Greenzap Concludes $2 Million Round of Financing

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SAN DIEGO--(BUSINESS WIRE)--Feb. 1, 2006--GreenZap, Inc. (Pink Sheets:GZPN), a provider of secure online payment services, announced today that it had received commitments for the maximum amount of its second-round of financing at $2 million. GreenZap made the offer available to a select group of its members, enabling the company to close the offering in just nine days.

"We are thrilled with the response we received from our users. Unfortunately, due to the $2 million funding limit of this offering, we were unable to allow more of our users to participate," said GreenZap CEO Damon Westmoreland. "The monies raised will help us build the company and meet our strategic growth plan for the upcoming year," continued Westmoreland. The plan for 2006 includes full-scope credit card processing, a 24 hour customer service call center and a customized transaction switch to deliver rapid transactions.

The company reported earlier this month that it retained a financial auditing company and expects to commence reporting obligations by the end of first quarter 2006. Once complete, the company hopes to commence quotation on the OTCBB.:thumbsup:
:party:

“THE TRUTH WILL PREVAIL”
Friday, February 03, 2006
[email protected]
http://www.sddt.com
Source Code: 20060203czg

News Release:


Bloggers target online-payment firm GreenZap as a scam

By JERAN WITTENSTEIN, The Daily Transcript

Friday, February 3, 2006

GreenZap Inc (PNK: GZPN, News), an online payment service headquartered in La Jolla, has come under fire from a number of blog Web sites, alleging the company is fraudulent.

The sites, www.greenzapscam.com and www.scam.com, are full of postings leveling accusations that the company is “confusing and misleading” to “they are the biggest scam of 2005.”

But according to GreenZap CEO Damon Westmoreland and President Alex Sonkin, the Web sites are libelous and are themselves a scam, designed to take advantage of the firm's more than 600,000 members, cause fear and ultimately generate money by generating hits to their blogs.

“It’s a very underground society of people who don’t do much, who either generate sites for the purpose of revenue or strictly because they don’t have anything better to do,” said Westmoreland.

GreenZap offers a service similar to PayPal in that it offers customers the ability to make a secure payment over the Internet. But instead of charging customers a percentage of the transaction, as PayPal does (sometimes as much as 2.9 percent), GreenZap charges a flat fee per transaction, from $1 to $2 depending on membership status. In addition, GreenZap offers a bonus: Webcash, which can be used at more than 400 online retailers, such as DirectTV or Starbucks, or as a means of payment for the transaction fees.

GreenZap began a “pre-soft registration” campaign in the beginning of April 2005, offering potential registrants $25 in Webcash and an additional $5 in Webcash for each additional customer registered using a customer referral code.

According to Westmoreland, by the time GreenZap officially opened, in June 2005, membership exceeded 200,000, and the Webcash incentive had been so popular they decided to up it to $50. By November 2005, GreenZap said it had over 600,000 members.

Then came the bloggers.

Westmoreland and Sonkin first noticed greenzapscam.com in August. “I was shocked that this industry even existed. It just opened my eyes and made me question a lot of what I was reading. It forced me to look at the motivation when someone writes things and posts them on the Internet,” said Sonkin.

Greenzapscam.com proclaims, “After doing some research on GreenZap, I have found it to be a very suspicious outfit! Read this site as I track the progress on this whole GreenZap fiasco. Only facts are posted here ... YOU determine if GreenZap is a scam.” Directly underneath this posting is another statement: “Want to make a donation or advertise on this site? Contact me now!”

The person who runs the Web site, who requested anonymity citing shyness, stated in an e-mail, “My site merely compiles facts and user opinions, and reading through all the posts may give you a better idea of whether GZ is really a scam.” The person claims to have been conned by GreenZap but wouldn’t elaborate.

Posts from bloggers on the site also claim that GreenZap members have been deceived and cheated. The California Better Business Bureau has a record of 32 complaints filed by consumers unhappy with GreenZap, but all 32 complaints are listed as resolved, which according to the BBB, means there was a goodwill effort on behalf of the company and the consumer was satisfied. In comparision, the BBB has logged nearly 4,000 complaints in the last 36 months regarding PayPal.

Bloggers claim that GreenZap is not domiciled properly or is domiciled outside of the United States to avoid legal issues. According to the California Franchise Tax Board, GreenZap is an active corporation with no issues to report.

Perhaps the most damaging claim bloggers have leveled at the company is that CEO Westmoreland is a con man with a history of fraudulent business endeavors.

According to Westmoreland, both in a phone interview and a short, self-authored biography written to address the charges leveled at him in the blogosphere, he has never taken part in a fraudulent business and has never been convicted of a crime (although he does admit to having tax complications with one of his first companies, Tele-Card Network, which eventually forced him into bankruptcy).

According to Sonkin, Westmoreland has built 18 different companies and has an exceptional understanding of Internet startups. Sonkin himself worked as a derivatives trader in Chicago for seven years and later started Strategic Business Development Group, a marketing consulting company in New York.

Westmoreland and Sonkin claim that two months ago they were contacted by greenzapscam.com. By e-mail, an anonymous representative of the Web site offered to sell the domain to GreenZap for $5,000. Westmoreland declined.

“Paypal and Overstock.com are both experiencing this. For example, if you Google Paypal, the number one site that pops up is Paypal.com. Second is Paypalsucks.com. Third is Paypalwarning.com. Because of the amount of traffic our Web site generates, we adversely draw attention to these types of sites. Traffic means revenue,” said Westmoreland.

This type of blog assault can have a serious effect on business.

“These kind of sites have been around a long time. It certainly can have an impact on sales and public perception. But the blog is a much more immediate way to do it,” said Andy Serwin, a partner with Foley & Lardner LLP in San Diego who specializes in technology and business law.

Still, Sonkin said the attention generated from these types of sites have been more of a nuisance than an impediment to business. “We hate seeing that there is some confusion, but we’re confident that the truth will prevail,” he said.


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Send your comments, thoughts or suggestions to [email protected]

Hey Zappers,

Join me every Tuesday 4 pm pst. for the GZ meeting at either of this two links.

1. Company link www.greenzap.it then click on the conference room.

2. My link at www.tstyles.greenzap.it

3. Or your greenzap.it site. just click on conference room.

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International Time Clock
Tuesday, May 9, 2006
All times listed are Pacific Time

8:00 AM - John Gross
GreenZap Meeting
General Information

4:00 PM - Damon Westmoreland
COMMUNITY CALL
Learn what is new or coming and get your questions answered by the CEO of Greenzap

8:00 PM - Donald Barnes
GreenZap Meeting
General Information

Hi Neno,
I have not been following my Greezap account for some time because I was having so much trouble accessing the storez and also they were working on the zapmaps and I could never pull up my map. Now, when I go in to try to access the account I cannot get in. Just wondering if you know why this is happening? Please PM me as I don't come in here too often.
Also wondering how the agreement (?) with the Fortune 100 company will change GreenZap? Do you know?

Thanks for lending your ear,
hzchoice

Quote:

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Originally Posted by hzchoice2

Hi Neno,
I have not been following my Greezap account for some time because I was having so much trouble accessing the storez and also they were working on the zapmaps and I could never pull up my map. Now, when I go in to try to access the account I cannot get in. Just wondering if you know why this is happening? Please PM me as I don't come in here too often.
Also wondering how the agreement (?) with the Fortune 100 company will change GreenZap? Do you know?

Thanks for lending your ear,
hzchoice

---

Pm sent.

Dear tommy,

GreenZap is proud to announce the launch of the Cash Back program.

You can now earn $25 in cash for simply applying for everyday products
and services that you and your family can benefit from. Choose from
the world's top companies offering everything from high rewards credit
cards to progressive health insurance.

Simply log into your account, click on the 'Storez' tab, followed by
the 'Cash Back' tab.

Happy Zapping!

Sincerely,

GreenZap Customer Care Team

__________________________________________________ ____________________

Please do not reply to this email. This mailbox is not monitored and
you will not receive a response. For assistance, log into your GZ account
and choose the 'Help' link located in the upper right-hand corner of
every page.

Security Notification

GZ and its representatives will never ask you to reveal your password.
There are NO EXCEPTIONS to this policy. If anyone asks for your
password by phone or by email, or on any website other than GZ, refuse and
immediately report it to [email protected].

Protect yourself against fraudulent websites or emails by opening a new
web browser window (e.g. Internet ExplorerR or NetscapeR every time you
log into your account.