GreenBox POS Reports Third Quarter 2020 Financial Results

SAN DIEGO, CA / ACCESSWIRE / November 17, 2020 / GreenBox POS (OTCQB:GRBX) ("GreenBox", the "Company"), an emerging financial technology company leveraging proprietary blockchain security to build customized payment solutions, has provided its financial results for the third quarter ended September 30, 2020.

Recent Operational Highlights:

  • Acquired money service business MoltoPay, expanding its international footprint and licensing capabilities to deploy its proprietary blockchain payment solutions in Canada
  • Repurchased 6.0 million shares of common stock in a transaction as part of the settlement agreement option with RB Capital Partners Inc
  • Completed a $3.85 million private placement to extinguish all debt and accelerate the release of the Company's next-generation (Gen 3) technology platform, which will be infinitely scalable and allow for faster onboarding
  • Completed the retirement of its last convertible note held by Vista Capital
  • Filed application to Uplist to the Nasdaq Capital Market and reserved the ticker "GBOX"

Management Commentary

"During the third quarter, we saw sequential momentum in processing volume, which resulted in both revenue and gross profit growth from the previous quarter," said Fredi Nisan, Chief Executive Officer of GreenBox POS. "We believe the second quarter of 2020 is a more suitable earnings comparison than year over year, as it better reflects the revenue derived from our current platform. Late last year we recognized the potential scale limitations of our Gen 1 technology platform, and therefore, decided to improve and re-launch to capture the massive market opportunity we continue to see. Today, we are in the early stages with our Gen 2 technology and are already seeing promising top and bottom-line results on a sequential basis. In fact, this re-launch ultimately allowed us to expand and drive revenue in Europe-following the addition of crypto currency and forex capabilities added in the second quarter-as well as Canada-following the MoltoPay acquisition.

"We are encouraged by the pace of adoption of our highly scalable blockchain platform across multiple countries. In addition to the growth in revenues, the Company took several steps towards establishing new tier-one partnerships while also adding additional functionality to the platform that is focused on rapid scalability."

"With our newly strengthened balance sheet, we believe we have all of the resources needed to complete the development of the 3rd generation of our platform and are in a stronger position than ever to execute upon our growing pipeline of opportunities, uplist to the NASDAQ Capital Market and drive long-term value for our shareholders," concluded Nisan.

Third Quarter 2020 Financial Summary

  • Revenues in the third quarter of 2020 were $3.1 million, compared to revenues of $14.8 million in the same quarter a year ago. This decrease was primarily a result of the Company deciding to pause operations with Gen 1 technology and re-launch an infinitely scalable platform architecture (Gen 2). Sequentially, revenues increased 33% when compared to $2.3 million in the second quarter of 2020, primarily due to increased processing volume on the Gen 2 technology platform.
  • Gross profit in the third quarter of 2020 was $1.2 million, or 39.6% of total revenue, compared to gross profit of $8.0 million, or 53.8% of total revenue, in the same quarter a year ago. Sequentially, gross profit increased 120 basis points when compared to $0.9 million, or 38.4% of total revenue, in the second quarter of 2020.
  • Total operating expenses in the third quarter of 2020 totaled $1.5 million, compared to $6.9 million in the same quarter a year ago, and $1.1 million in the second quarter of 2020.
  • Loss from operations in the third quarter of 2020 was $0.2 million, compared to an operating profit of $1.0 million in the same quarter a year ago, and a loss from operations of $0.2 in the second quarter of 2020.
  • Net loss in the third quarter of 2020 was $0.5 million, or ($0.00) per basic and diluted share, compared to net income of $1.3 million, or $0.01 per basic and diluted share, in the same quarter a year ago. Net income in the second quarter of 2020 was $4.9 million. The sequential decrease in net income was primarily related to changes in the fair value of a derivative security and gain from extinguishment of convertible debt in the second quarter of 2020, which collectively totaled $5.2 million.

About GreenBox POS
GreenBox POS (OTCQB: GRBX) is an emerging financial technology company leveraging proprietary blockchain security to build customized payment solutions. The Company's applications enable an end-to-end suite of turnkey financial products, reducing fraud and improving the efficiency of handling large-scale commercial processing volumes for its merchant clients globally. For more information, please visit the Company's website at www.greenboxpos.com.

Forward-Looking Statements Disclaimer
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. In evaluating such statements, prospective investors should review carefully various risks and uncertainties identified in this release and matters set out in the Company's SEC filings. These risks and uncertainties could cause the Company's actual results to differ materially from those indicated in the forward-looking statements.

Investor Relations Contact
Mark Schwalenberg
MZ Group - MZ North America
312-261-6430
GRBX@mzgroup.us
www.mzgroup.us

GreenBox POS
Consolidated Balance Sheets
September 30, 2020 and December 31, 2019
(unaudited)

       
  (Unaudited)    
  September 30,  December 31,  
  2020   2019  
       
ASSETS      
       
Current Assets:      
Cash and cash equivalents $-  $- 
Restricted cash  124,834   763,110 
Accounts receivable, net of allowance for bad debt of $0 and $0, respectively  10,000   70,257 
Accounts receivables from fines and penalties from merchants, net of allowance for bad debt of $6,665,031  2,789,230   2,776,687 
Cash due from gateways, net  5,680,356   8,426,844 
Prepaid and other current assets  59,766   24,888 
Total current assets  8,664,186   12,061,786 
         
Non-current Assets:        
Property and equipment, net  62,555   66,491 
Other assets  87,174   17,174 
Operating lease right-of-use assets, net  146,984   229,639 
Total non-current assets  296,713   313,304 
         
Total assets $8,960,899   $12,375,090  
         
         
         
Current Liabilities:        
Accounts payable $725,558  $504,505 
Other current liabilities  47,207   15,100 
Accrued interest  87,560   368,071 
Payment processing liabilities, net  12,624,082   14,021,892 
Short-term notes payable, net of debt discount of $39,000 and $32,418, respectively  731,232   741,253 
Convertible debt, net of debt discount of $133,500 and $0, respectively  44,500   807,500 
Derivative liability  284,210   1,050,063 
Current portion of operating lease liabilities  30,314   113,935 
Total current liabilities  14,574,663   17,622,319 
Operating lease liabilities, less current portion  120,110   120,110 
         
Total liabilities  14,694,773   17,742,429 
         
Commitments and contingencies        
         
Stockholders' Equity:        
Common stock, par value $0.001, 495,000,000 shares authorized, shares issued and outstanding of 181,6550,138 and 169,862,933, respectively  181,650   169,863 
Common stock - issuable  -   695 
Additional paid-in capital  1,590,993   1,179,272 
Accumulated deficit  (7,506,517)  (6,717,169)
Total stockholders' equity  (5,733,874)  (5,367,339)
         
Total liabilities and stockholder's equity $8,960,899   $12,375,090  
         

GreenBox POS
Consolidated Statements of Operations

For the Three and Nine Months Ended September 30, 2020 and 2019
(unaudited)

       
  Three Months Ended September 30,  Nine Months Ended September 30, 
  2020   2019   2020   2019  
             
Revenue $3,056,271  $14,793,117  $5,536,335  $19,070,861 
                 
Cost of revenue  1,845,295   6,834,198   3,504,283   10,602,555 
                 
Gross profit  1,210,976   7,958,919   2,032,052   8,468,306 
                 
Operating expenses:                
Advertising and marketing  59,099   10,319   86,368   35,928 
Research and development  243,923   381,112   798,157   1,085,298 
Cash due from gateway reserve expense  -   5,665,031   -   5,665,031 
General and administrative  366,734   176,120   613,156   375,373 
Payroll and payroll taxes  436,216   420,074   1,279,174   967,121 
Professional fees  344,641   281,659   852,234   588,677 
Depreciation and amortization  5,764   4,897   16,856   11,352 
Total operating expenses  1,456,377   6,939,212   3,645,945   8,728,780 
                 
Loss from operations  (245,401)  1,019,707   (1,613,893)  (260,474)
                 
Other income (expense):                
Interest expense  (48,931)  3,837   (372,553)  (171,193)
Interest expense - debt discount  (83,500)  -   (121,918)  (188,273)
Derivative expense  (925,576)  -   (925,576)  (634,689)
Changes in fair value of derivative liability  819,366   236,184   (383,769)  (129,186)
Gain from extinguishment of convertible debt  -   -   2,630,795   - 
Other income or expense  (5,768)  -   (2,434)  - 
Total other expense, net  (244,409)  240,021   824,545   (1,123,341)
                 
Loss before provision for income taxes  (489,810)  1,259,728   (789,348)  (1,383,815)
                 
Income tax provision  -   -   -   - 
                 
Net loss $(489,810)  $1,259,728   $(789,348)  $(1,383,815) 
                 
                 
Earnings (loss) per share:                
Basic and diluted $(0.00) $0.01  $(0.00) $(0.01)
                 
Weighted average number of common shares outstanding:                
Basic and diluted  176,930,358   168,492,966   176,930,358   167,136,344 
                 

GreenBox POS
Consolidated Statements of Cash Flows
For the nine months ended September 30, 2020 and 2019
(unaudited)

    
  Nine Months Ended September 30, 
  2020   2019  
       
Cash flows from operating activities:      
Net loss $(789,348) $(1,383,815)
         
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:        
Depreciation expense  16,856   11,352 
Noncash lease expense  (966)  4,292 
Stock compensation expense  162,633   85,640 
Common stocks issued for professional fees  4,130   - 
Common stocks - issued donation  8,000   - 
Proceeds from exercise of stock options  32,500   - 
Interest expense - debt discount  121,918   188,273 
Derivative expense  925,576   634,766 
Gain (loss) on extinguishment of debt  (2,630,795)  - 
Changes in fair value of derivative liability  383,769   129,186 
Changes in assets and liabilities:        
Other receivable, net  47,714   (3,810,776)
Prepaid and other current assets  (34,878)  (4,919)
Cash due from gateways, net  3,124,085   (12,562,634)
Other assets  (70,000)  - 
Accounts payable  220,465   79,768 
Other current liabilities  32,107   (6,609)
Accrued interest  (286,461)  20,243 
Payment processing liabilities, net  (1,397,810)  16,678,995 
Net cash provided by (used in) operating activities  (130,505)  64,622 
         
Cash flows from investing activities:        
Purchases of property and equipment  (12,332)  (5,984)
Net cash used in investing activities  (12,332)  (5,984)
         
Cash flows from financing activities:        
Borrowings from convertible debt  178,000   482,500 
Repayments on convertible debt  (670,000)  (496,500)
Borrowings from notes payable  1,954,480   - 
Principal payments on notes payable  (1,147,919)  - 
Repayment on long-term debt  -   (75,000)
Repurchase of common stocks outstanding  (810,000)  - 
Net cash used in financing activities  (495,439)  (89,000)
         
Net increase in cash, cash equivalents, and restricted cash  (638,276)  (30,362)
         
Cash, cash equivalents, and restricted cash - beginning of period  763,110   284,978 
         
Cash, cash equivalents, and restricted cash - end of period $124,834   $254,616  
         
Supplemental disclosures of cash flow information        
Cash paid during the period for:        
Interest $575,014  $110,873 
Income taxes $800  $800 
         
         
Non-cash financing activities:        
Convertible debt conversion to common stock $137,500  $(150,000)
Interest accrual from convertible debt converted to common stock $78,050  $- 
Short-term notes payable converted to common stock $810,000  $- 
         

SOURCE: GreenBox POS, LLC 



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