<PAGE>   1

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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-Q

[X]             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

               FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

                                       OR

[ ]             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                        COMMISSION FILE NUMBER: 0-27470

                                CYBERCASH, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                         <C>
                 DELAWARE                         54-1725021
       (STATE OR OTHER JURISDICTION            (I.R.S. EMPLOYER
     OF INCORPORATION OR ORGANIZATION)       IDENTIFICATION NO.)
</TABLE>

                     2100 RESTON PARKWAY, RESTON, VA 20191
          (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)

     REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (703) 620-4200

     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.

                               Yes [X]     No [ ]

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date.

                         Common Stock, $0.001 Par Value
                                    (Class)
                               22,957,701 Shares
                       (Outstanding at November 7, 1999)

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<PAGE>   2

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                        PAGE NO.
                                                                        ---------
<S>       <C>                                                           <C>
PART I    FINANCIAL INFORMATION
Item 1.   Consolidated Financial Statements
          Consolidated Statements of Operations for the three and nine
            months ended September 30, 1999 and 1998..................      3
          Consolidated Balance Sheets as of September 30, 1999 and
            December 31, 1998.........................................      4
          Consolidated Statements of Cash Flows for the nine months
            ended September 30, 1999 and 1998.........................      5
          Notes to Consolidated Financial Statements..................      6
Item 2.   Management's Discussion and Analysis of Financial Conditions
            and Results of Operations.................................      8
Item 3.   Qualitative and Quantitative Market Risk Disclosure.........     12
PART II   OTHER INFORMATION
Item 1.   Legal Proceedings...........................................     13
Item 2.   Changes in Securities.......................................     13
Item 3.   Defaults upon Senior Securities.............................     13
Item 4.   Submission of Matters to a Vote of Security-Holders.........     13
Item 5.   Other Information...........................................     13
Item 6.   Exhibits and Reports on Form 8-K............................     13
Signatures............................................................     15
</TABLE>

                                        2
<PAGE>   3

                        PART I -- FINANCIAL INFORMATION

ITEM I.  CONSOLIDATED FINANCIAL STATEMENTS

                                CYBERCASH, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED           NINE MONTHS ENDED
                                                SEPTEMBER 30,                SEPTEMBER 30,
                                          --------------------------   --------------------------
                                              1999          1998           1999          1998
                                          ------------   -----------   ------------   -----------
<S>                                       <C>            <C>           <C>            <C>
Revenues................................  $  5,099,528   $ 4,522,285   $ 13,991,649     8,169,621
Less: returns and allowances............       107,980       136,014        376,059       198,657
                                          ------------   -----------   ------------   -----------
  Net revenues..........................     4,991,548     4,386,271     13,615,590     7,970,964
Cost of revenues........................     3,059,681     2,438,345      8,222,562     4,760,073
                                          ------------   -----------   ------------   -----------
  Gross profit..........................     1,931,867     1,947,926      5,393,028     3,210,891
Costs and expenses:
  Research and development..............     2,904,705     2,342,087      7,847,419     6,355,774
  Sales and marketing...................     8,785,564     3,469,635     17,695,996    11,241,282
  General and administrative............     2,339,861     1,866,326      6,193,268     5,441,037
  Amortization of intangibles...........     2,234,468     1,936,521      6,107,510     3,227,535
  Restructuring Charge..................            --            --             --       608,755
                                          ------------   -----------   ------------   -----------
Loss from operations....................   (14,332,731)   (7,666,643)   (32,451,165)  (23,663,492)
Interest and other income...............       132,202        45,293        395,412       876,110
Other expense...........................            --       (10,723)            --      (119,776)
Loss from investments...................            --            --     (1,000,000)           --
                                          ------------   -----------   ------------   -----------
Net loss................................  $(14,200,529)  $(7,632,073)  $(33,055,753)  (22,907,158)
                                          ============   ===========   ============   ===========
Net loss per share......................  $      (0.65)  $     (0.51)  $      (1.61)        (1.71)
                                          ============   ===========   ============   ===========
</TABLE>

                            See accompanying notes.

                                        3
<PAGE>   4

                                CYBERCASH, INC.

                          CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                              SEPTEMBER 30,   DECEMBER 31,
                                                                  1999            1998
                                                              -------------   -------------
<S>                                                           <C>             <C>
ASSETS
Current assets:
  Cash and cash equivalents.................................  $  13,406,216   $  10,902,532
  Restricted cash...........................................        354,936         347,733
  Accounts receivable, net..................................      4,317,198       4,661,574
  Prepaid expenses and other current assets.................        936,900         600,024
                                                              -------------   -------------
Total current assets........................................     19,015,250      16,511,863
Property and equipment, net.................................      9,758,403       9,050,162
Investment in affiliates....................................      3,742,947         242,947
Other long-term assets......................................      1,228,148       2,346,184
Intangibles, net............................................     70,655,960      65,173,315
                                                              -------------   -------------
Total assets................................................  $ 104,400,708   $  93,324,471
                                                              =============   =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable..........................................  $   1,628,144   $   2,474,155
  Accrued employee benefits and bonus.......................        747,396       1,432,060
  Other accrued expenses....................................      1,673,064         853,268
  Deferred revenue..........................................      1,516,705         970,783
                                                              -------------   -------------
Total current liabilities...................................      5,565,309       5,730,266
Commitments and contingencies
Stockholders' equity:
  Common Stock, $.001 par value; 25,000,000 shares
     authorized; 22,977,139 shares issued and 22,957,139
     outstanding as of September 30, 1999 and 19,129,622
     shares issued and 19,109,722 outstanding as of December
     31, 1998...............................................         22,977          19,130
  Additional paid-in capital................................    227,618,042     183,265,162
  Accumulated deficit.......................................   (127,936,541)    (94,880,788)
  Treasury stock, at cost, 20,000 shares....................       (120,000)       (120,000)
  Accumulated other comprehensive income....................       (484,091)       (420,750)
  Receivable from sale of Common Stock......................       (264,988)       (267,724)
  Unearned compensatory stock options.......................             --            (825)
                                                              -------------   -------------
Total stockholders' equity..................................     98,835,399      87,594,205
                                                              -------------   -------------
Total liabilities and stockholders' equity..................  $ 104,400,708   $  93,324,471
                                                              =============   =============
</TABLE>

                            See accompanying notes.

                                        4
<PAGE>   5

                                CYBERCASH, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   NINE MONTHS ENDED
                                                                     SEPTEMBER 30,
                                                              ---------------------------
                                                                  1999           1998
                                                              ------------   ------------
<S>                                                           <C>            <C>
OPERATING ACTIVITIES
  Net loss..................................................  $(33,055,753)  $(22,907,158)
  Adjustments to reconcile net loss to net cash used in
     operating
     activities:
     Depreciation...........................................     2,807,096      2,236,376
     Amortization...........................................     6,107,510      3,227,535
     Loss from write-off of investment......................     1,000,000             --
     Expense recognized in association with issuance of
       stock, stock options and warrants....................     1,300,468         83,632
     Loss on disposal of assets.............................       165,007        211,973
     Accrued interest on receivable from sale of Common
       Stock................................................       (11,434)       (23,364)
     Changes in operating assets and liabilities:
       Restricted cash......................................        (7,203)            --
       Accounts receivable..................................       720,589       (499,993)
       Prepaid expenses and other current assets............      (293,839)    (1,962,074)
       Other long-term assets...............................       118,036       (192,572)
       Accounts payable and accrued expenses................      (635,812)     1,878,968
       Deferred revenue.....................................       481,413        186,299
                                                              ------------   ------------
          Net cash used in operating activities.............   (21,303,922)   (17,760,378)
INVESTING ACTIVITIES
  Sales of short-term investments...........................            --      8,779,773
  Acquisitions, net of cash received........................      (634,782)   (15,690,498)
  Investment in affiliates..................................    (3,500,000)    (1,001,972)
  Purchases of property and equipment.......................    (3,564,739)    (5,333,829)
                                                              ------------   ------------
          Net cash used in investing activities.............    (7,699,521)   (13,246,526)
FINANCING ACTIVITIES
  Proceeds from issuance of Preferred Stock.................            --     29,262,372
  Proceeds from issuance of Common Stock....................    29,890,818      3,600,000
  Proceeds from receivable from sale of Common Stock........        14,170        562,890
  Proceeds from the issuance of Common Stock through the
     Employee Stock Purchase Plan...........................       238,840        163,152
  Proceeds from the issuance of Common Stock through the
     Employee Stock Option Plan.............................     1,426,640        690,819
                                                              ------------   ------------
          Net cash provided by financing activities.........    31,570,468     34,279,233
                                                              ------------   ------------
Effect of exchange rates changes on cash and cash
  equivalents...............................................       (63,341)       (91,314)
                                                              ------------   ------------
Net increase/(decrease) in cash and cash equivalents........     2,503,684      3,181,015
Cash and cash equivalents at beginning of period............    10,902,532     13,222,234
                                                              ------------   ------------
Cash and cash equivalents at end of period..................  $ 13,406,216   $ 16,403,249
                                                              ------------   ------------
Supplemental disclosure of non-cash investing and financing
  activities:
Issuance of Common Stock grants to employees................  $    233,919   $         --
                                                              ============   ============
Conversion of Preferred Stock to Common Stock...............  $         --   $ 21,699,835
                                                              ============   ============
Accretion of Stated Value of Preferred Stock................  $         --   $    344,756
                                                              ============   ============
Supplemental disclosure of acquisition activities:
Assets and intangibles acquired.............................  $ 12,739,809   $ 72,489,536
Liabilities.................................................      (163,731)    (1,728,649)
Common stock and stock options..............................   (11,326,496)   (54,230,954)
                                                              ------------   ------------
                                                                 1,249,582     16,529,933
Less: cash received.........................................       614,800        839,435
                                                              ------------   ------------
Cash paid...................................................  $    634,782   $ 15,690,498
                                                              ============   ============
</TABLE>

                            See accompanying notes.
                                        5
<PAGE>   6

                                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 leader in secure,
convenient payment technologies and services, enabling e-commerce across the
entire market spectrum from electronic retailing environments to the Internet.
CyberCash provides 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.

     The accompanying condensed consolidated financial statements and notes
thereto have been prepared in accordance with generally accepted accounting
principles for interim financial information and should be read in conjunction
with the Company's consolidated financial statements found in the Company's Form
10-K. In the opinion of management, all adjustments (consisting only of normal,
recurring adjustments) considered necessary to reflect fairly the Company's
consolidated financial position and consolidated results of operations have been
included. 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 at the
date of the financial statements and the reported amounts of revenues and
expenses for the nine months ended September 30, 1999 and 1998 are not
necessarily indicative of the results for the full year.

2.  FINANCING

     On January 6, 1999 and March 31, 1999, the Company issued in a private
placement 609,756 and 304,878 Units, respectively, each consisting of one share
of the Company's Common Stock and Warrants to purchase 0.75 shares of Common
Stock. The price of each Unit was $16.40, and the net proceeds were
approximately $14,779,000. The initial exercise price of the Warrants are $20.00
per share. If the average closing bid price of the Company's Common Stock over
the 10 trading days preceding January 6, 2000, January 6, 2001 or January 6,
2002 (the "Reset Price") 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 number of shares of Common Stock that can be issued
upon exercise of the Warrants would proportionately increase. The Warrants
issued on January 6, 1999 will expire on January 6, 2004 and the Warrants issued
on March 31, 1999 will expire on March 31, 1999.

     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 must 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. 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 Warrants will expire on August 19,
2004.

3.  ACQUISITION OF 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 $12.7 million, including fees and expenses. The purchase price
included $1.2 million in cash and 1,105,024 shares of CyberCash's Common Stock.
In addition, Tellan shareholders may be entitled to additional cash payments
based upon the

                                        6
<PAGE>   7
                                CYBERCASH, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

achievement of specific milestones estimated at approximately $1.1 million over
the next three years. 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 tentatively allocated to the assets and liabilities
acquired at their estimated fair value as of the date of acquisition. Of the
purchase price, $1.0 million was allocated to Tellan's net assets, $1.8 million
to developed technology and $9.8 million to goodwill. Accumulated amortization
was approximately $298,000 at September 30, 1999.

     The Company's unaudited pro forma consolidated condensed statements of
income for the nine months ended September 30, 1999 and 1998, assuming the
acquisition of Tellan was effected at the beginning of each period, are
summarized as follows:

<TABLE>
<CAPTION>
                                                              FOR THE NINE MONTHS ENDED
                                                                    SEPTEMBER 30,
                                                              --------------------------
                                                                  1999          1998
                                                              ------------   -----------
<S>                                                           <C>            <C>
Revenue.....................................................  $ 15,311,009     9,414,485
Net loss....................................................  $(32,404,124)  (22,785,896)
                                                              ------------   -----------
Net loss available to Common Stockholders...................  $(32,404,124)  (23,381,784)
                                                              ------------   -----------
Weighted average shares outstanding.........................    21,404,984    14,861,890
Basic earnings per share....................................  $      (1.51)        (1.57)
                                                              ------------   -----------
Diluted earnings per share..................................  $      (1.51)        (1.57)
                                                              ------------   -----------
</TABLE>

     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 date
assumed.

4.  NET LOSS PER SHARE

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

<TABLE>
<CAPTION>
                                             THREE MONTHS ENDED            NINE MONTHS ENDED
                                               SEPTEMBER 30,                 SEPTEMBER 30,
                                         --------------------------   ---------------------------
                                             1999          1998           1999           1998
                                         ------------   -----------   ------------   ------------
<S>                                      <C>            <C>           <C>            <C>
Numerator:
Net loss...............................  $(14,200,529)  $(7,632,073)  $(33,055,753)  $(22,907,158)
Accrued dividends to Preferred
  Stockholders.........................            --      (251,132)            --       (595,888)
                                         ------------   -----------   ------------   ------------
Net loss available to Common
  Stockholders.........................  $(14,200,529)  $(7,883,205)  $(33,055,753)  $(23,503,046)
                                         ============   ===========   ============   ============
Denominator:
Weighted average shares outstanding....    21,817,468    15,436,576     20,583,300     13,756,866
Basic earnings per share...............  $      (0.65)  $     (0.51)  $      (1.61)  $      (1.71)
                                         ============   ===========   ============   ============
Diluted earnings per share.............  $      (0.65)  $     (0.51)  $      (1.61)  $      (1.71)
                                         ============   ===========   ============   ============
</TABLE>

                                        7
<PAGE>   8
                                CYBERCASH, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5.  COMPREHENSIVE INCOME

     The components of comprehensive income for the nine months ended September
30, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                             THREE MONTHS ENDED            NINE MONTHS ENDED
                                               SEPTEMBER 30,                 SEPTEMBER 30,
                                         --------------------------   ---------------------------
                                             1999          1998           1999           1998
                                         ------------   -----------   ------------   ------------
<S>                                      <C>            <C>           <C>            <C>
Net loss...............................  $(14,200,529)  $(7,632,073)  $(33,055,753)  $(22,907,158)
Foreign currency translation
  adjustments..........................           224           771        (63,341)       (91,314)
                                         ------------   -----------   ------------   ------------
Comprehensive income...................  $(14,200,305)  $(7,631,302)  $(33,119,094)  $(22,998,472)
                                         ============   ===========   ============   ============
</TABLE>

6.  SEGMENT INFORMATION

     The Company has three reportable segments: Payments and InstaBuy Service
("Service"), Payment Software ("Software") and Consulting Services. During the
third quarter, the Company realigned its primary business segments from
Payments, which included both services and software, and the InstaBuy Service to
consolidate its services offerings into one business segment and to separate out
its software business into its own segment: all amounts herein have been
restated to reflect the realignment. The Company's revenues in the three and
nine months ended September 30, 1999 from each of these segments were $1,838,000
(36%) and $5,640,000 (40%) from Service; $2,936,000 (58%) and $7,674,000 (55%)
from Software; and $325,000 (6%) and $678,000 (5%) from Consulting respectively.

     The Company's revenues in the three and nine months ended September 30,
1998 from each of these segments were $1,802,000 (40%) and $2,852,000 (35%) from
Service; $2,419,000 (53%) and $3,914,000 (48%) from Software; and $301,000 (7%)
and $1,404,000 (17%) from Consulting respectively.

                                        8
<PAGE>   9

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS

     Investors should read the following discussion in conjunction with the
accompanying consolidated financial statements and the notes thereto. Our
reported results for the third quarter of 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, that reflect our current
expectations. The forward-looking statements we make about industry prospects
and our future results of operations or financial position involve risks and
uncertainties. Our actual results could differ significantly. The following
discussion and the section entitled "Risk Factors" in Item 1 of our Annual
Report on Form 10-K for 1998 describe some, but not all, of the factors that
could cause these differences.

OVERVIEW

     Our future operating performance will depend in large part on:

     - the rate of growth of electronic commerce

     - our success in broadening our offerings by adding new products and
       services to assist merchants in growing their businesses

     - our ability to identify, develop, and deliver products 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.

     The market for electronic payment products and services is still new and
changing rapidly. It is not certain that our product and service offerings will
find the widespread market acceptance required to support the level of
investment made in these offerings. Most of the Company's efforts before 1998
were devoted to business development and marketing in preparation for, and
anticipation of, the growth in electronic commerce. Largely, as a result of the
expenses associated with these efforts, operating expenses increased each
quarter through the end of 1996, but they remained constant at approximately
$7.5 million per quarter for the five quarters ended March 31, 1998. Operating
expenses increased to approximately $12.5 million per quarter for the last three
quarters of 1998 and the first three quarters of 1999, largely as a result of
consolidating the operating results of ICVerify and Tellan. In addition, during
the second and third quarter of 1999, the Company invested $5.5 million in total
into a corporate branding campaign. Also, during the first two quarters of 1999,
we made significant investments and/or commitments to expand our service
offerings and the technological infrastructure that supports the growth of our
Payment and InstaBuy Service offerings. Marketing and sales expenditures also
increased, as we focused on increasing our installed base of Internet merchants,
on deploying our InstaBuy service and our corporate branding campaign.

     Electronic commerce appears to have become established, and promises to
continue to grow rapidly. In this environment, our success will depend largely
on our ability to continue to compete successfully in our established service
and software payments business, establish the InstaBuy service, develop new
products and services and market them successfully in a market that is becoming
increasingly competitive.

RESULTS OF OPERATIONS

     Revenues.  Our Services business grew over 40% for the three months ended
September 30, 1999 compared to the three months ended September 30, 1998, not
including a one-time $500,000 licensing payment received in the third quarter
1998 for InstaBuy licensing and increased almost 100% from the nine months ended
September 30, 1999 from the same period in 1998. The growth between each of the
1998 and

                                        9
<PAGE>   10

1999 periods resulted in part from an increase of over 100% in our merchant base
from September 30, 1998, and in part from implementing a new fee structure
during 1998 for our Payment Services.

     Our Software business grew over 20% for the three months ended September
30, 1999 compared to the three months ended September 30, 1998 primarily because
of the inclusion in the Company's consolidated financial statements of sales of
Tellan's software product since July 23, 1999, the date of the Tellan
acquisition. In addition, our Software business increased almost 100% from the
nine months ended September 30, 1998 to the nine months ended September 30,
1999, as a result of including ICVerify software product sales in the Company's
consolidated financial statements for the full nine months of 1999 versus in
1998 when only the sales from the date of acquisition of ICVerify, Inc. of
April, 1998, were included in the Company's financial statements.

     Revenues from our consulting fees on the customization of our services
remained relatively flat between the three months ended September 30, 1998 and
September 30, 1999 and decreased over 50% from the nine months ended September
30, 1998 to the nine months ended September 30, 1999, as we have emphasized the
growth of our Services and Software businesses and de-emphasized customizing
those services for different customers. We anticipate that the revenues from
consulting work will remain a small portion of our overall revenue stream.

     Cost of Revenues.  Cost of revenues consist primarily of cost of operations
to provide transaction processing and customer support, labor costs for the
development work associated with licensing activities, and the manufacturing and
distribution costs of our software products. Cost of revenues increased $622,000
from $2,438,000 for the three months ended September 30, 1998 to $3,060,000 for
the three months ended September 30, 1999 and increased $3,463,000 from
$4,760,000 for the nine months ended September 30, 1998 to $8,223,000 for the
nine months ended September 30, 1999. The increases are primarily a result of
costs incurred to produce and distribute Payment Software and to enlarge and
enhance our customer support operations.

     Research and Development.  Research and development expenses consist
primarily of compensation expense and consulting fees to support the development
of our services and technologies. Research and development expenses increased
$563,000 from $2,342,000 for the three months ended September 30, 1998 to
$2,905,000 for the three months ended September 30, 1999 and increased
$1,491,000 from $6,356,000 for the nine months ended September 30, 1998 to
$7,847,000 for the nine months ended September 30, 1999. This increase was due
in part to the continued focus on developing new technology, including
enhancements of the Agile Wallet technology, the Year 2000 remediation efforts
and in part to the acquisitions of ICVerify and Tellan. We plan to continue to
make significant investments in research and development. We have expensed all
software development costs as incurred, and we will continue to do so until it
can be demonstrated that future benefits may be realized 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 $5,316,000 from $3,470,000 for the three months ended
September 30, 1998 to $8,786,000 for the three months ended September 30, 1999
and increased $6,455,000 from $11,241,000 for the nine months ended September
30, 1998 to $17,696,000 for the nine months ended September 30, 1999. A large
part of the increase was related to a $5.5 million corporate branding campaign
of which $5.0 million was incurred during the third quarter 1999. A large
portion of 1999 sales and marketing expense was related to a multi-media
campaign designed to promote our InstaBuy service. We anticipate that sales and
marketing expenses will continue to be significant.

     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 not attributable to a particular
source of revenue, or type of expense. General and administrative expenses
increased $474,000 from $1,866,000 for the three months ended September 30, 1998
to $2,340,000 for the three months ended September 30, 1999 and increased
$752,000 from $5,441,000 for the nine months ended September 30, 1998 to
$6,193,000 for the nine months ended September 30, 1999. The quarter-to-quarter
increase is primarily related to the compensation expense associated with the
employment contract of the Company's President. We anticipate that general and
administrative expenses will continue to be significant as
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our operations continue to develop and expand, however we do not anticipate that
they will increase significantly.

     Amortization of Intangibles.  The acquisitions of ICVerify and Tellan were
accounted for as purchases. Accordingly, the purchase prices were allocated to
the respective assets and liabilities acquired at their estimated fair value as
of the date of each acquisition. Intangible assets acquired in the acquisitions
are being amortized using the straight-line method over their estimated useful
lives.

     Restructuring Charge.  Restructuring charges consist of severance and other
expenses related to a reduction-in-force of the Company's employee base. In June
1998, the Company reduced the size of its employee base by approximately 20%,
which resulted in costs of $609,000.

     Interest and Other Income.  Interest and other income increased $87,000
from $45,000 for the three months ended September 30, 1998 to $132,000 for the
three months ended September 30, 1999, as a result of investing the funds
received from private placements during 1999. Interest and other income
decreased $481,000 from $876,000 for the nine months ended September 30, 1998 to
$395,000 for the nine months ended September 30, 1999, as a result of carrying
higher cash balances during 1998.

     Loss From Investments.  Loss from investments consists of the adjustment of
the carrying value of an investment in a technology company. During the second
quarter of 1999 this asset was determined to be impaired and was written off
based on the criteria established in Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets Disposed of."

LIQUIDITY AND CAPITAL RESOURCES

     At September 30, 1999, we had cash and cash equivalents of $13,406,000
compared to $10,903,000 at December 31, 1998. The increase of $2,500,000
resulted from a net loss of $33,056,000, offset by net cash proceeds of
$31,570,000 from the private placement and exercise of stock options and stock
purchase through the employee stock purchase plan, by non-cash expenses of
$11,368,000 for depreciation, amortization, expenses related to the issuance of
stock, warrants and options, provision for doubtful accounts and disposal of
property and equipment; and offset by the net inflows from operating activities
and the effect of exchange rates of $320,000. In addition, we had cash outflows
for capital expenditures, investment in affiliates and acquisitions of
$7,700,000.

     In June 1999 we registered for future sale on an as needed basis $60
million in securities pursuant to an unallocated shelf registration. In our
August financing, we sold $15 million of Common Stock and Warrants under that
registration to finance our planned marketing campaign and investment in a
strategic partnership. To fund the future growth of our business, losses from
operations, and possible strategic acquisitions, we may raise up to an
additional $45 million in one or more financings over the next twelve months. We
have conducted preliminary discussions with several institutional investors, and
we believe that we will be able to raise the necessary funds without difficulty,
most likely through the sale of common stock or senior debt securities that are
convertible into common stock.

     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 give
any assurance that we will, in fact, be able to raise additional funds on
desirable terms, or at all. 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. This would be likely to have a material adverse effect on our
business.

YEAR 2000 COMPLIANCE

     We have been actively engaged in examining and taking corrective action to
ensure our readiness for, and to mitigate risks associated with, the year 2000.
The systematic assessment and remediation of year 2000-related issues, measured
against rigorous, consistent and objective standards has been one of our top
objectives in 1999.
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     We have followed an approach adopted by many public reporting companies,
both within and outside the financial service and software industries, for
conducting our year 2000 readiness efforts. The approach identifies
approximately five phases to achieving readiness: awareness, inventory,
assessment, action and contingency planning. By September 30, 1999, we had
substantially completed the first four phases of our year 2000 readiness efforts
and had begun our contingency planning efforts. At this time, all internally
developed software contained in active releases of our products and services
meet our definition of year 2000 compliance. For some previously released
versions of our products and services, we have made available to our customers,
at no charge, new versions or upgrades that are year 2000 compliant. We are
retiring all other versions that are not compliant, and we have published
information on our plans to discontinue those products or services. Our website
(http://www.cybercash.com) provides current information about year 2000 upgrades
for CyberCash and ICVerify products and services, and our definition of year
2000 compliance. Tellan's website (located at http://www.tellan.com) provides
similar information for Tellan's PCAuthorize, WebAuthorize and MacAuthorize
products. We have previously indicated that our direct labor costs for
addressing year 2000 issues would be approximately $500,000, and we have no
reason to believe that our estimate will be exceeded.

     We have completed our assessment of third party software, hardware,
firmware, telecommunications systems, network systems, embedded systems and
other systems to assure that our reliance on these technologies will not result
in year 2000-related interruptions. However, the ultimate performance of some of
our services may depend upon the readiness of third party suppliers and vendors
over whom we have limited or no control. While have worked to determine whether
our vendors' products or services are year 2000 compatible, we cannot ensure
compatibility between our products, services, equipment or computer systems and
those of our suppliers, telecommunications carriers and other vendors.

     We believe we are managing the risk of revenue and customer service
interruption due to the year 2000 threat to immaterial levels. However, existing
industry standards in year 2000 compliance efforts cannot guarantee 100%
accuracy, and there may be issues of which we are not yet aware. Accordingly, we
may experience future uncertainties regarding year 2000 compliance of our
services and products. We cannot assure you that all of our products and
services will be year 2000 compliant before all relevant change-over dates,
including January 1, 2000, January 3, 2000 (the first business day of the year
2000) and February 29, 2000. Nor can we assure you that our currently compliant
products will not contain undetected problems associated with year 2000
compliance. Such problems may result in litigation and/or increased expenses
negatively affecting our future operating results.

ITEM 3.  QUALITATIVE AND QUANTITATIVE MARKET RISK DISCLOSURE

     Not Applicable.

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                                    PART II

                               OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     None.

ITEM 2.  CHANGES IN SECURITIES

     None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     None.

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

     None.

ITEM 5.  OTHER INFORMATION

     None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

        10.1 [Employment Contract between the Company and James J. Condon, dated
             August 20, 1999.]

     (b) Reports on Form 8-K

     On January 11, 1999, the Company filed a Form 8-K, which reported under
items 5 and 7 therein the closing of the first tranche of a private placement of
Units on January 6, 1999.

     On February 5, 1999, the Company filed a Form 8-K/A providing under item 7
therein updated unaudited pro forma financial information for the nine month
period ended September 30, 1998, to amend a Current Report on Form 8-K filed on
May 1, 1998 that reported financial information following the Company's
acquisition of ICVerify.

     On April 6, 1999, the Company filed a Form 8-K, which reported under items
5 and 7 therein the closing the second tranche of a private placement of Units
on March 31, 1999.

     On April 6, 1999, the Company filed a Form 8-K/A providing under item 7
therein updated unaudited pro forma financial information for the year ended
December 31, 1998, to amend a Current Report on Form 8-K filed on May 1, 1998
that reported financial information following the Company's acquisition of
ICVerify.

     On July 6, 1999, the Company filed a Form 8-K, which reported under item 5
therein that it had entered into a definitive agreement on June 29, 1999 to
acquire Tellan Software, Inc..

     On July 29, 1999, the Company filed a Form 8-K, which reported under item 5
therein the closing of the acquisition of Tellan Software, Inc. on July 23,
1999.

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     On August 9, 1999, the Company filed a Form 8-K/A, which reported under
item 2 therein the closing of the acquisition of Tellan.

     On August 19, 1999, the Company filed a Form 8-K to file a legal opinion in
connection with a public offering of securities under the Company's Registration
Statement on Form S-3 (SEC File No. 333-79943).

     On August 23, 1999, the Company filed a Form 8-K, which reported under
items 5 and 7 therein the closing of an offering under the Company's
Registration Statement on Form S-3 (SEC File No. 333-79943) for 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.

     On August 31, 1999, the Company filed a Form 8-K/A, which amended and
restated in its entirety the Form 8-K/A filed on August 9, 1999 to correct
certain minor and inadvertent typographical errors.

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                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                          CYBERCASH, INC.
                                          (Registrant)

                                          /s/ WILLIAM N. MELTON
                                          William N. Melton
                                          Chairman and Chief Executive Officer
Date: November 15, 1999

                                          /s/ JAMES J. CONDON
                                          James J. Condon
                                          President
                                          and Chief Operating Officer
Date: November 15, 1999

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