Asia PR News

FREMONT, Calif., July 27 /PRNewswire-AsiaNet/ –

Company Announces Management Additions and Board Changes

ActivCard Corp. (Nasdaq: ACTI) today announced that it has signed an
agreement to acquire Protocom Development Systems Pty. Ltd. Under the terms of
the agreement, ActivCard will make an initial cash payment of $21.0 million and
issue 1.65 million shares of ActivCard common stock to Protocom shareholders.
Additionally, up to 2.1 million shares will be payable on the achievement of an
$18.7 million revenue milestone as set forth in the agreement. The acquisition
is expected to close in the next 10 days.

Positioned for Growth and Leadership
"The acquisition positions ActivCard for strong growth and the ability to
leverage each company’s customers, channels, partners and technology. ActivCard
will capitalize on Protocom’s recognized leadership in enterprise single
sign-on solutions (eSSO)," said Ben C. Barnes, Chief Executive Officer of
ActivCard. Protocom provides its award winning SecureLogin eSSO software to
more than 600 customers globally. "The combination of Protocom with ActivCard’s
trusted identity solutions for enterprises, governments and financial services
institutions positions the Company to become a leader in the digital identity
assurance and credential management market," Mr. Barnes added.

"Today’s announcement goes beyond the joining of two technology leaders,"
said Mr. Barnes. "It’s really a much larger story about two companies with many
complementary strengths and expertise. The acquisition of Protocom provides
ActivCard opportunities for revenue growth, brings needed scale to the Company,
adds to our senior management team, increases operational efficiencies and
accelerates our path to profitability."

Aligned with Industry Leaders
"The acquisition will broaden ActivCard’s reach with leading identity
management partner relationships from both ActivCard and Protocom, such as
Novell, IBM, Microsoft, Sun Microsystems and Hewlett Packard, as well as
leading systems integrators such as Northrop Grumman, Maximus, EDS, Unisys,
Lockheed Martin, Atos Origin and Deloitte," said Mr. Barnes. "We will continue
to serve and grow in the markets of commercial enterprises, government and
financial services worldwide and will extend our reach into healthcare."

Restructuring
ActivCard also announced that it has initiated a plan to restructure the
combined companies in order to take advantage of the complementary operating
models and infrastructures and to drive the combined Company to profitability.
The initial restructuring will include a reduction in force of approximately
13 percent of the total workforce, with the majority of these reductions taking
place in the quarter ending September 30, 2005.

This restructuring is expected to save the combined company approximately
$11.0 million per year in functional expenses. In addition to the reduction in
headcount, the Company expects expense savings from a range of sources
including the elimination of overlapping product development efforts and
technologies, the consolidation of facilities and personnel into more flexible
and lower cost locations, as well as outsourcing certain functions and reducing
overall sales, marketing, general and administrative expenses.

In addition, the Company announced that Thomas Jahn has been appointed to
the new position of Chief Restructuring and Integration Officer to help manage
these initial integration efforts and to ensure that all the financial
objectives and operational efficiency goals of the acquisition and related
restructuring are met. Additionally, Mr. Jahn will be tasked with overseeing
other restructuring activities designed to drive ActivCard to profitability. He
will assist with other expense reduction plans, such as helping to lower fixed
overhead costs, as well as work on a number of process improvements and
efficiency initiatives.

"Mr. Jahn has a strong track record of transforming business functions,
driving change across all facets of an organization and building cost effective
organizations," stated Mr. Barnes. "He is a seasoned executive with a strong
record of success, with significant experience turning around businesses."
Previously, Mr. Jahn worked for IBM, Philip Morris, Raychem and Tyco and has
held CFO, CIO and general management positions. Mr. Jahn will report to Ben C.
Barnes, ActivCard’s Chief Executive Officer and the Board of Directors.

"We are taking decisive steps to build an integrated business with the
financial strength, fiscal integrity, and a strengthened management team, with
the size and scale to support the development of leading identity assurance
solutions with worldwide sales and marketing," said Mr. Barnes. "ActivCard is
taking action to reduce expenses and providing a vision of how the Company can
reach profitability."

Board Change
Jason Hart, Chief Executive Officer of Protocom, will join the Board of
Directors of ActivCard and assume the role of Senior Vice President, Sales and
Marketing, responsible for global sales, marketing, business development and
product management functions, reporting directly to Ben C. Barnes, ActivCard’s
Chief Executive Officer. Yves Audebert will be stepping down from the Board of
Directors, while retaining his position of President and Chief Strategy Officer
of ActivCard. The Board of Directors is now comprised of Chairman Richard A.
Kashnow and Directors Ben C. Barnes, John A. Gordon, Clifford Gundle, Jason
Hart, Montague Koppel, James E. Ousley and Richard White.

Strategic Alternatives
"Over the past two months, the Company took a pragmatic approach in
evaluating options to strategically meet the Company’s goal of profitability,
objectively researching each possibility," said Mr. Barnes. "As part of this
review, we evaluated in detail many aspects of its existing businesses,
including consideration of future capital requirements. The Company also
announced that its Board of Directors is analyzing the utilization of its cash
resources, including implementing a stock repurchase plan, declaring a cash
dividend, or strategic alternatives for increasing shareholder value. The
Company expects to announce its plans once final deliberations are complete,"
Mr. Barnes added.

Outlook
For its fiscal year 2006, beginning October 1, 2005, ActivCard expects
revenue to be in the range of $65.0 million to $75.0 million, gross margins to
be in the range of 68 percent to 73 percent and functional expenses, including
sales and marketing, research and development, and general and administrative,
to be in the range of $57.0 to $60.0 million. "The acquisition and
restructuring provides ActivCard the opportunity to significantly reduce
quarterly cash outlays and move more aggressively toward cash flow break even,"
Mr. Barnes added. As a result of the acquisition and restructuring, ActivCard
expects to record a charge of approximately $1.8 million in the quarter ending
September 30, 2005.

Conference Call
The Company will hold a conference call at 1:30 p.m. Pacific Time today,
July 27, 2005, to discuss the acquisition and restructuring. The call may be
accessed by dialing 1-877-292-2820 domestically or 1-706-679-4390 for
international callers. A live web cast of the conference call will also be
available on the investor relations section of the Company’s website at
www.activcard.com. A replay of the web cast will be available approximately two
hours after the conclusion of the call. An audio replay of the conference call
will also be available approximately one hour after the conclusion of the call.
The audio replay will remain available until August 8, 2005 at 9 pm Pacific
Time and can be accessed by dialing 1-800-642-1687 or 1-706-645-9291 and
referencing code 8170106.

ActivCard’s regularly scheduled fiscal third quarter financial results will
be announced on August 9, 2005.

About ActivCard
ActivCard is a global provider of identity assurance solutions that allow
customers to issue, use and manage trusted digital identities to enable secure
transactions, communication and access to information. ActivCard’s solutions
include secure remote access, single sign-on, enterprise access cards and
multi-channel identification and verification. Globally, over seven million
users at corporations, government agencies and financial institutions use
ActivCard solutions to safely and efficiently interact electronically.
Headquartered in Fremont, California, ActivCard has development centers in the
US, France and the United Kingdom and sales and service centers in more than
nine countries. For more information, visit www.activcard.com.

About Protocom Development Systems
Protocom Development Systems Pty. Ltd. is an award-winning leader in
credential management solutions, recognized by the 2004 Deloitte Technology
Fast 50 Awards as the fastest growing software development firm in Australia.
Protocom develops innovative credential management solutions for governments
and enterprises worldwide. The SecureLogin Credential Management Suite,
consisting of enterprise single sign-on, advanced (strong) authentication and
self-service password reset enhances security, lowers administration costs,
improves employee productivity and assists enterprises with legislative
compliance. Founded in 1989, Protocom is a profitable, privately held company
that was incorporated in 1993. Protocom has Microsoft Gold Certified partner
status and is a member of the Liberty Alliance and OATH Projects. Protocom has
offices in Australia, Europe, North America, South Africa and the United
Kingdom. For further information on the Protocom SecureLogin Credential
Management Suite, visit www.protocom.com, or call +1 800 5813502.

The statements in this press release that are not historical facts are
forward-looking statements that involve risks and uncertainties, including
risks associated with the integration of acquired companies, products and
technologies into our operations, our future operating results, changes in our
management team, changes in our business focus, cost reduction initiatives and
streamlining of our operations, our history of losses, the concentration of our
customer base, our reliance on strategic relationships and other risks
identified in our periodic filings with the United States Securities and
Exchange Commission, including, but not limited to, those appearing under the
caption "Risk Factors" in our most recent Annual Report on Form 10-K and in our
Quarterly Reports on Form 10-Q. Copies of these filings are available from
ActivCard and on the SEC’s website at www.sec.gov. Actual results, events and
performance may differ materially from our forward-looking statements. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. ActivCard disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.

NOTE: ActivCard is a registered trademark in the United States and other
countries. All other trademarks are the property of their respective
owners in the United States and/or other countries.

SOURCE: ActivCard Corp.

CONTACT: Robin Schultz
+1-510-745-6221, rschultz@activcard.com

Ragu Bhargava
+1-510-574-0100, rbhargava@activcard.com

both of ActivCard Corp.

Maria Riley of Sapphire Investor Relations, LLC
+1-415-399-9345, maria@sapphireinvestorrelations.com

for ActivCard Corp.

FCMN Contact:
rschultz@activcard.com

Web site: http://www.protocom.com
http://www.activcard.com

(ACTI)