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ZixIt Announces Results for Second Quarter 2000

DALLAS--(BUSINESS WIRE)--Aug. 4, 2000--ZixIt Corporation (Nasdaq:ZIXI) announced today financial results for the second quarter and six-month period ended June 30, 2000.

The company reported a second quarter net loss of $9,456,000, or $0.58 per share, and a six-month period net loss of $20,592,000, or $1.30 per share, as compared to net losses of $12,370,000, or $0.81 per share, and $14,785,000, or $0.97 per share, respectively, for the corresponding periods in 1999. Included in these net losses are significant non-cash charges for stock-based compensation and depreciation and amortization totaling $10,623,000, or 52% of the net loss for the six-month period ended June 30, 2000, and $8,488,000, or 57% of the net loss for the six-month period ended June 30, 1999.

The company's net working capital position at June 30, 2000, is $56,555,000, including cash and marketable securities of $52,443,000. Net cash used by continuing operations during the first six months of 2000 was $13,010,000, which included pre-payments of $2,500,000 for certain marketing programs related to the second half of 2000. Additionally, during the first six months of 2000, the company made further investments in property and equipment totaling $4,739,000, primarily for additional computer and storage capacity. Further investments for property and equipment in the second half of 2000 are expected to be approximately $2,500,000.

As previously announced, the company completed a private placement of equity securities during the second quarter. In the third quarter of 2000, the company will receive the remaining cash proceeds of approximately $16,000,000 from this private placement, which will strengthen the company's net working capital position.

ZixIt Corporation provides products and services that enhance security, privacy, and convenience for users of the Internet. Principal services include: SecureDelivery.com(TM) -- an Internet secure-messaging portal, and ZixMail(TM) -- a secure document delivery, private email, and message tracking service that enables users worldwide to easily send and receive encrypted and digitally signed communications using their existing email systems and addresses. For further information, visit www.zixit.com or contact investor relations at 214/515-7357. -0-

                           ZIXIT CORPORATION
                     (A Development Stage Company)

            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands, except per share data)
                              (Unaudited)

                            Three Months Ended     Six Months Ended
                           --------------------- ---------------------
                            June 30,   June 30,   June 30,   June 30,
                              2000       1999       2000       1999
                           ---------- ---------- ---------- ----------

Revenues                   $     92   $     --    $    188   $     --
Research and development
 expenses                    (2,205)   (11,334)     (4,416)   (14,065)
Operating costs and general
 corporate expenses          (8,287)    (2,500)    (17,882)    (3,275)
Investment income               636        976       1,210      2,037
                           ---------- ---------- ---------- ----------
Loss from continuing
 operations before income
 taxes                       (9,764)   (12,858)    (20,900)   (15,303)
Income tax benefit               --         90          --        120
                           ---------- ---------- ---------- ----------
Loss from continuing
 operations                  (9,764)   (12,768)    (20,900)   (15,183)
Discontinued operations         308        398         308        398
                           ---------- ---------- ---------- ----------
Net loss                   $ (9,456)  $(12,370)   $(20,592)  $(14,785)
                           ========== ========== ========== ==========


Basic and diluted earnings
 (loss) per common share:
   Continuing operations   $  (0.60)  $  (0.84)   $  (1.32)  $  (1.00)
   Discontinued operations     0.02       0.03        0.02       0.03
                           ---------- ---------- ---------- ----------
   Net loss                $  (0.58)  $  (0.81)   $  (1.30)  $  (0.97)
                           ========== ========== ========== ==========

Weighted average shares
 outstanding                 16,227     15,249      15,832     15,187



                           ZIXIT CORPORATION
                     (A Development Stage Company)

                 CONDENSED CONSOLIDATED BALANCE SHEETS
                            (In thousands)
                              (Unaudited)

                                           June 30,      December 31,
                                             2000           1999
                                        -------------   -------------
ASSETS
 Cash and marketable securities           $  52,443       $  39,784
 Due from sale of discontinued operations        --             581
 Property and equipment, net                 21,866          21,006
 Other assets                                 8,800           5,152
                                        -------------   -------------
                                          $  83,109       $  66,523
                                        =============   =============

LIABILITIES AND STOCKHOLDERS' EQUITY
 Accounts payable and accrued expenses    $   3,179       $   3,629
 Stockholders' equity                        79,930          62,894
                                        -------------   -------------
                                          $  83,109       $  66,523
                                        =============   =============


    CONTACT: Zixit Corporation
             Investor Contact:
             Beverly V. Fuortes, 214/515-7357
             invest@zixit.com
             or
             Press Contact:
             Cindy Lawrence, 212/419-8343
             cindy.lawrence@citigatedr-ny.com