Mike .. Thread
I'm in ATLB..NTBK..TBFC and been on the prowl
for i-net focused banks or i-net focused financial
services companies with a national footprint ..
and have found 3 more candidates to consider ..
1) EQTX 5.35 mm shs/3.40 mm shs float
has no revenues and $2.00 mm in loses but
has negtiated a merger with First Telebanc Corp
of Baca Raton, Fla. and will be re-named Net1Bank Corp..
EQTX shareholders will hold 45% of new company .. current
market cap 125 mm ..
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Monday April 12, 6:55 am Eastern Time
Company Press Release
SOURCE: Equitex, Inc.
Equitex to Merge With Internet
Focused Bank; Letter of Intent Signed
to Acquire 100 Percent of Net1Bank,
NA
Equitex to Spin-Off Non-Financial Services Assets to Stockholders In Newly
Formed Public Company
ENGLEWOOD, Colo., April 12 /PRNewswire/ -- Equitex, Inc. (Nasdaq: EQTX - news)
announced today that it has signed a letter of intent to merge with Boca Raton, Florida-based First
TeleBanc Corp. The definitive agreement is expected to be signed within 30 days. First TeleBanc
Corp. is the bank holding company for Net1Bank, NA (''Net1Bank'' or the ''Bank'') formerly
known as Boca Raton First National Bank, NA, a nationally chartered bank. Net1Bank's business
plan calls for it to become the premier Internet bank, offering banking related services through low
cost delivery channels including the Internet and the telephone, with access 24-hours-per-day,
seven-days-a-week. Equitex previously announced its acquisition of a 9.9% interest in First
TeleBanc. As a result of the merger, Equitex will change its name to Net1Bank Corp. and will apply
for the ticker symbol NBNK on the Nasdaq Stock Market. The letter of intent, subject to certain
conditions and adjustments, calls for Equitex to acquire all of the outstanding capital stock of
Net1Bank. Under the agreement, the Net1Bank stockholders will receive shares of Equitex
common stock based on the relative value of each company, however, in no case will the existing
stockholders of either company receive less than 45% of the outstanding stock of the resulting entity.
The merger will be subject to the customary regulatory and stockholder approvals.
Equitex also announced today that concurrent with the merger, certain of the current non-financial
services related investment assets of the Company will be spun-off to stockholders in the form of a
newly formed investment company. Plans call for the newly formed company to become a publicly
traded entity.
The hypergrowth of Internet commerce presents an unprecedented opportunity for financial services
companies. It is estimated that more than one third of all U.S. households will be online by the end of
this year and more than half of these will make purchases through the Internet. The number of U.S.
households banking via the Internet is expected to more than double over the next three years from 7
million to over 16 million. Over the same period, it is estimated that online mortgages and credit
cards will capture more than 10% of the market, and the percentage of small businesses conducting
electronic commerce will reach 25%. Worldwide, Internet commerce is projected to more than
double in 1999 to over $68 billion.
Henry Fong, President of Equitex, Inc., said, ''Net1Bank plans to capitalize on the explosive growth
of the Internet for consumers and small businesses by offering superior customer service and a wide
array of quality financial products. This merger will advance the transformation of Equitex into a fully
integrated financial services organization, with the objective of convenient one-stop financial
shopping.'' Equitex's wholly owned subsidiary First TeleServices Corp. (''FTC'') currently offers
fee-based financial products for the sub-prime market. Mr. Fong also stated that, ''the Company
plans to build a substantial base of lifetime loyal customers by effectively managing each client
relationship.''
''The merger with Equitex allows Net1Bank access to the capital markets, which will enable the
realization of our business plan'' said Keith Duffy, Chairman of Net1Bank. ''Net1Bank will become
a leader in electronic banking while generating substantial earnings through its SBA and secured
credit card programs. Without the tremendous overhead of a large branch system, savings can be
passed along to customers in the form of reduced fees, lower loan rates or higher deposit account
rates. The key is providing personalized service along with convenient Internet access, which some
prominent Internet banks seem to have forgotten about. We will also work to promote consumer
confidence regarding privacy and security in online banking.''
''Net1Bank has contracted with a national Internet banking technology company and is in the
process of developing its on-line banking web site, which should be completed by early summer,''
said William Schneider, President and CEO of Net1Bank. ''Customers will be able to initiate
virtually all of their banking transactions online including opening new accounts, obtaining account
information, transferring funds, and paying bills.'' Net1Bank anticipates offering a comprehensive line
of personal and business products including: checking; savings and money market accounts;
certificates of deposit; bill paying; SBA loans; credit cards; mortgage and consumer loans; and
merchant transaction processing services to facilitate e-commerce.
Net1Bank expects to announce its leading edge on-line banking applications during the second
quarter of 1999. The Bank is one of the top Small Business Administration (SBA) lenders in the
Southeastern U.S. with a current pipeline of over $30 million in SBA loans. The guaranteed portion
of SBA loans is generally sold in the secondary market for premiums of approximately 10%.
Net1Bank's SBA program is forecasted to generate $4 million of revenue in 1999. To generate
additional fee-based low credit risk income, Net1Bank also plans to issue secured credit cards and
to eventually become a leading merchant processor for electronic commerce Internet transactions.
First TeleBanc Corp. is a bank holding company regulated by the Federal Reserve Bank of Atlanta,
which owns Net1Bank, National Association, formerly known as Boca Raton First National Bank, a
13-year-old nationally chartered bank based in Boca Raton, Florida.
First TeleServices Corp. of Atlanta, Georgia is a fee-based financial services organization. FTC
operates as a consumer finance company offering a broad array of financial products and services to
the sub-prime consumer market. These products are made available through correspondent
relationships with companies specializing in those business lines, including debt transfer servicing,
debt arbitration, secured credit cards, B and C mortgage loans and sub-prime auto loans. FTC has
developed strategic alliances with a number of nationwide organizations to outsource many of the
products and services it offers.
Equitex, Inc. is a holding company that currently operates through its wholly owned subsidiary, First
TeleServices Corp. of Atlanta, Georgia. First TeleServices Corp. is a financial services marketing
company offering various financial products targeted to the subprime consumer. Equitex also owns
9.9% of First TeleBanc Corp., a single bank holding company which owns Net1Bank, NA based in
Boca Raton, Florida.
Except for the historical information presented herein, the matters set forth in this press release are
forward-looking statements within the meaning of the ''safe-harbor'' provision of the Private
Securities Litigation Act of 1995. These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially. These risks are detailed in the
Company's periodic reports filed with the Securities and Exchange Commission. These
forward-looking statements speak only as of the date hereof. The Company disclaims any intent or
obligation to update these forward-looking statements.
SOURCE: Equitex, Inc.
EOM-----------------------------------------------------------------
Jim in CT .. 2 more coming
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