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:
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
Fiscal Year Ended December 31, 2020 Summary
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
This email address is being protected from spambots. You need JavaScript enabled to view it.
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.
| Last Trade: | US$1.39 |
| Daily Change: | 0.04 2.96 |
| Daily Volume: | 29,216 |
| Market Cap: | US$9.400M |
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