Codercard, Montana Firm Agree on a Joint Venture

Codercard Inc., which said last month that it was considering selling out to a Montana computer company, said Tuesday that the two companies have agreed instead to form a joint venture to market their products.

Codercard, the Irvine maker of computer security devices, will supply security mechanisms for modems produced by Isometry Inc., a Whitefish, Mont., company that was poised to acquire Codercard in a stock swap.

“We couldn’t reach compatible terms (for the acquisition) and found an alternate way to achieve both our goals,” said Willis Marsing, executive vice president of Codercard.

The joint venture, being organized as CypherCom Inc., expects to be operating in a month, Marsing said, although design, production and federal approval of the company’s product--a new type of computer modem--could take up to a year.

The new modems will be used for transmitting computer data over telephone lines. Their security features are aimed at preventing unauthorized access to the information, Marsing said.

CypherCom is owned 55% by Isometry and 45% by Codercard; each will give up a portion of its stake to attract about $500,000 in start-up capital, he said.

Walter Dickenson III, Isometry’s chief executive officer, will be the new company’s chairman and president. Two members from each of Codercard’s and Isometry’s boards will fill the remaining board seats.

Marsing could not predict how much the joint venture would earn. Codercard will get royalties from CypherCom and a small amount as a consultant to the new company, he said. Isometry will also market other Codercard products.

In March, Codercard received the computer security industry’s first complete stamp of approval from the National Bureau of Standards for a product used to verify electronic fund transfers. About five other companies have received federal approval for different phases of electronic fund-transfer systems, Marsing said.