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GreenBox POS Reports Fourth Quarter and Full Year 2020 Financial Results

SAN DIEGO, CA, March 31, 2021 (GLOBE NEWSWIRE) -- GreenBox POS (NASDAQ: GBOX) ("GreenBox", the "Company"), an emerging financial technology company leveraging proprietary blockchain security to build customized payment solutions, has provided its financial results for the fourth quarter and full year ended December 31, 2020.

Fourth Quarter 2020 and Subsequent Operational Highlights:

  • Achieved a company record processing volume of $131 million during the fourth quarter 2020, an increase of 254% sequentially from the third quarter of 2020

  • Completed a $50.1 million public offering and uplisting to the NASDAQ National Market

  • Joined Visa’s Fintech Fast Track Program, enabling the company to have direct push-to-card payments and co-branded Visa card issuance capabilities

  • Announced the development of GBOXT, a new secure smart-contract token technology to accelerate transaction volume in the GreenBox blockchain platform

  • Launched the Generation 3 white label bank offering to pave the way for banks to connect and process transactions using GreenBox blockchain infrastructure

  • Launched Generation 3 advanced large-scale technology upgrades to rapidly accelerate portfolio onboarding and processing efficiency

  • Announced the planned acquisition of ChargeSavvy, a specialty retail payment processing company with $500 million in annual processing volume

  • Completed a $2.66 million private placement for development of Generation 3 technology upgrades

  • Appointed Vanessa Luna, experienced payments industry executive, as Chief Operating Officer

Management Commentary

“The fourth quarter 2020 marked the end to a breakout year for GreenBox POS as technology upgrades made to our blockchain based payment platform accelerated the pace of merchant portfolio onboarding,” said Fredi Nisan, Chief Executive Officer of GreenBox POS. “The company achieved a record setting quarter for number of clients onboarded and processing volume and continues to see strong momentum in early 2021. The successful deployment of the rapid onboarding module, among other features, in Generation 3 facilitated this surge in growth. Another benchmark achievement for GreenBox was our successful uplist to the Nasdaq Capital Market combined with a $50.1 million public offering which we believe will both raise national awareness of GreenBox in the capital markets while providing ample resources to continue to develop our technology.

“Looking forward, our white label bank offering and new smart-contract token provide exciting opportunities for rapid growth and adoption of our platform. Our recently announced partnership with Visa’s FastTrack program confirms our ongoing efforts to integrate with tier-1 partners. Furthermore, our pending acquisition of ChargeSavvy, expected to close in the second quarter, would provide a significant boost to our annual revenue and earnings while creating opportunities to expand into new verticals and adding new anti-fraud technology for higher-risk, higher fee merchants.

“While proud of our accomplishments during 2020, we are just getting started. We believe we have the technology, resources, and partnerships in place to continue to establish GreenBox as a leader in the financial technology space. I would like to thank our stakeholders for their ongoing support and commitment. We look forward to a successful 2021 as we continue to execute on our strategy to bring secure, instantly settled, blockchain based payment solutions to the world while creating long-term sustainable value for our shareholders,” concluded Nisan.

Fourth Quarter 2020 Financial Summary

  • Revenues in the fourth quarter of 2020 were $3.0 million, compared to revenues of $0.4 million in the same quarter a year ago. Sequentially, revenues were flat compared to $3.0 million in the third quarter of 2020. This was primarily due to ChargeSavvy exiting the GreenBox ecosystem.

  • Gross profit in the fourth quarter of 2020 was $1.7 million, or 55.8% of total revenue, compared to gross profit of $0.1 million, in the same quarter a year ago. Sequentially, gross profit increased 37.6% from $1.2 million, or 39.6% of total revenue, in the third quarter of 2020. The increase in gross profit was primarily due to increase processing efficiency and reduced cost to scale.

  • Total operating expenses in the fourth quarter of 2020 totaled $5.3 million, compared to $2.5 million in the same quarter a year ago, and $1.5 million in the third quarter of 2020. The increase in operating expenses was due to an increase in one-time charges and non-cash stock-based compensation expenses.

  • The Company’s net income in the fourth quarter of 2020 was ($4.5) million, or ($0.15) per basic and diluted share, compared to net income of ($3.3) million, or ($0.02) per basic and diluted share, in the same quarter a year ago. Net income in the third quarter of 2020 was ($0.5) million or $0.00 per basic and diluted share. The sequential decline was primarily due to an increase in one-time charges and non-cash stock-based compensation expenses related to the public offering and Nasdaq uplisting that was completed in the first quarter.

Fiscal Year Ended December 31, 2020 Summary

  • Revenues for the year ended December 31, 2020 decreased 14.8% to $8.5 million, compared to revenue of $10.0 million in the previous year. The decline in revenue was primarily due to ChargeSavvy exiting the GreenBox ecosystem in August 2020.

  • Gross profit for 2020 increased to $3.7 million, or 43% of revenues, compared to gross profit of ($1.1) million in the previous year. The increase in gross profit was primarily attributable to lower cost of revenue in 2020 as a result of increased processing efficiency and decreased cost to scale.

  • Total operating expenses for the full year 2020 were $8.8 million, compared to $4.5 million in the previous year. This increase was primarily due to an increase in non-cash stock-based compensation expense, professional fees and payroll costs.

  • The Company’s net income for the year ended December 31, 2020 was ($5.0) million, or ($0.17) per basic and diluted share outstanding, compared to net income of ($4.7) million, or ($0.17) per basic and diluted share outstanding, in the prior year. The decline in net income was primarily due to one-time charges and non-cash stock-based compensation expenses.

  • Adjusted EBITDA, a non-GAAP financial measure, was $0.3 million for the year ended 2020.

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 EBITDA and Adjusted EBITDA. These measurements are not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance. EBITDA represents net income before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before stock-based compensation expense and gain (loss) in equity investment. EBITDA and Adjusted EBITDA are presented because we believe they provide additional useful information to investors due to the various noncash items during the period. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: EBITDA and Adjusted EBITDA do not reflect cash expenditures, future requirements for capital expenditures, or contractual commitments; EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments. Although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. See also Reconciliation of Net Income (Loss) attributable to GreenBox POS, Inc., to Adjusted EBITDA 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, 2020 and December 31, 2019
(unaudited)

December 31,

2020

2019

ASSETS

Current Assets:

Cash and cash equivalents

$

-

$

-

Restricted cash

1,832,735

763,110

Accounts receivable, net

10,000

70,257

Accounts receivables from fines and fees from merchant, net of allowance for bad debt of $6,665,031 and $6,665,031, respectively.

2,789,230

2,776,687

Cash due from gateways, net

7,303,949

8,426,844

Prepaid and other current assets

70,130

42,062

Total current assets

12,006,044

12,078,960

Non-current Assets:

Property and equipment, net

57,264

66,491

Operating lease right-of-use assets, net

117,795

229,639

Other assets

81,636

-

Total non-current assets

256,695

296,130

Total assets

$

12,262,739

$

12,375,090

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Accounts payable

$

210,094

$

504,505

Other current liabilities

68,138

15,100

Accrued interest

-

368,071

Payment processing liabilities, net

10,199,956

14,021,892

Short-term notes payable, net of debt discount of $0 and $32,418, respectively

-

741,253

Note payable, payroll protection plan loan

272,713

-

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

856,592

807,500

Derivative liability

-

1,050,063

Current portion of operating lease liabilities

120,110

113,935

Total current liabilities

11,727,603

17,622,319

Operating lease liabilities, less current portion

-

120,110

Long-term debt

149,900

-

Total liabilities

11,877,503

17,742,429

Commitments and contingencies

Stockholders' Equity (Deficit):

Common stock, par value $0.001, 82,500,000 shares authorized, shares issued and outstanding of 30,710,646 and 28,310,489, respectively

30,711

28,311

Common stock - issuable

-

2,872

Additional paid-in capital

12,079,074

1,318,647

Accumulated deficit

(11,724,549

)

(6,717,169

)

Total stockholders' equity (deficit)

385,236

(5,367,339

)

Total liabilities and stockholder's equity

$

12,262,739

$

12,375,090

GreenBox POS
Consolidated Statements of Operations
For the Twelve Months Ended December 31, 2020 and 2019
(unaudited)

Years Ended December 31,

2020

2019

Net revenue

$

8,525,015

$

10,002,857

Cost of revenue

4,825,587

11,091,140

Gross profit

3,699,428

(1,088,283

)

Operating expenses:

Advertising and marketing

93,868

45,928

Research and development

1,363,757

1,255,296

Payroll and payroll taxes

1,796,160

1,429,136

Professional fees

1,691,107

1,026,556

General and administrative

3,836,120

750,078

Depreciation and amortization

22,742

16,216

Total operating expenses

8,803,754

4,523,210

Loss from operations

(5,104,326

)

(5,611,493

)

Other income (expense):

Interest expense - debt discount

(1,149,677

)

(195,201

)

Interest (expense) income

(359,493

)

(604,504

)

Derivative expense

(641,366

)

(634,766

)

Changes in fair value of derivative liability

(383,769

)

(415,297

)

Merchant fines and penalty income

2,630,796

2,776,687

Other income or expense

455

-

Total other expense, net

96,946

926,919

Loss before provision for income taxes

(5,007,380

)

(4,684,574

)

Income tax provision

-

-

Net loss

$

(5,007,380

)

$

(4,684,574

)

Earnings (loss) per share:

Basic and diluted

$

(0.17

)

$

(0.17

)

Weighted average number of common shares outstanding:

Basic and diluted

29,868,955

27,969,702

GreenBox POS
Consolidated Statements of Cash Flows
For the Twelve months ended December 31, 2020 and 2019
(unaudited)

Years Ended December 31,

2020

2019

Cash flows from operating activities:

Net loss

$

(5,007,380

)

$

(4,684,574

)

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

Depreciation expense

15,876

14,019

Interest expense - debt discount

1,102,706

195,201

Stock compensation expense

3,036,009

86,500

Stock issued for services and others

1,262,641

-

Changes in fair value of derivative liability

(1,050,063

)

1,050,063

Noncash lease expense

-

(4,406

)

Changes in assets and liabilities:

Accounts receivable

60,257

(20,259

)

Accounts receivables from fines and fees from merchant, net

(12,543

)

(2,776,687

)

Cash due from gateways, net

1,122,895

(7,796,145

)

Prepaid and other current assets

(28,068

)

(4,830

)

Other assets

(81,636

)

-

Accounts payable

(295,181

)

386,288

Other current liabilities

53,038

5,699

Accrued interest

(515,202

)

235,581

Payment processing liabilities, net

(3,821,936

)

13,156,806

Lease liability, net of asset

(2,091

)

-

Net cash provided by (used in) operating activities

(4,160,678

)

(156,744

)

Cash flows from investing activities:

Purchases of property and equipment

(6,649

)

(49,795

)

Net cash used in investing activities

(6,649

)

(49,795

)

Cash flows from financing activities:

Borrowings from convertible debt

3,678,000

482,500

Repayments on convertible debt

(985,500

)

(496,500

)

Repayment on long-term debt

149,900

(75,000

)

Borrowings from short-term notes payable

1,531,867

1,132,975

Repayments on short-term notes payable

(2,305,538

)

(359,304

)

Borrowings under note payable, payroll protection plan loan

272,713

-

Proceeds from issuances of common stock

2,860,000

Proceeds from stock option exercises

35,510

-

Net cash provided by financing activities

5,236,952

684,671

Net increase in cash, cash equivalents, and restricted cash

1,069,625

478,132

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

763,110

284,978

Cash, cash equivalents, and restricted cash end of year

$

1,832,735

$

763,110

Supplemental disclosures of cash flow information

Cash paid during the years for:

Interest

$

727,564

$

988,751

Income taxes

$

800

$

800

FY 2020 Reconciliation of Net Income (Loss) attributable to GreenBox POS, Inc., to Adjusted EBITDA*

Year Ended December 31,

2020

Net loss

$

(5,007,380

)

Adjustments to net loss:

Non-cash adjustments - income (loss):

Interest expense - debt discount

1,149,677

Stock compensation expense

3,036,009

Common stocks issued for services and others

1,262,641

Derivative expense

641,366

Changes in fair value of derivative liability

383,769

Merchant fines and penalty income

(2,630,796

)

Total non-cash adjustments

3,842,666

Non-recurring expenses - income (loss):

Transaction fees paid to investment bank and lawyers

612,800

Outside consultant

202,492

Finance costs

245,128

Total non-recurring expenses

1,060,420

EBIDTA Adjustment:

Interest expense

359,493

Depreciation

22,742

Total EBIDTA adjustments

382,235

Total adjustments to net loss:

5,285,321

Adjusted net income

$

277,941

* Adjusted EBITDA is a non-GAAP financial measure. This measurement is not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance.