made a "significant but not unexpected loss'' of more than $300,000 during 2000, the company said.

Difficult market conditions for dot-coms and problems with AT&T Global Network were blamed for a poor year for the company.

In July, 2000 BCS said the payment of dividends would be suspended, "until Transact-e-Biz.com is profitable or we decide to refinance the development cost of this new business''.

The company also noted that they anticipated entry into the market at the level noted would cost a minimum of $1.5 million. An initial investment of $450,000 for equipment is only a small part of the total investment to be made.

The company said substantial costs will come from marketing the services to customers around the world, recruiting additional highly skilled technical staff and continual training and certification of staff to ensure they can provide "the very best service and solutions to meet the needs of our global customers''.

The company, in its year-end report to December 31, 2000 said: "The significant but not unexpected loss of $317,903 for the year is, therefore, no surprise for we incurred development costs of $253,052 in 2000, which have been expensed as incurred.

Going gets tough for Transact-e-Biz.com Included in the development costs are interest and rent paid to the parent company amounting to $26,862.'' But delays in negotiating an agreement with AT&T Global Network Services continued throughout the year.

"This segment of Transact's business has consumed a disproportionate amount of management's time and has not been profitable. Transact is investigating alternatives as a result of this challenge.'' It added that Bermuda's fibre-optic links to the US have traditionally been and continue to be expensive, although the Bermuda international carriers have been reducing their price for bandwidth and the cost has fallen.

"We continue to look forward to growth in our core business and to the emergence of new opportunities as the cost of communication to and from Bermuda is reduced,'' it added.

"The business environment in which the company operates was one of exceptional exuberance and tremendous investment in 1999 and early 2000 -- for virtually any business that incorporated the phrase `dot com' as a part of its name. This was followed by disillusionment and in the late fall of 2000 the bubble burst. `Dot-com' stocks crashed and took with them most Internet related businesses and as predicted, many companies have since gone bankrupt as the dot-com companies rapidly burned through millions of dollars in start up capital.'' It added that Bermuda had high hopes of becoming a premier e-commerce site, but said as the year progressed, "it became clear that Bermuda's e-commerce industry would take much longer to develop''.

The company said Transact has been very frugal with its shareholders' resources and while the company's losses in 2000 were significant, "it must be noted that these losses are largely due to the development costs referred to earlier and these costs have not been wasted''.

The company said it has invested in state of the art infrastructure and in staff certification training.

In 2001 Transact said it will focus on its core competencies of hosting, server and storage management and will extensively market its service offerings in Bermuda and abroad.