Frontera, formed in 2003, invested nearly four years and three million dollars to build a unique technology platform for the check cashing, money services, and the alternative lending business.  The Company believes that there is an opportunity to build a large, profitable business through the application of information technology to substantially reduce direct store management, minimize loan losses and cash shrink while offering a full suite of products. To address this opportunity, management has created unique business model for providing check cashing, money transfer, payday and gold pawn lending (and gold buying) and related financial services to the un-banked and under-banked financial services customer.

To take advantage of its highly scalable business/technology model and the current market environment, the Company is acquiring “mom and pop” stores.  After implementing the Frontera systems, technology and new products, the Company has demonstrated through its acquisitions and research, it can acquire stores at 3x cash flows and, within the first year of operations, increase store cash flows and earnings.  The Company also believes that acquiring these stores at 3x cash flows will provide an immediate increase in value to the company through the valuation expected from the revenues and cash flows achieved on sale by similar businesses in the public market. 

Check cashing is often a staple or the underserved customer, particularly among the un-banked. According to the Federal Reserve statistics, 22% of low-income US families (10 million households) are un-banked. Furthermore, among those who are banked, check cashing establishments offer a convenient way to obtain needed funds more quickly than simply depositing a check. The check cashing industry has, therefore, experienced significant growth over the past ten years. Recently, check cashing outlets processed 180 million checks with a face value of $55 billion, earning $1.5 billion in fees. Furthermore, most check cashing customers do not simply cash their check, but often they also purchase money orders and engage in various forms of remittance transactions, such as international money transfer and bill pay services.

International money transfer not only provides a source of cash flow for check cashing and lending, it is also extremely profitable. This is also a growing market with money transfers to Mexico alone accounting for nearly $20 billion (estimate) in 2005 with growth expected to continue.

The payday advance and pawn (gold jewelry) lending industries are relatively young and have grown steadily since the early 1990's in response to a shortage of available short-term consumer credit alternatives from traditional banking institutions. The consumer market served by this industry is “middle America”, people with jobs who typically live paycheck to paycheck. Industry growth has been dramatic, growing from virtually nothing to $25+ billion in the last ten years, with several companies building lucrative, rapidly growing businesses.