CyberCash 1995 Non-Employee Directors Stock Option
	Plan

The Companys 1995 Non-Employee Directors Plan
(Directors Plan) provides for the automatic
grant of options to purchase shares of Common Stock to
non-employee directors of the Company. Upon election to the Board
 of Directors, non-employee directors receive an option to
purchase 5,000 shares of

36



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##### Table of Contents



CYBERCASH, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)



9.  Common Stock Options  (Continued)


Common Stock. Thereafter, directors receive automatic grants of
options to purchase 5,000 shares annually. Directors receive
 additional annual grants of options to acquire 1,500 shares
 for each committee on which they serve and 5,000 for each
committee that they chair. All options are priced at the fair
market value of the Companys Common Stock on the date of
grant and are fully vested immediately. The maximum number of
shares of Common Stock that may be issued pursuant to options
that are granted under the Directors Plan is 600,000.



| |                                            
| | -------------------------------------------
| | CyberCash 1995 Employee Stock Purchase Plan

The Companys Employee Stock Purchase Plan (the
ESPP) allows employees to voluntarily contribute
between 1% and 15% of their compensation on a pre-tax basis to
purchase shares of Common Stock. Lump-sum purchases of Common
Stock are made at the end of each semi-annual purchase period at
the lower of 85% of the fair market value of the stock on the
first day of the period (or the employees commencement date
 in the program) or 85% of the fair market value of the stock on
the last day of the period.

The following activity occurred in the ESPP:

|     |  |             |         |           |  |          |        |  |  |   |              | 
|---- |  | ----------- | ------- | --------- |  | -------- | ------ |  |  | - | ------------ | 
|     |  | Amount      |         |           |  |         
|     |  | Contributed |         | Shares    |  | Purchase
|     |  | To ESPP     |         | Purchased |  | Price   
|     |  |             |         |           |  |         
|1999 |  | $           | 431,000 |           |  |          | 48,233 |  |  | $ | 6.69-$13.39  | 
|    
|    
|    
|    
|1998 |  | $           | 443,000 |           |  |          | 54,829 |  |  | $ | 6.43-$17.42  | 
|    
|    
|    
|    
|1997 |  | $           | 442,000 |           |  |          | 35,451 |  |  | $ | 11.90-$13.39 | 

The maximum number of shares of Common Stock that may be issued
under the ESPP is 500,000.



| |                                         
| | ----------------------------------------
| | ICVerify 1995 Employee Stock Option Plan

In connection with the acquisition of ICVerify, CyberCash assumed
 all outstanding options under ICVerifys 1995 Employee
Stock Option Plan (ICVerify Stock Option Plan). All
options outstanding under the ICVerify Stock Option Plan were
converted into options to acquire CyberCash Common Stock on an
adjusted basis based upon the exchange ratio in the acquisition.
These options generally vest 25% on the first anniversary of
issuance and approximately 2% per month thereafter, so that
the option is fully vested 48 months after grant. The
maximum number of shares of Common Stock that may be issued
pursuant to options granted under the ICVerify Stock Option Plan
is 542,000. No additional options will be issued under the plan.



| |                                     
| | ------------------------------------
| | CyberCash 1999 Restricted Stock Plan

In February 1999, the Company adopted the 1999 Restricted Stock
Plan (the Stock Plan). The Stock Plan provides for
restricted and unrestricted stock grants to be made at the
discretion of the Compensation Committee of the Board of
Directors to employees, officers and employee directors and
consultants. The Company reserved 500,000 shares of Common
Stock for issuance under the Stock Plan. During 1999, the Company
 granted 28,050 shares of Common Stock under the Stock Plan,
 which shares had a fair market value on the date of grant of
$12.50 per share. The Company recognized compensation
expense of $285,000 related to the issuance of these stock
grants. These grants vest 20% immediately and 20% will vest at
the end of each of the next four fiscal quarters. As of
December 31, 1999, 3,860 shares of Common Stock were
cancelled.

37



---



##### Table of Contents



CYBERCASH, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)



9.  Common Stock Options  (Continued)


A summary of activity under the Employee Stock Option Plan,
Directors Stock Option Plan and ICVerify Option Plan
follows:

|                                 |                                |           |           |            |   |           |             |              |  |           |       |           |  |  |        |          |   |   |             |              |  |   |      |      | 
|-------------------------------- | ------------------------------ | --------- | --------- | ---------- | - | --------- | ----------- | ------------ |  | --------- | ----- | --------- |  |  | ------ | -------- | - | - | ----------- | ------------ |  | - | ---- | ---- | 
|                                 |                                |           |           |           
|                                 |                                | CyberCash |           | ICVerify  
|                                 |                                |           |           |           
|                                 |                                |           |           | Weighted   |   |           |             | Weighted    
|                                 |                                |           |           | Average    |   |           |             | Average     
|                                 |                                | Option    |           | Price per  |   | Price per |             | Option       |  | Price per |       | Price per
|                                 |                                | Shares    |           | Share      |   | Share     |             | Shares       |  | Share     |       | Share    
|                                 |                                |           |           |            |   |           |             |              |  |           |       |          
|Outstanding at December 31, 1996 |                                |           | 1,339,958 |            |   | $         | 2.00-$45.75 |              |  | $         | 20.49 |           |  |  |       |          |   |   |            |              |  |   |     |     
|                                
|                                
|                                
|                                
|                                 | Granted                        |           |           | 793,889    |   |           | $           | 2.00-$27.50  |  |           | $     | 14.27     |  |  |        |         |   |   |             |             |  |   |      |     | 
|                                
|                                
|                                
|                                
|                                 | Exercised                      |           |           | (94,377    | ) |           | $           | 2.00-$15.00  |  |           | $     | 5.62      |  |  |        |         |   |   |             |             |  |   |      |     | 
|                                
|                                
|                                
|                                
|                                 | Canceled                       |           |           | (388,561   | ) |           | $           | 2.00-$37.25  |  |           | $     | 21.69     |  |  |        |         |   |   |             |             |  |   |      |     | 
|                                 |                                |           |           |            |   |           |             |              |  |           |       |           |  |  |        |          |   |   |             |              |  |   |      |     
|Outstanding at December 31, 1997 |                                |           | 1,650,909 |            |   | $         | 2.00-$45.75 |              |  | $         | 18.03 |           |  |  |       |          |   |   |            |              |  |   |     |     
|                                
|                                
|                                
|                                
|                                 | Granted                        |           |           | 1,855,773  |   |           | $           | 6.26-$22.625 |  |           | $     | 13.32     |  |  |        |         |   |   |             |             |  |   |      |     | 
|                                
|                                
|                                
|                                
|                                 | Converted in CyberCash Options |           |           |            |   |           |             |             |  |           |       |           |  |  |        | 377,717  |   |   | $           | 0.41-$16.875 |  |   | $    | 6.59 | 
|                                
|                                
|                                
|                                
|                                 | Exercised                      |           |           | (115,816   | ) |           | $           | 2.00-$17.00  |  |           | $     | 3.97      |  |  |        | (220,610 | ) |   | $           | 0.41-$ 1.79  |  |   | $    | 0.71 | 
|                                
|                                
|                                
|                                
|                                 | Canceled                       |           |           | (750,917   | ) |           | $           | 2.00-$37.25  |  |           | $     | 18.60     |  |  |        | (58,247  | ) |   | $           | 0.41-$16.875 |  |   | $    | 2.20 | 
|                                 |                                |           |           |            |   |           |             |              |  |           |       |           |  |  |        |          |   |   |             |              |  |   |      |     
|Outstanding at December 31, 1998 |                                |           | 2,639,949 |            |   | $         | 2.00-$45.75 |              |  | $         | 15.08 |           |  |  | 98,860 |          |   | $ | 0.41-$ 9.94 |              |  | $ | 2.38 |     
|                                 |                                |           |           |            |   |           |             |              |  |           |       |           |  |  |        |          |   |   |             |              |  |   |      |     
|                                 | Granted                        |           |           | 2,162,530  |   |           | $           | 7.31-$20.75  |  |           | $     | 11.31     |  |  |        |         |   |   |             |             |  |   |      |     | 
|                                
|                                
|                                
|                                
|                                 | Exercised                      |           |           | (142,855   | ) |           | $           | 2.00-$18.50  |  |           | $     | 10.60     |  |  |        | (20,944  | ) |   | $           | 0.41-$ 9.94  |  |   | $    | 1.42 | 
|                                
|                                
|                                
|                                
|                                 | Canceled                       |           |           | (1,140,661 | ) |           | $           | 2.00-$33.50  |  |           | $     | 14.07     |  |  |        | (39,130  | ) |   | $           | 0.41-$ 9.94  |  |   | $    | 2.64 | 
|                                 |                                |           |           |            |   |           |             |              |  |           |       |           |  |  |        |          |   |   |             |              |  |   |      |     
|Outstanding at December 31, 1999 |                                |           | 3,518,963 |            |   | $         | 2.00-$45.75 |              |  | $         | 13.25 |           |  |  | 38,786 |          |   | $ | 0.41-$ 9.94 |              |  | $ | 2.64 |     
|                                 |                                |           |           |            |   |           |             |              |  |           |       |           |  |  |        |          |   |   |             |              |  |   |      |     

|                                 |           |                 |         |           |  |           |              |               |  |   |       |       | 
|-------------------------------- | --------- | --------------- | ------- | --------- |  | --------- | ------------ | ------------- |  | - | ----- | ----- | 
|                                 |           |                
|                                 |           | Directors Plan
|                                 |           |                
|                                 |           |                 |         | Weighted 
|                                 |           |                 |         | Average  
|                                 |           | Option          |         | Price per |  | Price per
|                                 |           | Shares          |         | Share     |  | Share    
|                                 |           |                 |         |           |  |          
|Outstanding at December 31, 1996 |           |                 | 10,000  |           |  | $         | 32.25        |               |  | $ | 32.25 |      
|                                
|                                
|                                
|                                
|                                 | Granted   |                 |         | 32,158    |  |           | $            | 10.75-$13.625 |  |   | $     | 11.64 | 
|                                
|                                
|                                
|                                
|                                 | Exercised |                 |         |          |  |           |              |              |  |   |       |      | 
|                                
|                                
|                                
|                                
|                                 | Canceled  |                 |         |          |  |           |              |              |  |   |       |      | 
|                                 |           |                 |         |           |  |           |              |               |  |   |       |      
|Outstanding at December 31, 1997 |           |                 | 42,158  |           |  | $         | 10.75-$32.25 |               |  | $ | 16.53 |      
|                                
|                                
|                                
|                                
|                                 | Granted   |                 |         | 29,000    |  |           | $            | 14.38         |  |   | $     | 14.38 | 
|                                
|                                
|                                
|                                
|                                 | Exercised |                 |         |          |  |           |              |              |  |   |       |      | 
|                                
|                                
|                                
|                                
|                                 | Canceled  |                 |         |          |  |           |              |              |  |   |       |      | 
|                                 |           |                 |         |           |  |           |              |               |  |   |       |      
|Outstanding at December 31, 1998 |           |                 | 71,158  |           |  | $         | 10.75-$32.25 |               |  | $ | 15.93 |      
|                                 |           |                 |         |           |  |           |              |               |  |   |       |      
|                                 | Granted   |                 |         | 39,000    |  |           | $            | 12.44         |  |   | $     | 12.44 | 
|                                
|                                
|                                
|                                
|                                 | Exercised |                 |         |          |  |           |              |              |  |   |       |      | 
|                                
|                                
|                                
|                                
|                                 | Canceled  |                 |         |          |  |           |              |              |  |   |       |      | 
|                                 |           |                 |         |           |  |           |              |               |  |   |       |      
|Outstanding at December 31, 1999 |           |                 | 110,158 |           |  | $         | 10.75-$32.25 |               |  | $ | 14.70 |      
|                                 |           |                 |         |           |  |           |              |               |  |   |       |      

38



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##### Table of Contents



CYBERCASH, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)



9.  Common Stock Options  (Continued)


The following table summarizes information regarding stock
options outstanding at December 31, 1999:

|                |  |                     |           |                     |  |          |      |             |  |          |       |  |  |  |           |  |  |   |       | 
|--------------- |  | ------------------- | --------- | ------------------- |  | -------- | ---- | ----------- |  | -------- | ----- |  |  |  | --------- |  |  | - | ----- | 
|                |  |                     |           |                    
|                |  | Outstanding Options |           | Exercisable Options
|                |  |                     |           |                    
|                |  |                     |           | Weighted            |  | Weighted |      |             |  | Weighted
|                |  | Number of           |           | Average             |  | Average  |      |             |  | Average 
|Range of        |  | Options             |           | Remaining           |  | Exercise |      | Number      |  | Exercise
|Exercise Prices |  | Outstanding         |           | Contractual Life    |  | Price    |      | Exercisable |  | Price   
|                |  |                     |           |                     |  |          |      |             |  |         
|$ 0.41-$ 8.88   |  |                     | 652,497   |                     |  |          | 8.31 |             |  | $        | 7.23  |  |  |  | 302,230   |  |  | $ | 6.23  | 
|               
|               
|               
|               
|$ 8.97-$ 9.13   |  |                     | 474,817   |                     |  |          | 9.28 |             |  | $        | 9.12  |  |  |  | 49,907    |  |  | $ | 9.12  | 
|               
|               
|               
|               
|$ 9.19-$10.56   |  |                     | 542,641   |                     |  |          | 8.36 |             |  | $        | 10.20 |  |  |  | 48,255    |  |  | $ | 10.12 | 
|               
|               
|               
|               
|$10.75-$13.06   |  |                     | 495,277   |                     |  |          | 8.56 |             |  | $        | 12.17 |  |  |  | 272,740   |  |  | $ | 12.03 | 
|               
|               
|               
|               
|$13.13-$14.19   |  |                     | 627,441   |                     |  |          | 8.33 |             |  | $        | 13.72 |  |  |  | 367,060   |  |  | $ | 13.72 | 
|               
|               
|               
|               
|$14.25-$15.94   |  |                     | 539,450   |                     |  |          | 7.96 |             |  | $        | 15.09 |  |  |  | 338,164   |  |  | $ | 14.91 | 
|               
|               
|               
|               
|$16.25-$41.50   |  |                     | 269,607   |                     |  |          | 7.30 |             |  | $        | 25.40 |  |  |  | 193,481   |  |  | $ | 27.08 | 
|               
|               
|               
|               
|$45.75-$45.75   |  |                     | 100,000   |                     |  |          | 6.47 |             |  | $        | 45.75 |  |  |  | 25,000    |  |  | $ | 45.75 | 
|                |  |                     |           |                     |  |          |      |             |  |          |       |  |  |  |           |  |  |   |       | 
|$ 0.41-$45.75   |  |                     | 3,701,730 |                     |  |          | 8.31 |             |  | $        | 13.18 |  |  |  | 1,596,837 |  |  | $ | 14.13 | 
|                |  |                     |           |                     |  |          |      |             |  |          |       |  |  |  |           |  |  |   |       | 

The Company has reserved shares of Common Stock for future
issuance relating to the employee benefit plans and the
Directors Plan. At December 31, 1999, the remaining
reserved shares of Common Stock are as follows:

|                            |  |  |           | 
|--------------------------- |  |  | --------- | 
|                           
|                           
|                           
|                           
|CyberCash Stock Option Plan |  |  | 6,565,541 | 
|                           
|                           
|                           
|                           
|ICVerify Stock Option Plan  |  |  | 300,446   | 
|                           
|                           
|                           
|                           
|Directors Plan             |  |  | 600,000   | 
|                           
|                           
|                           
|                           
|Restricted Stock Plan       |  |  | 477,200   | 
|                           
|                           
|                           
|                           
|ESPP                        |  |  | 338,038   | 
|                            |  |  |           | 
|                            |  |  | 8,281,225 | 
|                            |  |  |           | 

Adjusted pro forma information regarding net loss is required by
SFAS No. 123 and has been determined as if the Company had
accounted for its Employee Stock Option Plan, ICVerify Stock
Option Plan, Directors Plan and ESPP under the fair value
methodology. The fair value of the options granted during the
years ended December 31, 1999, 1998 and 1997 are estimated
as $10.22, $11.35, and $9.14 per share, respectively, on the
 date of grant. The fair value for the Employee Stock Option
Plan, ICVerify Stock Option Plan, Directors Plan and ESPP
was estimated at the date of grant using the Black-Scholes
option-pricing model with the following weighted-average
assumptions:

|                                      |  |      |        |      |  |      |       |   |  |  |       |  
|------------------------------------- |  | ---- | ------ | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                      |  | 1999 |        | 1998 |  | 1997
|                                      |  |      |        |      |  |     
|Risk-Free Interest Rate               |  |      | 5.25   | %    |  |      | 5.40  | % |  |  | 5.44  | %
|                                     
|                                     
|                                     
|                                     
|Expected Dividend Yields              |  |      | 0.00   | %    |  |      | 0.00  | % |  |  | 0.00  | %
|                                     
|                                     
|                                     
|                                     
|Expected Life of the Option in months |  |      | 48.4   |      |  |      | 48.4  |   |  |  | 48.4  |  
|                                     
|                                     
|                                     
|                                     
|Volatility of the Companys Stock     |  |      | 104.67 | %    |  |      | 91.41 | % |  |  | 79.88 | %

For purposes of adjusted pro forma disclosures, the estimated
fair value of the options is amortized over the options
vesting period. The effect of applying SFAS No. 123 on 1999,
 1998 and 1997 pro forma net loss is not necessarily
representative of the effects on reported net loss for future
years due to, among other things, (1) the vesting period of
the stock options and (2) the fair value of additional stock
 options in future years. The Companys adjusted pro forma
information for the years ended December 31, are as follows:

|                                      |  |      |             |      |  |      |             |   |  |   |             |  
|------------------------------------- |  | ---- | ----------- | ---- |  | ---- | ----------- | - |  | - | ----------- | -
|                                      |  | 1999 |             | 1998 |  | 1997
|                                      |  |      |             |      |  |     
|Adjusted pro forma net loss           |  | $    | (53,915,228 | )    |  | $    | (42,494,601 | ) |  | $ | (31,468,485 | )
|                                     
|                                     
|                                     
|                                     
|Adjusted pro forma net loss per share |  | $    | (2.52       | )    |  | $    | (2.89       | ) |  | $ | (2.91       | )

39



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##### Table of Contents



CYBERCASH, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)



9.  Common Stock Options  (Continued)


As of December 31, 1999, there remains available for grant
pursuant to the Employee Stock Option Plan, ICVerify Stock Option
 Plan, Directors Plan, Stock Bonus Plan and the ESPP
4,502,409 shares of Common Stock.

10.  Income Taxes

The following is a summary of the components of the
Companys net deferred tax assets as of December 31:

|                                 |  |      |             |      |  |   |             |  
|-------------------------------- |  | ---- | ----------- | ---- |  | - | ----------- | -
|                                 |  | 1999 |             | 1998
|                                 |  |      |             |     
|Net operating loss carry forward |  | $    | 41,785,000  |      |  | $ | 32,189,000  |  
|                                
|                                
|                                
|                                
|Deferred start-up costs          |  |      | 370,000     |      |  |   | 741,000     |  
|                                
|                                
|                                
|                                
|Depreciation                     |  |      | 1,153,000   |      |  |   | 81,000      |  
|                                
|                                
|                                
|                                
|Accrued and deferred expenses    |  |      | 645,000     |      |  |   | 360,000     |  
|                                 |  |      |             |      |  |   |             |  
|                                 |  |      | 43,953,000  |      |  |   | 33,371,000  |  
|                                
|                                
|                                
|                                
|Valuation allowance              |  |      | (43,953,000 | )    |  |   | (33,371,000 | )
|                                 |  |      |             |      |  |   |             |  
|Deferred tax asset, net          |  | $    |            |      |  | $ |            |  
|                                 |  |      |             |      |  |   |             |  

At December 31, 1999, the Company had approximately
$104,462,000 in tax net operating loss carry forwards that expire
 at varying dates through 2019. These carry forwards may be
significantly limited under the Internal Revenue Service Code as
a result of ownership changes resulting from the Companys
private placements and the initial public offering.

11.  Investment in Affiliates

On May 13, 1997, CyberCash and Softbank Corporation
(Softbank) formed a joint venture, CyberCash
Kabushiki Kaisha (CCKK), to commercialize
CyberCashs technology in Japan. A subsidiary of CyberCash
purchased 200 shares of CCKKs Common Stock for $83,000
 and during February 1998, sold 10 shares of CCKKs
common stock for approximately $200,000. As of December 31,
1999, CyberCash owns approximately 45% of the joint venture and
accounts for its investment in CCKK under the equity method.

In May 1997, CyberCash and CCKK entered into a Software
Development Agreement. Under the agreement, CyberCash will modify
 the CyberCash technology and will license it to CCKK for use in
the Japanese market. During 1999, 1998 and 1997, the Company
recognized revenues of $519,000, $522,000 and $597,000,
respectively, for work performed under the Software Development
Agreement and $126,000 and $315,000 of these revenues are
included in accounts receivable as of December 31, 1999 and
1998, respectively.

On October 3, 1997, CyberCash and several leading banks in
Germany formed a joint venture, CyberCash GmbH
(CC GmbH), to commercialize CyberCashs
technology in Germany. A wholly owned subsidiary of CyberCash
owns 22% of CC GmbHs equity shares, which were
purchased for $1,165,000. CyberCash does not maintain significant
 influence over CC GmbH and therefore, accounts for its
investment in CC GmbH under the cost method.

CyberCash and CC GmbH agreed to enter into a technology
license agreement. Under the agreement, CyberCash will modify the
 CyberCash technology and will license it to CC GmbH for use
 in the German market. CC GmbH agreed to pay CyberCash
DM 3,600,000 (approximately US $2,100,000) for the
initial licensing of the technology, in addition to annual
maintenance fees of $80,000. The Company recognized $237,000,
$344,000 and $2,045,000 in revenues during 1999, 1998 and 1997,
respectively, from CC GmbH

40



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##### Table of Contents



CYBERCASH, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)



11.  Investment in Affiliates 
(Continued)


and $118,000 and $471,000 of these revenues are included in
accounts receivable as of December 31, 1999 and 1998,
respectively.

On August 27, 1999, CyberCash entered into a stock purchase
agreement with Commission Junction (CJ), a privately
held affiliate marketing company. CyberCash agreed to purchase
939,791 shares of CJ for an aggregate purchase price of
$7 million. The purchase of the stock occurred in two
closings in August and November 1999. CyberCash owns
approximately 19% of CJ and accounts for its investment in CJ
using the cost method.

12.  Retirement Plan

The Company has adopted a 401(k) plan (the Plan),
which covers all employees who have completed three months of
service and attained the age of twenty-one. The Plan allows
employees to contribute up to 15% of their total compensation,
subject to Internal Revenue Service limitations. The Company has
not made matching contributions to the Plan.

13.  Segment, Geographic and Product Information

In order to more effectively present its business in the
marketplace the Company realigned into the following three
reportable business segments during 1999: Internet Payment
Service, Software Payment Product and Customization Services. The
 Companys revenues in 1999 from each of these segments were
 $8,049,000 (40%) from Internet Service, $10,736,000 (53%) from
Software Product and $1,469,000 (7%) from Customization Services.
 The Companys revenues in 1998 from each of these segments
were $4,236,000 (34%) from Internet Service, $6,525,000 (52%)
from Software Product and $1,827,000 (14%) from Customization
Services. The 1998 revenues presented above have been restated to
 be consistent with the Companys new reportable segment
structure.

CyberCashs Internet Services segment which includes
CyberCashs CashRegister, PayNow and InstaBuy Services and
CyberCashs Software Product segment which includes ICVERIFY®, PCVERIFY, NetVERIFY,
MacAuthorize, PCAuthorizeand WebAuthorize,
provide a complete line of software products and services
allowing merchants, billers, financial institutions and consumers
 to conduct secure transactions using the broadest array of
popular payment forms. Credit, debit, purchase cards, cash,
checks, smart cards and alternative payment types
(e.g., frequent buyer or loyalty programs) are
all supported by CyberCash payment solutions.

CyberCashs Customization Services segment provides for the
commercialization of CyberCashs technology through the
modification of and subsequent licensing of CyberCashs
technology to partners.

The following table sets forth the Companys long-lived
assets and revenues by geographic location:

|               |  |        |             |          |  |        |            |          |  |          |            |  |  |   |            |  |  |   |           | 
|-------------- |  | ------ | ----------- | -------- |  | ------ | ---------- | -------- |  | -------- | ---------- |  |  | - | ---------- |  |  | - | --------- | 
|               |  |        |             |          |  |       
|               |  | 1999   |             | 1998     |  | 1997  
|               |  |        |             |          |  |       
|               |  | Assets |             | Revenues |  | Assets |            | Revenues |  | Revenues
|               |  |        |             |          |  |        |            |          |  |         
|United States  |  | $      | 106,149,000 |          |  | $      | 18,636,000 |          |  | $        | 89,964,000 |  |  | $ | 11,207,000 |  |  | $ | 1,531,000 | 
|              
|              
|              
|              
|India          |  |        | 2,324,000   |          |  |        |           |          |  |          | 3,035,000  |  |  |   |           |  |  |   |          | 
|              
|              
|              
|              
|United Kingdom |  |        |            |          |  |        | 600,000    |          |  |          |           |  |  |   | 350,000    |  |  |   | 164,000   | 
|              
|              
|              
|              
|Germany        |  |        | 233,000     |          |  |        | 399,000    |          |  |          | 325,000    |  |  |   | 533,000    |  |  |   | 2,195,000 | 
|              
|              
|              
|              
|Asia           |  |        |            |          |  |        | 619,000    |          |  |          |           |  |  |   | 498,000    |  |  |   | 597,000   | 

The Companys net revenues in 1997 were primarily from three
 customers who have licensed CyberCash technology for use in
foreign markets and who provide services in the banking and
transaction processing industries. Revenues from these customers
totaled approximately $2,045,000 (46%), $1,028,000 (23%) and

41



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CYBERCASH, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)



13.  Segment, Geographic and Product
Information  (Continued)


$597,000 (13%). As of December 31, 1997, substantially all
of the Companys accounts receivable were due from these
three customers.

14.  Net Loss Per Share

The following table sets forth the computation of basic and
diluted loss per share:

|                                 |                                             |                         |       |             |   |      |       |             |   |   |       |             |  
|-------------------------------- | ------------------------------------------- | ----------------------- | ----- | ----------- | - | ---- | ----- | ----------- | - | - | ----- | ----------- | -
|                                 |                                             |                        
|                                 |                                             | Year Ended December 31,
|                                 |                                             |                        
|                                 |                                             | 1999                    |       | 1998        |   | 1997
|                                 |                                             |                         |       |             |   |     
|Numerator:                       |                                             |                         |       |             |   |      |       |             |   |   |       |            
|                                
|                                
|                                
|                                
|                                 | Net loss                                    |                         | $     | (43,131,505 | ) |      | $     | (30,944,448 | ) |   | $     | (26,221,910 | )
|                                
|                                
|                                
|                                
|                                 | Accrued dividends to Preferred Stockholders |                         |       |            |   |      |       | (723,064    | ) |   |       | (282,739    | )
|                                 |                                             |                         |       |             |   |      |       |             |   |   |       |            
|                                 | Net loss available to Common Stockholders   |                         | $     | (43,131,505 | ) |      | $     | (31,667,512 | ) |   | $     | (26,504,649 | )
|                                 |                                             |                         |       |             |   |      |       |             |   |   |       |            
|Denominator:                     |                                             |                         |       |             |   |      |       |             |   |   |       |            
|                                
|                                
|                                
|                                
|                                 | Weighted average shares outstanding         |                         |       | 21,396,537  |   |      |       | 14,707,723  |   |   |       | 10,898,036  |  
|                                 |                                             |                         |       |             |   |      |       |             |   |   |       |            
|Basic and diluted loss per share |                                             | $                       | (2.02 | )           |   | $    | (2.15 | )           |   | $ | (2.43 | )          

Stock options issued under the Companys Employee Stock
Option Plan, ICVerify Stock Option Plan, Directors Plan and
 warrants and Investment Options issued to CMU and First USA and
in connection with the Companys private placements, have
been excluded from diluted earnings per share computation because
 of their anti-dilutive nature.

15.  Related Party Transactions

On August 20, 1999, Mr. Condon, the Companys
Chief Executive Officer and President, entered into a revised
three-year employment agreement with the Company. Under the
agreement, Mr. Condon is to receive a base salary with
staged increases, stock options and bonuses. In addition,
Mr. Melton, the Chairman of the Board and principal
shareholder of the Company, granted Mr. Condon additional
options on a portion of Mr. Meltons personally held
CyberCash stock. Additionally, Mr. Melton personally
guaranteed a minimum level of intrinsic value of
Mr. Condons stock options in the amount of $6,000,000
and also guaranteed the payment of Mr. Condons bonus
over the life of the agreement. During 1999, the Company
recognized $600,000 in compensation expense and additional
paid-in-capital related to Mr. Meltons guarantee.

During 1999 and 1998, the Company paid $56,000 and $35,000 to a
relative of a shareholder in connection with an office space
lease agreement in California.

At the end of 1998, the Company entered into an agreement with an
 affiliated company for a five year sublease of office space,
during 1999 the Company received sublease income of $106,000
under this agreement. Also, during 1999 and 1998, the Company
purchased engineering services totaling approximately $1,005,000
and $670,000 from this affiliated company.

During 1999, 1998 and 1997 the Company purchased services
totaling approximately $142,000, $119,000, and $65,000,
respectively from a processing company in which the
Companys Chairman is a director.

42



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|        |                                                                                       
|------- | --------------------------------------------------------------------------------------
|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
	AND FINANCIAL DISCLOSURE.

Not applicable.




PART III




ITEM 10.  DIRECTORS AND OFFICERS OF THE REGISTRANT

Directors

The following sets forth certain information regarding the
directors as of March 10, 2000:

|                   |  |     |    |            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------------------ |  | --- | -- | ---------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name               |  | Age |    | Background
|                   |  |     |    |           
|William N. Melton  |  |     | 57 |            |  | Mr. Melton, a founder of CyberCash, has served as a member
	of its board since its inception in August 1994 and was
	elected chairman of the board in November 1999. He served as
	 its chief executive officer until November 1999. He also
	served as CyberCashs president until January 1999.
	Mr.  Melton founded VeriFone, Inc., a transaction
	automation company, in 1981. He was a director of VeriFone from
	1981 until 1996, and served as its Chairman of the Board from
	1986 until 1992. Mr. Melton was a founding investor of
	Transaction Network Services, Inc., a transaction network
	communications company. Mr. Melton also served as a director
	 of America Online, Inc. until October 1999.                                                                                                               
|Daniel C. Lynch    |  |     | 58 |            |  | Mr. Lynch, a founder of the Company, has served as a member
	of CyberCashs board of directors since the Companys
	inception in August 1994. He served as CyberCashs
	chairman of the board until January 1999. He also served
	briefly as vice president during the companys formation in
	August  1994. Mr. Lynch was the founder of Interop, a
	conference and tradeshow company for the computer and
	communications industry, now a division of Softbank Expos and
	formerly Ziff-Davis Conference and Exhibition Company. From 1980
	to 1983, he was director of information processing division for
	the Information Sciences Institute. Mr. Lynch is also a
	member of the Board of Trustees of the Santa Fe Institute, a
	 director of Exodus Communications, Inc. and a director of
	Covad Communications Group, Inc.
|Michael Rothschild |  |     | 47 |            |  | Mr. Rothschild has served as a member of CyberCashs
	board of directors since November 1995. He is an author,
	economic columnist and president of The Bionomics Institute, a
	non-profit educational foundation. Since 1996, Mr. 
	Rothschild has been president and chief executive officer of
	Maxager Technology, Inc., a software maker specializing in
	advanced product costing systems for manufacturers.                                                                                                                                                                                                                                                                                                                                                                                                                
|Charles T. Russell |  |     | 70 |            |  | Mr. Russell has been a member of CyberCashs board of
	directors since August 1997. Mr. Russell was president
	and chief executive officer of Visa International from 1984 to
	1994. Mr. Russell is a member of the board of directors of
	First Data Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

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|                   |  |     |    |            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------------------ |  | --- | -- | ---------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name               |  | Age |    | Background
|                   |  |     |    |           
|Garen K. Staglin   |  |     | 55 |            |  | Mr. Staglin has served as a member of CyberCashs board of
	directors since July 1996. Mr. Staglin served as
	chairman and chief executive officer from 1991 to 1998 of
	Safelite Glass Corporation, a manufacturer and retailer of
	replacement autoglass and related services. He continues to serve
	 as chairman of Safelites board of directors. Mr. 
	Staglin is also a director of First Data Corporation, Quick
	Response Services, Inc. and Specialized Bicycle Corporation.
	 He is a member of the Advisory Board of the Stanford Graduate
	School of Business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Parvinder S. Kohli |  |     | 43 |            |  | Mr. Kohli joined CyberCashs board of directors in
	February 2000. He has held various management positions in
	Marketing and Business Development at Intel for the last 11 
	 years. He is currently the General Manager of Intel Internet
	Security Services, a new start-up operation within Intel that is
	delivering content protection solutions to the media industry.
	Prior to that he was responsible for leading Intels
	investment strategy in the area of E-Commerce and built
	Intels investment portfolio of companies in the E-Commerce/
	 E-Business sector. Previously Mr. Kohli was Product
	Marketing Manager at National Semiconductor from 1984 to 1989.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|James J. Condon    |  |     | 43 |            |  | Mr. Condon has served as CyberCashs president and its
	chief executive officer since January and November of 1999,
	respectively. He served as the Companys chief operating
	officer from March 1998 until November 1999 and served
	as chief financial officer from February 1997 until
	July  1999. Mr. Condon was elected to the board of
	directors in February 2000. Before joining CyberCash,
	Mr. Condon was Director of Performance Improvement for the
	ICE (Information, Communications and Entertainment) segment of
	KPMG. From 1991 to 1995, he was corporate vice president for
	financial planning and administration, and before that vice
	president of operations, in the customer support and development
	divisions of Legent Corporation. Mr. Condon serves as a
	director of the following companies: Solutions Consulting, a
	privately held company that consults to software companies about
	electronic commerce and supply-chain management issues;
	Ultraprise Corporation, an online business-to-business exchange
	for trading residential whole loans and other assets between
	financial services institutions; PocketPass.Com, Inc., a
	provider of electronic pre-paid payment cards for purchases on
	the Internet; and Election.com, Inc., a provider of public
	and private election services.



| |                  
| | -----------------
| | Board Composition

CyberCashs board of directors is divided into three
classes: Class I expires at the annual meeting of
stockholders to be held in 2000; Class II expires at the
annual meeting of stockholders to be held in 2001; and
Class III expires at the annual meeting of stockholders to
be held in 2002. The Class I directors are
Messrs. Melton and Staglin; the Class II directors are
Messrs. Lynch and Russell; and the Class III directors
are Messrs. Rothschild, Kohli and Condon. At each annual
meeting of stockholders, the successors to directors whose terms
are expiring will be elected to serve from the time of election
and qualification until the third annual meeting following
election and until their successors have been duly elected and
qualified. Any additional directorships resulting from an
increase in the number of directors will be distributed among the
 three classes so that, as nearly as possible, each class will
consist of an equal number of directors.

44



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##### Table of Contents





| |                 
| | ----------------
| | Board Committees

The audit committee of the CyberCashs board of directors
was formed in December 1995 to review the internal
accounting procedures of the company and consult with and review
the services provided by the companys independent auditors.
 Messrs. Lynch, Rothschild and Staglin comprise the audit
committee. The compensation committee of CyberCashs board
of directors was formed in December 1995 to review and
recommend to the board the compensation and benefits of employees
 of the company. The compensation committee also administers the
issuance of stock options and other awards under the
companys stock plans, except for the 1995 Non-Employee
Directors Stock Option Plan, which is administered by the
board of directors. Messrs. Kohli, Russell and Staglin
comprise the compensation committee.



| |                      
| | ---------------------
| | Director Compensation

Directors currently do not receive any cash compensation from
CyberCash for their service as members of its board of directors,
 although they are reimbursed for certain expenses in connection
with attendance at board and committee meetings. Under the
CyberCash Non-Employee Directors Option Plan, directors are
 awarded options to acquire 5,000 shares of CyberCash Common
 Stock upon their election to the board and are awarded options
to acquire 1,500 shares per year thereafter. Additionally,
directors are awarded options to acquire 1,500 shares of
stock annually for each board committee on which they serve and
5,000 shares for each committee that they chair. All grants
are at fair market value and are fully vested.



| |                                                            
| | -----------------------------------------------------------
| | Compensation Committee Interlocks and Insider Participation

No executive officer of CyberCash served as a director or member
of (i) the compensation committee of another entity which
has an executive officer who is a director of CyberCash or a
member of CyberCashs Compensation Committee, (ii) the
board of directors of another entity in which one of the
executive officers of such entity served on CyberCashs
compensation committee, or (iii) the compensation committee
of any other entity in which one of the executive officers of
such entity served as a member of CyberCashs board of
directors, during the year ended December 31, 1999.

Executive Officers

The following sets forth certain information concerning
CyberCashs executive officers and key employees as of
March 10, 2000.

|                  |  |                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|----------------- |  | ----------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name              |  | Position                                        |  | Background                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                  |  |                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|James J. Condon   |  | President, Chief Executive Officer and Director |  | Mr. Condons biographical information is set forth
	above under the heading Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Charles L. Riegel |  | Executive Vice President, Worldwide Marketing   |  | Mr. Riegel, 41, has served as CyberCashs executive
	vice president responsible for worldwide marketing since
	September 1999. Prior to joining CyberCash, Mr. Riegel
	served as executive vice president at Virtus Corporation, a North
	 Carolina-based software and technology firm specializing in 3D
	imaging from 1996 to 1999 and from 1996 was also a principal at
	Software Insights, a high-tech consulting firm located in Cary,
	North Carolina. Previously, from 1994 to 1996 he served as senior
	 vice president of worldwide marketing at Seer
	Technologies Inc., and from 1988 to 1994 as vice president
	of marketing and product management at Legent Corporation.
	Mr. Riegel serves as director of Neomar and WebSurveyor.

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|                   |  |                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------------------ |  | ---------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name               |  | Position                                             |  | Background                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                   |  |                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Joseph G. Monteil  |  | Executive Vice President, Development and Operations |  | Mr. Monteil, 42, joined CyberCash in May 1999 as
	Executive Vice President of Development and Operations bringing
	with him over 21 years experience in the IT industry. Prior
	to joining CyberCash, Mr. Monteil was the Vice President of
	Technical Operations at CareerBuilder Inc., the fastest
	growing, interactive-web-based recruiting company on the
	Internet. From 1995 to 1997, Mr. Monteil was a Senior
	Manager of Performance Improvement Services for KPMG Peat
	Marwick. He served as the Vice President, Client Services for
	Legent Corporation, from 1986 to 1995, where he led the Client
	Services operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Dennis N. Cavender |  | Executive Vice President and Chief Financial Officer |  | Mr. Cavender, 49, has served as CyberCashs executive
	vice president and chief financial officer since July 1999.
	Prior to CyberCash, from 1998 to 1999 he was president, chief
	operating officer and chief financial officer of
	Gooitech, Inc., a wireless communications company. Prior to
	Gooitech, Mr. Cavender was vice president and chief
	financial officer for Broadband Associates from 1997 to 1998, an
	Internet services company and vice president and chief financial
	officer from 1996 to 1997 for Aksys, Ltd, a medical device
	development-stage company, where he was a member of the
	management team at the time of their initial public offering.
	Additionally, Mr. Cavender served as vice president and
	chief financial officer for Promega Corporation 1994 to 1996, a
	high growth biotechnology company, held various senior financial,
	 strategic planning and operational positions with Amdahl
	Corporation from 1981 to 1994, a manufacturer of mainframe
	computer systems, and from 1972 to 1981 held various financial
	management positions with Syntex Corporation, a pharmaceutical
	company.

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|                  |  |                                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|----------------- |  | ----------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name              |  | Position                                                          |  | Background                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                  |  |                                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Nancy C. Goldberg |  | Executive Vice President, Sales                                   |  | Ms. Goldberg, 41, has served as CyberCashs executive vice
	president responsible for Sales since June 1999. Prior to
	that she was senior vice president responsible for the Payments
	business. Ms. Goldberg joined CyberCash in January 1998
	 as vice president for Internet Billing and Payment Services.
	Before joining CyberCash, Ms. Goldberg was market director
	for financial services at Proxicom, Inc., an Internet
	software developer, from October 1997 to January 1998;
	chief executive officer and a co-founder of Verb, Inc., a
	developer of internet based recruiting software, from 1994 to
	1997; and a vice president for Prudential Home Mortgage from 1991
	 to 1994, where she was responsible for all applications systems.
	 Before 1991, Ms. Goldberg was a senior manager with the
	financial services industry group of Andersen Consulting.
|George C. Pappas  |  | Executive Vice President, Development and Strategic Relationships |  | Mr. Pappas, 39, joined CyberCash as executive vice
	president, development and strategic relationships in
	March 1999. He has served as CyberCashs executive vice
	 president, technology and strategic relationships since
	May 1999. Mr. Pappas was the president of
	Netguard, Inc. an Israeli-based Internet security and
	performance vendor from 1997 to 1999. From 1995 to 1997 he also
	served as senior vice president, sales and marketing for Relay
	Technology, Inc. In 1994, Mr. Pappas helped start
	U.S.  Operations for France-based Implicit Software 
	Inc.; was vice president sales and marketing for Software
	Emancipation Technology, Inc. from 1991 to 1994; and vice
	president at Bachman Information Systems, 1986-1991.                                                                                                                          
|Arthur A. Pumo    |  | Executive Vice President, Human Resources                         |  | Mr. Pumo, 59, joined CyberCash in March 2000 as
	executive vice president, human resources. Since 1995
	Mr. Pumo served as vice president, human resources at
	Omnipoint Corporation, a leading provider of wireless personal
	communications services and technology. Mr.  Pumo was vice
	president, human resources for Legent Corporation from 1993 to
	1995, and was with International Business Machines Corporation
	from 1963-1992, serving in numerous human resources management
	and executive positions.                                                                                                                                                                                                                                                                                                                                                           

47



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##### Table of Contents



|               |  |                                                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-------------- |  | ------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name           |  | Position                                                |  | Background                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|               |  |                                                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|John H. Karnes |  | Vice President, General Counsel and Corporate Secretary |  | Mr. Karnes, 39, joined CyberCash in February of 2000 as Vice
	 President, General Counsel and Corporate Secretary, positions he
	 has held with a number of entrepreneurial, public companies
	including Snyder Oil Corporation during 1999 (oil and gas
	exploration); FIRSTPlus Financial Corporation during 1998
	(consumer finance); Pillowtex Corporation during 1997 (textile
	manufacturer); AMRE Incorporated during 1996 (home improvement
	product manufacturer and marketer); and Pratt Hotel Corporation
	during 1995 (hotel and casino resort management). Mr. 
	Karnes previously was in private practice with the national law
	firm of Kirkland & Ellis, where he specialized in
	corporate finance and mergers and acquisitions.

48



---



##### Table of Contents






ITEM 11.  EXECUTIVE COMPENSATION

Executive Compensation

The following table sets forth certain compensation awarded or
paid by the Company during the three fiscal years ended
December 31, 1999 to its Chief Executive Officer, the
Companys four other most highly compensated officers who
were employed on such date, and one former executive whose 1999
compensation qualifies him for inclusion notwithstanding his
resignation during the year:

Summary Compensation Table

|                                       |  |      |      |                     |  |            |         |                     |  |            |         |                 |  |  |        |     |  |  |         |  |  |  |         |    
|-------------------------------------- |  | ---- | ---- | ------------------- |  | ---------- | ------- | ------------------- |  | ---------- | ------- | --------------- |  |  | ------ | --- |  |  | ------- |  |  |  | ------- | ---
|                                       |  |      |      |                     |  |            |         |                     |  |           
|                                       |  |      |      |                     |  |            |         | Long Term           |  |           
|                                       |  |      |      |                     |  |            |         | Compensation Awards |  |           
|                                       |  |      |      |                     |  |            |         |                    
|                                       |  |      |      | Annual Compensation |  | Restricted |         | Securities          |  |           
|                                       |  |      |      |                     |  | Stock      |         | Underlying          |  | All Other 
|Name and Principal Position            |  | Year |      | Salary($)           |  | Bonus($)   |         | Awards($)           |  | Options(#) |         | Compensation($)
|                                       |  |      |      |                     |  |            |         |                     |  |            |         |                
|William N. Melton                      |  |      | 1999 |                     |  |            |        |                     |  |            |        |                 |  |  |       |     |  |  |        |  |  |  |        |    
|Chairman of the Board(1)               |  |      | 1998 |                     |  |            |        |                     |  |            |        |                 |  |  |       |     |  |  |        |  |  |  |        |    
|                                       |  |      | 1997 |                     |  |            | 100,000 |                     |  |            |        |                 |  |  |       |     |  |  |        |  |  |  |        |    
|                                      
|                                      
|                                      
|                                      
|James J. Condon                        |  |      | 1999 |                     |  |            | 268,333 |                     |  |            | 100,000 |                 |  |  | 37,500 | (4) |  |  | 580,000 |  |  |  | 11,058  | (5)
|Chief Executive Officer(2)             |  |      | 1998 |                     |  |            | 207,853 |                     |  |            |        |                 |  |  |       |     |  |  | 165,000 |  |  |  |        |    
|and President                          |  |      | 1997 |                     |  |            | 126,628 |                     |  |            |        |                 |  |  |       |     |  |  | 90,000  |  |  |  |        |    
|                                      
|                                      
|                                      
|                                      
|Russell B. Stevenson, Jr.(3)           |  |      | 1999 |                     |  |            | 220,000 |                     |  |            |        |                 |  |  | 25,000 | (4) |  |  | 35,000  |  |  |  | 6,346   | (5)
|Senior Vice President, General Counsel |  |      | 1998 |                     |  |            | 209,160 |                     |  |            |        |                 |  |  |       |     |  |  | 55,000  |  |  |  |        |    
|and Secretary                          |  |      | 1997 |                     |  |            | 210,000 |                     |  |            | 20,475  |                 |  |  |       |     |  |  | 30,000  |  |  |  |        |    
|                                      
|                                      
|                                      
|                                      
|Bruce G. Wilson(3)                     |  |      | 1999 |                     |  |            | 200,000 |                     |  |            |        |                 |  |  | 11,250 | (4) |  |  | 40,000  |  |  |  | 268,443 | (6)
|Executive Vice President               |  |      | 1998 |                     |  |            | 186,806 |                     |  |            |        |                 |  |  |       |     |  |  | 23,000  |  |  |  |        |    
|                                       |  |      | 1997 |                     |  |            | 180,000 |                     |  |            | 9,000   |                 |  |  |       |     |  |  | 15,000  |  |  |  |        |    
|                                      
|                                      
|                                      
|                                      
|Nancy C. Goldberg                      |  |      | 1999 |                     |  |            | 194,167 |                     |  |            |        |                 |  |  | 16,250 | (4) |  |  | 70,000  |  |  |  |        |    
|Executive Vice President               |  |      | 1998 |                     |  |            | 158,718 |                     |  |            |        |                 |  |  |       |     |  |  | 47,500  |  |  |  |        |    
|                                       |  |      | 1997 |                     |  |            |        |                     |  |            |        |                 |  |  |       |     |  |  |        |  |  |  |        |    
|                                      
|                                      
|                                      
|                                      
|Denis Yaro(3)                          |  |      | 1999 |                     |  |            | 184,179 |                     |  |            |        |                 |  |  | 7,500  | (4) |  |  | 36,500  |  |  |  | 26,934  | (5)
|Executive Vice President               |  |      | 1998 |                     |  |            | 220,000 |                     |  |            |        |                 |  |  |       |     |  |  | 10,000  |  |  |  |        |    
|                                       |  |      | 1997 |                     |  |            | 220,000 |                     |  |            | 26,000  |                 |  |  |       |     |  |  | 10,000  |  |  |  |        |    
|                                      
|                                      
|                                      
|                                      
|George C. Pappas                       |  |      | 1999 |                     |  |            | 149,583 |                     |  |            |        |                 |  |  |       |     |  |  | 90,000  |  |  |  |        |    
|Executive Vice President               |  |      | 1998 |                     |  |            |        |                     |  |            |        |                 |  |  |       |     |  |  |        |  |  |  |        |    
|                                       |  |      | 1997 |                     |  |            |        |                     |  |            |        |                 |  |  |       |     |  |  |        |  |  |  |        |    



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Mr. Melton served as chief executive officer of the Company
	prior to November 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(2) | Mr. Condon assumed the role of chief executive officer of
	the Company commencing November 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(3) | Mr. Stevenson resigned form the Company effective
	January 31, 2000. Mr.  Wilson resigned from the Company
	 effective December  31, 1999. Mr. Yaro resigned from
	the Company effective November 1, 1999.                                                                                                                                                                                                                                                                                                                                              
|   
|(4) | Awarded February 10, 1999. All stock was 20% vested at
	issuance and vested 20% every 90 days thereafter. All
	unvested shares were subject to forfeiture if the recipient
	terminated his/her employment prior to February 10, 2000.
	Number of shares awarded was as follows: Mr. Condon: 3,000;
	Mr. Wilson: 1,000; Mr. Stevenson: 2,000; Ms. 
	Goldberg: 1,300; Mr. Yaro: 600. Value of aggregate
	restricted stock holdings at December 31, 1999 was as
	follow: Mr. Condon: $5,500; Mr. Wilson: $0: Mr. 
	Stevenson: $3,700; Ms. Goldberg: $2,405.
|   
|(5) | One time settlement of accrued vacation hours resulting from
	Company-wide change in vacation policy.                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(6) | Amount paid in connection with an agreement relating to
	Mr. Wilsons resignation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

49



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##### Table of Contents



Stock Option Information

The following table shows for the fiscal year ended
December 31, 1999, certain information regarding options
granted to, exercised by, and held at year end by the individuals
 appearing on the preceding Summary Compensation Table:

|                           |  |               |         |              |  |           |      |            |  |                        |             |     |  |  |           |  |  |   |           |  |  |   |           | 
|-------------------------- |  | ------------- | ------- | ------------ |  | --------- | ---- | ---------- |  | ---------------------- | ----------- | --- |  |  | --------- |  |  | - | --------- |  |  | - | --------- | 
|                           |  |               |         |              |  |           |      |            |  |                       
|                           |  |               |         |              |  |           |      |            |  | Potential Realizable  
|                           |  |               |         |              |  |           |      |            |  | Value at Assumed      
|                           |  |               |         |              |  |           |      |            |  | Annual Rates of Stock 
|                           |  |               |         |              |  |           |      |            |  | Price Appreciation for
|                           |  | Number of     |         | % of Total   |  |           |      |            |  | Option Term($)(3)(4)  
|                           |  | Securities    |         | Options      |  | Exercise  |      |            |  | Option Grants in Last 
|                           |  | Underlying    |         | Granted to   |  | or Base   |      |            |  | Fiscal Year           
|                           |  | Options       |         | Employees in |  | Price     |      | Expiration |  |                       
|Name                       |  | Granted(#)(1) |         | Fiscal Year  |  | ($/sh)(2) |      | Date       |  | 5%                     |             | 10%
|                           |  |               |         |              |  |           |      |            |  |                        |             |    
|William N. Melton          |  |               |        |              |  |           |     |            |  |                        |            |     |  |  |          |  |  |   |          |  |  |   |          | 
|                          
|                          
|                          
|                          
|James J. Condon            |  |               | 580,000 |              |  |           | 27.2 | %          |  | $                      | 9.13-$14.19 |     |  |  | 8/25/2009 |  |  | $ | 3,851,260 |  |  | $ | 9,766,460 | 
|                          
|                          
|                          
|                          
|Bruce G. Wilson            |  |               | 40,000  |              |  |           | 1.9  | %          |  | $                      | 9.13-$14.38 |     |  |  | 8/25/2009 |  |  | $ | 330,000   |  |  | $ | 832,900   | 
|                          
|                          
|                          
|                          
|Russell B. Stevenson,  Jr. |  |               | 35,000  |              |  |           | 1.6  | %          |  | $                      | 9.13-$14.38 |     |  |  | 8/25/2009 |  |  | $ | 301,275   |  |  | $ | 760,175   | 
|                          
|                          
|                          
|                          
|Nancy C. Goldberg          |  |               | 70,000  |              |  |           | 3.3  | %          |  | $                      | 9.13-$14.38 |     |  |  | 8/25/2009 |  |  | $ | 592,270   |  |  | $ | 1,495,370 | 
|                          
|                          
|                          
|                          
|Denis Yaro                 |  |               | 36,500  |              |  |           | 1.7  | %          |  | $                      | 9.13-$14.19 |     |  |  | 8/25/2009 |  |  | $ | 309,892   |  |  | $ | 781,992   | 
|                          
|                          
|                          
|                          
|George Pappas              |  |               | 90,000  |              |  |           | 4.2  | %          |  | $                      | 9.13-$13.03 |     |  |  | 8/25/2009 |  |  | $ | 669,460   |  |  | $ | 1,696,410 | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The options are generally incentive stock options with vesting
	occurring over 40 months, with 7.5% of the shares
	vesting after three months, and 2.5% of the shares vesting
	each month for the next 37 months.                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(2) | The exercise price is equal to 100% of the fair market value
	 of the Common Stock on the date of the grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(3) | The options have a ten-year term, subject to earlier termination
	upon death, permanent and total disability or termination of
	employment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(4) | The potential realizable value is calculated based on the term of
	 the option at its time of grant (10 years) and is
	calculated by assuming that the stock price on the date of grant
	as determined by the Board of Directors appreciates at the
	indicated annual rate compounded annually for the entire term of
	the option and that the option is exercised and sold on the last
	day of its term for the appreciated price. The 5% and
	10% assumed rates of appreciation are derived from the rules
	 of the Securities and Exchange Commission and do not represent
	the Companys estimate or projection of the future Common
	Stock price.

The table below sets forth with respect to each individual
appearing on the preceding Summary Compensation Table, the
following information with respect to (i) the exercise of
stock options during the fiscal year ended December 31,
1999, (ii) the number of unexercised options held as of
December 31, 1999 and (iii) the value as of
December 31, 1999 of unexercised in-the-money options;
calculated as the amount by which the fair market value exceeds
the exercise price of the Common Stock as of December 31,
1999.

Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Option Values

|                          |  |             |   |                        |  |                         |         |             |  |               |         |  |  |   |        |  |  |   |        | 
|------------------------- |  | ----------- | - | ---------------------- |  | ----------------------- | ------- | ----------- |  | ------------- | ------- |  |  | - | ------ |  |  | - | ------ | 
|                          |  |             |   |                        |  |                         |         |            
|                          |  |             |   | Number of Securities   |  |                        
|                          |  |             |   | Underlying Unexercised |  | Value of Unexercised   
|                          |  | Shares      |   | Options                |  | In-the-Money Options at
|                          |  | Acquired    |   | at Fiscal Year End(#)  |  | Fiscal Year-End($)(1)  
|                          |  | on Exercise |   |                        |  |                        
|Name                      |  | (#)         |   | Exercisable            |  | Unexercisable           |         | Exercisable |  | Unexercisable
|                          |  |             |   |                        |  |                         |         |             |  |              
|William N. Melton         |  |             |  |                        |  |                         |        |             |  |               |        |  |  |   |       |  |  |   |       | 
|                         
|                         
|                         
|                         
|James J. Condon           |  |             |  |                        |  |                         | 176,125 |             |  |               | 658,875 |  |  | $ | 2,125  |  |  | $ | 14,125 | 
|                         
|                         
|                         
|                         
|Bruce G. Wilson           |  |             |  |                        |  |                         | 80,700  |             |  |               |        |  |  | $ | 89,075 |  |  |   |       | 
|                         
|                         
|                         
|                         
|Russell B. Stevenson, Jr. |  |             |  |                        |  |                         | 93,125  |             |  |               | 61,875  |  |  | $ | 2,313  |  |  | $ | 3,938  | 
|                         
|                         
|                         
|                         
|Nancy Goldberg            |  |             |  |                        |  |                         | 54,250  |             |  |               | 63,250  |  |  | $ | 3,688  |  |  | $ | 6,938  | 
|                         
|                         
|                         
|                         
|Denis Yaro                |  |             |  |                        |  |                         | 202,325 |             |  |               | 14,775  |  |  |   |       |  |  |   |       | 
|                         
|                         
|                         
|                         
|George Pappas             |  |             |  |                        |  |                         | 13,625  |             |  |               | 76,375  |  |  | $ | 250    |  |  | $ | 2,250  | 



---



|    |                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Based on the closing price of the Companys Common Stock on
	December 31, 1999 of $9.25 per share, minus the
	exercise price, multiplied by the number of shares underlying the
	 option.

50



---



##### Table of Contents






ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

The following table sets forth certain information known to
CyberCash with respect to the beneficial ownership of its common
stock as of March 10, 2000 for (i) each stockholder who
 is known by CyberCash to own beneficially more than 5% of its
common stock, (ii) certain executive officers of CyberCash,
(iii) each director of CyberCash and (iv) all directors
 and executive officers of CyberCash, as a group. Unless
otherwise specified, the address of all stockholders is the
address of CyberCashs principal executive offices, provided
 on the cover page of this Annual Report.

|                                                                   |                                                                                                                   |              |           |            |  |  |       |   | 
|------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------- | ------------ | --------- | ---------- |  |  | ----- | - | 
|                                                                   |                                                                                                                   | Amount and   |           |           
|                                                                   |                                                                                                                   | Nature of    |           |           
|                                                                   |                                                                                                                   | Beneficial   |           |           
|Name and Address of Beneficial Owner                               |                                                                                                                   | Ownership(1) |           | % of Class
|                                                                   |                                                                                                                   |              |           |           
|William N. Melton(2)                                               |                                                                                                                   |              | 3,830,498 |            |  |  | 15.50 | %
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|First USA Bank, N.A.(3)                                            |                                                                                                                   |              | 2,200,000 |            |  |  | 8.18  | %
|                                                                   | Three Christine Centre
	201 North Walnut Street
	Wilmington, Delaware 19801                                       |              |           |            |  |  |       |   | 
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Halifax Fund LP(4)                                                 |                                                                                                                   |              | 1,672,500 |            |  |  | 6.60  | %
|                                                                   | c/o The Palladin Group, Inc.
	40 West 57th Street
	New York, New York 10019                                       |              |           |            |  |  |       |   | 
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|RGC International Investors, LDC(5)                                |                                                                                                                   |              | 2,541,782 |            |  |  | 9.90  | %
|                                                                   | c/o Rose Glen Capital Management, L.P.
	251 St. Asaphs Road, 3 Bala Plaza  East
	Bala Cynwyd, Pennsylvania 19004 |              |           |            |  |  |       |   | 
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Daniel C. Lynch(6)                                                 |                                                                                                                   |              | 821,576   |            |  |  | 3.32  | %
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Michael Rothschild(7)                                              |                                                                                                                   |              | 75,924    |            |  |  | *     |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Charles T. Russell(8)                                              |                                                                                                                   |              | 30,500    |            |  |  | *     |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Garen K. Staglin(9)                                                |                                                                                                                   |              | 82,858    |            |  |  | *     |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Parvinder S. Kohli(10)                                             |                                                                                                                   |              | 25,000    |            |  |  | *     |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|James J. Condon(11)                                                |                                                                                                                   |              | 234,025   |            |  |  | *     |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Russell B. Stevenson, Jr.(12)                                      |                                                                                                                   |              | 97,725    |            |  |  | *     |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Bruce G. Wilson(13)                                                |                                                                                                                   |              | 232,049   |            |  |  | *     |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Nancy C. Goldberg(14)                                              |                                                                                                                   |              | 67,488    |            |  |  | *     |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Denis Yaro(15)                                                     |                                                                                                                   |              | 205,371   |            |  |  | *     |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|George C. Pappas(16)                                               |                                                                                                                   |              | 23,500    |            |  |  | *     |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|All directors and executive officers as a group (13 
	persons)(17) |                                                                                                                   |              | 5,248,510 |            |  |  | 20.79 | %



---



| |   |                       
| | - | ----------------------
| | * | Less than one percent.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The ownership of shares of Common Stock reported herein is based
	upon filings with the Securities and Exchange Commission (the
	Commission), except as noted otherwise. Beneficial
	ownership is determined in accordance with the rules of the
	Commission and generally includes voting or investment power with
	 respect to securities. Except as indicated by footnote, and
	subject to community property laws where applicable, the persons
	named in the table above have sole voting and investment power
	with respect to all shares of Common Stock shown as beneficially
	owned by them. Securities underlying options and warrants that
	are exercisable within 60  days of March 10, 2000 are
	deemed to be outstanding for the purpose of computing the
	percentage of outstanding securities owned by the holder of such
	options.
|   
|(2) | Includes 15,000 shares held by members of
	Mr. Meltons immediate family, 40,000 shares held
	by The William N. Melton 1994 Charitable Remainder Annuity
	Trust, 70,000 shares held by The William N. Melton 1995
	 Charitable Remainder Annuity Trust and 110,000 shares held
	by The Melton Foundation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

51



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##### Table of Contents





|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Consists of shares subject to warrants exercisable within
	60 days of March 10, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(4) | Based upon information contained in the most recent
	Schedule 13G filed by Halifax Fund LP, Halifax held
	1,044,450 shares of Common Stock and warrants to acquire
	388,415 shares of Common Stock at December 31, 1999.
	The warrants are exercisable only to the extent that the number
	of shares of Common Stock issuable upon the exercise of the
	warrants, together with any other shares of Common Stock
	beneficially owned by the filers, would not exceed 9.9% of
	the then outstanding Common Stock of the Company. The Company
	issued 239,635 additional warrants to Halifax effective
	January 6, 2000 pursuant to re-pricing provisions in certain
	 of the warrants, as more fully described in Note 7 to the
	financial statements included in this report. These additional
	warrants are also subject to the foregoing 9.9% limitation on
	exerciseability.



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (5) | Based upon information contained in the most recent
	Schedule 13G filed by RGC International Investors LDC, RGC
	held 1,510,367  shares of Common Stock and warrants to
	acquire 1,093,955 shares of Common Stock at
	December 31, 1999. The warrants are exercisable only to the
	extent that the number of shares of Common Stock issuable upon
	the exercise of the warrants, together with any other shares of
	Common Stock beneficially owned by the filers, would not exceed
	9.9% of the then outstanding Common Stock of the Company. The
	Company issued 479,271 additional warrants to RGC effective
	January  6, 2000 pursuant to re-pricing provisions in
	certain of the warrants, as more fully described in Note 7
	to the financial statements included in this report. These
	additional warrants are also subject to the foregoing 9.9%
	limitation on exerciseability. As such, the amount reported above
	 as beneficially owned by RGC includes only that portion of the
	warrants as may be exercised by RGC within 60 days of
	March 10, 2000 by virtue of the 9.9% limitation on
	exercisability contained herein. According to the Schedule 13G
	filed by RGC, RGC shares voting and dispositive power over the
	Common Stock it owns with Rose Glen Capital Management, L.P., its
	 investment manager, and RGC General Partner Corp., the general
	partner of the investment manager.
|
| | (6) | Consists of 762,576 shares held by The Lynch Living Trust U/
	 T/ A dated March  2, 1990 of which Daniel C. Lynch and
	 Karen D. Lynch are co-trustees; 10,000 shares held by
	The Katherine Danielle Lynch Irrevocable Trust of which
	Daniel C. Lynch is trustee; 10,000 shares held by The
	Michael MacAllen Lynch Irrevocable Trust of which Daniel C.
	Lynch is trustee; and 5,000 shares held by The Francis Troy
	Lynch Irrevocable Trust of which Daniel  C. Lynch is trustee
	 and 34,000 shares subject to stock options exercisable
	within 60 days of March  10, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| | (7) | Consists of 38,924 shares held by The Michael L.
	Rothschild Trustee Revocable Trust U/ T/ A dated August 9,
	1993, 10,000 shares held by The MLR Enterprises, Inc.
	Master Pension and Profit-Sharing Plan U/ T/ A dated
	January 1, 1991 and 27,000 shares subject to stock
	options exercisable within 60 days of March 10, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (8) | Consists of shares subject to stock options exercisable within
	60 days of March 10, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | (9) | Includes 16,700 shares held by The Garen K. and
	Sharalyn King Staglin 1997 Charitable Unit Trust dated
	July 8, 1997, 20,000  shares subject to forfeiture
	within 60 days of March  10, 2000 and
	46,158 shares subject to stock options exercisable within
	60 days of March 10, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        



|     |                                                                                                   
|---- | --------------------------------------------------------------------------------------------------
|(10) | Consists of shares subject to stock options exercisable within
	60 days of March 10, 2000.        
|    
|(11) | Includes 229,625 shares subject to stock options exercisable
	 within 60 days of March 10, 2000.  
|    
|(12) | Includes 96,125 shares subject to stock options exercisable
	upon effective date of termination.  
|    
|(13) | Includes 80,700 shares subject to stock options exercisable
	upon effective date of termination.  
|    
|(14) | Includes 66,188 shares subject to stock options exercisable
	within 60 days of March 10, 2000.    
|    
|(15) | Includes 202,325 shares subject to stock options exercisable
	 upon effective date of termination.
|    
|(16) | Consists of shares subject to stock options exercisable within
	60 days of March 10, 2000.        
|    
|(17) | Includes 536,721 shares subject to stock options exercisable
	 within 60 days of March 10, 2000.  

52



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##### Table of Contents






ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS

On November 19, 1999, Mr. William Melton, Chairman of
the Board of Directors, purchased 1,186,240 shares of
CyberCash Common Stock for an aggregate purchase price of
$10.0 million. These shares were purchased at the then
current fair market value of the Common Stock that CyberCash was
able to receive from third parties.

In addition, during 1999, 1998 and 1997 the Company purchased
services totaling approximately $142,000, $119,000, and $65,000,
respectively from a processing company in which Mr. Melton
is a director.

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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this Annual Report to be signed on its behalf by the undersigned,
 thereunto duly authorized.



| |                              
| | -----------------------------
| | CYBERCASH, INC. 
	 REGISTRANT



| |    |                    
| | -- | -------------------
| | By | /s/ JAMES J. CONDON

| |                                      
| | -------------------------------------
| |                                      
| | James J. Condon                      
| | President and Chief Executive Officer

March 30, 2000

|                                         |  |                                                                                                                      |  |               
|---------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------- |  | --------------
|/s/ WILLIAM N. MELTONWilliam N. Melton   |  | Chairman of the Board of Directors                                                                                   |  | March 30, 2000
|/s/ JAMES J. CONDONJames J. Condon       |  | Director, President and Chief Executive Officer
	(Principal Executive Officer)                                       |  | March 30, 2000
|/s/ DENNIS N. CAVENDERDennis N. Cavender |  | Executive Vice President and Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer) |  | March 30, 2000
|/s/ PARVINDER S. KOHLIParvinder S. Kohli |  | Director                                                                                                             |  | March 30, 2000
|/s/ DANIEL C. LYNCHDaniel C. Lynch       |  | Director                                                                                                             |  | March 30, 2000
|/s/ MICHAEL ROTHSCHILDMichael Rothschild |  | Director                                                                                                             |  | March 30, 2000
|/s/ CHARLES T. RUSSELLCharles T. Russell |  | Director                                                                                                             |  | March 30, 2000
|/s/ GAREN K. STAGLINGaren K. Staglin     |  | Director                                                                                                             |  | March 30, 2000

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##### Table of Contents



INDEX TO EXHIBITS

|        |      |                         |  |                                                                                                                                                              
|------- | ---- | ----------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |                        
|Number  |      | Description Of Document
|        |      |                        
|        | 2.1  |                         |  | Agreement and Plan of Reorganization dated April 8, 1998
	among CyberCash, Inc., CyberCash Acquisition Corporation and
	ICVerify, Inc. (1)                   
|        | 2.2  |                         |  | Agreement and Plan of Reorganization dated June 25, 1999
	among CyberCash, Inc., Shaker Acquisition Corporation, Tellan
	Software Inc. and Donald L. Neff (2)
|        | 3.1  |                         |  | Amendment to Amended and Restated Certificate of Incorporation
	(3)                                                                                          
|        | 3.2  |                         |  | Bylaws (4)                                                                                                                                                   
|        | 3.3  |                         |  | Certificate of Designation, Preferences and Rights of
	Series E Junior Participating Preferred Stock (5)                                                     
|        | 4.1  |                         |  | Form of CyberCash, Inc.s common stock certificate (4)                                                                                                       
|        | 4.2  |                         |  | Form of Rights Agreement dated as of June 30, 1998 between
	CyberCash, Inc. and BankBoston N.A. as Rights Agent, including
	exhibits thereto (6)             
|        | 4.3  |                         |  | Form of Amendment dated as of December 18, 1998 to Rights
	Agreement (7)                                                                                     
|        | 4.4  |                         |  | Amended and Restated Investors Rights Agreement dated
	August 24, 1994 between the Company and certain investors
	(8)                                        
|        | 4.5  |                         |  | Amendment dated September 29, 1995 to Amended and Restated
	Investors Rights Agreement (9)                                                                  
|        | 4.6  |                         |  | Purchase Agreement dated February 15, 1996 between
	CyberCash, Inc. and Softbank Holdings, Inc. (10)                                                         
|        | 4.7  |                         |  | Subscription Agreement dated as of March 21, 1997 between
	CyberCash, Inc. and Carnegie Mellon University (11)                                               
|        | 4.8  |                         |  | Warrant Certificate dated as of March 21, 1997 issued to
	Carnegie Mellon University (12)                                                                    
|        | 4.9  |                         |  | Securities Purchase Agreement dated as of August 1, 1997
	between CyberCash, Inc., RGC International Investors, LDC and
	Halifax Fund, L.P. (13)             
|        | 4.10 |                         |  | Registration Rights Agreement dated as of August 1, 1997
	between CyberCash, Inc., RGC International Investors, LDC and
	Halifax Fund, L.P. (14)             
|        | 4.11 |                         |  | Securities Purchase Agreement dated as of February 5, 1998
	between CyberCash, Inc., RGC International Investors, LDC and
	Halifax Fund, L.P. (15)           
|        | 4.12 |                         |  | Registration Rights Agreement dated as of February 5, 1998
	between CyberCash, Inc., RGC International Investors, LDC and
	Halifax Fund, L.P. (16)           
|        | 4.13 |                         |  | Form of Investment Option issued to RGC International Investors,
	LDC and Halifax Fund, L.P. (17)                                                            
|        | 4.14 |                         |  | Form of Warrant 98-1 dated as of November 6, 1998 between
	CyberCash, Inc. and First USA Bank (18)                                                           
|        | 4.15 |                         |  | Form of Warrant 98-2 dated as of November 6, 1998 between
	CyberCash, Inc. and First USA Bank (19)                                                           
|        | 4.16 |                         |  | Form of Warrant 98-3 dated as of November 6, 1998 between
	CyberCash, Inc. and First USA Bank (20)                                                           
|        | 4.17 |                         |  | Form of Subscription Agreement between the Company and certain of
	 its directors (21)                                                                       
|        | 4.18 |                         |  | Securities Purchase Agreement dated as of January 6, 1999
	between CyberCash, Inc., RGC International Investors, LDC and
	Halifax Fund, L.P. (22)            
|        | 4.19 |                         |  | Registration Rights Agreement dated as of January 6, 1999
	between CyberCash, Inc., RGC International Investors, LDC and
	Halifax Fund, L.P. (23)            
|        | 4.20 |                         |  | Form of Warrant issued to RGC International Investors, LDC and
	Halifax Fund, L.P. (24)                                                                      
|        | 4.21 |                         |  | Stock Purchase Agreement dated August 19, 1999 between
	CyberCash, Inc., RGC International Investors, LDC and Halifax
	Fund, L.P. (25)                       
|        | 4.22 |                         |  | Stock Purchase Warrant dated August 19, 1999 issued to RGC
	Institutional Investors, LDC and Halifax Fund, L.P. (26)                                         
|        | 4.23 |                         |  | Form of Warrant dated as of November 19, 1999 issued to RGC
	International Investors, LDC (27)                                                               

55



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##### Table of Contents



|        |       |                         |  |                                                                                                                                                               
|------- | ----- | ----------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description Of Document
|        |       |                        
|        | 4.24  |                         |  | Form of Subscription Agreement dated November 19, 1999
	between the Company and William N. Melton (28)                                                        
|        | 10.1  |                         |  | Form of Indemnity Agreement entered into between CyberCash, Inc.
	and certain of its directors and executive officers (4) (*)                                 
|        | 10.2  |                         |  | CyberCash, Inc. 1995 Stock Option Plan (4) (*)                                                                                                                
|        | 10.3  |                         |  | Form of Incentive Stock Option (4) (*)                                                                                                                        
|        | 10.4  |                         |  | Form of Performance Stock Option (4) (*)                                                                                                                      
|        | 10.5  |                         |  | Form of Non-Statutory Stock Option (4) (*)                                                                                                                    
|        | 10.6  |                         |  | CyberCash, Inc. Employee Stock Purchase Plan (4) (*)                                                                                                          
|        | 10.7  |                         |  | CyberCash, Inc. Non-Employee Directors Stock Option Plan (4) (*)                                                                                              
|        | 10.8  |                         |  | CyberCash, Inc. 1999 Restricted Stock Plan (29) (*)                                                                                                           
|        | 10.9  |                         |  | Lease dated November 30, 1994 by and between CyberCash, Inc.
	 and Gateway Virginia Properties, Inc. and First Amendment to
	Lease dated November 7, 1995 (30)
|        | 10.10 |                         |  | Second Amendment to Lease dated April 29, 1996 by and
	between CyberCash, Inc. and Gateway Virginia Properties, Inc.
	(31)                                    
|        | 10.11 |                         |  | Sublease dated March 22, 1999 between Computer Associates
	International Inc. and CyberCash, Inc. (32)                                                        
|        | 10.12 |                         |  | Third Amendment to Lease dated June 21, 1999 between
	CyberCash, Inc. and Gateway Virginia Properties, Inc. (33)                                              
|        | 10.13 |                         |  | BSAFE/ TIPEM OEM Master License Agreement, dated September 
	1995, by and between CyberCash, Inc. and RSA Data Security, Inc.
	(34)                           
|        | 10.14 |                         |  | Joint Venture Agreement dated as of May 13, 1997 among
	CyberCash, Inc., CyberCash Japan C.V. and Softbank Corporation
	(35)                                  
|        | 10.15 |                         |  | Software License Agreement dated as of May 13, 1997 between
	CyberCash, Inc. and CyberCash K.K. (36)                                                          
|        | 10.16 |                         |  | Technology License Agreement dated as of December 17, 1997
	between CyberCash, Inc. and CyberCash GmbH (37)                                                   
|        | 10.17 |                         |  | Operating Agreement dated October 15, 1998 between
	CyberCash, Inc. and First USA Bank (38)                                                                   
|        | 10.18 |                         |  | Employment Agreement dated August 26, 1999 between
	CyberCash, Inc. and James J. Condon (*)(39)                                                               
|        | 10.19 |                         |  | Form of Employment Agreement dated December 15, 1999 between
	 CyberCash, Inc. and George C. Pappas. (*)                                                      
|        | 10.20 |                         |  | Form of Employment Agreement dated December 15, 1999 between
	 CyberCash, Inc. and Nancy C. Goldberg. (*)                                                     
|        | 10.21 |                         |  | Form of Option Agreement dated February 1, 2000 between
	CyberCash, Inc. and George C. Pappas. (*)                                                            
|        | 10.22 |                         |  | Form of Option Agreement dated February 1, 2000 between
	CyberCash, Inc. and Nancy C. Goldberg. (*)                                                           
|        | 21.01 |                         |  | Subsidiaries of CyberCash, Inc.                                                                                                                               
|        | 23.1  |                         |  | Consent of Ernst & Young LLP, Independent Auditors                                                                                                            
|        | 27    |                         |  | Financial Data Schedule                                                                                                                                       




| |     |                                                                                                                                                                                      
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Incorporated herein by reference to the same-numbered exhibit to
	the Companys Current Report on Form 8-K filed with the
	 Securities and Exchange Commission on May 1, 1998.       
|
| | (2) | Incorporated herein by reference to Exhibit 2.1 to the
	Companys Registration Statement on Form S-3 (Reg.
	No. 333-83559).                                                          
|
| | (3) | Incorporated herein by reference to Exhibit 3.1(i) to the
	Companys Annual Report on Form 10-K filed with the
	Securities and Exchange Commission March 30, 1999 (the
	1998 10-K).

56



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##### Table of Contents





| |     |                                                                                                                                                                                        
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (4) | Incorporated herein by reference to the same-numbered exhibit to
	the Companys Registration Statement on Form S-1 (Reg.
	No.  33-80725) (the S-1 Registration Statement).           
|
| | (5) | Incorporated herein by reference to Exhibit 3.1 to the
	Companys Current Report on Form 8-K filed with the
	Securities and Exchange Commission on July 2, 1998 (the
	July 1998 8-K).
|
| | (6) | Incorporated herein by reference to Exhibit 4.1 to the
	July 1998 8-K.                                                                                                                 
|
| | (7) | Incorporated herein by reference to Exhibit 4.2(i) to the
	1998 10-K.                                                                                                                  
|
| | (8) | Incorporated by reference to Exhibit 10.13 to the S-1
	Registration Statement.                                                                                                         
|
| | (9) | Incorporated by reference to Exhibit 10.13(i) to the S-1
	Registration Statement.                                                                                                      



|     |                                                                                                                                                                                                        
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Incorporated by reference to Exhibit 10.15 to the
	Companys Annual Report on Form 10-K filed
	March 10, 1997 (the 1996 10-K).                                                                       
|    
|(11) | Incorporated herein by reference to Exhibit 10.3 to the
	Companys Quarterly Report on Form 10-Q filed with the
	Securities and Exchange Commission on August 25, 1997
	(Second Quarter 1997 10-Q).  
|    
|(12) | Incorporated herein by reference to Exhibit 10.4 to the
	Second Quarter 1997 10-Q.                                                                                                                     
|    
|(13) | Incorporated herein by reference to Exhibit 99.3 to the
	Companys Current Report on Form 8-K filed with the
	Securities and Exchange Commission on August 5, 1997 (the
	August 1997 8-K).           
|    
|(14) | Incorporated herein by reference to Exhibit 99.4 to the
	August 1997 8-K.                                                                                                                              
|    
|(15) | Incorporated herein by reference to Exhibit 4.2 to the
	Companys Current Report on Form 8-K filed with the
	Securities and Exchange Commission on February 10, 1998 (the
	 February 1998 8-K).      
|    
|(16) | Incorporated herein by reference to Exhibit 4.3 to the
	February 1998 8-K.                                                                                                                             
|    
|(17) | Incorporated herein by reference to Exhibit 4.4 to the
	February 1998 8-K.                                                                                                                             
|    
|(18) | Incorporated herein by reference to Exhibit 4.1 to the
	Companys Quarterly Report on Form 10-Q filed with the
	Securities and Exchange Commission on November 16, 1998
	(Third Quarter 1998 10-Q).  
|    
|(19) | Incorporated herein by reference to Exhibit 4.2 to the Third
	 Quarter 1998 10-Q.                                                                                                                      
|    
|(20) | Incorporated herein by reference to Exhibit 4.3 to the Third
	 Quarter 1998 10-Q.                                                                                                                      
|    
|(21) | Incorporated herein by reference to Exhibit 10.15 to the
	1998 10-K.                                                                                                                                   
|    
|(22) | Incorporated herein by reference to Exhibit 4.1 to the
	Companys Current Report on Form 8-K filed with the
	Securities and Exchange Commission on January 11, 1999 (the
	January 1999 8-K).         
|    
|(23) | Incorporated herein by reference to Exhibit 4.2 to the
	January 1999 8-K.                                                                                                                              
|    
|(24) | Incorporated herein by reference to Exhibit 4.3 to the
	January 1999 8-K.                                                                                                                              
|    
|(25) | Incorporated herein by reference to Exhibit 4.1 to the
	Companys Current Report on Form 8-K filed with the
	Securities and Exchange Commission on August 23, 1999 (the
	August 1999 8-K).           
|    
|(26) | Incorporated herein by reference to Exhibit 4.2 to the
	August 1999 8-K.                                                                                                                               
|    
|(27) | Incorporated herein by reference to Exhibit 4.1 to the
	Companys Current Report on Form 8-K filed with the
	Securities and Exchange Commission on November 19, 1999 (the
	 November 19, 1999 8-K).  
|    
|(28) | Incorporated herein by reference to Exhibit 99.1 to the
	November 19, 1999 8-K.                                                                                                                        
|    
|(29) | Incorporated by reference to Exhibit 10.8 to the 1998 10-K.                                                                                                                                            
|    
|(30) | Incorporated by reference to Exhibit 10.9 to the S-1
	Registration Statement.                                                                                                                          
|    
|(31) | Incorporated by reference to Exhibit 10.10 to the
	Companys Annual Report on Form 10-K filed with the
	Securities and Exchange Commission on March 10, 1998 (the
	1997 10-K).                       
|    
|(32) | Incorporated herein by reference to Exhibit 10.14 to the
	1998 10-K.                                                                                                                                   
|    
|(33) | Incorporated herein by reference to Exhibit 10.1 to the
	Companys Quarterly Report on Form 10-Q filed with the
	Securities and Exchange Commission on August 16, 1999 (the
	Second Quarter 1999 10-Q).
|    
|(34) | Incorporated by reference to Exhibit 10.14 to the S-1
	Registration Statement.                                                                                                                         
|    
|(35) | Incorporated by reference to Exhibit 10.5 to the Second
	Quarter 1997 10-Q.                                                                                                                            

57



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|     |                                                                                                                                                                                              
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(36) | Incorporated by reference to Exhibit 10.6 to the Second
	Quarter 1997 10-Q.                                                                                                                  
|    
|(37) | Incorporated herein by reference to Exhibit 10.18 to the
	Companys Annual Report on Form 10-K filed with the
	Securities and Exchange Commission on March 31, 1998.                         
|    
|(38) | Incorporated by reference to Exhibit 10.22 to the 1998 10-K.                                                                                                                                 
|    
|(39) | Incorporated by reference to Exhibit 10.1 to the Company
	Quarterly Report on Form 10-Q filed with the Securities and
	Exchange Commission on November 15, 1999 (Third
	Quarter 1999 10-Q).

(*)  Indicates a management compensatory plan, contract or
arrangement.

58