JACKSONVILLE, Fla., March 18 /PRNewswire-FirstCall/ -- FNDS3000 Corp (OTC Bulletin Board: FDTC) (Frankfurt: "FT4," A0MWLG), a financial transaction processing services company, currently introducing prepaid card programs to the South African market, today announced that Chief Executive Officer, John Hancock, has released a letter to stockholders, in which he reviews the strategic achievements and progress of the Company.

Dear Fellow FNDS3000 Corp Stockholders:

Thank you for your continuing support of FNDS3000 Corp. Today, I would like to highlight a few of the Company achievements and brief you on our current activities and growth opportunities as it appears that 2010 will be a pivotal year for your Company. Over the last year or so, our accomplishments, which included developing an infrastructure, systems and new products did take time, but the potential return of future rewards can be dramatically positive. Our platform is solidly in place and will be the cornerstone of our growth in 2010 and beyond.

CORPORATE HIGHLIGHTS 

    --  In September 2008, we achieved the distinction of being certified as a
        third party processing company by MasterCard in South Africa.


    --  In the first half of 2009, we established a corporate office in South
        Africa and assembled our infrastructure, through strategic staff
        additions, establishing customer service operations and developing the
        local-market required functionality of our system.


    --  In August 2009, we completed the Pilot Test Phase, with the initial
        distribution of approximately 10,000 prepaid cards to corporate clients.
        During this phase, we implemented further product enhancements, together
        with more comprehensive customer service operations and advanced fraud
        prevention protocols, all of which were essential in assuring that the
        system was fit for purpose.


    --  In 2009, the Company implemented a mobile banking solution for the South
        Africa/African market.


    --  Our comprehensive test phases demonstrated stability and validated the
        processes and systems that are required to handle the higher volume of
        prepaid cards to be processed during the Production Roll-Out. During
        these phases, we tested, developed and enhanced our systems, processes,
        infrastructure and the operational team. This process included extensive
        internal testing and validation.


    --  Our sponsor bank was actively involved in the validation of our
        procedures and our electronic funds transfer system was reviewed by the
        staff of one of the top international auditing firms.


    --  In December 2009, we concluded the Market Test Phase and commenced the
        Production Roll-Out of our South African operations.


    --  These achievements did not raise any material problems which would cause
        us to question our confidence in our business model.


    --  Toward the end of the year, our distributors and corporate clients
        encountered logistical and procedural delays in distributing cards to
        cardholders. We found the process significantly slower than expected.
        This impacted the speed and rate of card activation. As a result, the
        Company refocused staff on supporting and assisting distributors and
        corporate clients in meeting this challenge.

CURRENT ACTIVITIES AND BUSINESS METRICS

CARDS DISTRIBUTED, ACTIVATION AND CORPORATE CLIENTS

The second quarter of fiscal 2010 began in December 2009 as we entered the full production roll-out of our prepaid cards. As of January 2010, we have exceeded the level of 100,000 cards distributed to corporate clients which was called for in a financing covenant with our lead investor.

Our prepaid cards are distributed to corporate clients via the distributor network. After the cards are delivered to distributors, the next phase is that our distributors utilize internal processes to support our corporate clients in rolling out cards to the end-user cardholders. Distributors and corporate clients have experienced delays in this final process. The onward transmission to end-users has been a challenge. Approximately 10,000 cards have been activated since inception and the activation speed and rate has been much slower than anticipated. We are focusing our corporate resources in supporting customers and distributors in carrying out this task. We expect that the majority of distributed cards will be activated over time.

Our customer base has steadily increased. In August 2009, we announced that we had executed agreements with 11 corporate clients. As of today, our sponsor bank has approved card programs for 39 corporate customers. We have submitted another 15 corporate customer applications.

BREADTH OF CARD OFFERINGS

Our South African prepaid card programs initially envisioned a payroll prepaid card program. Today, our offerings include, in addition to payroll programs, micro-lending, debt rescheduling and management programs, commission and gratuity cards. Our system is capable of meeting the current mobile banking needs of our customers and can be further developed to provide for anticipated requirements. More recently, the Company has piloted card programs with seven established micro lenders, for whom the opportunity to lend small sums on a card rather than via cash provides significant security and cost advantages.

In addition, we have commenced implementation of unbranded "closed loop" cards into our product offerings. A closed loop card is a non branded card that can be used only in pre-defined group of stores or within communities which install their own acquiring infrastructure. We see a significant opportunity in this segment for a higher volume of cards. The sources of revenue and margins of closed loop card programs are different in comparison to our branded offerings. We are working with several South African retailers to potentially roll-out closed loop card programs by mid-2010.

CARD LOAD / SYSTEM PERFORMANCE

Since August 2009 through February 28, 2010, our corporate customers have loaded approximately 25 million rands (over US $3 million at current exchange rates) onto our prepaid cards.

Our system has performed as expected through February 28, 2010 and the incidence of fraud is well within expected limits.

REVENUE AND MARGINS

In the first fiscal quarter of 2010, we realized revenues of $77,695. While a modest figure, this is an important milestone in the development of our Company.

Revenue is only generated when cards are activated and hence, the speed and rate of the activation of our prepaid cards is our most critical corporate priority in the evolution of our business. In addition to our corporate clients, our distributors have experienced a significant learning curve in the support required for the activation process. Our future revenue growth depends on card activation and we have identified additional resources to resolve this issue expeditiously. The Company refocused staff on supporting and assisting distributors and corporate clients in meeting this challenge.

During the first fiscal half of 2010, revenue generated per card exceeded our earlier expectations of $5 per card per month. Costs were broadly in line with expectation. Margins per card, being the difference between revenue and cost, were not forecasted specifically. However, at this early stage of customer card utilization, we believe margin trends are encouraging. A definitive margin ratio will emerge from the specific mix of actual future card profiles as more cards are activated.

GROWTH OPPORTUNITIES

The marketplace for our prepaid card programs remains as attractive today as it was at the inception of the Company. The population of South Africa is around 50 million people and it is reported to be growing rapidly.

MARKET PROSPECT

The Company selected South Africa as the initial location to build its business, and we have seen no reason to change our view of the opportunity. The ability to customize programs that utilize our cards' extensive functionality, and the flexibility of our platform, is in our opinion, a competitive strength and we currently are not aware of significant competitors in the South African market with the same functionalities and product offerings. Though at an early stage, we are pleased with the customer reaction to the functions and benefits of our card.

We continue to identify further opportunities, for example, we have in process an additional 15 micro lending corporate applications. Although there is no guarantee that these opportunities will generate revenue, we view this as a particularly attractive growth sector.

Management cannot be specific on its aspirations at this early stage, but given the experiences so far, we see the South African market as a center of excellence, with a sophisticated banking system, which we feel provides a solid opportunity for growth. We expect to add a significant number of cards for the remainder of 2010 and we will report as new milestones are achieved as the volume of distributed and activated cards increases.

FINANCING

To date, the Company has raised approximately $11 million in capital in an extraordinary credit environment. This investment has been used to establish a solid corporate base while quickly building a presence in the South African market.

While delays in testing have negatively affected our cash flow in our early stages of development, the enhancements to our system and offerings have undoubtedly strengthened our position. There is a need to secure additional funds to cover operational expenses due to delays in launching the production roll-out in the latter half of 2009, as noted above, as we work towards positive cash flow.

Whatever financing proposals emerge, we will require to obtain consent from Sherington Holdings, LLC. We cannot today provide any guarantee that we will successfully close such financing or that such financing, if closed, will be on reasonable terms.

SUMMARY

FNDS3000 Corp is now in production roll-out, the most exciting phase of a company start up, and I feel privileged to lead the Company at this time. A total investment of approximately $11 million has financed the identification and entry into an attractive market place. This has included licensing and customization of a U.S. software platform, extensive IT development, setting up a solid corporate center in South Africa, recruitment of experienced senior executives in relevant disciplines such as the card industry, IT, fraud prevention, and customer service. We have obtained the support of a bank, certification of one of the top international card brands, regulatory approval and a network of distributors who have delivered contracted customers.

We have a major challenge, and it is not to be underestimated. The problem is one of logistics; that the extent of the effort involved in moving the 100,000 plus cards purchased by our corporate clients into the hands of their cardholders has been a disappointment. Our clients bought the cards because they have a need to transfer funds efficiently to individuals, and thus we know they are motivated to overcome the problems. We are working increasingly closely with them and providing additional support. I have redirected corporate effort to complete this roll out. Our currently contracted customers represent a significant opportunity and I am confident that we can provide the continuing support that will take on this challenge . In the meantime, we will seek additional investment while we fully execute these plans.

Sincerely,

John Hancock

Chief Executive Officer

FNDS3000 Corp

About FNDS3000 Corp: FNDS3000 Corp (OTC Bulletin Board: FDTC) (Frankfurt: "FT4," A0MWLG) is a financial transaction processing service company. Since its inception, its focus has been on the development and implementation of a variety of prepaid card programs outside the United States, including services to individuals who lack access to conventional banking services. FNDS3000 meets a vital need of companies that have financial dealings with such individuals by offering prepaid cards that can be tailored to the differing requirements of each customer. FNDS3000 intends to provide these services in both developed and underdeveloped nations through a proven U.S. processing platform that has been designed for international and cross border capability. Many of these FNDS3000 products carry worldwide brand marks and can be used anywhere that accepts these brands. Programs that can be supported include payroll, insurance, medical aid, gift cards, prepaid cellular charges and small-scale international transfers of funds.

Forward Looking Statements

Matters discussed in this press release contain forward looking statements. Investors are cautioned that such forward looking statements involve risk and uncertainties, which could significantly impact the actual results, performance, or achievements of the Company. Such risks and uncertainties include, but are not limited to, the potential loss of our relationships with each of the parties that sponsor our cards and banks that manufacture, issue, and own the cards; the loss of our service providers; security breaches of our electronic information; the inability to raise sufficient capital to fund its operations; and other risks as may be detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission. The Company assumes no obligation to publicly update or revise its forward looking statements even if experience or future events make it clear that any of the projected results expressed or implied herein will not be realized.



    Contact: 
    Joe McGuire
    Chief Financial Officer
    FNDS3000 Corp
    904-273-2702
    jmcguire@fnds3000.com

www.FNDS3000.com

SOURCE FNDS3000 Corp