Cry Me a (Digital) River

Its stock price down to less then $1 a share, Internet recession victim filed for bankruptcy today and said it has
agreed to sell most of its assets to e-commerce enabler Digital River Inc.

Santa Clara, Calif.-based said it was unable to secure additional
capital to strengthen its balance sheet and satisfy its debt obligations.

Eden Prairie, Minn.-based Digital River will pay $3.5 million in cash and
$7.5 million in common stock to for its eStores and Government
Systems Group businesses,
subject to certain escrow and sale restrictions. Digital River is not
assuming any liabilities of other than obligations under the client contracts.

The Chapter 11 filing will enable to maintain operation of its
business during the sale approval process.

“This filing protects the value of’s business, including its
eStores and Government Systems businesses for the benefit of’s
creditors, and will help to ensure that our customers continue to receive
uninterrupted service through the sale process,” said Ron Smith, president
and CEO of

The deal also provides with an earn-out for an additional $1.5
million in Digital River common stock. was in trouble as early as January of 2000, when it lost a CEO,
abandoned retail software sales and refocused on the B2B area. The company began life in 1998 as an Internet “software superstore” called Corp.

Ex-CEO Mark Breier reportedly gained notoriety in 1999 by appearing on TV in
only his boxer shorts to tout the firm’s business, according to Hoover’s

Founded in 1994, Digital River is an e-commerce outsource provider, offering
more than 13,000 companies complete e-commerce systems and services.

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