Here's some news... AND IT'S LONNGGGGGGGGG...
Wednesday May 27, 5:27 pm Eastern Time
Company Press Release
Greenland Corporation Completes Acquisition of Check Central Inc.
Check Cashing/ATM System Will Supplement Company's Metering Technology Efforts
SAN DIEGO--(BUSINESS WIRE)--May 27, 1998--Greenland Corporation (NASDBB:GLCP - news) announced today that it has completed its acquisition of Check Central Inc.
Check Central, a wholly-owned subsidiary of Greenland, has developed proprietary technology to provide automated check cashing, money orders and ATM services from free-standing kiosks in retail locations.
The acquisition of Check Central was an all-stock transaction. Greenland purchased all of the outstanding shares of Check Central for 35,000,000 shares of Greenland restricted common stock; approximately 45% of the total issued and outstanding shares.
''Check Central provides Greenland with access to an important business segment,'' said Eric Gaer, Greenland's chairman and chief executive officer. ''We see considerable synergy between our business plan for utility automation and Check Central's automation of consumer banking, a multi-billion dollar industry.''
Check Central Inc.'s corporate offices will be relocated to Greenland's headquarters in San Diego. It is estimated that the payroll check cashing industry serves over 20% of U.S. households that do not have checking accounts. These households generally pay their bills with cash or money orders.
The June 8, 1998 issue of Fortune features a lengthy discussion of the check cashing industry. Check cashing is variously referred to as the ''working man's bank'' and an important service to ''the unbanked,'' a growing percentage of the American population. The article can be accessed over the Internet at pathfinder.com.
Check Central technology was previously licensed for use by Southland Corp., operator of 7-11 Stores, which is currently rolling out their ''Financial Service Center.''
Check Central machines are designed to be free-standing kiosks in retail locations providing consumers access to many bank services, especially check-cashing. The fees associated with this service exceed $1.5 billion annually.
The core of the system is Check Central's proprietary server technology. This is an on-line check approval system that makes all the check cashing decisions and electronically dispenses the cash for each check transaction. This service, along with the user-friendly design of the retail kiosk, enables automated transaction services, including advanced security features to minimize theft and fraud.
The server technology, ''Central Command,'' has been extensively tested in the retail market. This technology eliminates all responsibility at the store level by providing proprietary software with sophisticated risk management algorithms, digital communication to each branch location, connectivity to major databases and a back-office staff with experienced check cashing personnel. The system makes all check cashing decisions in a real-time environment.
First released in 1995, Central Command is in use in a variety of locations, including the test units in 7-11 stores under a license to ACS, a large ATM network carrier. Check Central products and technologies have been used successfully by five of the top ten banking institutions and three of the five largest convenience store operators in the U.S.
''There are an estimated 40 million people in the U.S. that do not have a checking account with a bank,'' said Mike Marcinko, president of Check Central. ''The advantages of Check Central to the retail market include the presence of a new profit center.''
The company will own and operate a number of machines, paying for retail space and providing some profit-sharing revenues to retailers. Alternatively, the company will sell Check Central systems to retailers and provide service and support in exchange for a percentage of fee revenues.
How It Works
Check Central is provided as a turnkey system to retail locations, owned by the merchant or the company. Cash in each location is provided by a bank service company (vault cash) and accounts are reconciled at Central Command on a daily basis.
Customers access the service initially by filling out a written application, submitted through the Check Central kiosk through a touch-screen monitor. A digital photograph is also taken of the customer for ongoing identification. Once approval is granted, an identification card (with a magnetic strip on the back) is issued and mailed to the customer's home address (required). The approval process includes research of the customer, his employer and any banking relationships (including that of the employer issuing the check). An operator is available by telephone (attached to the Check Central kiosk) to assist with customer service.
In order to access Check Central services, the customer need only follow a few easy steps for self service. All instructions are clearly communicated via the color touch-screen monitor in the kiosk. A series of questions are asked of the customer at each visit, beginning with choice of language: English or Spanish. A photograph of the customer is taken to confirm that the customer is the proper user registered with the system.
The user is then prompted to enter his or her Check Central Check Cashing Card, which is transmitted to Central Command via high-speed ISDN telephone for processing and confirmation. No additional identification is required. He is prompted to endorse the paycheck and insert it into the designated slot in the Check Central kiosk, where it is scanned and transmitted to Central Command. The user is also prompted to indicate whether he or she would like to purchase a money order (to pay bills, etc.). Once the transaction is approved, funds are dispensed by the machine in $20 bills (with the remainder issued as a printed money order for no additional charge). A receipt is provided to the customer for the transaction.
Central Command is responsible for all transaction approvals and back office accounting. The system is reconciled daily. Checks are picked up and deposited and cash is replenished daily. Fees (2% to 3% for each check cashed) are deducted from the check amount when cashed. Money order fees are also deducted. Retailers and/or owners of machines have their accounts reconciled on a weekly basis.
The Market
As the number of consumers without bank services grows, so do the check cashing businesses that cater to them. These consumers generally do not have checking accounts; some do not have any formal banking relationship whatsoever. Bills are generally paid with money orders.
The payroll check cashing industry serves a population that transacts approximately one trillion dollars annually. This market segment is estimated to be as large as 28% of U.S. households. Additionally, there are at least 10 million Americans who receive some form of government payment, but cannot afford bank services, according to the U.S. Treasury Department.
Check cashing businesses (in storefronts) are proliferating. These businesses cash checks for a fee based upon a percentage of the face amount of the check (up to 6%). These businesses have to absorb traditional operating costs such as rent, telephone and personnel. Additionally, losses due to bad checks can be as high as 5% to 6%.
Until recently, there has never been a cash machine that could cash a check. Check Central provides a highly rational and profitable alternative to serve a large population that requires check cashing/ATM/money orders/on-line transaction services. The underlying technology mitigates much of the risk of bad checks, theft, etc.
The check cashing industry generates over $1 billion in fees annually. 80% of the transactions are payroll checks, with the balance from government and personal checks.
There are a wide variety of retail establishments that could profit (whether on a Check Central machine purchase or placement of company-owned machines) from Check Central. These include: convenience stores, supermarkets, laundromats, liquor stores, military exchange stores, entertainment establishments, etc. Even businesses with large workforces, such as factories, could benefit from the installation of Check Central.
There is an emerging trend in the convenience store industry toward providing alternative financial services to its customers. Convenience stores are currently the leading vendors of money orders; and the industry is emerging also as a leader in providing ATM services with over 50% currently providing machines on-site. Over 90% of convenience stores accept personal checks.
The company expects that most of its Check Central kiosks will be company-owned for which it will pay a space rental fee and a 20% split of fees with the retailer. Average check cashing locations, once established, are expected to generate fees of approximately $2,000 monthly.
At this time, the company has released no forecast related to the future financial performance of Check Central operations. However, the company estimates the total size of its market segment to be $2 to $4 billion annually, based upon check cashing, money order and ATM transaction fees. The company anticipates contracting for 100 locations for initial launch.
Greenland's core business has been the development of automated meter reading technology for the utility industry. The company's products are designed to provide significant added value to utility service through cost savings, resource management, security and management intelligence. The AirLink system is a highly sophisticated electronics hardware and software product.
Greenland Corp.
Greenland Corp. has developed patent-pending wireless communication technology for use in automated meter reading for utilities, a market with vast possibilities. The company's proprietary technology for automated meter reading is AirLink. The primary application of AirLink is to serve the information gathering needs of utility companies, a $15 billion market in the U.S., where approximately 300 million residential utility meters are installed to monitor the use of electricity, natural gas and water.
Greenland has contracts to install AirLink pilot systems in three U.S. cities in Connecticut, Oregon and Utah. It has additional agreements with a number of companies associated with providing services to electric utilities, which are faced with deregulation. Additionally, the company has a number of international agreements to provide its technology.
This press release may consist of forward-looking statements that involve risks and uncertainties. Such statements are subject to risks and uncertainties that could cause the actual results to differ materially. Readers are referred to the documents filed by Greenland Corp. with the Securities and Exchange Commission.
Greenland Corp. (''Greenland'' or the ''Company'') from time-to-time files various documents with the U.S. Securities and Exchange Commission, issues press releases to inform shareholders and the investment community of significant operating activities of the Company and discusses the Company's operating activities with the investment community which may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the Company's then current judgment on those issues. In various disclosures, words such as ''gratifying'', ''highly qualified'', ''progress'', ''encouraged'', ''growth'', ''strengthening'', ''enthusiastic'', and other similar expressions are used to identify forward-looking statements. Because such statements apply to future events, they are subject to risks and uncertainties that could cause the actual results to differ materially.
Investors in and/or shareholders of the Company are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. The Company undertakes no obligation to publicly release updates or revisions to these statements.
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Contact:
Greenland Corporation
Eric Gaer, 619/566-9604 |
