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**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION********Washington, DC 20549**

**FORM 10-QSB**

**            ****ý****         Quarterly Report Pursuant to Section 13 or15(d) of the Securities   Exchange Actof 1934**

**For the quarterly period endedJune 30, 2001**

**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 incorporation or organization) | (I.R.S. Employer Identification Number) |
|                                                           |                                    |
| **2111 Palomar Airport Road, Suite  200  Carlsbad, CA 92009**  | **(760)****804-2770**                   |
| (Address of principal executive offices)                       | (Issuer’s telephone number)        |
|                                                           |                                    |
| **1935 Avenida Del Oro, Suite D  Oceanside, CA 92056**         | **(760)****414-9941**                   |
| (Prior Address)                                                | (Prior telephone  number)               |

Indicate bycheck mark whether the issuer (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for thepast 90 days.

**ý**** YES            ****o****  NO**

**APPLICABLEONLY TO CORPORATE ISSUER**

State thenumber of shares outstanding of each of the issuer’s classes of common equity,as of the latest practicable date.

| **Class A Common Stock****$0.001 par value** | **130,667,227 Shares Outstanding   As of August 15, 2001** |
|----------------------------------------------|------------------------------------------------------------|

**Transitional  Small Business Disclosure Format****(Check One)Yes   ****o****   No  ****ý**

----

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**GreenlandCorporationReport on Form 10-QSBQuarter Ended June 30, 2001**

**Tableof Contents**

| **Part I.**  | Financial Information                                                                                                                                    |   |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|         |                                                                                                                                                     |   |
| **Item 1.**  | Financial Statements (unaudited)                                                                                                                         |   |
|         |                                                                                                                                                     |   |
|         | Condensed  consolidated balance sheets as of June 30, 2001 and December 31, 2000                                                                         |   |
|         |                                                                                                                                                     |   |
|         | Condensed  consolidated statements of operations for the three and six months ended June  30, 2001 and 2000                                              |   |
|         |                                                                                                                                                     |   |
|         | Condensed  consolidated statements of changes in stockholders’ equity for the six months  ended June 30,2001,  and the year ended December 31, 2000 |   |
|         |                                                                                                                                                     |   |
|         | Condensed  consolidated statements of cash flows for the six months ended June 30, 2001  and 2000                                                        |   |
|         |                                                                                                                                                     |   |
|         | 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                                                                                                                                               |   |

 

 

**GREENLAND CORPORATION ANDSUBSIDIARYCondensed Consolidated BalanceSheets(Unaudited)**

 

| **ASSETS**                                                                                                                              |                                                                                                                |
|-----------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|
| *Thousands of dollars, except share amounts*                                                                                            | **June  30,**                                                                                                       |   | **December  31,** |   |
|                                                                                                                                    | **2001**                                                                                                            |   | **2000** | ** ** |
|                                                                                                                                    | ****                                                                                                                |   | **** |   |
| Current  Assets:                                                                                                                        |                                                                                                                |   |   |   |
|                                                                                                                                    | Cash                                                                                                                | $ | 7 |   | $ | 75 |   |
|                                                                                                                                    | Accounts  receivable (less allowance for uncollectible accounts of $127 thousand in  2001 and $27 thousand in 2000) | 100 |   | 23 |   |
|                                                                                                                                    | Inventories                                                                                                         | 287 |   | 319 |   |
|                                                                                                                                    | Prepaid  officers compensation                                                                                      | 63 |   | -0- |   |
|                                                                                                                                    | Other  current assets                                                                                               | 84 |   | 17 |   |
|                                                                                                                                    |                                                                                                                |  |   |  |   |
|                                                                                                                                    |                                                                                                                |   |   |   |
|                                                                                                                                    | Total  current assets                                                                                               | 541 |   | 434 |   |
|                                                                                                                                    |                                                                                                                |   |   |   |
| Property  and equipment, net                                                                                                            | 690                                                                                                                 |   | 886 |   |
| Long  term notes receivable (less allowance for uncollectible Account of $1.9  million in 2001 and 2000)                                | -0-                                                                                                                 |    | -0- |    |
| Investments                                                                                                                             | -0-                                                                                                                 |   | 247 |   |
| Intangibles,  net                                                                                                                       | 2,807                                                                                                               |   | 3,009 |   |
| Other  assets                                                                                                                           | 36                                                                                                                  |   | 30 |   |
|                                                                                                                                    |                                                                                                                     |   |  |   |
|                                                                                                                                    |                                                                                                                |   |   |   |
|                                                                                                                                    | Total  assets                                                                                                       | $ | 4,074 |   | $ | 4,606 |   |
|                                                                                                                                    |                                                                                                                     |   |  |   |
|                                                                                                                                    |                                                                                                                |   |   |   |
| **LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                                           | ** **                                                                                                          |
| Current  Liabilities:                                                                                                                   |                                                                                                                |   |   |   |
|                                                                                                                                    | Notes  payable                                                                                                      | $ | 463 |   | $ | 463 |   |
|                                                                                                                                    | Trade  accounts payable                                                                                             | 701 |   | 662 |   |
|                                                                                                                                    | Accrued  expenses                                                                                                   | 633 |   | 279 |   |
|                                                                                                                                    | Current  portion of capital leases                                                                                  | 129 |   | 119 |   |
|                                                                                                                                    | Notes  payable to related parties                                                                                   | 82 |   | 50 |   |
|                                                                                                                                    |                                                                                                                |  |   |  |   |
|                                                                                                                                    |                                                                                                                |   |   |   |
|                                                                                                                                    | Total  current liabilities                                                                                          | 2,008 |   | 1,573 |   |
|                                                                                                                                    |                                                                                                                |   |   |   |
| Long  term liabilities:                                                                                                                 |                                                                                                                |   |   |   |
|                                                                                                                                    | Long  term portion of capital leases                                                                                | 235 |   | 300 |   |
|                                                                                                                                    |                                                                                                                |  |   |  |   |
|                                                                                                                                    |                                                                                                                |   |   |   |
|                                                                                                                                    | Total  Liabilities                                                                                                  | 2,243 |   | 1,873 |   |
|                                                                                                                                    |                                                                                                                |  |   |  |   |
|                                                                                                                                    |                                                                                                                |   |   |   |
| Stockholders’  Equity:                                                                                                             |                                                                                                                |   |   |   |
| Common  stock, $.001 par value; and 180,000,000 shares authorized, 130,667,227 in  2001 and (69,962,830 in 2000) issued and outstanding | 131                                                                                                                 |    | 70 |    |
|                                                                                                                                    | Additional  paid-in capital                                                                                         | 27,384 |   | 24,399 |   |
|                                                                                                                                    | Subscribed  shares and (receivable)                                                                                 | (980 | ) | (133 | ) |
|                                                                                                                                    | Accumulated  other comprehensive income                                                                             | -0- |   | (315 | ) |
|                                                                                                                                    | Retained  deficit                                                                                                   | (24,704 | ) | (21,288 | ) |
|                                                                                                                                    |                                                                                                                |  |   |  |   |
|                                                                                                                                    |                                                                                                                |   |   |   |
|                                                                                                                                    | Total  stockholders’ equity                                                                                    | 1,831 |   | 2,733 |   |
|                                                                                                                                    |                                                                                                                |  |   |  |   |
|                                                                                                                                    |                                                                                                                |   |   |   |
|                                                                                                                                    | Total  liabilities and stockholders’ equity                                                                    | $ | 4,074 |   | $ | 4,606 |   |
|                                                                                                                                    | **                                                                                                                  | * * | ** | * * |
|                                                                                                                                         |                                                                                                                     |  |  |  |  |  |  |  |

* *

*See accompanying notes to condensed consolidated financialstatements*

 

**GREENLAND CORPORATION ANDSUBSIDIARYCondensed ConsolidatedStatements of Operations and Other Comprehensive Income(Unaudited)**

 

| *Thousands except per share  amounts*    | **Three months ended****June 30,**                                   |   | **Six months ended****June 30,** |   |
|------------------------------------------|----------------------------------------------------------------------|--------|----------------------------------|--------|
|                                     | **2001**                                                             |   | **2000**                         |   | **2001** |   | **2000** |   |
|                                     | ****                                                                 |   | ****                             |   | **** |   | **** |   |
| Net sales                                | $                                                                    | 100    |                             | $      | 395 |   | $ | 189 |   | $ | 475 |   |
| Cost of goods sold                       | 83                                                                   |   | 1,176                            |   | 518 |   | 1,811 |   |
|                                     |                                                                      |   |                                  |   |  |   |  |   |
|                                     |                                                                 |   |                             |   |   |   |   |   |
|                                     | Gross profit (loss)                                                  | 17     |                             | (781   | ) | (329 | ) | (1,336 | ) |
|                                     |                                                                 |   |                             |   |   |   |   |   |
| General and  administrative expenses     | 1,059                                                                |   | 1,238                            |   | 2,096 |   | 2,039 |   |
| Research and  development costs          | 18                                                                   |   | 141                              |   | 85 |   | 361 |   |
| Repurchase of  distributor agreement     | -0-                                                                  |   | -0-                              |   | -0- |   | 320 |   |
|                                     |                                                                      |   |                                  |   |  |   |  |   |
|                                     |                                                                 |   |                             |   |   |   |   |   |
|                                     | Total operating costs                                                | 1,077  |                             | 1,379  |   | 2,181 |   | 2,720 |   |
|                                     |                                                                 |        |                             |        |   |  |   |  |   |
|                                     |                                                                 |   |                             |   |   |   |   |   |
|                                     | Operating loss                                                       | (1,060 | )                                | (2,160 | ) | (2,510 | ) | (4,056 | ) |
|                                     |                                                                 |   |                             |   |   |   |   |   |
| Other income  (expenses):                |                                                                 |   |                             |   |   |   |   |   |
|                                     | Loss on sale of assets                                               | (370   | )                                | -0-    |   | (484 | ) | (43 | ) |
|                                     | Termination of lease  cost                                           | -0-    |                             | -0-    |   | (212 | ) | -0- |   |
|                                     | Warrant costs – equity  investor                                | -0-    |                             | -0-    |   | (138 | ) | -0- |   |
|                                     | Interest expense                                                     | (38    | )                                | (19    | ) | (54 | ) | (33 | ) |
|                                     | Other income (expense)                                               | -0-    |                             | 3      |   | (16 | ) | 4 |   |
|                                     |                                                                      |   |                                  |   |  |   |  |   |
|                                     | Total other income  (expense)                                        | (408   | )                                | (16    | ) | (904 | ) | (72 | ) |
|                                     |                                                                 |        |                             |        |   |  |   |  |   |
|                                     |                                                                 |   |                             |   |   |   |   |   |
|                                     | Loss before income  taxes                                            | (1,468 | )                                | (2,176 | ) | (3,414 | ) | (4,128 | ) |
|                                     |                                                                 |   |                             |   |   |   |   |   |
| Income tax expense                       | -0-                                                                  |   | -0-                              |   | 2 |   | 3 |   |
|                                     |                                                                      |   |                                  |   |  |   |  |   |
|                                     |                                                                 |   |                             |   |   |   |   |   |
|                                     | Net loss                                                             | (1,468 | )                                | (2,176 | ) | (3,416 | ) | (4,131 | ) |
|                                     |                                                                 |   |                             |   |   |   |   |   |
| Other comprehensive  income, net of tax: |                                                                 |   |                             |   |   |   |   |   |
|                                     | Unrealized loss on  investments                                      | -0-    |                             | -0-    |   | (67 | ) | -0- |   |
|                                     | Plus: reclassification  adjustment for losses included in net income | 282    |                             | -0-    |   | 382 |   | -0- |   |
|                                     |                                                                 |        |                             |        |   |  |   |  |   |
|                                     | Other comprehensive  income                                          | 282    |                             | -0-    |   | 315 |   | -0- |   |
|                                     |                                                                 |        |                             |        |   |  |   |  |   |
|                                     |                                                                 |   |                             |   |   |   |   |   |
|                                     | Comprehensive loss                                                   | $      | (1,186                           | )      | $ | (2,176 | ) | $ | (3,101 | ) | $ | (4,131 | ) |
|                                     |                                                                 |        |                             |        |   |  |   |  |   |
|                                     |                                                                 |   |                             |   |   |   |   |   |
| Net loss per share:                      |                                                                 |   |                             |   |   |   |   |   |
|                                     |                                                                 |   |                             |   |   |   |   |   |
|                                     | Basic loss per share                                                 | (0.01  | )                                | (0.04  | ) | (0.04 | ) | (0.08 | ) |
|                                     | Diluted loss per share                                               | (0.01  | )                                | (0.04  | ) | (0.04 | ) | (0.08 | ) |
|                                     |                                                                 |   |                             |   |   |   |   |   |
| Weighted average  shares outstanding     |                                                                 |   |                             |   |   |   |   |   |
|                                     | Basic                                                                | 97,481 |                             | 52,262 |   | 85,086 |   | 48,863 |   |
|                                     | Diluted                                                              | 97,481 |                             | 52,262 |   | 85,086 |   | 48,863 |   |
|                                     |                                                                 |   |                             |   |   |   |   |   |
|                                          |                                                                      |        |                                  |        |  |  |  |  |  |  |  |  |  |  |  |  |

* *

*See accompanying notes to condensed consolidated financialstatements*

 

**GREENLAND CORPORATION ANDSUBSIDIARYCondensed ConsolidatedStatements of Stockholders’ Equity(Unaudited)**

 

|                                                                |             |          |        |          |               |          | **Subscribed**    |          | **Accumulated** |          |        |          |      |          |
|---------------------------------------------------------------------|------------------|---------------|-------------|---------------|--------------------|---------------|-------------------|---------------|-----------------|---------------|-------------|---------------|-----------|---------------|
| *Thousands  of shares/dollars*                                      |             |          |        |          | **Additional**     |          | **Shares**        |          | **Other**       |          |        |          |      |          |
|                                                                | **Common Stock** |          | **Paid-in** |          | **Unissued &** |          | **Comprehensive** |          | **Retained**    |          |        |          |
|                                                                | **Shares**       |          | **Amount**  |          | **Capital**        |          | **Receivable**    |          | **Income**      |          | **Deficit** |          | **Total** |          |
|                                                                | ****             |          | ****        |          | ****               |          | ****              |          | ****            |          | ****        |          | ****      |          |
| Balance  at December 31, 1999                                       | 35,298           |          | 35          |          | 16,882             |          | 175               |          | -0-             |          | (13,707     | )             | 3,385     |          |
|                                                                |             |          |        |          |               |          |              |          |            |          |        |          |      |          |
| Shares  issued to retire debt and To purchase assets                | 2,245            |     | 2           |     | 1,055              |     |              |     |            |     |        |     | 1,057     |     |
| Sale  of common stock                                               | 11,508           |          | 12          |          | 2,146              |          |              |          |            |          |        |          | 2,158     |          |
| Shares  issued for services                                         | 14,746           |          | 15          |          | 2,614              |          |              |          |            |          |        |          | 2,629     |          |
| Subscribed  shares issued                                           | 930              |          | 1           |          | 174                |          | (175              | )             |            |          |        |          | -0-       |          |
| Warrants  to purchase shares                                        |             |          |        |          | 265                |          |              |          |            |          |        |          | 265       |          |
| Exercised  warrants and options                                     | 5,236            |          | 5           |          | 653                |          | (133              | )             |            |          |        |          | 525       |          |
| Options  issued for services                                        |             |          |        |          | 610                |          |              |          |            |          |        |          | 610       |          |
| Unrealized  loss on investments                                     |             |          |        |          |               |          |              |          | (315            | )             |        |          | (315      | )             |
| Net  loss                                                           |             |          |        |          |               |          |              |          |            |          | (7,581      | )             | (7,581    | )             |
|                                                                |                  |          |             |          |                    |          |                   |          |                 |          |             |          |           |          |
| Balance  at December 31, 2000                                       | 69,963           |          | $           | 70            |               | $             | 24,399            |          | $               | (133          | )           | $             | (315      | )             | $ | (21,288 | ) | $ | 2,733 |   |
|                                                                |             |          |        |          |               |          |              |          |            |          |        |          |      |          |
|                                                                |             |          |        |          |               |          |              |          |            |          |        |          |      |          |
|                                                                |             |          |        |          |               |          |              |          |            |          |        |          |      |          |
| Shares  issued to retire debt and To purchase assets                | 2,869            |     | 3           |     | 125                |     |              |     |            |     |        |     | 128       |     |
| Shares  issued and held in escrow                                   | 27,467           |          | 27          |          | 439                |          | (466              | )        |            |          |        |          | -0-       |          |
| Shares  issued for services                                         | 19,387           |          | 19          |          | 1,740              |          |              |          |            |          |        |          | 1,759     |          |
| Shares  issued for note receivable                                  | 6,339            |          | 6           |          | 244                |          | (250              | )             |            |          |        |          | -0-       |          |
| Exercised  warrants and options                                     | 4,642            |          | 6           |          | 207                |          | (131              | )             |            |          |        |          | 82        |          |
| Warrants  issued to equity investor                                 |             |          |        |          | 138                |          |              |          |            |          |        |          | 138       |          |
| Options  issued for services                                        |             |          |        |          | 92                 |          |              |          |            |          |        |          | 92        |          |
| Unrealized  loss on investments, net of reclassification adjustment |             |     |        |     |               |     |              |     | 315             |     |        |     | 315       |     |
| Net  loss                                                           |             |          |        |          |               |          |              |          |            |          | (3,416      | )             | (3,416    | )             |
|                                                                |                  |          |             |          |                    |          |                   |          |                 |          |             |          |           |          |
| Balance  at June 30, 2001                                           | 130,667          |          | $           | 131           |               | $             | 27,384            |          | $               | (980          | )           | $             | -0-       |          | $ | (24,704 | ) | $ | 1,831 |   |
|                                                                |                  |          |             |          |                    |          |                   |          |                 |          |             |          |           |          |

 

See accompanying notes to condensed consolidatedfinancial statements

 

**GREENLAND CORPORATION ANDSUBSIDIARYCondensed ConsolidatedStatements of Cash Flows(Unaudited)**

 

| *Thousands of dollars*                 | **Six Months Ended**                                                         |   |
|----------------------------------------|------------------------------------------------------------------------------|--------|
|                                   | ****                                                                         |   |
|                                   | **June 30,  2001**                                                           |   | **June 30, 2000** |   |
|                                   | ****                                                                         |   | **** |   |
| Cash flows from  operating activities: |                                                                         |   |   |   |
|                                   | Net loss                                                                     | $      | (3,416 | ) | $ | (4,131 | ) |
|                                   | Adjustments to  reconcile net loss to net cash used in operating activities: |   |   |   |   |
|                                   | Depreciation and  amortization                                               | 407    |   | 306 |   |
|                                   | Allowance for  uncollectible accounts                                        | 100    |   | 28 |   |
|                                   | Repurchase of  distributor agreement                                         | -0-    |   | 320 |   |
|                                   | Options and warrants  issued for services                                    | 92     |   | 280 |   |
|                                   | Warrant costs – equity  investor                                        | 138    |   | -0- |   |
|                                   | Loss on sale of assets                                                       | 484    |   | 42 |   |
|                                   | Stock issued for  services                                                   | 1,759  |   | 1,164 |   |
|                                   |                                                                         |   |   |   |
|                                   | (Increase) decrease in  Accounts receivable                                  | (177   | ) | (324 | ) |
|                                   | (Increase) decrease in  Inventories                                          | 52     |   | (9 | ) |
|                                   | (Increase) decrease in  Other                                                | (136   | ) | (36 | ) |
|                                   | Increase (decrease) in  Trade accounts payable                               | 39     |   | 217 |   |
|                                   | Increase (decrease) in  Accrued expenses                                     | 354    |   | 260 |   |
|                                   |                                                                         |        |   |  |   |
|                                   |                                                                         |   |   |   |
|                                   | Net cash used in  operating activities                                       | (304   | ) | (1,883 | ) |
|                                   |                                                                         |        |   |  |   |
|                                   |                                                                         |   |   |   |
| Cash flows from  investing activities: |                                                                         |   |   |   |
|                                   | Purchase of software  and equipment                                          | (53    | ) | (292 | ) |
|                                   | Proceeds from sale of  investments                                           | 164    |   | -0- |   |
|                                   | Investment in notes  receivable                                              | -0-    |   | (200 | ) |
|                                   |                                                                         |        |   |  |   |
|                                   |                                                                         |   |   |   |
|                                   | Net cash provided by  (used in) investing activities                         | 111    |   | (492 | ) |
|                                   |                                                                         |        |   |  |   |
|                                   |                                                                         |   |   |   |
| Cash flows from  financing activities: |                                                                         |   |   |   |
|                                   | Proceeds from sale of  stock                                                 | -0-    |   | 2,170 |   |
|                                   | Proceeds from notes  payable to related parties                              | 128    |   | -0- |   |
|                                   | Proceeds from the  exercise of warrants and options                          | 82     |   | -0- |   |
|                                   | Principal payments on  capital leases                                        | (85    | ) | -0- |   |
|                                   | Proceeds from sale of  stock warrants                                        | -0-    |   | 488 |   |
|                                   |                                                                         |        |   |  |   |
|                                   |                                                                         |   |   |   |
|                                   | Net cash provided by  financing activities                                   | 125    |   | 2,658 |   |
|                                   |                                                                         |        |   |  |   |
|                                   |                                                                         |   |   |   |
|                                   | Increase (decrease) in  cash                                                 | (68    | ) | 283 |   |
|                                   |                                                                         |   |   |   |
|                                   | Cash at beginning of  period                                                 | 75     |   | 236 |   |
|                                   |                                                                         |        |   |  |   |
|                                   |                                                                         |   |   |   |   |
|                                   | Cash at end of period                                                        | $      | 7 |   | $ | 519 |   |
|                                   |                                                                         |   |   |   |   |
| Supplemental  information:             |                                                                         |   |   |   |
|                                   | Cash paid for interest                                                       | $      | 24 |   | $ | 17 |   |
|                                   |                                                                         |        |   |  |   |
|                                   | Cash paid for income  taxes                                                  | $      | -0- |   | $ | 3 |   |
|                                   |                                                                              |   |  |   |
|                                        |                                                                              |        |  |  |  |  |  |  |  |  |  |

Seeaccompanying notes to condensed consolidated financial statements**Supplemental disclosure of non-cashinvesting and financing activities:
 For  the six months ended June 30, 2001: The  Company issued shares in exchange for a note receivable in the amount of $250  thousand.   The  Company acquired assets in the amount of   $20 thousand by issuing stock.   The  Company repaid notes payable to related parties of $96 thousand through the  issuance of stock   The  Company paid for services in the amount of $1.8 million by issuing shares of  its common stock.   The  Company issued non-qualified options and warrants to employees and directors  to purchase 5.9 million shares with a weighted average strike price of $.12  and recorded a $92 thousand expense.   The  Company issued 5.4 million warrants to an equity investor and recorded a $138  thousand other expense.   For  the six months ended June 30, 2000:   The  Company acquired assets in the amount of $476 thousand by issuing stock.   The  Company repaid debt and other accrued expenses of $145 thousand through the  issuance of stock in 2000.   The  Company repaid notes payable to related parties through the issuance of stock  in the amount of $195 thousand.   The  Company acquired a receivable from its employees in the amount of  $245 thousand for the repayment of  the  employee portion of withholding  from compensation paid in the form of Company stock.   The  Company provided compensation advances to certain officers in the form of  common stock in the amount of $64   thousand.   The  Company paid for services accrued in 1999 by issuing shares of its common  stock in the amount of $199 thousand.   The  Company acquired equipment and furniture in the amount of $157 thousand by  incurring capital leases.   The  Company issued options to purchase 3,962 thousands share with weighted  average strike price of $.16 for services   in the amount of $562 thousand.
 

*See accompanying notes to condensed consolidated financialstatements*
* 

**GREENLAND CORPORATION ANDSUBSIDIARYNotes to CondensedConsolidated Financial Statements****(Unaudited)**

**Note 1.**             **BASIS OF PRESENTATION**

GeneralThe accompanying unaudited condensed consolidated financial statements havebeen prepared in accordance with the instructions to Form 10-QSB. Therefore,they do not include all information and footnotes necessary for a completepresentation of financial position, results of operations, cash flows, andstockholders' equity in conformity with generally accepted accountingprinciples. The condensed consolidated balance sheet at December 31, 2000 wasderived from the audited balance sheet at that date which is not presentedherein. Except as disclosed herein, there has been no material change in theinformation disclosed in the notes to the financial statements included in theCompany's annual report on Form 10-KSB for the year ended December 31, 2000. Inthe opinion of Management, all adjustments considered necessary for a fairpresentation of the results of operations and financial position have beenincluded, and all such adjustments are of a normal recurring nature. Operatingresults for the six months ended June 30, 2001 are not necessarily indicativeof the results that can be expected for the year ended December 31, 2001.

Future AccountingRequirements

In June 2001, the Financial AccountingStandards Board ("FASB") issued Statement of Financial AccountingStandard ("SFAS") No. 141, "Business Combinations", whichis effective for all business combinations initiated after June 30, 2001.  SFAS No. 141 eliminates the use of thepooling-of-interests method in a business combination.  The Company does not expect the adoption ofSFAS No. 141 to have a material impact on its consolidated financial positionor results of operations.

In June 2001, the Financial AccountingStandards Board ("FASB") issued Statement of Financial AccountingStandard ("SFAS") No 142, "Goodwill and Other IntangibleAssets", which is effective for the Company's year ending December 31,2002.  Under SFAS No. 142, goodwill isnot amortized and is tested for impairment on an annual basis and betweenannual tests in certain circumstances. The Company currently amortizes goodwill over twelve years and expectsthe adoption of SFAS No. 142 to eliminate the annual amortization ofapproximately $173,000 per year through December 31, 2010.  The Company has not completed its analysisof the impairment test provisions of SFAS No. 142 and the effect on theconsolidated financial position and results of operations of the impairmentprovisions is not known.

**Note 2.**             **GOING CONCERN UNCERTAINTY**

As shown in the accompanying condensedconsolidated financial statements, the Company has suffered recurring lossesfrom operations, has a net working capital deficiency of approximately $1.5million and a retained deficit of $24.7 million as of June 30, 2001. Thesefactors, among others, raise substantial doubt about the Company’s ability tocontinue as a going concern. The Company’s need for working capital is a keyissue for management and necessary for the Company to meet its goals andobjectives. The Company continues to meet its obligations and pursue additionalcapitalization opportunities. There is no assurance, however, that the Companywill be successful in meeting its goals and objectives in the future.

During 2000 and 1999, the Company fullysubscribed its private placement offering realizing $3.4 million in netproceeds. In addition, the Company realized $378 thousand from the exercise ofClass A Warrants.  There are stilloutstanding Class A Warrants exercisable at $.50, Class B Warrants exercisableat $1.00 and Class C Warrants exercisable at $1.50 (collectively, the “Warrants”).  By letter dated June 18, 2001 the Companynotified the holders the Warrants issued pursuant to the private placement thatthey could exercise all or any portion of their warrants at an exercise priceof $.033 per warrant (each warrant can be exercised into one share of commonstock of Greenland Corporation) (the “Warrant Purchase Offer”).  The holders have thirty days to exercisesaid warrants.  As of June 30, 2001 theCompany had received $14 thousand through the exercise of the Warrants. Subsequentto June 30, 2001, the company extended the Warrant Purchase Offer until August31, 2001. As of August 15, 2001, the Company had received gross proceeds of$176 thousand from the Warrant Purchase Offer. In the event, all the holders exercised the Warrants at $.033 perwarrant, the gross proceeds to the Company could total $1.5 million. However,the holders of such warrants are not under any obligation to exercise them andthere can be no assurance that the Company will receive any cash from theexercise of warrants outstanding. 

On March 28, 2001, the Company announcedthat it had entered an agreement with a NASD approved Underwriter, referred toin Company communications as an “institutional private equity investor,” underwhich the Underwriter agreed to purchase shares of the Company’s common stockover the next three years. Generally, under the terms of the agreement, theUnderwriter has agreed to purchase such amounts of common stock as the Companyelects to sell the Underwriter.  Thepurchase price for the shares is generally the lesser of (1) the market priceless $0.075 per share or (2) 93% of the market price. The agreement limits theamount of common shares that the Underwriter is obligated to purchase duringany 61-day period to 9.9% of the total common shares outstanding and is subjectto an overall cap of $35 million over the three-year term of the agreement. TheUnderwriter’s obligation to purchase shares terminates upon the occurrence ofvarious events as specified in the agreement. The actual amount of common stockthat the Underwriter may purchase is dependant on, among other things, (1) themarket price of the Company’s stock and (2) whether a termination event occurs.The agreement must be registered and declared effective by the Securities andExchange Commission. In consideration for executing the agreement, theUnderwriter will receive warrants to purchase 5,390,000 shares of Common stock.The Company has recorded a $138 thousand expense for issuance of the warrants.  There can be no assurance that the Companywill sell any stock to the Underwriter under the terms of the agreement.

As discussed in Note 15, the Company isin a dispute regarding the ownership of software technology paid for byGreenland Corporation, which Seren Systems, Inc. has refused to deliver and/ormake available to the Company. As a result, Greenland Corporation has beenunable to fulfill its obligations with respect to certain purchase ordersand/or contracts.  The Company filed aDemand for Arbitration with the American Arbitration Association against SerenSystems, Inc. with respect to the above mentioned dispute. The Company remainsconfident that Greenland Corporation will obtain the substantive determinationnecessary to obtain the return of its property. However, the Company isactively seeking a settlement that would be beneficial to the Company’s abilityto continue its business operations.

**Note 3.**             **INVENTORIES**

Inventories at June 30, 2001 were asfollows:
Raw materials$308 Work-in-progress-0- Finished goods20    328    Less allowance for  obsolescence(41)   $287   
Inventories are stated at lower of cost,first-in first-out basis or market. Provision for potentially obsolete or slow moving inventory is madebased on management’s analysis of inventory levels.

**Note 4.**              **ACCOUNT RECEIVABLE**

The Company entered into an agreementwith CardPlus International, Inc., the nation’s only certified minorityelectronic payments processor.  Pursuantto the agreement CardPlus purchased six interactive check cashing Maxcash TMAutomated Banking Machine kiosks.  Theseterminals are to be processed from CardPlus’ newly established Denver Coloradoelectronic transaction and data processing center.  This transaction is the first purchase under the Company’songoing strategy to aggressively pursue sales of the Maxcash ABM to customersthat have their own processing capabilities.

**Note 5.**             **PROPERTY AND EQUIPMENT**

Net property and equipment at June 30,2001 was as follows:
Computers and  equipment$145Furniture &  equipment under capital leases537Demonstration  equipment215Furniture and fixtures61Leasehold improvements-0-  958  Accumulated  depreciation268  $690 
Depreciation expense, includingamortization of capital lease assets, for the three months and six months endedJune 30, 2001 was $67 and $154 thousand (including $42 thousand on furnitureand equipment under capital leases).

**Note 6.**             **LONG TERM NOTES RECEIVABLE**

During 1999, the Company exchanged 1.1million convertible preferred shares in a public company for notes receivablevalued at $1.9 million with interest at 9%. The Company has substantial doubt about the collectibility of the notesand established a 100% allowance at December 31, 1999.  The Company does not recognize interestincome on impaired notes.

**Note 7.**             **INVESTMENTS**

At June 30, 2001 the Company had sold allof its investments in common stock.  Thecommon stock was carried at fair value. Unrealized holding gains and losses areexcluded from earnings and reported in other comprehensive income. During thesix months ended June 30, 2001, the Company realized $397 thousand of lossesand $164 thousand of proceeds from sales of shares in the investment. Cost isdetermined based on specific identification.

**Note 8.**             **INTANGIBLE ASSETS**

Intangible assets at June 30, 2001consisted of the following: 
Capitalized software  costs$1,014Licenses675Excess of purchase  price over fair value of net assets acquired2,079  3,768  Less accumulated  amortization961  $2,807 
During 1998, as part of the purchase ofthe net assets of Check Central, Inc., the Company acquired licenses to usecertain software in the development of check cashing machines.  The Company is amortizing these licensesover 5 years.  The excess of thepurchase price over the fair value of the identifiable net assets acquired wascapitalized and is being amortized over 12 years.

The Company amortizes capitalizedsoftware costs over 5 years.  At June30, 2001 and December 31, 2000, net intangible assets of the Company include$588 thousand of software developed by Seren Systems, Inc. (see Note 15).

The Company reviews its intangibles forimpairment whenever events and circumstances indicate that the carrying amountof an asset may not be recoverable. Management evaluates assets for impairment by comparing undiscountedfuture cash flows to the carrying amount of the assets.  If impairment exists, the amount of impairmentis measured as the amount by which the carrying amount of the asset exceed it’sfair value.  Management evaluated itsintangible asset for impairment and no impairment loss was recognized in thethree month and six month ended June 30, 2001. Due to industry conditions, it is at least reasonably possible that theimpairment estimate will change in the near term.

**Note 9.**             **NOTES PAYABLE TO RELATED PARTIES**

Notes payable to related parties at June30, 2001 were as follows:
Note  payable to a stockholder and officer of the Company.  Interest at 8%.  Principal due February 2002.2  Note  payable to a stockholder and officer of the Company.  Interest at 8%.  Principal due February 2002.12  Notes  payable to a stockholder and employee of the Company.  Interest at 8%.  Principal due at various dates through June, 25, 2002.68  $82 
The Company repaid notes payable duringthe period ended June 30, 2001 to related parties of $96 thousand through theissuance of stock.

**Note10.**            **NOTES PAYABLE**

Notes payable at June 30, 2001 were asfollows:
Note  payable to a company, with interest at 8%.   Due through the payment of commissions earned through March 9, 2001$320  Revolving  Line-of-credit agreement with a commercial bank which allows for advances up  to a maximum of $150 thousand.  The  line was scheduled to expire on July 17, 2001 but was extended by mutual  agreement of the parties until September 30, 2001. The final terms and  conditions of the extension are expected to be materially similar to the  prior terms and conditions (interest at the bank’s reference rate plus 2.5%)  and  will be consummated within 30  days.   The line will be secured by  company assets and personally guaranteed by a director and stockholder of the  Company.143  $463 
**Note11.**            **STOCKHOLDERS’ EQUITY**

The Company issued common stock inexchange for a note receivable in the amount of $250 thousand.

The Company issued 27 million shares heldin escrow for deferred compensation.

The Company acquired assets in the amountof  $20 thousand by issuing stock.

The Company repaid notes payable torelated parties of $96 thousand through the issuance of stock

The Company paid for services in theamount of $1.8 million by issuing 19 million shares of its common stock.

The Company issued non-qualified optionsand warrants to employees and directors to purchase 5.9 million shares with aweighted average strike price of $.12 and recorded a $92 thousand compensationexpense.

The Company issued 5.4 million warrantsto an equity investor and recorded $138 thousand as other expense.

**Note 12.**            **SEGMENTS AND MAJOR CUSTOMERS**

The Company has two reportable segmentsconsisting of (1) the sale and distribution of automatic check cashing machinesand (2) customer service and fee income earned through check cashingtransaction processing.  The accountingpolicies of the segments are the same as those described in the summary ofsignificant accounting policies.  TheCompany evaluates performance based on sales, gross profit margins andoperating profit before income taxes.

The following is information for theCompany’s reportable segments for the six months ended June 30, 2001:
 **Sales Segment** **Processing    Segment** **Unallocated** **Total**  ****** ******** ******** ******** **Revenue$173 $16 $-0- $189 Gross margin25 (354)-0- (329)Depreciation and  amortization7 204 196 407 Interest expense54 54     Other, net    (3,030)(3,030)Loss from continuing  operations before income taxes25 (354 )(3,085 )(3,414 )         Identifiable assets$287 $2,807 $980 $4,074 Capital expenditures-0- -0- 53 53 
The above negative gross margins includefixed overhead costs for expenses such as supervision, labor, amortization anddepreciation, communications, and facilities, as well as the direct costs tomanufacture and service the automated banking machines.

**Note 13.**            **OPERATING LEASE**

The Company moved its executive officesto new corporate headquarters in Carlsbad, California.  The Company leases its office facilitiesunder an operating lease expiring August 14, 2003 with monthly payments of $6 thousanddue at the beginning of the month.  Rentwill increase semi annually at a fixed rate of approximately 4%.

Future minimum lease payments for twelvemonths ended June 30, under the lease are as follows:
2002$69 200384 20047      Total minimum lease payments$160   
**Note 14.**            **REPURCHASE OF DISTRIBUTOR AGREEMENT**

In March 2000, the Company repurchasedthe exclusive distribution rights to the Master Distribution Agreement withSmartCash ATM, Ltd. (SmartCash). In consideration, the Company agreed to loanSmartCash $200 thousand collateralized by 333 thousand shares of GreenlandCorporation common stock, release certain restrictions on Company common stockheld by SmartCash, issue warrants to purchase 500 thousand shares of Companycommon stock, and continue to pay commissions on sales of machines sold bycertain sales representatives until the earlier of March 2002, or saidcommissions equal $320 thousand. During December 2000, the Company fullyreserved against the $200 thousand note receivable given the probability ofcollection from SmartCash, and the decrease in the value of the Company’scollateral. In addition, the Company issued SmartCash a note payable for $320thousand that will be repaid through the payment of the commissions notedabove. During March 2000 the Company recorded a $320 thousand expense on thistransaction.

**Note 15.**            **LEGAL PROCEEDINGS**

On October 12, 2000, the Company filed aDemand for Arbitration with the American Arbitration Association against SerenSystems, Inc. The Complaint sought preliminary relief in a dispute regardingthe ownership of software technology paid for by the Company, which SerenSystems, Inc. has refused to deliver and/or make available to the Company. As aresult, the Company has been unable to fulfill its obligations with respect tocertain purchase orders and/or contracts. with respect to the above mentioneddispute. The November 26, 1998 Consulting Agreement by and between the Companyand Seren Systems, Inc. stipulates that any controversy between the partiesshall be settled by binding arbitration. A hearing date is scheduled forSeptember 17, 2001. Although there can be no assurance as to the outcome of theproceeding, the Company is confident that the Company will obtain thesubstantive determination necessary to obtaining the return of its propertyand/or to collect damages. In addition to the return of its property, theCompany seeks actual damages in the amount of approximately $1.5 million,including the return of payments made to Seren as a subcontractor for Greenlandon the ACS/7-Eleven V.com project; Seren Systems has counterclaimed for damagesin the amount of $700,000.

On December 19, 2000, the Company filed aComplaint for Declaratory Relief and Provisional remedies in Los Angeles CountySuperior Court against Seren Systems, Inc. The Complaint was brought in LosAngeles County in response to certain venue-related issues. The Complaint isfor the remedies as requested in the San Diego action cited above. In addition,the Complaint seeks damages as related to a contract between the Company andSeren dated on or about June 30, 2000 that is part of the dispute with Seren.The Complaint was dismissed by mutual agreement of the parties.

On March 23, 2001 Arthur Kazarian,Trustee for the General Wood Investment Trust (the “Landlord”) filed aComplaint in San Diego County naming Greenland Corporation as a defendant.  The Complaint alleges UnlawfulDetainer.   On or about May 1, 2001 theCompany paid $45,000 to the Landlord and entered into a judgment to pay anadditional $15,000 of legal fees.  TheCompany has entered into a settlement agreement to pay legal fees of $12,000.

On May 23, 2001 the Company filed aComplaint in San Diego County naming Michael Armani as the defendant. TheComplaint alleges breach of contract by Michael Armani in connection with twoseparate stock purchase agreements.  TheCompany seeks damages in the amount of $474,595.  Mr. Armani has yet to file a response to the Complaint. On August7, 2001 the Company filed a request for Entry of Default against Mr. Armani inthe amount of $474,595.

On May 23, 2001 Arthur Kazarian, Trusteefor the General Wood Investment Trust (the “Landlord”) filed a Complaint in SanDiego County naming Greenland Corporation as a defendant.  The Complaint alleges breach of contractpursuant to the terms of the lease agreement between the Company and theLandlord for the real property located at 1935 Avenida Del Oro, Oceanside,California and previously occupied by the Company.  The Complaint seeks damages in the amount of approximately$500,000.  Although the Company remainsliable for the payments remaining for the term of the lease, the Landlord has aduty to mitigate said damages.  TheCompany recorded a lease termination liability of $212 thousand during the quarterended March 31, 2001.  The Company hasretained outside counsel for representation in this matter and settlementdiscussions are presently being conducted.

The Company, along with Seren Systems(“Seren”), its then current and primary software developer and supplier for itsown ABM terminals, was in the process of completing development of the checkcashing service interface to the Mosaic Software host system being implementedto support a large network of V.com terminals. In September 2000, Seren unilaterallyhalted testing and effectively shut-down any further check cashing developmentfor the V.com project. The parties participating in this project may have beenfinancially damaged, related to the delay in performance by the Company andSeren. None of the parties have brought suit against the Company and/or Serenat this time. There is no assurance, however, that such suit(s) will not bebrought in the future.

The Company's officers and directors areaware of no other threatened or pending litigation, which would have amaterial, adverse effect on the Company. From time to time the Company is adefendant (actual or threatened) in certain lawsuits encountered in theordinary course of its business, the resolution of which, in the opinion ofmanagement, should not have a material adverse effect on the Company'sfinancial position results of operations, or cash flows.

**Note 16.**            **SUBSEQUENT EVENTS**

In July 2001, Thomas A. Hyde, Jr, CEO andChairman of Greenland Corporation agreed to loan the Company $100,000. Theterms of the loan provide for repayment within one year at 8% interest andwarrant to purchase 1,333,333 shares of Greenland Corporation common stock at$.03 per share.

Subsequent to June 30, 2001 the Companyextended the Warrant Purchase Offer (see Note 2) until August 24, 2001.  The extension was in response to therequests by warrant holders for additional time.  As of August 15, 2001 the Company had received gross proceeds of$176 thousand from the Warrant Purchase Offer.

On July 5, 2001 Max Farrow filed aComplaint in San Diego County naming Greenland Corporation, Thomas J.Beener,  Intelli-Group, Inc.,  Intelli-Group LLC and Intelli-Corp, Inc. asdefendants.  The Complaint allegesbreach of contract in connection with Mr. Farrow’s resignation as an officerand director of the Company in January 2001. The Company believes that the Company and Mr. Beener have valid defenseto the allegations of Mr. Farrow. Although there can be no assurances, theCompany believes that it will successfully defend this legal action and thatthe outcome will not have a material adverse impact on the Company. The Companyis considering filing a counterclaim against Mr. Farrow seeking damages relatedto his activities as an officer and director of Greenland Corporation.

**ITEM 2-****MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS**

This Quarterly Report containsforward-looking statements that involve risk and uncertainties. Forward-lookingstatements include, without limitation, any statement that may predict,indicate or imply future results, performance or achievements and may containthe words "believe," "expect," "anticipate,""estimate," "project," "will be," "willcontinue" or words or phrases of similar meaning. Forward-looking statementsinvolve risks and uncertainties which may cause actual results to differmaterially from the forward-looking statements.  Such risks and uncertainties include, but are not limited to,risks associated with completing product development; commercial use ofcheck-cashing machines; product repairs; consumer acceptance; need foradditional financing; manufacturing risks; dependence on suppliers; dependenceon 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 theCompany's reports filed with the Securities and Exchange Commission.

**INTRODUCTION**

The following discussion pertains to theCompany's operations and financial condition as of June 30, 2001, and should beread in conjunction with the Company’s financial statements and notes thereto,and other financial information included elsewhere in this report.

The Company is engaged in the developmentof proprietary software that is capable of providing support and delivery of arange of on-line financial services to consumers, including: check cashing,ATM, wire transfers, bill pay, money orders, and phone card dispensingservices. The Company has developed, manufactured and delivered limited numbersof freestanding kiosks under its trademarked brand name MAXcash ABM. TheCompany acquired its base technology in May 1998, when Check Central wasincorporated into Greenland Corporation as a wholly-owned subsidiary.

The Company’s initial strategy had beenoriented around two revenue streams:(1) the sale of its MAXcash ABM machines;and (2) generation of fees in connection with the various banking servicesprovided on each of the machines in operation. Fees range from $0.35 per transaction to 6% of the value of thetransaction. However, without sufficient numbers of machines in the field, thisrevenue stream did not produce material results.

The Company's strategy for marketing andsales of the MAXCash ABM, during fiscal 2000, was directed at locatingdistributors of ATM machines and entering on its distribution agreements. Thisstrategy enabled the Company to concentrate its resources on productdevelopment and support. The Company has signed a number of such agreements (37to date). However, significant unit sales have not materialized to date dueprimarily to the uncertainty caused by its dispute with Seren Systems. (Also see “Legal Matters.”)

Management determined that its efforts todevelop, produce, and successfully market and support its MAXcash ABM systemmay be beyond the scope of its currently available resources. On April 2, 2001,the Company announced that it was temporarily suspending its Check Centralsubsidiary check cashing operations until such time as the integration of theCompany’s Check Central software with the MAXcash operating system wascomplete, in order to minimize its check cashing risk, reduce operating losses,and to conserve capital.

The Company has invested, and continuesto invest substantial resources in the ongoing development of its back-office,risk management, and transaction support software systems. The Company hopes toexpand its scope from manufacturing, distribution, and support of itsproprietary MAXcash ABM to also providing support for the ABM-like terminals ofother manufacturers. Furthermore, the Company believes that it can besuccessful in providing back-office and on-line transaction support to otherhardware vendors and retailers through a network and software system of its owndesign.

The Company's long-term goal is toparticipate in the multi-billion dollar check cashing market by offering anopen-architecture POS/check cashing transaction processing platform, either forself-service or clerk-assisted transactions. In addition to Greenland’s supportfor its MAXcash ABM kiosk, the Company plans to broaden its market focus andreposition itself as a leading provider of back-office transactions and supportservices to the self-service check cashing, retail, and POS transactionindustries – including check approval and guarantee services, merchant POSservices, ATM transaction processing, money order and prepaid phone carddispensing, wire transfer, bill pay and other products and services.

In order to accomplish its objectives,the Company has entered into several strategic partnerships for the continueddevelopment and sales of hardware systems (ABM-like machines), POS transactionsoftware (the back-office), all to reside on a third-party-supplied hostplatform. This strategy is expected to reduce Greenland’s ongoing businessrisk.

As resources permit, management hopes tofurther the development of its proprietary back-office risk managementoperations to support fully automated POS check cashing approval and guaranteeservices. The proposed processing architecture will be reengineered as an openplatform systems environment in order to provide support for multiple existingATM and POS vendors. The Company hopes to leverage the direct sale forces ofother large-scale, national hardware manufacturers to sell its system.

On May 8, 2001 the Company announced thatit signed a software license and support agreement with Florida-based MosaicSoftware for use of its PostilionÔsystems platform to provide transaction routing and switching software for theCompany’s interactive check cashing MAXcash ABM kiosks, as well as fortraditional ATM, advanced ATM and point-of-sale (POS) terminals manufactured byother companies.  The software providesa scalable foundation for the Company’s new strategy of providing services toand through multiple hardware platforms. By supporting virtually all major ATM hardware vendors, such as NCR,Diebold, Tidel, IBM, and Verifone (Hewlett Packard), the Company will have theopportunity to work with third-party sales channels to generate  transaction processing revenues.  The agreement expired on or aboutAugust 1, 2001. However, the parties are presently negotiating anextension on terms materially similar to the terms of the previous agreement.If fully implemented, management projects total cost of the services providedpursuant to the term of the agreement to be approximately $1.3 million.

The Mosaic system is a fully integratedMicrosoft WindowsÔNT-based applications suite that facilitates transaction management and networkcommunication between free-standing financial services machines such as theCompany’s MAXcash ABM, the Postilion host, and the Company’s Check Centralback-office risk management system and call center.

On June 5, 2001 the Company entered intoan exclusive software development and support agreement with Trilicom DataSolutions to provide device-level software for the Company’s interactive checkcashing Maxcash ABM, as well as to provide systems integration services forindependent check cashers, grocers, and other Greenland customers.  This will allow the Company to continuesales and support of its Maxcash AMB terminals while the Company  rebuilds it’s host and back-officetransaction support infrastructure with Mosaic Software. The agreement providesfor payment through a combination of company stock and equity funding as it becomes available.

On June 26, 2001, the Company enteredinto an exclusive manufacturing and assembly agreement with California Chassis,Inc., to build Greenland’s interactive check cashing Maxcash ABM.

**RESULTS OF OPERATIONS**

**For the Three-Month Period Ended June 30, 2001**

**Revenue**

TheCompany had total revenue of $100 thousand from its two segments including thesale of Maxcash ABM’s,  for the threemonths period ended june 30, 2001 as compared to revenues of $395 thousand inthe year-earlier period which represent a $295 thousand or 75% decrease. Duringthe period ended June 30, 2001, the Company’s sales operations for itsprincipal product, the Maxcash ABM, had been temporarily suspended primarilydue to a legal dispute with its software provider and the associated financialrisks to the Company represented by the dispute.

**Cost of Goods Sold**

Costof goods sold during the period ended June 30, 2001 were $83 thousand, comparedto costs of approximately $1.2 million in the year-earlier period.  The $1.1 million or 93% decrease isprimarily attributable to a decrease in direct material and overhead cost as aresult of decreased machine production. The cost of goods sold during the three month period ended June 30, 2001were for Maxcash ABM  production,support, restructuring including overhead costs shifted to an originalequipment manufacturer.

**Operating Expenses**

Generaland administrative expenses for the three months period ended June 30, 2001were $1.1 million, compared to approximately $1.2 million in the period endedJune 30, 2000. The decrease of $179 thousand (15%) was due to generally reducedoperations, including the temporary discontinuation of its maxcash abm salesand support efforts. During the three month period ended June 30, 2001, thecompany reduced staff and facilities.

Research and development costs werereduced by $123 thousand (87%) for the period ended June 30, 2001 from theyear-earlier period due, primarily, to the temporary discontinuation of itssupport for the Maxcash ABM product.

**Other Expense**

The Company had other expenses of $408thousand for the three month period ended June 30, 2001 as compared to $16thousand in the year-earlier period; an increase of $392 thousand (2,450%). Theincrease is primarily due to a loss on the sale of  assets of $370 thousand.

**Net Loss**

The Company has a net loss ofapproximately $1.5 million for the three month period ended June 30, 2001 ascompared with a net loss of approximately $2.2 million in the year-earlierperiod. Losses were reduced $708 thousand (33%) due primarily to reduced costof good sold and general and administrative expenses associated with downsizedoperations.

**For the Six-Month Period Ended June 30, 2001**

**Revenue**

The Company reported total revenues of$189 thousand from its two segments for the six months ended June 30, 2001compared to revenues of $475 thousand for the six months ended June 30, 2000,which represents a $286 thousand, or 60% decrease. The Company earned revenuesfrom the sale and rental of ABM’s and related products of $173 thousand and$176 thousand for the six months ended June 30, 2001, and 2000,respectively.  The Company sold sevenABM’s in 2001, and ten ABMs in 2000.

**Cost of Goods Sold**

The Company incurred total costs ofrevenues of $518 thousand (274% of revenues) and $1,811 thousand (381% ofrevenues) from its two segments for the six months ended June 30, 2001, and2000, respectively. The costs incurred by the transaction processing segmentwere $370 thousand and $1,266 thousand for the six months ended June 30, 2001,and 2000, respectively, resulting in gross margins on transaction revenue of$(354) thousand, and $(967) thousand, respectively. The primary cause of the$896 thousand, or 71%, decrease in costs between the periods was a reduction inmanufacturing costs. Management had anticipated greater improvements in thegross margin based on anticipated increases in the number of transactionsprocessed, and the associated economies of scale. Such increases did notmaterialize.

The costs incurred in the sales segmentwere $148 thousand and $544 thousand for the six months ended June 30, 2001,and 2000, respectively. This $396 thousand, or 73%, decrease is primarily attributableto a decrease in direct material and overhead costs as a result of decreasedmachine production. Manufacturing costs include fixed overhead expenses foritems such as supervision, testing, and facilities, as well as the direct costof the machines sold.  The gross marginon machine sales for the six months ended June 30, 2001, and 2000, was $25thousand and $(369) thousand. Management had anticipated greater improvements in the gross margin onmachine sales as a result of sales volume increasing to a level sufficient toabsorb overhead costs. Such increases did not materialize

**Operating Expenses**

General and administrative expenses were$2.1 million and $2.0 for the six months ended June 30, 2001, and 2000,respectively.  Research and Development Costsfor the six months ended June 30, 2001 and 2000 of $85 thousand and $361thousand, respectively, decreased $276 thousand or, 77%, which reflects theCompany’s completion of development of the Max Cash ABM.

In March 2000, the Company repurchasedthe exclusive distribution rights to the Master Distribution Agreement withSmartCash ATM, Ltd. (SmartCash). In consideration, the Company agreed to loanSmartCash $200 thousand collateralized by 333 thousand shares of GreenlandCorporation common stock, release certain restrictions on Company common stockheld by SmartCash, issue warrants to purchase 500 thousand shares of Companycommon stock, and continue to pay commissions on sales of machines sold bycertain sales representatives until the earlier of March 2002, or saidcommissions equal $320 thousand. During December 2000, the Company fullyreserved against the $200 thousand note receivable given the probability ofcollection from SmartCash, and the decrease in the value of the Company’scollateral. In addition, the Company issued SmartCash a note payable for $320thousand that will be repaid through the payment of the commissions notedabove. During March 2000 the Company recorded a $320 thousand expense on thistransaction.

Future AccountingRequirements

In June 2001, the Financial AccountingStandards Board ("FASB") issued Statement of Financial AccountingStandard ("SFAS") No 141, "Business Combinations", which iseffective for all business combinations initiated after June 30, 2001.  SFAS No. 141 eliminates the use of thepooling-of-interests method in a business combination.  The Company does not expect the adoption ofSFAS No. 141 to have a material impact on its consolidated financial positionor results of operations.

In June 2001, the Financial AccountingStandards Board ("FASB") issued Statement of Financial AccountingStandard ("SFAS") No 142, "Goodwill and Other IntangibleAssets", which is effective for the Company's year ending December 31,2002.  Under SFAS No. 142, goodwill isnot amortized and is tested for impairment on an annual basis and betweenannual tests in certain circumstances. The Company currently amortizes goodwill over twelve years and expectsthe adoption of SFAS No. 142 to eliminate the annual amortization ofapproximately $173,000 per year through December 31, 2010.  The Company has not completed its analysisof the impairment test provisions of SFAS No. 142 and the effect on theconsolidated financial position and results of operations of the impairmentprovisions is not known.

**Other Expense**

Net other expense of $904 thousand forthe six months ended June 30, 2001 increased $832 thousand, or 1,156%, from thecorresponding period in 2000. Expenses incurred in 2001 included a $484thousand loss on the sale of assets, a $212 thousand expense accrued for futurelease payments potentially due under the Company’s terminated office spaceoperating lease, and a $138 thousand expense accrued for warrant costs dueunder the equity funding agreement.

**Net Loss**

The net loss for the six months endedJune 30, 2001 was $3.4 million compared to $4.1 million for the comparativeperiod in 2000, resulting in a decreased loss of $700 thousand, or 17%.

**Liquidity and Capital Resources**

Historically, theCompany has financed its operations through cash generated from the sale ofequity securities and debt financing. To date, the Company has not been able tosupport its operations from revenues through sales of products or services.

At June 30, 2001,the Company’s had a working capital deficit of approximately $1.5 millioncompared with a working capital deficit of $1.1 million at December 31,2000.  This decrease of $328 thousand,or 29%, resulted primarily from a increase in accrued expenses of $354thousand. Stockholders’ equity decreased for the six months ended June 30, 2001from December 31, 2000 by $902 thousand, or 33%, due primarily to the  $3.4 million net loss, which was offset byincreased paid-in-capital of $3.0 million.

The Company'sofficers and directors are aware of no other threatened or pending litigation,not otherwise discussed in Item 1, Legal Matters, which would have a material,adverse effect on the Company. From time to time the Company is a defendant(actual or threatened) in certain lawsuits encountered in the ordinary courseof its business, the resolution of which, in the opinion ofmanagement, should not have a material adverse effect on the Company'sfinancial position results of operations, or cash flows.

The Company’s auditors have expressedtheir uncertainty as to the Company’s ability to continue as a going concern.They cite recurring losses from operations, the Company’s working capitaldeficiency, and limited cash resources.

In order to address this uncertainty, theCompany has taken steps to raise additional funds to finance its operations,including the potential for making strategic acquisitions, which could betterposition the Company for growth.

On March 28, 2001, the Company announcedthat it had entered an agreement with a NASD approved Underwriter, referred toin Company communications as an “institutional private equity investor,” underwhich the Underwriter agreed to purchase shares of the Company’s common stockover the next three years. Generally, under the terms of the agreement, theUnderwriter has agreed to purchase such amounts of common stock as the Companyelects to sell the Underwriter.  Thepurchase price for the shares is generally the lesser of (1) the market priceless $0.075 per share or (2) 93% of the market price. The agreement limits theamount of common shares that the Underwriter is obligated to purchase duringany 61-day period to 9.9% of the total common shares outstanding and is subjectto an overall cap of $35 million over the three-year term of the agreement. TheUnderwriter’s obligation to purchase shares terminates upon the occurrence ofvarious events as specified in the agreement. The actual amount of common stockthat the Underwriter may purchase is dependant on, among other things, (1) themarket price of the Company’s stock and (2) whether a termination event occurs.The agreement must be registered and declared effective by the Securities andExchange Commission. In consideration for executing the agreement, theUnderwriter will receive warrants to purchase 5,390,000 shares of Common stock.The company has recorded a $138 thousand expense for issuance of thewarrants.  There can be no assurancethat the Company will any sell stock to the Underwriter under the terms of theagreement.

During 2000 and 1999, the Company fullysubscribed its private placement offering realizing $3.4 million in netproceeds.  In addition, the Companyrealized $378 thousand from the exercise of Class A Warrants.  There are still outstanding Class A Warrantsexercisable at $.50, Class B Warrants exercisable at $1.00 and Class C Warrantsexercisable at $1.50 (collectively, the “Warrants”)..  By letter dated June 18, 2001 the Company notified the holdersall the warrants issued pursuant to the private placement that they couldexercise all or any portion of their warrants at an exercise price of $.033 perwarrant (each warrant can be exercised into one share of common stock ofGreenland Corporation) (the “Warrant Purchase Offer”). The holders have thirtydays to exercise said warrants. As of June 30, 2001 the Company had received$14 thousand through the exercise of said warrants.  Subsequent to June30, 2001 the Company extended the Warrant Purchase Offer (see Going Concern Uncertanity) until August 31,2001.  The extension was in response torequests by warrant holders for additional time.  As of August 15, 2001 the Company had received gross proceeds of$176 thousand from the Warrant Purchase Offer. In the event, all the holders exercised all the outstanding warrants at$.033 per warrant, the gross proceeds to the Company could total $1.5million.  However, the holders of suchwarrants are not under any obligation to exercise them and there can be noassurance that the Company will receive any cash from the exercise of warrantsoutstanding.

On April 2, 2001, the Company announcedthat it was temporarily suspending its check cashing operations in order tominimize its check cashing risk, reduce operating losses, and to conservecapital.

**Part II- OTHER INFORMATION**

**ITEM 1 - LEGAL PROCEEDINGS**

On October 12, 2000, the Company filed aDemand for Arbitration with the American Arbitration Association against SerenSystems, Inc. The Complaint sought preliminary relief in a dispute regardingthe ownership of software technology paid for by the Company, which SerenSystems, Inc. has refused to deliver and/or make available to the Company. As aresult, the Company has been unable to fulfill its obligations with respect tocertain purchase orders and/or contracts. with respect to the above mentioneddispute. The November 26, 1998 Consulting Agreement by and between the Companyand Seren Systems, Inc. stipulates that any controversy between the partiesshall be settled by binding arbitration. A hearing date is scheduled forSeptember 17, 2001. Although there can be no assurance as to the outcome of theproceeding, the Company is confident that the Company will obtain thesubstantive determination necessary to obtaining the return of its propertyand/or to collect damages. In addition to the return of its property, theCompany seeks actual damages in the amount of approximately $1.5 million, including the return of payments made toSeren as a subcontractor for Greenland on the ACS/7-Eleven V.com project; SerenSystems has counterclaimed for damages in the amount of $700,000.

On December 19, 2000, the Company filed aComplaint for Declaratory Relief and Provisional remedies in Los Angeles CountySuperior Court against Seren Systems, Inc. The Complaint was brought in LosAngeles County in response to certain venue-related issues. The Complaint isfor the remedies as requested in the San Diego action cited above. In addition,the Complaint seeks damages as related to a contract between the Company andSeren dated on or about June 30, 2000 that is part of the dispute with Seren.The Complaint was dismissed by mutual agreement of the parties.

On March 23, 2001 Arthur Kazarian,Trustee for the General Wood Investment Trust (the “Landlord”) filed aComplaint in San Diego County naming Greenland Corporation as a defendant. TheComplaint alleges Unlawful Detainer.  On or about May 1, 2001 the Company paid $45,000 to the Landlord andentered into a judgment to pay an additional $15,000 of legal fees.  The Company has entered into a settlementagreement to pay legal fees of $12,000.

On May 23, 2001 the Company filed aComplaint in San Diego County naming Michael Armani as the defendant. TheComplaint alleges breach of contract by Michael Armani in connection with twoseparate stock purchase agreements.  TheCompany seeks damages in the amount of $474,595.  Mr. Armani has yet to file a response to the Complaint. On August7, 2001 the Company filed a request for Entry of Default against Mr. Armani.

On May 23, 2001 Arthur Kazarian, Trusteefor the General Wood Investment Trust (the “Landlord”) filed a Complaint in SanDiego County naming Greenland Corporation as a defendant. The Complaint allegesbreach of contract pursuant to the terms of the lease agreement between theCompany and the Landlord for the real property located at 1935 Avenida Del Oro,Oceanside, California and previously occupied by the Company.  The Complaint seeks damages in the amount ofapproximately $500,000.  Although theCompany remains liable for the payments remaining for the term of the lease,the Landlord has a duty to mitigate said damages.  The Company recorded a lease termination liability of $212thousand during the quarter ended March 31, 2001.  The Company has retained outside counsel for representation inthis matter and settlement discussions are presently being conducted.

On July 5, 2001 Max Farrow filed aComplaint in San Diego County naming Greenland Corporation, Thomas J. Beener,Intelli-Group, Inc., Intelli-Group LLC and Intelli-Corp, Inc. asdefendants.  The Complaint alleges breachof contract in connection with Mr. Farrow’s resignation as an officer anddirector of the Company in January 2001. The Company believes that the Company and Mr. Beener have valid defenseto the allegations of Mr. Farrow. Although there can be no assurances, theCompany believes that it will successfully defend this legal action and thatthe outcome will not have a material adverse impact on the Company. The Companyis considering filing a counterclaim against Mr. Farrow seeking damages relatedto his activities as an officer and director of Greenland Corporation.

The Company's officers and directors areaware of no other threatened or pending litigation, which would have amaterial, adverse effect on the Company. From time to time the Company is adefendant (actual or threatened) in certain lawsuits encountered in theordinary course of its business, the resolution of which, in the opinion ofmanagement, should not have a material adverse effect on the Company'sfinancial position results of operations, or cash flows.

**ITEM 2 - CHANGES IN SECURITIES**

The Company issued 6.3 million shares inexchange for a note receivable in the amount of $250 thousand.

The Company issued 27 million shares heldin escrow for deferred compensation.

The Company acquired assets in the amountof $20 thousand by issuing 1.0 million shares.

The Company repaid notes payable torelated parties of $96 thousand by issuing 1.8 million shares of its commonstock.

The Company paid for services in theamount of $1.8 million by issuing 19 million shares of its common stock.

The Company issued non-qualified optionsand warrants to employees and directors to purchase 5.9 million shares with aweighted average strike price of $.12 and recorded a $92 thousand compensationexpense.

The Company issued 5.4 million warrantsto an equity investor and recorded a $138 thousand other expense.

**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 1 - None             (b)        Reports on Form 8-K - None

**SIGNATURES**

In accordance with the requirements ofthe Securities Exchange Act of 1934, the registrant has duly caused this reportto be signed on its behalf by the undersigned thereunto duly authorized.

 
Date:   August 17, 2001By: /s/ T.A. Hyde, Jr. T.A.  Hyde, Jr. CEO,  Chairman of Board      Date:  August 17, 2001By:  /s/ Gene Cross Gene  Cross Chief  Financial Officer, Director    Date: August 17, 2001By: /s/ Thomas J. Beener Thomas  J. Beener Secretary,  Director  
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