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GreenBox POS Reports Fourth Quarter and Full Year 2021 Financial Results

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GreenBox POS
GreenBox POS

SAN DIEGO, CA, March 31, 2022 (GLOBE NEWSWIRE) -- GreenBox POS (NASDAQ: GBOX) ("GreenBox", the "Company"), an emerging and rapidly growing FinTech company has provided its financial results for the fourth quarter and full year ended December 31, 2021.

Fourth Quarter 2021 and Subsequent Operational Highlights:

  • Achieved a company record revenue in 2021 of $26.3 million, an increase of $17.8 million or 208.6% from $8.5 million in 2020.

  • 2021 processing volume increased nearly tenfold to approximately $2.0 billion, from $202 million in 2020.

  • Entered into key licensing partnership with Cross River, a respected technology driven infrastructure provider, to initiate banking as a service offering and substantially expand the universe of potential customers while creating new channels for revenue growth.

  • Launched a new ACH bulk processing channel with client commitments surpassing $50 million per month.

  • Strengthened senior management team by appointing respected world-class marketer Jacqueline Reynolds as Chief Marketing Officer.

  • Launched a transformative global initiative to raise GreenBox brand awareness and appointed award-winning international agency INNOCEAN as advertising and branding agency of record.

  • Fortified the company’s balance sheet and obtained necessary growth capital with the issuance of a $100 million convertible debt financing.

  • Accelerated the Company’s share repurchase program with an additional $10 million being approved for repurchase.

  • Appointed Min Wei, an accomplished operations executive with extensive experience in managing global technology company processes as Chief Operating Officer.

Management Commentary

“2021 was highlighted by the rapid expansion of our payment processing footprint and a record approximately $2.0 billion in processing volume,” said Fredi Nisan, Chief Executive Officer of GreenBox POS. “This represents growth of nearly 10x over 2020, a milestone achievement that demonstrates the scalability of our technology, our market share growth, our ability to remain compliant, and the quality of our sales team and overall ecosystem for our growing client roster. This KPI translated into record company revenue during 2021 of $26.3 million, representing tremendous growth of over 209% when compared to 2020’s full year revenue.

“During the year we were highly focused on closing and integrating our strategic acquisitions of Northeast Merchant Services and ChargeSavvy. As an indication of the success of their integration, just six months after closing, ChargeSavvy achieved its best quarter in its 9-year history as a result of improved technology and efficiencies. We also announced the planned acquisition of Transact Europe Holdings (TEU). Once complete, the acquisition of TEU positions us for rapid global expansion and creates a tremendous opportunity to deploy coyni at scale. We will continue to explore strategic acquisitions that will allow us to add portfolios of processing volume, increase key licensing assets domestically and globally, grow the adoption of coyni and enable us to branch out and service more verticals and geographic locations.

“Operationally, during the fourth quarter and into 2021 we continued to strengthen the composition of our management team. We welcomed Min Wei as our new Chief Operating Officer whose background in operational efficiencies at global technology companies will be critical for us given our expansion plans. Jacqueline Reynolds, our new Chief Marketing Officer, is utilizing her decades of experience leading some of the world’s most coveted brands and spearheading our recently announced transformational global initiative to raise GreenBox brand awareness with the appointment award-winning advertising agency, INNOCEAN as our advertising and branding agency of record.

“Looking forward, we remain highly focused on the pursuit of our objectives to build compliant, cutting edge blockchain ledger tokenized payment solutions for the diverse, evolving and dynamic global market. Considering our global expansion plans and potential acquisitions, we expect to increase our processing volume in 2022 to between $4-$5 billion.

“I would like to thank our stakeholders for their ongoing support. We recently demonstrated our commitment to our shareholders and confidence in our ability to execute on the growth opportunities in front of us with the approval of an accelerated share repurchase program of up to $10 million. Taken together, we believe we have the technology, resources, and partnerships in place to continue to drive the future of financial technology while creating long-term sustainable value for our shareholders,” concluded Nisan.

Fourth Quarter and Full Year 2021 Financial Results

  • 2021 revenues increased by $17.8 million or 208.6%, to $26.3 million from $8.5 million for the year 2020. The increase was primarily due to an increase in processing volume from $202 million for 2020 to $1.95 billion for 2021. The increase in processing volume was due to a number of factors, including: growth of our customer/merchant base as the result of expanded sales and marketing efforts; an increase in average merchant transaction volume as a result of a greater strategic focus on larger merchants; the expansion and growth of our advanced blockchain ledger-based payment solutions product offering, combined with an expanding ISO and partnership network; and our strategic acquisition strategy

  • Fourth quarter 2021 revenues were $7.1 million, compared to revenues of $3.0 million in the same quarter a year ago, an increase of $4.1 million or 138.6%.

  • 2021 gross profit was $16.9M, or 64% of revenue, an increase of 357% compared to $3.7M in the prior year, or 43% of revenue. Our margins increased significantly due to increased processing efficiency; greater utilization of lower cost gateways; and decreased cost to scale.

  • Fourth quarter 2021 gross profit was $3.0M, or 43% of revenue, as compared to $1.7M, or 56% of revenue, in the same period a year ago.

  • 2021 operating expenses increased by $28.9 million, or 328%, to $37.7 million from $8.8 million in the prior year. The increase was due to increases in general and administrative, stock-based compensation, research and development, acquisition related due diligence and increased head count all to fuel the Company’s growth initiatives.

  • Total operating expenses in the fourth quarter of 2021 totaled $11.7 million, compared to $5.2 million in the same quarter a year ago.

  • The Company sustained a net loss in 2021 of $26.5 million, or $0.65 per basic and diluted share, compared to a net loss of $5.0 million, or $0.17) per basic and diluted share during 2020. The increase in net loss was primarily due to increased operating expenses from stock-based compensation for services as well as an increase in general and administrative expenses.

  • Fourth quarter 2021 net loss was $7.0 million or $0.17 per basic and diluted share compared to a loss of $4.2 million or $0.14 per basic and diluted share during the same period prior year.

  • Adjusted Net Income, a non-GAAP financial measure, for 2021 was $3.0 million while Adjusted Net loss for the fourth quarter 2021 was $1.5 million.

Management will host a conference call on Thursday, March 31, 2021 at 4:30 p.m. Eastern time to discuss GreenBox’s fourth quarter and full year 2021 financial results, provide a corporate update, and conclude with Q&A from telephone participants. To participate, please use the following information:

Q4 and Full Year 2021 Conference Call and Webcast
Date: Thursday, March 31, 2022
Time: 4:30 p.m. Eastern time
US Dial In: 1-877-407-4018
International Dial In: 1-201-689-8471
Conference ID: 13728060
Webcast: Link

Please dial in at least 10 minutes before the start of the call to ensure timely participation.

About GreenBox POS

GreenBox POS (NASDAQ: GBOX) 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.

Use of Non-GAAP Financial Information

This earnings release discusses Adjusted Net Income which is not a financial measure as defined by GAAP. This financial measure is presented as a supplemental measure of operating performance because we believe it can aid in, and enhance, the understanding of our financial results. In addition, we use Adjusted Net Income as a measure internally for budgeting purposes.

We define Adjusted Net Income as net income (loss) before (1) interest expense (income), net, (2) income tax expense (benefit), (3) depreciation, (4) amortization of intangible assets, (5) stock-based compensation expense, plus (6) from time to time, certain other items which are specific transaction-related items. Other companies may define or calculate this measure differently, limiting the usefulness as a comparative measure. Because of this limitation, this non-GAAP financial measure should not be considered in isolation or as substitute for or superior to performance measures calculated in accordance with GAAP and should be read in conjunction with the financial statement tables. See also Reconciliation of Net Income (Loss) attributable to GreenBox POS, Inc., to Adjusted Net Income in the table below.*

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
GBOX@mzgroup.us
www.mzgroup.us


GreenBox POS
Consolidated Balance Sheets
December 31, 2021 and December 31, 2020
(unaudited)

As of December 31,

2021

2020

ASSETS

Current Assets:

Cash and cash equivalents

$

89,559,695

$

-

Restricted cash

-

1,832,735

Accounts receivable, net of allowance for bad debt of $54,795 and $0, respectively

481,668

10,000

Accounts receivable from fines and penalties from merchants, net of allowance for bad debt of $9,454,261 and $6,665,031, respectively

-

2,789,230

Inventory, net of inventory reserve of $3,127 and $0, respectively

286,360

-

Cash due from gateways, net of allowance of $3,904,952 and $0, respectively

18,941,761

7,303,949

Prepaid and other current assets

6,420,696

70,130

Total current assets

115,690,180

12,006,044

Non-current Assets:

Property and equipment, net

1,674,884

57,264

Other assets

190,636

81,636

Goodwill

6,048,034

-

Intangible Assets, net

7,578,935

-

Operating lease right-of-use assets, net

1,490,159

117,795

Total non-current assets

16,982,648

256,695

Total assets

$

132,672,828

$

12,262,739

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Accounts payable

$

871,037

$

210,094

Other current liabilities

501,167

68,138

Accrued interest

1,226,287

-

Payment processing liabilities, net

4,997,807

10,199,956

Current portion of long term debt

-

272,713

Convertible debt, net of debt discount of $0 and $2,993,408, respectively

-

856,592

Derivative liability

18,735,000

-

Current portion of operating lease liabilities

495,134

120,110

Total current liabilities

26,826,432

11,727,603

Long term debt, net of debt discount of $41,344,822 and $0, respectively

59,305,078

149,900

Operating lease liabilities, less current portion

1,035,895

-

Total liabilities

87,167,405

11,877,503

Commitments and contingencies

Stockholders' Equity:

Common stock, par value $0.001, 82,500,000 shares authorized, shares issued and
outstanding of 42,831,816 and 30,710,645, respectively

42,831

30,711

Additional paid-in capital

88,574,469

12,079,074

Accumulated deficit

(38,178,061

)

(11,724,549

)

Less: Treasury stock, at cost; 714,831 and 0 shares, respectively

(4,933,816

)

-

Total stockholders' equity

45,505,423

385,236

Total liabilities and stockholder's equity

$

132,672,828

$

12,262,739


GreenBox POS
Consolidated Statements of Operations
For the Twelve Months Ended December 31, 2021 and 2020
(unaudited)

Year Ended December 31,

2021

2020

Net Revenue

$

26,304,502

$

8,525,015

Cost of revenue

9,412,254

4,825,587

Gross profit

16,892,248

3,699,428

Operating expenses:

Advertising and marketing

134,166

93,868

Research and development

3,870,050

1,363,757

General and administrative

9,114,370

800,111

Payroll and payroll taxes

4,502,605

1,796,160

Professional fees

3,132,528

1,691,107

Stock compensation for employees

3,704,008

3,036,009

Stock compensation for services

12,306,365

-

Depreciation and amortization

912,677

22,742

Total operating expenses

37,676,769

8,803,754

Income (Loss) from operations

(20,784,521

)

(5,104,326

)

Other income (expense):

Interest expense

(1,931,713

)

(359,493

)

Interest expense - debt discount

(2,993,408

)

(1,149,677

)

Derivative expense

(3,435,178

)

(641,366

)

Changes in fair value of derivative liability

2,845,000

(383,769

)

Merchant liability settlement

(364,124

)

-

Merchant fines and penalty income

-

2,630,796

Other income or expense

215,338

455

Total other income (expense), net

(5,664,085

)

96,946

Loss before provision for income taxes

(26,448,606

)

(5,007,380

)

Income tax provision

4,906

-

Net loss

$

(26,453,512

)

$

(5,007,380

)

Net loss per share:

Basic and diluted

$

(0.65

)

$

(0.17

)

Weighted average number of common shares outstanding:

Basic and diluted

40,708,304

29,868,955


GreenBox POS
Consolidated Statements of Cash Flows
For the Twelve months ended December 31, 2021 and 2020
(unaudited)

Year Ended December 31,

2021

2020

Cash flows from operating activities:

Net loss

$

(26,453,512

)

$

(5,007,380

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation expense

912,677

15,876

Forgiveness of PPP Loan

(272,713

)

-

Noncash lease expense

38,555

-

Stock compensation expense

3,704,008

3,036,009

Restricted stock issued for services

4,768,980

-

Common stocks issued for professional fees

7,537,385

1,262,641

Stock compensation issued for interest

653,467

-

Interest expense - debt discount

2,993,408

1,102,706

Derivative expense

3,435,178

-

Changes in fair value of derivative liability

(2,845,000

)

(1,050,063

)

Changes in assets and liabilities:

Accounts receivable

-

60,257

Accounts receivables from fines and fees from merchant, net

-

(12,543

)

Lease liability, net of asset

-

(2,091

)

Other receivable, net

2,382,352

-

Inventory

(161,859

)

-

Prepaid and other current assets

(6,343,905

)

(28,068

)

Cash due from gateways, net

(11,637,812

)

1,122,895

Other assets

686,876

(81,636

)

Accounts payable

443,263

(295,181

)

Other current liabilities

301,469

53,038

Accrued interest

1,226,287

(515,202

)

Payment processing liabilities, net

(8,534,989

)

(3,821,936

)

Net cash provided by (used in) operating activities

(27,165,885

)

(4,160,678

)

Cash flows from investing activities:

Purchases of property and equipment

(158,858

)

(6,649

)

Acquisition of Northeast

(2,500,000

)

-

Net cash used in investing activities

(2,658,858

)

(6,649

)

Cash flows from financing activities:

Treasury stock repurchase

(4,934,531

)

-

Proceeds from stock option exercises

2,338

35,510

Borrowings from convertible debt

76,800,000

3,678,000

Repayments on convertible debt

-

(985,500

)

Repayment on long-term debt

-

149,900

Repayments on short-term notes payable

-

(2,305,538

)

Borrowings from short-term notes payable

-

1,531,867

Borrowings from notes payable

350,000

272,713

Proceeds from exercise of warrant

3,731,200

-

Repurchase of common stock from stockholder

(5,693,863

)

-

Proceeds from issuance of common stock

45,805,491

2,860,000

Net cash provided by (used in) financing activities

116,060,635

5,236,952

Cash acquired from acquisition of Northeast and ChargeSavvy

1,491,068

-

Net increase in cash, cash equivalents, and restricted cash

87,726,960

1,069,625

Cash, cash equivalents, and restricted cash – beginning of period

1,832,735

763,110

Cash, cash equivalents, and restricted cash end of period

$

89,559,695

$

1,832,735

Supplemental disclosures of cash flow information

Cash paid during the period for:

Interest

$

2,504,533

$

727,564

Income taxes

$

800

$

800

Non-cash financing and investing activities:

Convertible debt conversion to common stock

$

3,850,000

$

137,500

Common stock issued for acquisition of ChargeSavvy

$

12,140,000

$

-

Interest accrual from convertible debt converted to common stock

$

653,467

$

78,050

Short-term notes payable converted to common stock

$

-

$

810,000


Q4 and FY 2021 Reconciliation of Net Income (Loss) attributable to GreenBox POS, Inc., to Adjusted Net Income and Cash flow provided by operating activities - Adjusted*

Q4 2021

FY 2021

Net loss

$

(7,034,765

)

$

(26,453,512

)

Adjustments to net loss:

Non-cash adjustments - income (loss):

Stock compensation expense for employees

(2,163,064

)

3,704,008

Stock compensation expense for services

1,887,369

12,306,365

Bad debt expense

6,707,228

6,707,228

Total non-cash adjustments

6,431,533

22,717,601

EBIDTA Adjustment:

Depreciation

434,791

912,677

Income taxes

(3,248,949

)

4,906

Interest expense - debt discount and other interest

1,332,719

4,925,121

Derivative expense

3,435,178

3,435,178

Changes in derivative

(2,845,000

)

(2,845,000

)

Merchant liability settlement

-

364,124

Total EBIDTA adjustments

(891,261

)

6,797,006

Total adjustments to net loss:

5,540,272

29,514,607

Adjusted net income

$

(1,494,493

)

$

3,061,095

Cash flows used in operations per financial statements:

$

(13,131,846

)

$

(27,165,885

)

Adjustments:

Increase in cash due from gateways - receivables

(476,592

)

11,637,812

Decrease in payment processing liabilities - payables

1,636,650

8,534,989

Total adjustments

1,160,058

20,172,801

Cash flows provided by operating activities - Adjusted

$

(11,971,788

)

$

(6,993,084

)

* Adjusted Net Income and Cash flows provided by operating activities - Adjusted are non-GAAP financial measures. These measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance.