Codercard Inc., which has struggled for nearly four years to find a market for its sophisticated computer security device, said Tuesday that it is considering an acquisition offer as a means of generating much-needed operating cash.
Codercard said it has begun preliminary discussions with Isometry Inc. of Whitefish, Mont., that could lead to an acquisition in three months. Isometry, whose founder and president formerly worked for Codercard, is a 2-year-old company that is trying to develop a new high-speed telephone data-transmission modem.
The value of the deal, which would be completed through a stock swap, was not revealed.
Under the terms of the proposed acquisition, Isometry would underwrite the costs of Codercard's current operations and provide marketing assistance until the agreement is completed. The deal must be approved by shareholders of both companies.
If the Codercard deal is completed, it would be Isometry's fourth acquisition in the past six months. Since October, the company has acquired a Montana mortgage service company, a Hawaii orchid and tropical plant grower and a Seattle financial services company.
Codercard Executive Vice President Willis Marsing said that if the acquisition is completed, Codercard would remain in Irvine and would expand slightly to take on Isometry's modem development operations. Codercard, which still is waiting for its first big break into the market, currently has a skeletal development and operations staff.
Provides Computer Access
The Codercard device, under development for four years, is a cassette-size card equipped with its own microcomputer, which gives a user appropriate access to a computer. Banks and government agencies have been particularly interested in the device to combat the growing problem of hackers, the vandals and pranksters who break into computer systems electronically to pilfer information.
Despite some intense interest in the security problems caused by hackers, the company has said the market for its devices has been slow to develop. Last month the company received the computer security industry's first complete stamp of approval from the National Bureau of Standards for a Codercard product used to verify electronic fund transfers.