Applies to -- AXP -- ECNC -- NDC -- SUNW
eConnect Announces First Bank Eyes Only(TM) Purchase via eCashPad CEO Hughes, a Representative of Sun Microsystems, and Others Discuss Commercial Prospects as eConnect Resolves Litigation and Announces Plans For Share Increase, Listing on the NASDAQ or
eConnect Announces First Bank Eyes Only(TM) Purchase via eCashPad
CEO Hughes, a Representative of Sun Microsystems, and Others Discuss
Commercial Prospects as eConnect Resolves Litigation and Announces Plans
For Share Increase, Listing on the NASDAQ or American Stock Exchange
SAN PEDRO, Calif., Oct 31, 2000 /PRNewswire via COMTEX/ -- eConnect (ECNC)
successfully demonstrated the eCashPad, the launch product of its Bank Eyes
Only(TM) system of secure online payment, as shareholders preliminarily approved
an increase in authorized shares at the Company's annual meeting yesterday.
Thomas S. Hughes, founder, chairman and chief executive of eConnect, discussed
the Company's near-term marketing plan in greater detail, along with
representatives of several business partners. The first 5,000 eCashPads are now
being manufactured in Asia, and 10,000 are expected to be available for sale and
distribution to consumers and merchants by the end of November.
"I've been waiting a year for this to happen, and I'm thrilled to be one of the
first to use it," said shareholder Mark Salmanowicz, who swiped his Master Card
and American Express card through a pilot eCashPad, purchasing two golf shirts
in transactions that lasted about 90 seconds each. "It was extremely fast --
there was no delay whatever in processing the transaction," added Mr.
Salmanowicz, of Royal Oak, Michigan.
Although the golf shirts were from the website store of eConnect affiliate
National Data Funding Corp. (NDFC), the transactions confirmed the Bank Eyes
Only(TM) principle, in which the consumer swipes a credit card, bank
ATM-with-PIN card or smart card through the eCashPad. The consumer's financial
information is routed directly to the bank, and is never stored or made visible
to the merchant.
In addition to securing online purchases, the eCashPad, a PC peripheral that is
intended to be registered and traceable, guards the merchant from fraudulent
purchases by proving that a payment card, and not just the account number, was
physically present at the time of the transaction.
"You've seen the eCashPad, it's real, and we're really in this business," Mr.
Hughes told about 150 attendees following the demonstration. The eCashPad will
again be demonstrated at the company's exhibit at Nov. 13-17 COMDEX electronics
show in Las Vegas, which was also described at yesterday's meeting.
Already, the eCashPad and Bank Eyes Only(TM) have attracted the interest of such
Internet forces as Sun Microsystems Inc., which was represented at the meeting.
"The technology that eConnect is putting together with NDFC is something that
Sun is really embracing," said Don Yarter, Account Executive for America's eSun
and Channels Sales Computer Systems. Mr. Yarter added that Sun has possession of
a pilot eCashPad, and is investigating potential applications involving smart
card technology, a field in which Sun is a leader.
Turning to financing matters, Mr. Hughes said, "We have to increase our
authorization of shares, so that we have more funds to work with." According to
a preliminary, nonbinding tally of a small percentage of voting shares,
shareholders favor an increase in authorized common stock to 300 million shares
from 200 million. The preliminary tally also indicated reappointment of the
company's directors: Mr. Hughes, Jack M. Hall, and Laurence B. Donoghue.
(Director Diane Hewitt resigned from the Board earlier this month).
The Company expects the final vote tally to be completed next week.
Mr. Hughes said proceeds from the issue of additional stock would finance future
steps in eConnect's business plan, including its pending acquisition of NDFC,
the Chico, Calif.-based affiliate that will process Bank Eyes Only(TM)
transactions, and will help distribute initial eCashPad shipments. The deadline
for that acquisition has again been extended, to January 2, 2001, said R. Scott
Hatfield, NDFC's executive vice president.
Separately, Mr. Hughes said that applications by two market makers to relist
eConnect on the OTC Bulletin Board are still pending with the National
Association of Securities Dealers. However, he added that should relisting occur
as expected, the Company will immediately apply for listing on the NASDAQ
National Market or the American Stock Exchange. The company considers relisting
on the OTC BB first to be crucial, however, because it believes that shareholder
interest following repricing of the issue by a market maker would generate funds
for acquisitions, and allow expansion of the company's board of directors.
Mr. Hughes added that eConnect has reached an agreement in principle with lead
class counsel for plaintiffs regarding settlement of the consolidated
shareholder litigation. This litigation followed the company's delisting from
the OTC BB last March, as the Securities and Exchange Commission temporarily
halted trading in ECNC shares. Mr. Hughes declined to elaborate.
In other legal matters, he said the Company has ended litigation with its
80%-owned PowerClick Inc. subsidiary, and intends to retain Dominique Einhorn as
its President and Chief Operating Officer for one year following completion of
the acquisition. Referring to allegations made about PowerClick in recent media
reports, Mr. Hughes added, "We found them to be baseless."
Messrs. Hughes and Hatfield, and executives from such partners as iMethods,
Phoenix, reiterated eConnect's immediate focus on signing merchants on to Bank
Eyes Only(TM) as a complement, not a replacement, for their current payment
systems.
In addition to previously announced merchant incentives, eConnect's Artaste.com
art auction subsidiary, which went online earlier this month, is intended as a
demonstration to merchants of the benefits and convenience of Bank Eyes
Only(TM). The Company will discuss this and other developments in greater detail
in the near future.
Safe Harbor: Certain statements in this release may contain forward-looking
information within the meaning of Rule 175 under the Securities Act of 1933 and
Rule 3b-6 under the Securities and Exchange Act of 1934 and are subject to the
safe harbor created under those sections. All statements, other than statements
of fact, included in this release, including, without limitation, statements
regarding potential future plans and objectives of the company, are
forward-looking statements that involve risks and uncertainties. There can be no
assurance that such statements will prove accurate and actual results and future
events could differ materially from those anticipated in such statements.
SOURCE eConnect
CONTACT: Fred Biddle, Member of the Firm, Sitrick And Company,
310-788-2850, for eConnect
URL: econnectholdings.com
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