<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999
COMMISSION FILE NO. 017833
GREENLAND CORPORATION
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
NEVADA 87-0439051
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1935 AVENIDA DEL ORO, SUITE "D"
OCEANSIDE, CA 92056
(Address of principal executive offices)
(760) 414-9941
(Issuer's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[X] YES [ ] NO
Applicable only to corporate issuer.
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
CLASS A COMMON STOCK 25,556,462 SHARES OUTSTANDING
$0.001 PAR VALUE AS OF AUGUST 13, 1999
Transitional small business disclosure format (check one)
YES [ ] NO [X]
1
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GREENLAND CORPORATION
REPORT ON FORM 10-QSB
QUARTER ENDED JUNE 30, 1999
TABLE OF CONTENTS
PART I. Financial Information
ITEM 1. Financial Statements (unaudited)
- Condensed consolidated balance sheets as of June 30, 1999 and December 31,
1998
- Condensed consolidated statement of operations Three months ended June 30,
1999 and 1998
- Condensed consolidated statements of operations Six months ended June 30,
1999 and 1998
- Condensed consolidated statements of changes in stockholders' equity as of
June 30, 1999
- Condensed consolidated statements of cash flows Six months ended June 30,
1999 and 1998
- Notes to condensed consolidated financial statements
ITEM 2. Management's discussion and analysis of financial condition and
results of operations
PART II. Other Information
Signatures
2
<PAGE>
GREENLAND CORPORATION AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
(Unaudited) (Audited)
------------ -----------
<S> <C> <C>
ASSETS
Current Assets
Cash in banks $ 168,380 $ 3,332
Inventory 192,915 0
Accounts receivable - trade 291 0
Accounts receivable - other 134,102 44,250
Prepaid expenses - current portion 98,725 51,668
------------ -----------
TOTAL CURRENT ASSETS 594,413 99,250
Equipment, net of depreciation of $25,019 ($18,453 in 1998) 42,598 24,600
Other Assets
Lease Deposits 7,500 0
Prepaid expenses 51,518 51,669
Notes Receivable (Note 3) 0 1,900,000
Investments (GAHI) (Note 3) 0 1,450,000
Investments (Telenetics) (Note 3) 900,000 0
Capitalized software costs 0 186,723
Licenses - Check Central (Note 4) 2,719,545 2,625,000
------------ -----------
$ 4,315,574 $ 6,337,242
------------ -----------
------------ -----------
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 143,236 $ 172,672
Customer Deposits 120,000 0
Accrued expenses 26,610 0
Notes payable (Note 5) 71,800 150,000
Note payable - related parties (Note 5) 171,500 223,000
Stock subscription escrow account (Note 10) 131,602 11,000
------------ -----------
TOTAL CURRENT LIABILITIES 664,748 556,672
STOCKHOLDERS' EQUITY
Common Stock $.001 par value:
Authorized -100,000,000 shares
Issued and outstanding 24,631,242 shares (12,708,331 in 1998) 24,631 12,708
Additional paid-in capital 14,624,537 12,652,183
Deficit accumulated during development stage (10,998,342) (6,884,321)
------------ -----------
TOTAL STOCKHOLDERS' EQUITY 3,650,826 5,780,570
------------ -----------
$ 4,315,574 $ 6,337,242
------------ -----------
------------ -----------
</TABLE>
3
<PAGE>
GREENLAND CORPORATION AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
7/17/86
Three Months Ended Six Months Ended (Date of
June 30, June 30, inception) to
------------------- ------------------- 6/30/99
1999 1998 1999 1998 -------------
<S> <C> <C> <C> <C> <C>
REVENUES
Check Central Revenue $ 1,866 $ 0 $ 2,464 $ 0 $ 2,464
Other Income 0 4,871 36 5,491 228
--------------------------------------------------------------------------
1,866 4,871 2,500 5,491 2,692
EXPENSES
General and administrative 495,392 1,055,469 1,724,008 1,540,578 2,839,525
Depreciation 3,283 1,518 6,566 3,036 9,849
Interest 7,626 79 26,610 8,529 40,430
Property taxes and other taxes 5,285 30,215 9,009 30,215 4,852
Bad Debts 0 0 19,250 0 19,250
--------------------------------------------------------------------------
511,586 1,087,281 1,785,443 1,582,358 2,913,906
--------------------------------------------------------------------------
LOSS FROM OPERATIONS (509,720) (1,082,410) (1,782,943) (1,576,867) (2,911,214)
OTHER INCOME (LOSS)
Gain on disposition of subsidiary 0 0 0 0 531,388
Gain on sale of investments and PPE 20,394 0 20,394 0 20,394
Loss on sale of investment (Note 3) (0) (437,881) (1,164,750) (437,881) (1,906,775)
Reserve on note receivable - unrealized(Note 3) (1,900,000) 0 (1,900,000) 0 (1,900,000)
--------------------------------------------------------------------------
NET LOSS FROM CONTINUING
OPERATIONS (2,389,326) (1,520,291) (4,827,299) (2,014,748) (6,166,207)
Gain on sale of operations (Note 2) 713,277 0 713,277 10,000 713,277
Loss from discontinued operations (Note 2) 0 0 0 0 (5,545,413)
NET LOSS BEFORE INCOME TAXES (1,676,049) (1,520,291) (4,114,022) (2,004,748) (10,998,343)
PROVISION FOR INCOME TAXES 0 0 0 0 0
--------------------------------------------------------------------------
NET LOSS (1,676,049) (1,520,291) (4,114,022) (2,004,748) (10,998,343)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Loss before discontinued operations $ (0.13) $ (0.33)$ (0.27) $ (0.43)
Gain /(loss) from discontinued operations 0.04 0 0.04 0
NET LOSS PER WEIGHTED $ (0.09) $ (0.33)$ (0.23) $ (0.43)
AVERAGE SHARE
----------------------------------------------------------
----------------------------------------------------------
Weighted average number of common 18,163,279 4,628,757 18,163,279 4,628,757
shares used to compute net income (loss) ----------------------------------------------------------
per weighted average share ----------------------------------------------------------
</TABLE>
4
<PAGE>
GREENLAND CORPORATION AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Common Stock
------------------------------
Par Value $0.001 Additional
------------------------------ Paid - in Retained
Shares Amount Capital Deficit
------------ -------------- --------------- ------------
<S> <C> <C> <C> <C>
Balances at 7/17/86 (date of inception) 0 $ 0 $ 0 $ 0
Issuance of common stock (restricted)
At $.02 per share at 7/17/86 100,000 100 1,900
Net loss for period (1,950)
------------ -------------- -------------- -------------
Balances at 12/31/86 100,000 100 1,900 (1,950)
Net loss for period 10)
------------ -------------- -------------- -------------
Balances at 12/31/87 100,000 100 1,900 (1,960)
Net loss for period 10)
------------ -------------- -------------- -------------
Balances at 12/31/88 100,000 100 1,900 (1,970)
Net loss for period (10)
------------ -------------- -------------- -------------
Balances at 12/31/89 100,000 100 1,900 (1,980)
Net loss for period (10)
------------ -------------- -------------- -------------
Balances at 12/31/90 100,000 100 1,900 (1,990)
Net loss for period (10)
------------ -------------- -------------- -------------
Balances at 12/31/91 100,000 100 1,900 (2,000)
Net loss for period 0
------------ -------------- -------------- -------------
Balances at 12/31/92 100,000 100 1,900 (2,000)
Net loss for period 0
------------ -------------- -------------- -------------
Balances at 12/31/93 100,000 100 1,900 (2,000)
Issuance of common stock (restricted)
at $.33 per share for cash 120,000 120 39,880
to acquire subsidiary at $30.40 per
share at 10/1/94 10,000 10 303,983 (257,612)
to acquire additional rental properties
at $29.20 per share at 10/1/94 52,415 52 1,530,275
at par 10/21/94 for services rendered 13,200 13 119 (110,338)
------------ -------------- -------------- -------------
Net loss for period 295,615 295 1,876,157 (369,950)
Balance at 12/312/94
Issuance of common stock (regulation
S) at $1.00 per share for stock
subscription 110,000 110 109,890
Issuance of common stock (restricted)
at $48.29 per share to cancel debt 2,554 3 123,317
at $.01 per share for services 20,940 21 188
at $.85 per share for assets 850,000 850 718,479
at $20.00 per share for assets 840 1 16,807
at $50.00 per share to cancel debt 2,000 2 99,998
at $51.43 per share to cancel debt 500 0 25,719
at $60.34 per share to land option 40,851 41 2,464,959
Cancellation of restricted common
stock (4,275) (4) (124,825)
Net loss for period (587,153)
------------ -------------- -------------- -------------
Balances at 12/31/95 1,319,025 1,319 5,310,689 (957,103)
</TABLE>
5
<PAGE>
GREENLAND CORPORATION AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Continued)
(Unaudited)
<TABLE>
<CAPTION>
Common Stock
------------------------------
Par Value $0.001 Additional
------------------------------ Paid - in Retained
Shares Amount Capital Deficit
------------ -------------- --------------- ------------
<S> <C> <C> <C> <C>
Balances at 12/31/95 1,319,025 $ 1,319 $ 5,310,689 $ (957,103)
Issuance of common stock (restricted)
correction to issue price of shares
previously sold on subscription (14,195)
at $.001 per share for assets 127,036 127 (127)
at $.001 per share for services 11,886 12 (12)
at $5.00 per share for cash 24,250 24 121,226
at $2.50 per share for cash 143,850 144 359,482
at $20.00 per share for cash 5,450 6 108,994
at $10.00 per share for cash 60 0 600
at $50.00 per share for cash 20 0 1,000
at $30.00 per share for cash 2,800 3 83,997
at $8.17 per share for services 6,000 6 48,994
at $10.68 per share for cash 289 0 3,087
at $7.56 per share for services 450 0 3,401
at $3.10 per share for cash 13,200 13 40,905
Cancellation of restricted common stock (132,870) (133) (459,299) (886,162)
------------ -------------- -------------- -------------
Net loss for year
Balances at 12/31/96 1,521,446 1,521 5,608,742 (1,843,265)
Issuance of common stock (restricted)
at $2.50 per share for cash 88,700 89 221,661
at $2.60 per share for cash 1,500 2 3,898
at $2.83 per share for services 530 1 1,499
at $2.50 per share for services 16,500 16 41,234
at $2.60 per share for services 1,650 2 4,288
at $1.50 per share for cash 200,000 200 299,800
at par $.001 to settle lawsuit 6,138 6 (6)
at $2.50 to settle debt 20 0 50
at $1.00 per share for cash 294,400 294 294,106
at $2.20 per share for services 30,000 30 65,970
at $1.00 per share for services 26,810 27 26,783
at $2.77 per share for services 1,084 1 3,002
S-8 shares at
$2.60 per share for services 70,000 70 181,930
$2.00 per share for services 10,000 10 19,990
$1.00 per share for services 210,000 210 209,790
$.75 per share for services 231,000 231 173,019
Disposition of subsidiary (55,853)
Net loss for year (1,663,040)
------------ -------------- -------------- -------------
Balances at 12/31/97 2,709,778 2,710 7,155,756 (3,562,158)
</TABLE>
6
<PAGE>
GREENLAND CORPORATION AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Continued)
(Unaudited)
<TABLE>
<CAPTION>
Common Stock
------------------------------
Par Value $0.001 Additional
------------------------------ Paid - in Retained
Shares Amount Capital Deficit
-------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
Balances at 12/31/97 2,709,778 $ 2,710 $ 7,155,756 $ (3,562,158)
Issuance of common stock
S-8 shares
$.13 per share for services 1,000,000 1,000 129,000
$.19 per share for services 674,000 674 127,386
$.20 per share for services 300,000 300 59,700
$.275 per share for services 200,000 200 54,800
$.30 per share for services 291,666 292 87,208
$.50 per share for services 246,500 246 123,004
$.60 per share for services 760,000 760 455,240
$.70 per share for services 167,500 167 117,083
$1.00 per share for services 20,000 20 19,980
$1.50 per share for services 96,053 96 143,988
Regulation "S" shares
$.40 per share to retire debenture 500,000 500 199,500
$.50 per share to retire debenture 100,000 100 49,900
$1.00 per share to retire debenture 400,000 400 399,600
Issuance of restricted shares
$.07 per share for services 310,386 310 21,417
$.10 per share for services 20,000 20 180
$.14 per share for services 26,900 27 3,739
$.275 per share for services 115,000 115 31,510
$.295 per share for services 161,028 161 47,342
$.40 per share for services 145,000 145 57,855
$.45 per share for services 35,000 35 15,715
$.50 per share for cash 22,200 22 11,078
$.50 per share for services 208,729 209 104,051
$.75 per share for subsidiary 3,500,000 3,500 2,621,500
$.75 per share for services 350,000 350 262,150
$.85 per share for services 3,000 3 2,547
$1.00 per share for cash 341,300 341 340,959
$2.00 per share for services 2,500 3 4,997
$2.50 per share for services 2,000 2 4,998
Net loss for year (3,322,163)
-------------- --------------- --------------- ----------------
Balances at 12/31/98 12,708,331 12,708 12,652,183 (6,884,321)
Issuance of common stock
S-8 shares
$.08 per share for services 922,761 923 72,898
$.1875 pre share for services 1,352,919 1,353 252.319
$.21 per share for services 850,000 850 177,650
$.22 per share for services 761,110 761 166,683
Restricted shares
$.13 per share for services 380,527 381 49,088
$.15 per share for cash (rounded) 1,449,999 1,450 215,650
$.15 per share for services 980,000 980 146,420
$.19 per share for services 360,000 360 68,040
Net loss for quarter (2,437,973)
-------------- --------------- --------------- ----------------
Balance at 3/31/99 19,765,647 $ 19,766 $ 13,800,931 $ (9,322,294)
Issuance of common stock
S-8 shares
$.145 per share for services 196,055 196 28,231
$.18 per share for services 778,802 779 139,405
$.245 per share for services 363,971 364 88,808
$.26 per share for services 250,000 250 64,750
$.27 per share for services 447,437 447 120,360
Restricted shares
$.08 per share for cash 1,217,330 1217 96,169
$.15 per share for services 657,500 658 97,967
$.198 per share for cash 954,500 954 187,916
Net loss for quarter (1,676,049)
-------------- --------------- --------------- ----------------
Balance at 6/30/99 24,631,242 $ 24,631 $ 14,624,537 $ (10,998,343)
</TABLE>
7
<PAGE>
GREENLAND CORPORATION AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
7/17/86
Six Months Ended (Date of
June 30, inception) to
1999 1998 6/30/99
-------------- -------------- -----------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss $ (4,114,022) $ (2,004,748) $ (10,998,343)
Adjustments to reconcile net loss
to cash provided (required) by operating activities:
Depreciation and amortization 6,566 3,036 589,235
Unrealized decrease in investments/notes receivable 1,900,000 0 2,172,969
Net loss of disposed assets/liabilities 451,473 500,000 1,151,847
Stock issued for services 1,475,921 1,217,884 4,228,368
Changes in operating assets and liabilities:
Inventory (192,915) 0 (192,915)
Accounts receivable (89,852) (1,000) (74,434)
Prepaid expenses (46,906) 0 (149,701)
Prepaid expenses - non cash 46,415 0 46,415
Lease Deposits (7,500) 0 (7,500)
Accounts payable (29,436) 7,864 143,236
Accrued expenses 26,610 (59,743) 37,610
Customer Deposits 120,000 0 120,000
Property taxes payable 0 0 (112,522)
-------------- -------------- -----------------
NET CASH PROVIDED (REQUIRED)
BY OPERATING ACTIVITIES (453,646) (336,707) (3,045,735)
INVESTING ACTIVITIES
Capitalization of software costs 0 0 (186,723)
Purchase of stock 0 0 (55,000)
Purchase of equipment (14,715) (581) (32,854)
Organization cost 0 0 (50)
-------------- -------------- -----------------
NET CASH REQUIRED
BY INVESTING ACTIVITIES (14,715) (581) (274,627)
FINANCING ACTIVITIES
Cash from subsidiary 0 0 23,415
Proceeds from sale of stock 503,356 352,400 2,493,092
Collections of stock subscription 120,602 0 160,602
Amounts borrowed from (repaid to) stockholders (12,349) 0 210,651
Repayment of loans (65,000) (0) (308,818)
Proceeds from new loans 86,800 5,000 909,800
-------------- -------------- -----------------
NET CASH PROVIDED(REQUIRED)
BY FINANCING ACTIVITIES 633,409 357,400 3,488,742
-------------- -------------- -----------------
INCREASE IN CASH
AND CASH EQUIVALENTS 165,048 20,112 168,380
Cash at beginning of period 3,332 6,528 ______
-------------- -------------- -----------------
CASH AND CASH
EQUIVALENTS AT END OF PERIOD $ 168,380 $ 26,640 $ 168,380
-------------- -------------- -----------------
-------------- -------------- -----------------
SUPPLEMENTAL INFORMATION
Cash paid for interest $ 0 $ 79 $ 973,794
Assets acquired by assumption of debt and issuance of stock 0 2,625,000 13,558,790
Cancellation of stock previously issued for
assets determined to be worthless 0 0 459,432
Investment received in exchange for non-cash assets 900,000 0 4,750,000
Net book value of assets exchanged for investment (186,723) 0 (1,598,800)
Land option exchanged for investment 0 0 (2,515,000)
Stock issued to cancel debt 5,000 616,400 917,039
-------------- -------------- -----------------
$ 718,277 $ 3,241,479 $ 16,545,255
-------------- -------------- -----------------
-------------- -------------- -----------------
</TABLE>
8
<PAGE>
GREENLAND CORPORATION
NOTES TO CONDENSED CONSOLIDATED STATEMENTS
QUARTER ENDED JUNE 30, 1999
NOTE 1: BASIS OF PRESENTATION
GENERAL
The accompanying unaudited financial statements have been prepared in accordance
with the instructions to Form 10-QSB. Therefore, they do not include all
information and footnotes necessary for a complete presentation of financial
position, results of operations, cash flows, and stockholders' equity in
conformity with generally accepted accounting principles. Except as disclosed
herein, there has been no material change in the information disclosed in the
notes to the financial statements included in the Company's annual report on
Form 10-KSB for the year ended December 31, 1998. In the opinion of Management,
all adjustments considered necessary for a fair presentation of the results of
operations and financial position have been included, and all such adjustments
are of a normal recurring nature. Operating results for the quarter ended June
30, 1999 are not necessarily indicative of the results that can be expected for
the year ended December 31, 1999.
INVENTORY
The Company evaluates its inventory based on cost and will be using the first
in first out (FIFO) method once inventory becomes production. As of June 30,
1999 inventory consisted of $50,035 in finished goods, $88,214 in work in
progress (WIP) and the balance of $54,666 in component inventory.
NOTE 2: DISCONTINUED OPERATIONS
In December, 1997 the Company disposed of its wholly-owned subsidiary Gam
Properties, Inc. (which was in the real estate rental business). The financial
statements for the period from July 17, 1986 (Date of inception) to June 30,
1999 have been restated to reflect the loss from Gam's operations as resulting
from discontinued operations.
In April 1999, the Company sold its automated meter reading technology
("AMR") to Telenetics Corporation in exchange for shares of Convertible
Preferred Stock of Telenetics with a face value of $900,000. The Company no
longer engaged in this line of business. The financial statements have been
restated.
NOTE 3: INVESTMENTS AND NOTES RECEIVABLE
The Company sold its AMR Technology to Telenetics Corporation, a publicly
traded company, in exchange for shares of Convertible Preferred Stock with a
face value of $900,000 in April 1999. At the time of consummation of this
transaction with Telenetics, the book value of the AMR Technology was
$186,723, thus the Company recorded a gain in the amount of $713,277 as a
result of the transaction.
In April 1999, the Company sold the asset GAHI (Golden Age Homes) to Louis T.
Montulli, Chairman and CEO of Greenland Corporation for cash and assumption
of debt equal to $285,000. The asset was in the form of 290,000 Convertible
Preferred Shares of GAHI, a publicly traded, non-reporting company, which are
convertible to the number of common shares (at the then current market price)
equivalent to $1,450,000. This asset had been evaluated by management and
disposed to obtain working capital for continued operations.
Upon evaluation of the Note Receivable due from Quantix, the Company determined
that it is unlikely that this note would be collected. Although the note is
secured with underlying collateral in the form of Convertible Preferred Shares
of Stock in a publicly traded non-reporting company, which are convertible to
the number of common shares (at the then current market price) equivalent to
$1,900,000, that company's ability to operate as a going concern is
questionable. Therefore, the Company does not believe that said collateral is of
sufficient value to support the amount of the Quantix Note. Accordingly, the
Company has opted for a conservative approach to evaluating this asset and has
established a reserve for 100% of the $1,900,000 note receivable from Quantix.
The Company will continue to evaluate this asset, and in the event a firm
valuation can be established, the Company will record such in their financial
statements.
NOTE 4: LICENSES
In May of 1998, the Company acquired 100% of Check Central, Inc. (a Nevada
corporation) by issuing 3,500,000 shares of its common stock. The sole assets of
Check Central, Inc. was a license to use certain software in the development of
check cashing machines. The transaction was accounted for as a purchase and
recorded at the fair market value of the stock issued. During the second
quarter, additional shares were issued to certain original shareholders of Check
Central reflecting an adjustment to the consideration paid in connection with
the purchase of Check Central by Greenland Corporation. These shares have a
value equal to $94,545 and are considered part of the total consideration paid
by Greenland for acquisition of Check Central. The Company will amortize this
software license based on unit sales once machines are shipped into the field.
9
<PAGE>
GREENLAND CORPORATION
NOTES TO CONDENSED CONSOLIDATED STATEMENTS
QUARTER ENDED JUNE 30, 1999 (CONTINUED)
NOTE 5: NOTES PAYABLE
Notes payable at June 30, 1999 are summarized as follows:
Individuals: $71,800
Related Parties: $95,000
The Company increased its obligations to lenders by $86,800 during the six
months ending June 30, 1999. Of this amount, $35,000 was received from
related parties and the balance from outside investors. However, the Company
also repaid note obligations during this time frame equal to $216,500. These
repayments were made with stock and the sale of assets, not working capital.
As additional inducement to persons to loan money to the Company, certain
warrants were promised but were not issued until after the close of the
second quarter (See Subsequent Events).
NOTE 6: INCOME TAXES
No income tax benefit has been recorded in the Company's consolidated statements
of operations as all net deferred tax assets are reduced by a valuation
allowance. As time passes, management will be better able to assess the amount
of tax benefit the Company will realize from using net operating loss
carryforwards.
NOTE 7: CONTINGENICIES
On or about June 11, 1999 Hwa Sook Shin commenced a legal action in the San
Diego Superior Court against Greenland Corporation. The action arises in
connection with a loan made by Ms. Shin to the Company on or about August 1998.
Ms. Shin seeks repayment of her loan in the amount of $125,000 plus interest and
other costs. Although there can be no assurance as to the outcome of this
matter, the Company believes that it has valid defenses to the claims of Ms.
Shin and in the event Ms. Shin is successful in the pursuit of her claim, any
judgment awarded to Ms. Shin would not have a material adverse impact on the
operations of the Company.
NOTE 8: REVERSE STOCK SPLIT
The Company effected a 1:10 reverse stock split on July 2, 1998. All
references to stock prices, and numbers of shares in these financial
statements have been adjusted to reflect the reverse split as if it were
effective on the earliest date reported.
NOTE 9: SUBSEQUENT EVENTS
Officers and Directors of the Company and a relative of Louis T. Montulli
have loaned the Company a total of $70,000 and $25,000 respectively, as of
June 30, 1999 as unsecured bridge loans (the "Affiliate Loans"). The
Affiliate Loans provide for repayment one year from date of issuance at an
interest rate of 8% and are unsecured. In addition, these persons purchased
warrants to acquire, in the aggregate of 1,266,666 shares of Common Stock of
Greenland. The Warrants have an exercise period of two years and 50% of the
Warrants are exercisable at $.10 and 50% at $.13. The Warrants were issued
subsequent to the close of the second quarter.
Certain individuals who are not affiliates of the Company have loaned the
Company $71,800 as of June 30, 1999 as secured bridge loans (the "Non-Affiliate
Loans"). The Non-Affiliate Loans provide for repayment one year from date of
issuance at an interest rate of 8% and are secured by the assets of the Company.
In addition, these persons also purchased warrants to acquire, in the aggregate
958,000 shares of Common Stock of Greenland. The Warrants have an exercise
period of two years and 50% of the Warrants are exercisable at $.10 and 50% at
$.13. The Warrants were issued subsequent to the close of the second quarter.
NOTE 10: PRIVATE PLACEMENT
In May 1999 the Company commenced a private placement of its securities pursuant
to Regulation D Rule 506 of the Securities Act of 1933, as amended. If fully
subscribed the offering will provide approximately $4,000,000 of equity funding
to the Company, exclusive of proceeds payable to the Company through the
exercise of the warrants that are part of the offering. As of June 30, 1999, the
Company has collected approximately $179,000 in funds related to this private
placement. In addition, there was at June 30, 1999 $131,602 held in the stock
subscription escrow account scheduled to be released shortly.
10
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Quarterly Report contains forward looking statements which involve risk
and uncertainties Forward-looking statements include, without limitation, any
statement that may predict, indicate or imply future results, performance or
achievements and may contain the words "believe," "expect," "anticipate,"
"estimate," "project," "will be," "will continue" or words or phrases of
similar meaning. Forward-looking statements involve risks and uncertainties
which may cause actual results to differ materially from the forward-looking
statements. Such risks and uncertainties include, but are not limited to
risks associated with completing product development; commercial use of check
cashing machines; product repairs; consumer acceptance; need for additional
financing; manufacturing risks; dependence on suppliers; dependence on
distributors; rapid technological changes; dependence on key personnel;
compliance with state laws; risks of technical problems or product defects;
dependence on proprietary technology and other factors detailed in the
Company's reports filed with the Securities and Exchange Commission.
INTRODUCTION
The following discussion pertains to the Company's operations and financial
condition as of the end of the second quarter June 30, 1999.
In May of 1998,the Company purchased the exclusive rights to all of Check
Central Inc's., software and hardware designs for the expressed intent of
completing the development and marketing of a stand-alone Check Cashing ATM
unit. Check Central's technology was acquired through an exchange of all the
issued and outstanding stock of Check Central, Inc. for 35,000,000 (pre-reverse
split) restricted shares of the Company's common stock valued at $2,625,000.
In late 1998, after completion of further market and engineering studies, the
Company determined that a significant amount of additional capital and a
substantial commitment of labor resources would be required to complete
research and development of AMR. Since the Company was making rapid progress
with the Check Cashing ATM and believed that it would be faster to market,
took less resources and offered a greater financial potential for the
Company, a strategic decision was made to pursue the development of the
Company's Check Cashing ATM on a full resource basis. Therefore, the Company
entered into a transaction, on April 5, 1999, with Telenetics Corporation,
whereby Telenetics acquired the advanced communication technology known as
automated meter reading ("AMR") in exchange for shares of Convertible
Preferred Stock of Telenetics with a face value of $900,000 (the "Preferred
Stock"). The conditions for conversion of the Preferred Stock include: (i)
liquidation preference which provides for the receipt of $7 per share from
the assets of Telenetics for each share of the Preferred Stock in the event
of liquidation, dissolution, or winding up by Telenetics (ii) voluntary
conversion into shares of common stock of Telenetics at $7 per share for each
share of the Preferred Stock if converted prior to October 2, 2000 OR in the
event the Preferred Stock is converted subsequent to October 2, 2000, it
shall convert into shares of common stock of Telenetics at the lesser of
$7.00 per share or the fair market value of the common stock of Telenetics at
the time of conversion, for each share of the Preferred Stock.
As a result of the sale of AMR, the Company is engaged exclusively in the
development of proprietary software and hardware that is capable of providing
consumers with automated payroll check cashing, ATM and money order services
delivered through a free standing kiosk, similar to an ATM machine (the "Check
Cashing ATM").
PLAN OF OPERATION
The Company has invested, and continues to invest, considerable time and
effort in development of Check Cashing ATMs, assembling a development team,
analyzing the market, planning the business, creating prototype and beta test
units, and locating reliable manufacturers for the Check Cashing ATMs. The
Company's strategy for marketing and sales of the Check Cashing ATMs has been
directed at locating an established large, national distributor of ATM
machines. The Company believes that stablished distributors have the
infrastructure in place to sell, service and maintain a large volume of
machines and are best equipped to penetrate the market quickly and
efficiently. This strategy allows the Company to concentrate its resources on
doing what it does best, develop reliable, efficient products.
The Company successfully implemented this strategy by consummating a Master
Distributor Agreement with SmartCash ATM, Ltd. a Dallas; Texas based national
distributor on March 30, 1999.This agreement requires SmartCash ATM to purchase
385 units (a purchase order for these units totaling $9.2 million was received
upon execution of the agreement) for 1999, 1,200 units for the year 2000 and
2,000 units for the year 2001 in order to maintain their exclusivity. The
Company has scheduled shipment of Check Cashing ATMs commencing in September and
firm contracts for 90 machines as of July 30, 1999 against the purchase order
for 385 machines previously issued by SmartCash ATM in March 1999. The initial
machines will be installed in California and subsequent machines in Nevada,
North Carolina, South Carolina, Tennessee and Georgia.
11
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The Company anticipates that its current number of personnel, 25 (including
employees and consultants) will double by the end of the calendar year and
that significant capital will be spent for the continued development of the
technology, marketing and administration.
The Company anticipates that its working capital needs through the end of
this calendar year will be met through a combination of proceeds from the
offering of its securities in a private placement pursuant to Regulation D
Rule 506 of the Securities Act of 1933, as amended (See Note 10) and revenues
from the sale of the Check-Cashing ATM's. There can be no assurance the
Company will receive additional proceeds from the private placement. The
Company will also pursue additional sources of capital including, lines of
credit, purchase order financing (See Liquidity and Capital Resources).
RESULTS OF OPERATIONS
Revenue - The Company reported net revenue of $1,866 for the second quarter
ending June 30, 1999. The revenue is credited to the two beta units that were
placed in the field in late January and early March respectively. The Company
expects higher revenue from these "company owned" machines in the future since
their purpose during the beta phase was testing the functionality of the machine
and not to attempt maximization of revenue generation.
Operations - The Company continues to fund its operations for the development
and deployment of Check Cashing ATM. The two beta units and the one
demonstration unit were financed primarily from funds received from equity
private placements.
The Company spent further resources during the second quarter continuing to
build the infrastructure necessary to support not only the research and
development effort but laying the ground work for the various support groups
that will be required for successful transition from a development stage
company to a complete manufacturing, marketing and service organization. The
Company believes that it has successfully blended both employee and
consultant based infrastructure that is comprised of mechanical and design
engineers, software engineers, back-end support personnel, with payroll check
cashing experience, and financial support personnel. This organization will
be critical to the successful ramp-up of production scheduled for the third
quarter of 1999.
Check Central has a fully certified set of subcontractors, suppliers and
assemblers to build machines to meet the Company's requirements. To ensure
its ability to meet future production schedules and gear for increased
output, the Company has engaged in discussion with major ATM machine
manufacturers who have expressed an interest in becoming turnkey
manufacturing partners.
EXPENSES
General and Administrative expenses for the quarter ended June 30, 1999 were
$495,392 compared with $988,210 for 1998 and $1,724,008 for the six months
period ended June 30, 1999 compared to $1,540,578 for 1998. The major reason
for the decrease in G&A for the quarter ended June 30, 1999 was due directly
to costs savings relative to the procurement of inventory instead of product
development. Also, the Company has aggressively pursued increasing its
full-time personnel instead of hiring various consultants. This has reduced
the overhead significantly and the Company continues to actively recruit
knowledgeable staff.
Depreciation, interest, property taxes and other expenses decreased from $31,812
for June 30, 1998 to $16,194 for the second quarter ending June 30, 1999. This
is attributed to a significant decrease in Property and Other Taxes related to
investments previously held by Greenland.
Income (Loss) - During the second quarter ending June 30, 1999, the Company had
losses of $2,389,326 compared to losses of $1,520,291 for the previous year's
quarter ending June 30th. The majority of the loss for the second quarter ending
June 30, 1999 was the recording of a reserve for $1,900,000 against the Quantix
note. It is the position of management that at this time the collection of this
note is not likely and that the underlying asset pledged as collateral, not only
does not support full valuation but may in fact be of virtually no value.
Therefore, the Company has chosen the most conservative approach and has
reserved 100% of this asset until such time as the Quantix note is either
repaid, deemed uncollectable and/or the underlying asset pledged as collateral
is appraised.
LIQUIDITY AND CAPITAL RESOURCES
The year ending December 31, 1998 assets totaled $6,337,242 versus $4,315,574
for the second quarter 1999. The difference is the loss on the sale of the GAHI
asset of $1,164,750 and the reserve of the Quantix Note for $1,900,000. These
two items, however, were offset by the gain on the sale of AMR to Telenetics for
$900,000 in April 1999. The Company's total liabilities decreased slightly for
the second quarter 1999 compared with the year ending December 31, 1998 due to
the fact that the company continues to pay outstanding obligations and adhere to
strict budgetary guidelines with respect to purchases.
The Company reevaluates its assets on an on-going basis to determine the most
effective use and benefit to the Company in relation to the Company's
operations needs. Based on this review, the Company intends to either sell or
leverage the assets for liquidity to support the Company's capital
requirements.
12
<PAGE>
Stockholder's equity was $3,650,826 at June 30, 1999, a decrease of $2,129,744
from December 31, 1998 due in large part to the sale of GAHI and the reserve of
the Quantix Note.
The Company has a working capital deficiency of $(70,335) at June 30, 1999
and a retained deficit of $(10,998,342). The working capital deficiency has
been reduced from December 31, 1998 due to additional funds provided to the
Company from the private placement offering pursuant to Regulation D Rule 506
of the Securities Act of 1933, as amended (the "Private Placement"). The
Company's needs for working capital is a key issue for management and
necessary for the Company to meet its goals and objectives. The Company
continues to pursue additional capitalization through the private placement
and other activities in order to raise funds for ongoing operations,
including institutional lending, lines of credit, purchase order financing
and the sale of or financing of its assets. On May 4, 1999 the Company
commenced the Private Placement and if fully subscribed, the offering will
provide approximately $4,000,000 of equity funding to the Company, exclusive
of proceeds payable to the Company through the exercise of the warrants that
are part of the offering. As of June 30, 1999 the Company has received
approximately $179,000 in proceeds from the offering.
YEAR 2000 COMPLIANCE
The year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs or hardware that have date-sensitive software or embedded
chips may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.
The Company's plan to resolve the Year 2000 Issue involves the following four
phases: assessment, remediation, testing, and implementation. To date, the
Company has fully completed its assessment of all systems that could be
significantly affected by the Year 2000. The completed assessment indicated that
most of the Company's significant information technology systems could be
affected, particularly the general ledger, billing, and inventory systems. That
assessment also indicated that software and hardware (embedded chips) used in
production and manufacturing systems (hereafter also referred to as operating
equipment) also are at risk. Affected systems include automated assembly lines
and related robotic technologies used in various aspects of the manufacturing
process. However, based on a review of its product line, the Company has
determined that most of the products it will sell do not require remediation to
be Year 2000 compliant. Accordingly, the Company does not believe that the Year
2000 presents a material exposure as it relates to the Company's products. In
addition, the Company has gathered information about the Year 2000 compliance
status of its significant suppliers and subcontractors and continues to monitor
their compliance.
Management of the Company believes it has an effective program in place to
resolve the Year 2000 issue in a timely manner. As noted above, the Company has
not yet completed all necessary phases of the Year 2000 program. In the event
that the Company does not complete any additional phases, the Company would be
unable to take customer orders, manufacture and ship products, invoice customers
or collect payments. In addition, disruptions in the economy generally resulting
from Year 2000 issues could also materially adversely affect the Company. The
Company could be subject to litigation for computer systems product failure, for
example, equipment shutdown or failure to properly date business records. The
amount of potential liability and lost revenue cannot be reasonably estimated at
this time.
SUBSEQUENT EVENTS
Subsequent to June 30, 1999 the Company accepted the resignation of it Chief
Operating Officer, Richard Wray as both COO and Director of the Company. Richard
Wray will continue to act as a consultant to Greenland as he pursues other
opportunities.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
On or about June 11, 1999 Hwa Sook Shin commenced a legal action in the San
Diego Superior Court against Greenland Corporation. The action arises in
connection with a loan made by Ms. Shin to the Company on or about August 1998.
Ms. Shin seeks repayment of her loan in the amount of $125,000 plus interest and
other costs. The Company filed an answer on or about July 12, 1999. Although
there can be no assurance as to the outcome of this matter, the Company believes
that it has a valid defense to the claims of Ms. Shin and in the event Ms. Shin
is successful in the pursuit of her claim, any judgment awarded to Ms. Shin
would not have a material adverse impact on the operations of the Company. The
Company is not involved in any other litigation that would have a material
adverse effect on the Company.
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ITEM 2 - CHANGES IN SECURITIES
In connection with the Company's private placement of its securities pursuant to
Regulation D Rule 506 of the Securities Act of 1933, as amended, the Company
issued 954,500 shares of common stock of Greenland. These shares are not
registered and are deemed to be "Restricted" as that term is defined under Rule
144 of the Securities Act of 1933. The common stock was issued in reliance on
the exemption from registration pursuant to Section 4(2) of the Securities
Act and Regulation D promulgated thereunder. Written representations were
obtained from the purchasers and legends were placed upon the certificates
issued in connection therewith
ITEM 3 - DEFAULTS ON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTER TO VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - Master Distributor Agreement between Check
Central, Inc., and Smartcash ATM, Ltd.
(b) Reports on Form 8-K
None
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Greenland Corporation
Date: August 13, 1999 By: /s/ Lee R. Swanson
------------------------------
Lee R. Swanson
Chief Financial Officer, Director
Date: August 13, 1999 By: /s/ Thomas J. Beener
-------------------------------
Thomas J. Beener
Secretary, Director
Date: August 13, 1999 By: /s/ Louis T. Montulli
-------------------------------
Louis T. Montulli
CEO, Chairman of Board
14
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CHECK CENTRAL, INC.
7084 MIRAMAR ROAD
SAN DIEGO, CA 92121
(619) 566-9604
MASTER DISTRIBUTOR AGREEMENT
This Independent Distributor Agreement (the "Agreement") is entered
into effective as of March 30, 1999 by and between Check Central, Inc.
(hereinafter "CCI") a Nevada Corporation and, and SMARTCASH ATM, LTD., an
Independent Distributor (hereinafter "Distributor"), a Nevada Limited Liability
Company with reference to the following recitals of essential facts.
RECITALS
A. CCI is engaged in the manufacture, assembly and sales of that certain
product more particularly described on Exhibit A attached hereto and
incorporated by reference herein (the "Product" or the "Machine") and
accessories, special parts and replacement parts and software and
programming for such Product which are used in connection with such
Product;
B. Distributor represents and warrants itself to be experienced in
marketing, sales and the management of a sales force.
C. CCI desires to retain the services of Distributor, for the duration of
this Agreement and in accordance with the following terms and
conditions, to sell, lease and place Product and Services,
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES AND CONDITIONS
REFERENCED HEREIN, THE PARTIES AGREE THAT THE FOLLOWING TERMS AND CONDITIONS
SHALL GOVERN THE RELATIONSHIP OF THE PARTIES AND THE SALE, LEASE AND PLACEMENT
OF THE PRODUCTS AS FOLLOWS:
AGREEMENT
I. CONTRACT TERM AND TERMINATION
A. This Agreement shall commence on the date executed by both
parties, shall continue thereafter in effect for a period of
three (3) years, subject to the provisions of Paragraph III,
or until terminated by either party for cause pursuant to the
terms of Paragraph B below. In the event of termination other
than for cause, all compensation due to Distributor hereunder,
including Residual Compensation (as that term is defined in
Article IV below) shall continue to be paid to Distributor in
a timely manner provided Distributor shall not be found to be
in breach of any terms of this Agreement.
B. Termination for cause shall include, but is not limited to,
the following:
Page 1 of 16
<PAGE>
1. In the event either party fails to pay all amounts
due the other in accordance with the terms of this
Agreement,
2. In the event either party materially breaches the
terms of this Agreement,
3. In the event either party becomes or is declared
insolvent, becomes subject to a voluntary or
involuntary bankruptcy or similar proceeding, or
makes an assignment for the benefit of all or
substantially all of its creditors; in such case it
is the responsibility of Distributor to notify CCI
should any of the aforementioned occur. Failure to
notify CCI shall constitute a material breach of this
Agreement.
4. Distributor misrepresents any CCI Product or Service
to third parties.
CURE PERIOD
In the event a Party commits an act set forth above
(the "Breach")(the "Breaching Party"), the other
party (the "Non-breaching Party") may terminate this
Agreement provided that the Non-Breaching Party
notifies the Breaching Party of the Breach and the
Breaching Party fails to cure the Breach within sixty
days from receipt of said notice.
II. INDEPENDENT CONTRACTOR STATUS
A. Distributor shall at times be an independent contractor under
this Agreement. Except as expressly set forth herein,
Distributor is not authorized to act on behalf of CCI, act in
a manner that would indicate or imply, or represent itself to
be an officer, agent, employee, or representative of CCI.
B. CCI is not authorized to act on behalf of Distributor, act in
a manner that would indicate or imply, or represent itself to
be an officer, agent, employee, or representative of
Distributor.
C. Except as provided in Paragraph XXIV, Distributor agrees to
pay all of its own expenses, such as, but not limited to, all
operating expenses including rent, telephone, transportation,
entertainment, business cards, brochures, and other expenses
necessary to operate Distributors business.
D. Distributor concedes and recognizes the exclusive rights of
CCI in and to, and shall have no right or license in, the
trade names Check Central, Inc and the trademarks and trade
name used with or affixed to any Product, including OneCash
and any subsequently acquired trade names and/or trademarks.
Notwithstanding the foregoing, CCI shall license Distributor
to use trademarks in advertising the Products and Services
upon receipt of prior written approval from CCI. CCI shall
provide Distributor with written instructions as to the proper
use and display of said trademarks and trade names.
Page 2 of 16
<PAGE>
E. During the term of this Agreement, Distributor and
Distributor's agents are authorized to use the phrase
"Independent CCI Distributor" in connection with the sale,
advertisement, and promotion of Products and Services and not
in connection with any other aspect of Distributors business.
Distributor shall conduct its business solely under
Distributor's own name except for purposes of complying with
the Networks' rules and requirements for Independent Sales
Organization Sponsorship. Nothing herein shall give
Distributor or wholesale customers of Distributor any Interest
or license in such phrase and the right to use such phrase
shall immediately cease upon termination or cancellation of
this Agreement. Distributor specifically agrees to reimburse
CCI for any reasonable losses it may suffer in the event
Distributor uses the above name(s) and/or phrase in a
fraudulent or deceptive manner which in turn causes ant third
party to make a claim against CCI.
F. If Distributor has employees, Distributor shall maintain
workman's compensation insurance for its employees. In
addition, Distributor, at its sole cost and expense, shall
maintain no less than $1,000,000 in personal injury liability
and $1,000,000 property damage insurance upon any vehicle used
by Distributor and shall purchase and maintain during the term
of this Agreement comprehensive general liability insurance,
including product liability coverage, with combined single
limits of $1,000,000 or its equivalent. CCI must be named in
such policies as an additional insured and shall be furnished
with a copy of such policies or certificates of insurance.
Additionally, the policy shall contain a provision that it
cannot be canceled except upon ten- (10) day's prior written
notice to CCI.
III. APPOINTMENT EXCLUSIVE
A. Distributor shall remain the exclusive distributor, provided
Distributor meets the performance requirements below, for a
term of three years. In the event Distributor meets the
monthly performance requirements during each of the three
years, Distributor shall have an option to extend the term of
the Agreement for additional one-year terms subject to minimum
performance standards as follows: the performance standard for
each one year extension shall be an amount that is equal to
the greater of (i) a 20% increase from the prior years
performance or (ii) a 20% increase from the number of orders
actually placed by Distributor during the prior year. Provided
that in the year 2001 if Distributor in good faith determines
that the minimum performance standards are unacceptable, then
the Parties agree that they will commence good faith
negotiations to resolve the dispute. In the event the Parties
cannot reach agreement and Distributor does not exercise its
option to extend this Agreement for an additional year term,
this Agreement shall convert to a non-exclusive distribution
agreement and shall be cancelable upon 60 days notice by
either party. However, Distributor shall for a one year period
from the date that this Agreement reverts to non-exclusive
have the right of first refusal to become the exclusive
distributor on terms and conditions equal to those offered by
a party and accepted by CCI.
Page 3 of 16
<PAGE>
In the event Distributor fails to meet a performance
requirement in a particular month (the "Breach Month") said
failure shall constitute default of the Distribution Agreement
(the "Default"). Provided, however, if the total number of
orders placed by Distributor for the Breach Month and the two
subsequent months equal or exceed the performance requirements
established for said three months then the Default shall be
deemed to be cured and the Distribution Agreement shall remain
exclusive. In the event the Default is not cured, then the
Distribution Agreement shall revert to a non-exclusive
agreement as of the end of the cure period for the applicable
month in which Distributor failed to meet the performance
standard and may be cancelable upon sixty days notice by
either party. In addition, if Distributor has met or exceeded
his aggregate performance requirements for the prior six
months, including any individual Breach Months, Distributor
will not be deemed to be in Default.
Notwithstanding anything to the contrary contained herein,
Distributor and CCI hereby agree that the performance
standards established for the months of April, May, June, July
and August 1999 were agreed upon as a result of good faith
efforts by both parties to arrived at a standard that is in
the mutual interests of both CCI and Distributor based on
their mutual desire to form an on-going business relationship.
CCI and Distributor agree that said standard is a good faith
estimate based on a combination of factors including,
Distributor's ability to sell the Product, CCI's ability to
deliver the Product , CCI's ability to provide applicable
performance and market data and the acceptability of the
Product in the market. Distributor and CCI agree that in the
event said performance standards are determined to be
unachievable that the parties will in good faith negotiate an
appropriate adjustment to said standards to facilitate the
continuation of the business relationship and avoid a default
by Distributor or CCI for failure to cure the Default. In the
event the Parties cannot agree to the adjustment to said
standards, the dispute will be submitted to arbitration in San
Diego County, California with the American Arbitration
Association or such other nationally recognized association.
The Parties agree that the decision of the arbitrator will be
a final and binding upon the Parties determination and each
party will be responsible for their own fees, expenses and
costs.
B. PERFORMANCE STANDARD Distributor shall, to retain the
exclusivity of the distributorship, meet the following
performance standards: (a) 1999; issue a firm purchase order,
with the signing of the Definitive Agreement, for 385 Machines
with the following release dates; By April 30, 20 Machines; By
May 31, 40 Machines; and June through November 45 and December
55 Machines (b) 2000; 65 Machines for January and February; 75
Machines for March and April; 90 Machines for May and June;
120 Machines for July and August; 125 Machines for September,
October, November and December (c) 2001; 150 Machines for
January, February, March and April; 175 Machines for May,
June, July, August, September, October, November and December.
The terms for the purchase of Machines are: 50% down for 1999
and 25% down for 2000 and 2001 with purchase order; delivery
within 60 days of purchase order, balance paid COD with
delivery and shipments made FOB CCI shipping facility.
Page 4 of 16
<PAGE>
Distributor agrees that the 20 of the Machines to be purchased
in April 1999 will be placed in suitable locations in Southern
California. DELETED
C. PRICE Distributor shall purchase the Machines at the Wholesale
Price, which is currently $24,000 and Distributor may resell
the Machines at a price determined by Distributor to be
reasonable and appropriate to achieve maximum market
penetration. CCI recommends that a retail price for a Machine
be established at $32,000. CCI agrees the Wholesale Price will
be adjusted on a periodic basis to reflect reasonable changes
in Greenland's costs related to the manufacture/production of
the Machine.
D. EXCLUSIVE PROCESSOR. Distributor may, subject to agreement of
terms and conditions between CCI and Distributor, which will
include Distributor meeting the performance standards set
forth in B above, become the exclusive processor for CCI.
E. VAULT CASH. Distributor shall have the option but neither
party shall have the obligation to supply vault cash for the
Machines, subject to mutually acceptable terms and conditions.
F. SERVICE & INSTALLATION. Distributor may, subject to mutually
acceptable terms and conditions which will include
Distributors obligation to meet the performance standards set
forth in B above, have the exclusive right to provide service
and installation for the Machine.
G. DIRECT CORPORATE SALES. CCI may engage in direct corporate
sales of the Machines (the "Direct Corporate Sales") where and
if modifications to hardware and/or software are required by
the customer or when the sale is a result of direct corporate
contact by a chain or retail entity with more that 100
locations. No sales shall be made from corporate as a direct
sale through a distributor or ISO. If Direct Corporate Sales
are made, CCI sale's price shall not be less than the
Wholesale Price established by CCI for sales to Distributor,
plus 5%. If Direct Corporate sales are made CCI shall pay to
Distributor a fee equal 5% of the gross sales price of the
Machines sold by CCI and 5% of CCI's monthly revenue sharing
related to said sales. Machines sold, as part of a Direct
Corporate sale shall be counted as part of Distributors sales
performance requirements. Notwithstanding the foregoing,
unless otherwise agreed to by both Parties, CCI will not sell
direct to any accounts that were initially contacted by
Distributor or one of his distributor/representatives or that
call CCI due to advertising placed by Distributor. Distributor
and CCI hereby agree that CCI may sell directly to: ACE Check
Cashing, Air Touch and Seahorse Enterprises, Inc. and/or its
affiliates and said sales will not be counted as part of
Distributor's sales performance, but CCI will pay to
Distributor 5% of gross sales price of the Machines sold and
5% of CCI's monthly revenue sharing.
IV. COMPENSATION OF DISTRIBUTOR
Page 5 of 16
<PAGE>
A. BASIC COMPENSATION. Distributor shall be compensated for its
services under this Agreement as follows. Distributor may
purchase the Products from CCI or place the Products with a
third party on behalf of CCI, under the pricing arrangement
set forth on "Schedule 1" hereto. The pricing list (but not
the Residual Compensation, discussed below) may be amended
from time to time by CCI, upon provision to Distributor of
sixty (60) day's prior written notice. When Products are sold
by Distributor above the Distributor price set forth in
"Schedule 1" or Paragraph IIIC, Distributor shall keep the
difference as compensation. pricing information is the
confidential property of CCI and shall be for the internal use
of the Distributor only. At all times for the duration of this
Agreement, Distributor shall be considered and designated by
CCI as a Distributor, for purposes of computing prices and
Transaction Rebate percentages as set forth in "Schedule 1".
B. RESIDUAL COMPENSATION. Distributor acknowledges that CCI shall
receive an after sale fee of 1% of the face value of the check
cashed, $.10 per money order purchased and $.08 at the
interchange fee on each ATM transaction processed on each
machine, provided that no third party distributor is involved
and $.05 in the event a third party distributor is involved.
An additional .2% of the face value of each check shall be
reserved for purposes of providing .1% to the point of sale
agent and .1% to Distributor. As other services are added
(including but not limited to; bill paying; payday loan; etc.)
CCI and Distributor shall negotiate fees in good faith.
Distributor and CCI agree that revenue sharing may need to
change from time to time in order to remain competitive in the
market. If either party requests a change to the revenue
sharing the Parties agree to re-negotiate in good faith
according to the current market pricing. In the event the
Parties cannot agree to the adjustment to the revenue sharing,
the dispute will be submitted to arbitration in San Diego
County, California with the American Arbitration Association
or such other nationally recognized association. The Parties
agree that the decision of the arbitrator's determination will
be a final and binding upon the Parties and each party will be
responsible for their own fees, expenses and costs.
C. Other Compensation Any other compensation shall be as
described and set forth In "Schedule 1" hereto and/or
Paragraph III G.
D. In no event shall any other fees or expenses be paid to
Distributor except as specifically provided in "Schedule I"
hereto and/or Paragraph IIIG.
V. SCOPE OF AGREEMENT
Distributor's exclusive territory shall include the entire United
States and Canada.
VI. OBLIGATIONS OF DISTRIBUTOR AND CCI
A. Distributor agrees to use its best efforts in the promotion,
sale and placement of the Products and Services and to devote
such time as necessary to market The Products consistent with
good business ethics, and in a manner that will reflect
favorably on CCI and on the good will and reputation of CCI.
Page 6 of 16
<PAGE>
B. Distributor agrees to provide all tools, hire and/or contract
personnel, and otherwise provide whatever is necessary to
market the Products and Services.
C. Distributor agrees at all times to refrain from engaging in
any illegal, unfair or deceptive trade practices or unethical
business practices whatsoever, whether with respect to CCI or
otherwise.
D. Distributor agrees to adopt and maintain the high level of
quality and customer service that CCI has established.
E. Distributor agrees to ensure that all payments and documents
required by CCI for the sale or placement of its Products are
properly executed and forwarded to CCI.
F. Distributor agrees to provide CCI with all of the information
requested in the Independent Distributor Registration form
attached hereto as "Schedule 2". Distributor also agrees to
update the information requested by "Schedule 2" immediately
upon any change to such information. Distributor specifically
agrees to ensure that the list of sales people who will be
selling or placing CCI Products shall be kept current at all
times.
H. Distributor shall not knowingly make any misrepresentation
regarding any of the Products and/or services provided by CCI.
I. Distributor shall acquire and maintain a valid business
license, business address and telephone for receiving
inquiries about, or fulfilling orders for the Products made
available by CCI.
J. CCI shall: (i) supply a Machine that is fit for use for the
purpose intended with a one year warranty as described in
Paragraph XX A. (ii) pay amount due Distributor promptly,
(iii) process checks and money orders in a timely manner, (iv)
guarantee bad debt as related to checks cashed, unless
otherwise agreed (v) comply with applicable local, state and
federal regulations, (vi) maintain adequate insurance to
conduct its operations (vii) implement and maintain proper
reporting procedures and supply appropriate reports to
Distributor.
VII. COVENANT NOT TO COMPETE
During the period of this Agreement, and for twelve (12) months
following the termination of this Agreement for any reason, Distributor
agrees not to promote or sell any of the Products or other similar
self-service check cashing kiosk in the capacity of manufacturer,
Distributor, dealer, lessor. Locator to any clients and/or customers of
CCI, any prospects with whom CCI is negotiating, or any prospects that
Distributor has solicited during the term of this Agreement.
Distributor will use CCI exclusively for the Products sold, leased or
placed by its company during the term of this Agreement. Distributor
shall not solicit any CCI clients or customers concerning the sale of
the Product or other similar self-service check cashing kiosk sold by
Distributor under this Agreement. Any exceptions to this Covenant Not
to
Page 7 of 16
<PAGE>
Compete must be attached to this Agreement as Schedule 3 and
approved by a CCI officer. Notwithstanding the forgoing, Distributor
shall be released from its obligation not to compete in the event that
CCCI has been found to have committed an act that validates this
Agreement being terminated for cause by Distributor.
VIII. INDEMNIFICATION/HOLD HARMLESS
A. Distributor shall indemnity, hold harmless, and defend, at its
sole cost and expense, CCI against and from any and all
claims, actions, proceedings, damages, liabilities, losses,
fines, penalties, expenses, attorneys fees and all other
associated costs arising out of, or related in any manner
whatsoever to Distributor's, its agent's or employee's real or
alleged wrongful, acts or omissions (whether tortuous or
contractual) in connection with the sale or placement of the
Products.
B. CCI shall indemnity, hold harmless, and defend, at its sole
cost and expense, Distributor against and from any and all
claims, actions, proceedings, damages, liabilities, losses,
fines, penalties, expenses, attorneys fees and all other
associated costs arising out of, or related in any manner
whatsoever to CCI's, its agent's or employee's real or alleged
wrongful, acts or omissions (whether tortuous or contractual)
in connection with the sale or placement of the Products.
IX. COVENANT NOT TO DISCLOSE
A. Distributor, during the terms of this Agreement, shall have
access to and become familiar with various trade secretes and
confidential information of CCI including but not limited to,
customer contracts, customer lists, customer prospect lists,
invoices, customer requirements, sales procedures, research
data, design data, marketing and pricing information and data,
marketing plans, financial information of CCI and/or its
customers, and other technical, marketing and/or business
information. This information shall collectively be referred
to as the "Confidential Information" of CCI and Distributor
recognizes and acknowledges that this Confidential Information
gives CCI a competitive advantage in the industry. Distributor
agrees that it shall not use in any way or discloses to any
person or entity any of CCI's Confidential Information, either
directly or indirectly, either during the term of this
Agreement or at any time thereafter, except ad required in the
course of its services under this Agreement. Distributor shall
further take reasonable precautions and act in such manner as
to ensure against unauthorized disclosure or use of the
Confidential Information. Such information shall be promptly
delivered to CCI (without Distributor retaining copies) upon
termination of this Agreement.
B. CCI, during the terms of this Agreement, shall have access to
and become familiar with various trade secretes and
confidential information of Distributor including but not
limited to, customer contracts, customer lists, customer
prospect lists, invoices, customer requirements, sales
procedures, research data, design data, marketing and pricing
information and data, marketing plans, financial information
of Distributor and/or its customers, and other
Page 8 of 16
<PAGE>
technical, marketing and/or business information. This
information shall collectively be referred to as the
"Confidential Information" of Distributor and CCI
recognizes and acknowledges that this Confidential
Information gives Distributor a competitive advantage in
the industry. CCI agrees that it shall not use in any way
or discloses to any person or entity any of Distributor's
Confidential Information, either directly or indirectly,
either during the term of this Agreement or at any time
thereafter, except ad required in the course of its
services under this Agreement. CCI shall further take
reasonable precautions and act in such manner as to ensure
against unauthorized disclosure or use of the Confidential
Information. Such information shall be promptly delivered
to Distributor (without CCI retaining copies) upon
termination of this Agreement.
C. The Parties recognize and acknowledge that the remedy at law
for a breach by either party of any covenants contained in
this Section IX shall be inadequate, and each party agrees
that the other party in addition to all remedies each may
have, shall have the right to injunctive relief to enforce the
provisions of this Agreement if there is such a breach or
threatened breach.
X. NO GUARANTEES OR REPRESENTATIONS MADE BY CCI
Distributor understands and agrees that:
A. Neither CCI or any agent, employee or representative of CCI
have made any guarantees, representations, or promises
concerning the income, gross or net revenues which can or
might be realized by Distributor under this Agreement. The
success of Distributor under this Agreement is entirely
dependent upon Distributor's own business, marketing and
managerial skills.
B. The Agreement does not constitute an Agreement for a joint
venture, partnership, investment interest, franchise or any
relationship other than that of Independent Contractor for
CCI.
Notwithstanding the forgoing, CCI represents that it is a corporation duly
organized and validly existing under the laws of the State of Nevada and is in
good standing under such laws. CCI has all requisite corporate power and
authority to own lease and operate its properties and assets and to carry on its
business as presently conducted. CCI is qualified to do business as a foreign
corporation and is in good standing in California. CCI has all requisite
corporate right, power and authority to execute and deliver this Agreement and
all agreements related hereto and to consummate the transactions contemplated
hereby.
XI. CHOICE OF LAW/FORUM
A. This Agreement has been entered into, executed, and shall be
construed in accordance with the laws of the State of
California.
Page 9 of 16
<PAGE>
B. In the event of a dispute concerning this Agreement, the
parties agree that any proceeding for resolving such dispute
shall occur in the County of San Diego, State of California.
XIII. ATTORNEY FEES FOR PREVAILING PARTY
In any action at law or in equity, including an action for declaratory
relief, the prevailing party shall be entitled to an award of
reasonable attorney fees in addition to other awards resulting from the
dispute.
XIV. PURCHASE ORDERS
A. Purchase orders, which must be on a CCI approved form, from
Distributor are subject to written acceptance by CCI and must
incorporate this Agreement by reference. CCI shall have no
obligation under a purchase order placed under this Agreement
until such written acceptance is dispatched to Distributor by
CCI. All purchase orders will be deemed accepted by CCI if no
objection in writing is received within one week of submission
by Distributor. Any change to a previously accepted purchase
order, as of the date changed, will be treated as a new
purchase order submitted for acceptance by CCI. Purchase
orders and confirmation by FAX may be accepted by both
parties.
B. In the event Distributor is late in the payment of any
invoice, CCI may charge interest AT THE RATE OF 1% PER MONTH
and/or discontinue shipments and/or place Distributor on a COD
or prepayment basis.
XV. DISTRIBUTORS RIGHT TO SUBLICENSE
Distributor is authorized and has the right to enter into sublicensing
agreements and/or distribution agreements with third parties provided
that said agreements contain the essential terms and conditions of this
Agreement as they relate to the protection of the rights of CCI,
including but not limited to: confidentiality requirements, payment
terms and conditions, and obligations of Distributor. The sublicense's
and distributors shall be listed on the Registration Form attached as
Schedule 2.
XVI. CANCELLATION AND RESCHEDULING OF ORDERS
CCI and Distributor recognize that the calculation of damages resulting
from cancellation or rescheduling of an order would be difficult to
determine. Accordingly, the parties agree upon the following schedule
of charges pursuant to which CCI will accept cancellation of
rescheduling of any order from Distributor.
A. CANCELLATION: Distributor may cancel in whole or in part any
order previously accepted by CCI, providing that Distributor
reimburses CCI for any expenses
Page 10 of 16
<PAGE>
incurred by CCI in connection with such order and
cancellation. Notwithstanding the foregoing, in the event
cancellation by Distributor is due to delay or defective
product on the part of CCI, Distributor will pay no fees,
charges or expenses whatsoever.
B. RESCHEDULING: Distributor may reschedule the shipment date of
any order previously accepted by CCI by not more than thirty
(30) days by giving written notice to CCI received more than
five (5) business days prior to the scheduled shipment date.
CCI will accept any subsequent rescheduling of the same order
by written notice to CCI received more than five (5) business
days prior to the scheduled shipment date only if accompanied
by payment of any expenses incurred by CCI in connection with
such rescheduling.
XVII. DELIVERY
A. Delivery for all Products will be F.O.B. from CCI's staging
warehouse or the manufacturer, as appropriate ("Delivery").
CCI shall not be liable for any delay in Delivery unless such
delay is due to the acts or omissions of CCI.
B. Prices are F.0 B.. and are exclusive of all taxes and duties.
Distributor shall pay all taxes and duties associated with the
sale of Products and Services, including sales, use, but
exclusive of taxes based on CCI's net income. Any tax or duty
CCI may be required to collect or pay upon the sale or
delivery of Products shall be paid by the Distributor and such
sums shall be due and payable to CCI upon delivery.
XIX. PRODUCT SPECIFICATION CHANGES
CCI reserves the right to make changes in design or
improvements to the Product. CCI agrees that it will consult
with Distributor regarding any such changes and agrees to
coordinate the timing of implementing any such changes with
Distributor. CCI is not obligated to make any such changes to
the Product previously delivered to Distributor.
XX. SOFTWARE PRODUCT LICENSE
Unless otherwise stated, CCI grants Distributor a
nontransferable, non-exclusive license to use its software
programs for the purpose of the operation of the Product with
customers only. The software provided by CCI is subject to the
following provisions:
A. CCI retains title to all software and/or firmware programs.
B. Distributor agrees not to copy, duplicate or otherwise
reproduce, disclose sub-license or sell any CCI-supplied
software and/or firmware program.
XXI. TITLE AND RISK OF LOSS
Page 11 of 16
<PAGE>
Each accepted purchase order constitutes separate sales contract based
on the prices; terms and conditions set forth in this Agreement or as
amended from time to time in accordance with this Agreement. Title to
the Product, parts and components sold under each purchase order and
the risk of loss or damages to the Product will pass from CCI to
Distributor at the time that the Product is properly loaded on a
carrier for shipment.
XXII. PRODUCTS WARRANTY
A. The Product sold by CCI and purchased by Distributor under
this Agreement is covered by CCI's standard warranty, one year
parts and labor (copy to be supplied)("CCI Warranty"). CCI
reserves the right to modify such warranty on prior written
notice to Distributor.
B. In addition to the CCI Warranty, CCI will use reasonable
efforts to obtain and pass through to Distributor's customers
all available warranties obtained from manufacturers of the
Products and/or the components of the Products.
C. EXCEPT AS SPECIFICALLY PROVIDED HEREIN. NO WARRANTIES,
EXPRESSED OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE ARE BEING MADE HEREIN.
CCI NEITHER ASSUMES NOR AUTHORIZES ANY OTHER PERSON TO ASSUME
FOR IT ANY OTHER LIABILITY IN CONNECTION WITH THE SALE,
INSTALLATION OR USE OF THE PRODUCTS. NO REPRESENTATION OR
OTHER AFFIRMATION OF FACT INCLUDING BUT NOT LIMITED TO
STATEMENTS REGARDING CAPACITY, SUITABILITY FOR USE OR
PERFORMANCE OF PRODUCTS, WHETHER MADE BY CCI EMPLOYEES OR
OTHERWISE, WHICH IS NOT CONTAINED HEREIN, SHALL BE DEEMED TO
BE A WARRANTY BY CCI FOR ANY PURPOSE, OR GIVE RISE TO ANY
LIABILITY OF CCI WHATSOEVER.
D. CCI SHALL HAVE NO LIABILITY FOR SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES.
E. Distributor shall not make any other direct or indirect
representations or warranties, expressed or implied on behalf
of CCI. In the event Distributor does make any such
unauthorized representation or warranties, expressed or
implied, in connection with the sale, distribution or handling
of the Product, Distributor shall hold harmless and indemnify
CCI for any expenses (including counsel fees), claims,
damages, settlements or liability of any nature whatsoever
arising out of such unauthorized representation of
Distributor.
XXIII. LIMITATION OF LIABILITY
A. EXCEPT AS EXPRESSLY PROVIDED HEREIN, CCI SHALL NOT BE LIABLE
FOR ANY LOSS OR DAMAGE CLAIMED TO HAVE RESULTED FROM USE,
OPERATION OR PERFORMANCE OF THE PRODUCT AND REGARDLESS OF THE
FORM OF ACTION. [EXCEPT FOR LOSS OR DAMAGE CAUSED BY THE SOLE
GROSS NEGLIGENCE OF CCI.]
Page 12 of 16
<PAGE>
B. IN NO EVENT SHALL CCI BE LIABLE TO DISTRIBUTOR OR ITS END-USER
CUSTOMERS FOR (1) ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES (ii) ANY DAMAGES RESULTING FROM LOSS OF
USE, DATA OR PROFITS, OR (iii) ANY CLAIM, WHETHER IN CONTRACT
OR TORT, THAT AROSE MORE THAN ONE YEAR PRIOR TO INSTITUTION OF
SUIT THEREON, EVEN IF CCI WAS ADVISED, KNEW, OR SHOULD HAVE
KNOWN OF THE POSSIBILITY THEREOF.
C. THE FOREGOING LIMITATIONS ON LIABILITY SHALL BE EFFECTIVE,
EVEN IF THE REMEDIES PROVIDED HEREIN FAIL IN THEIR ESSENTIAL
PURPOSE. [CCI LIABILITY SHALL IN NO EVENT EXCEED THE PURCHASE
PRICE OF THE PRODUCTS PURCHASED.]
XXIV. JOINT MARKETING PROGRAM
CCI and Distributor shall cooperate in establishing a marketing
program and Marketing budget for the marketing and sales of the
Machines, which shall include a minimum of 3 trade shows and other
appropriate events. The parties shall share expenses related to
these activities equally, except for personal travel, which shall be
paid by each party for its own employees. As consideration for the
sharing of expenses, CCI agrees that it will pass to Distributor, on
a weekly basis, inquires it receives regarding distributorships,
licensing arrangements and individual purchase requests for the
Machine and CCI and Distributor agree that any fees Distributor
receives in connection with sub-license agreements or
distributorships (which result from inquiries provided by CCI),
Distributor shall retain the first $10,000 of each sub-license
and/or distributorship fee and the balance of said fees will be
shared equally between CCI and Distributor.
XXV. INSERTION OF SOFTWARE SERVICES
CCI shall have the exclusive right to determine services provided by
the Machine and the exclusive right to add or delete services from
the software menu and Distributor shall have no right to add
services or utilize the soft ware of CCI for any reason whatsoever,
without the prior consent of CCI which may be withheld for any
reason or for no reason; provided, however, in the event CCI
determines in its sole and absolute discretion to utilize a software
and/or a service introduced by Distributor, CCI will negotiate in
good faith a licensing arrangement providing for the utilization of
said software and/or services at that terms such as ownership,
retention, licensing fees, royalties etc.
XXVI. OTHER AGREEMENTS
SITE LOCATION AGREEMENTS (ATTACHED HERETO AS EXHIBIT C)
AGREEMENT WITH RBSA (ATTACHED HERETO AS EXHIBIT D)
Page 13 of 16
<PAGE>
THESE AGREEMENTS WILL BE INCORPORATED BY REFERENCE HEREIN AND MADE A PART OF
THIS AGREEMENT.
XXVII. GENERAL PROVISIONS
A. The parties agree to execute any further documents and
Instruments, which are necessary to effect the substance and
intent of this Agreement.
B. If any part of this Agreement is construed as
unconstitutional, illegal or otherwise invalid by a court of
competent jurisdiction, the invalid part shall in no way
invalidate the effectiveness of the remainder of this
Agreement.
C. This Agreement contains all of the Agreements, representations
and conditions made by and between the parties. None of the
parties shall be liable as a result of reliance upon any
statements or representations not contained in this Agreement,
or which contradict the expressed contractual language of this
Agreement.
D. Each party to this Agreement shall have sole responsibility
for fulfilling its respective commitments and obligations to
the appropriate local, state and federal taxing authorities,
as a result of this Agreement and any payments made or
received hereunder.
E. Notice shall be deemed given (i) when received, if hand
delivered and a receipt is executed or (ii) when receipt is
executed, if given in writing and actually delivered or
deposited in the United States Mail in registered or certified
form with return receipt requested postage paid (iii) or
received on CCI's Corporate Office facsimile machine given
below. All notices shall be given to the notified party at the
address given below. The address for notice may be changed by
notice.
CHECK CENTRAL, INC.
7084 Miramar Road
San Diego, CA 92121
PH#:619-566-9604 FAX#:619-566-9796
H. Each party to this Agreement shall execute all instruments and
documents and take all actions as may be reasonably required
to effectuate this Agreement.
I. For purposes of venue and jurisdiction, this Agreement shall
be deemed made and to be performed in the City of San Diego,
State of California.
J. This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which together shall
constitute one document. The facsimile signatures of the
parties shall be deemed to constitute original signatures, and
facsimile copies hereof shall be deemed to constitute
duplicate original counterparts.
Page 14 of 16
<PAGE>
K. Whenever the context so requires in this Agreement all words
used in the singular shall be construed to have been used in
the plural (and vice versa), each gender shall be construed to
include any other genders, and the word "person" shall be
construed to include a natural person, a corporation, a firm,
a partnership, a joint venture, a trust, an estate, or any
other entity.
L. The provisions of this Agreement shall be valid and
enforceable to the fullest extent permitted by law. If any
provision of this Agreement or the application of such
provision to any person or circumstance shall, to any extent,
be invalid or unenforceable, the remainder of this Agreement,
or the application of such provision to persons or
circumstances other than those as to which it is held invalid
or unenforceable, shall not be affected by such invalidity or
unenforceability, unless such provision or the application of
such provision is essential to the Agreement.
M. This Agreement may be modified only by an agreement in writing
executed by the parties to this Agreement, against whom
enforcement of such modification is sought.
N. This Agreement contains the entire Agreement between the
parties to this Agreement with respect to the subject matter
herein and supersedes all prior understandings, agreements,
representations and warranties, if any, whether oral or
written, express or implied, with respect to said subject
matter.
0. Any waiver of default under this Agreement must be in writing
and shall not be a waiver of any other default concerning the
same or any other provision of this Agreement. No delay or
omission in the exercise OF any rights or remedies shall
impair its right of remedy or be construed as a waiver. A
consent to or approval of any act shall not be deemed to waive
or render unnecessary consent to or approval of any other or
subsequent act.
Page 15 of 16
<PAGE>
P. Each party to this Agreement and its counsel have reviewed and
revised this Agreement. The rule of construction that any
ambiguities are to be resolved against the drafting parties
shall not be employed in the interpretation of this Agreement
or of any amendments or exhibits to this Agreement
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the day and year set forth herein below.
CHECK CENTRAL, INC. SMARTCASH, ATM LTD.
By:________________________ By:_________________________
Signature Signature
Name:______________________ Name:_______________________
(Please print) (Please print)
Title:_____________________ Title:______________________
Date:______________________ Date:_______________________
ATTACHMENTS:
Exhibit A - Products
Exhibit B - Site Location Agreement
Page 16 of 16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Greenland
Corporation June 30, 1999 financial statements and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<CIK> 0000852127
<NAME> GREENLAND CORPORATION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 168,380
<SECURITIES> 0
<RECEIVABLES> 134,393
<ALLOWANCES> 0
<INVENTORY> 192,915
<CURRENT-ASSETS> 594,413
<PP&E> 67,617
<DEPRECIATION> (25,019)
<TOTAL-ASSETS> 4,315,574
<CURRENT-LIABILITIES> 664,748
<BONDS> 0
0
0
<COMMON> 24,631
<OTHER-SE> 3,626,195
<TOTAL-LIABILITY-AND-EQUITY> 4,315,574
<SALES> 1,866
<TOTAL-REVENUES> 1,866
<CGS> 0
<TOTAL-COSTS> 511,586
<OTHER-EXPENSES> 1,879,606
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,626
<INCOME-PRETAX> (1,676,049)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,389,326)
<DISCONTINUED> 713,277
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,676,049)
<EPS-BASIC> (.09)
<EPS-DILUTED> (.09)
</TABLE>
