GreenBox POS (NASDAQ: GBOX) ("GreenBox", the "Company"), an emerging financial technology company leveraging proprietary blockchain security and token technology to build customized payment solutions, has provided its financial results for the third quarter ended September 30, 2021.
Management Commentary
GreenBox POS Chief Executive Officer Fredi Nisan commented: “Our third quarter of 2021 was instrumental in building the foundation for 2022 and beyond. We continued to successfully execute on our long-term growth strategy of quickly scaling our processing volume while accumulating key licensing assets through select acquisitions and partnerships. The success is evident from our year-to-date processing volume of $1.4 billion as of September 30th, only 8 short months after the launch of our Gen 3 platform. This is a testimony to both our technology and our talented team securing key ISO relationships and expanding our network. While much work is left to be done to accomplish our goals, our achievements and the trajectory of our growth is undeniable.
“The ability to finance our growth strategy is a key requirement as we look to become the premier blockchain based financial solutions company. In successfully closing on a $100 million convertible note financing, we demonstrated our ability to secure capital which we can deploy on accretive transactions. Now backed by a fortified balance sheet, we can continue to aggressively pursue our acquisition strategy, while investing in our core technology and adding funds to the Coyni custodian revolver to increase it up to $25 million.
“We continued to make great strides towards the spin-off and eventual public offering of Coyni, our stablecoin technology. We selected Miami as Coyni headquarters and appointed highly accomplished financial payments executive, Paul Levine, as the Chief Executive Officer. We opened up Coyni to early adopters and continued to work with Signature Bank and Armanino to ensure proper transaction and attestation functioning as we look to scale.
“Despite all GreenBox has accomplished in the last 18 months, we are in still just in the early innings of scaling our technology. We remain confident in our long-term strategy and are well positioned to capitalize on the opportunity at hand. Looking ahead, we expect to continue to grow our processing volumes and exceed our initial 2021 guidance of $1.85 billion. However, due to the timing and margin profile of customer onboarding and acquisitions closing we now expect 2021 reported revenue of at least $28 million and adjusted net income of at least $8 million. As we look out at 2022, we expect processing volume to be at least $4.9 billion for the year assuming completion of acquisitions. We look forward to bringing GreenBox to the forefront of financial payments technology and delivering long-term sustainable value for our shareholders.” concluded Nisan.
Third Quarter 2021 and Subsequent Operational Highlights:
Third Quarter 2021 Financial Summary
Third Quarter 2021 Results Conference Call
Management will host a conference call on Thursday, November 11, 2021 at 4:30 p.m. Eastern time to discuss GreenBox’s third quarter 2021 financial results. The call will conclude with Q&A from participants. To participate, please use the following information:
Q3 2021 Conference Call and Webcast
Date: Thursday, November 11, 2021
Time: 4:30 p.m. Eastern time
US Dial In: 1-800-430-8332
International Dial In: 1-323-289-6576
Conference ID: 7785831
Webcast: Link
Please dial in at least 10 minutes before the start of the call to ensure timely participation.
A playback of the call will be available through February 11, 2021. To listen, call 1-844-512-2921 within the United States or 1-412-317-6671 when calling internationally and enter replay pin number 7785831 A webcast will also be available for 90 days on the IR section of the GreenBox POS website or by clicking the webcast link above.
About GreenBox POS
GreenBox POS (NASDAQ: GBOX) is an emerging financial technology company leveraging proprietary blockchain security and token technology to build customized payment solutions. The Company's applications enable an end-to-end suite of turnkey financial products with fraud detection technology, improving the efficiency of handling large-scale commercial processing volumes for its merchant clients. 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
This email address is being protected from spambots. You need JavaScript enabled to view it.
www.mzgroup.us
GreenBox POS
Consolidated Balance Sheets
September 30, 2021 and December 31, 2020
(unaudited)
| (Unaudited) | ||||||||
| September 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 29,707,254 | $ | - | ||||
| Restricted cash | - | 1,832,735 | ||||||
| Accounts receivable, net of allowance for bad debt of $288,764 and $0, respectively | 229,346 | 10,000 | ||||||
| Accounts receivable from fines and penalties from merchants, net of allowance for bad debt of $6,665,031 | 2,789,231 | 2,789,230 | ||||||
| Inventory | 177,779 | - | ||||||
| Cash due from gateways, net | 19,418,353 | 7,303,949 | ||||||
| Prepaid and other current assets | 260,963 | 70,130 | ||||||
| Total current assets | 52,582,926 | 12,006,044 | ||||||
| Non-current Assets: | ||||||||
| Property and equipment, net | 1,630,379 | 57,264 | ||||||
| Other assets | 197,954 | 81,636 | ||||||
| Goodwill | 6,049,487 | - | ||||||
| Intangible Assets, net | 7,992,432 | - | ||||||
| Operating lease right-of-use assets, net | 668,865 | 117,795 | ||||||
| Total non-current assets | 16,539,117 | 256,695 | ||||||
| Total assets | $ | 69,122,043 | $ | 12,262,739 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 801,598 | $ | 210,094 | ||||
| Other current liabilities | 3,583,956 | 68,138 | ||||||
| Payment processing liabilities, net | 6,634,457 | 10,199,956 | ||||||
| Note payable, payroll protection plan loan | 272,713 | 272,713 | ||||||
| Short-term notes payable, net of debt discount of… | 3,448 | - | ||||||
| Convertible debt, net of debt discount of $0 and $2,993,408, respectively | - | 856,592 | ||||||
| Current portion of operating lease liabilities | 375,488 | 120,110 | ||||||
| Total current liabilities | 11,671,660 | 11,727,603 | ||||||
| Long term liabilities | 645,131 | 149,900 | ||||||
| Operating lease liabilities, less current portion | 294,490 | - | ||||||
| Total liabilities | 12,611,281 | 11,877,503 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ Equity: | ||||||||
| Common stock, par value $0.001, 82,500,000 shares authorized, shares issued and outstanding of 42,865,022 and 30,710,645, respectively | 42,865 | 30,711 | ||||||
| Additional paid-in capital | 90,290,826 | 12,079,074 | ||||||
| Accumulated deficit | (31,143,296 | ) | (11,724,549 | ) | ||||
| Less: Treasury stock, at cost; 300,000 and 0 shares, respectively | (2,679,633 | ) | - | |||||
| Total stockholders’ equity | 56,510,762 | 385,236 | ||||||
| Total liabilities and stockholder’s equity | $ | 69,122,043 | $ | 12,262,739 | ||||
GreenBox POS
Consolidated Statements of Operations
For the Three Months and Nine Months Ended September 30, 2021 and 2020
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue | $ | 8,045,469 | $ | 3,056,271 | $ | 19,174,089 | $ | 5,536,335 | ||||||||
| Cost of revenue | 2,420,748 | 1,845,295 | 5,337,999 | 3,504,283 | ||||||||||||
| Gross profit | 5,624,721 | 1,210,976 | 13,836,090 | 2,032,052 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Advertising and marketing | 37,179 | 59,099 | 84,509 | 86,368 | ||||||||||||
| Research and development | 1,043,385 | 243,923 | 2,504,976 | 798,157 | ||||||||||||
| General and administrative | 784,158 | 366,734 | 1,648,383 | 613,156 | ||||||||||||
| Payroll and payroll taxes | 1,250,451 | 436,216 | 2,871,581 | 1,279,174 | ||||||||||||
| Professional fees | 789,772 | 344,641 | 2,114,996 | 852,234 | ||||||||||||
| Stock compensation for employees | 3,777,572 | - | 5,867,072 | - | ||||||||||||
| Stock compensation for services | 238,238 | - | 10,418,996 | - | ||||||||||||
| Depreciation and amortization | 457,633 | 5,764 | 477,886 | 16,856 | ||||||||||||
| Total operating expenses | 8,378,388 | 1,456,377 | 25,988,399 | 3,645,945 | ||||||||||||
| Income (Loss) from operations | (2,753,667 | ) | (245,401 | ) | (12,152,309 | ) | (1,613,893 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | (4,736 | ) | (48,931 | ) | (598,994 | ) | (372,553 | ) | ||||||||
| Interest expense - debt discount | - | (83,500 | ) | (2,993,408 | ) | (121,918 | ) | |||||||||
| Derivative expense | - | (925,576 | ) | - | (925,576 | ) | ||||||||||
| Changes in fair value of derivative liability | - | 819,366 | - | (383,769 | ) | |||||||||||
| Gain from extinguishment of convertible debt | - | - | - | 2,630,795 | ||||||||||||
| Merchant liability settlement | - | - | (364,124 | ) | - | |||||||||||
| Other income or expense | (37,497 | ) | (5,768 | ) | (56,057 | ) | (2,434 | ) | ||||||||
| Total other expense, net | (42,233 | ) | (244,409 | ) | (4,012,583 | ) | 824,545 | |||||||||
| Income (Loss) before provision for income taxes | (2,795,900 | ) | (489,810 | ) | (16,164,892 | ) | (789,348 | ) | ||||||||
| Income tax provision | 3,253,855 | - | 3,253,855 | - | ||||||||||||
| Net income (loss) | $ | (6,049,755 | ) | $ | (489,810 | ) | $ | (19,418,747 | ) | $ | (789,348 | ) | ||||
| Earnings (loss) per share: | ||||||||||||||||
| Basic and diluted | $ | (0.14 | ) | $ | (0.02 | ) | $ | (0.49 | ) | $ | (0.03 | ) | ||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic and diluted | 42,065,842 | 29,488,393 | 39,949,732 | 29,488,393 | ||||||||||||
GreenBox POS
Consolidated Statements of Cash Flows
For the Nine months ended September 30, 2021 and 2020
(unaudited)
| Nine Months Ended September 30, | ||||||||
| 2021 | 2020 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (19,418,747 | ) | $ | (789,348 | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation expense | 477,886 | 16,856 | ||||||
| Noncash lease expense | (1,202 | ) | (966 | ) | ||||
| Stock compensation expense | 5,867,072 | 162,633 | ||||||
| Common stocks issued for professional fees | 10,418,996 | 4,130 | ||||||
| Common stocks - issued donation | - | 8,000 | ||||||
| Proceeds from exercise of stock options | - | 32,500 | ||||||
| Stock compensation issued for interest | 598,994 | - | ||||||
| Interest expense - debt discount | 2,993,408 | 121,918 | ||||||
| Derivative expense | - | 925,576 | ||||||
| Gain (loss) on extinguishment of debt | - | (2,630,795 | ) | |||||
| Changes in fair value of derivative liability | - | 383,769 | ||||||
| Changes in assets and liabilities: | ||||||||
| Other receivable, net | (154,556 | ) | 47,714 | |||||
| Inventory | (53,278 | ) | - | |||||
| Prepaid and other current assets | (184,172 | ) | (34,878 | ) | ||||
| Cash due from gateways, net | (12,114,404 | ) | 3,124,085 | |||||
| Other assets | 679,558 | (70,000 | ) | |||||
| Accounts payable | 370,487 | 220,465 | ||||||
| Other current liabilities | 3,384,258 | 32,107 | ||||||
| Accrued interest | - | (286,461 | ) | |||||
| Payment processing liabilities, net | (6,898,339 | ) | (1,397,810 | ) | ||||
| Net cash provided by (used in) operating activities | (14,034,039 | ) | (130,505 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (97,818 | ) | (12,332 | ) | ||||
| Acquisition of Northeast | (2,500,000 | ) | - | |||||
| Net cash used in investing activities | (2,597,818 | ) | (12,332 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Treasury stock repurchase | (2,679,633 | ) | - | |||||
| Proceeds from stock option exercises | 2,250 | - | ||||||
| Borrowings from convertible debt | - | 178,000 | ||||||
| Repayments on convertible debt | - | (670,000 | ) | |||||
| Borrowings from notes payable | 350,000 | 1,954,480 | ||||||
| Principal payments on notes payable | - | (1,147,919 | ) | |||||
| Proceeds from exercise of warrant | 3,731,200 | - | ||||||
| Repurchase of common stock from stockholder | (4,194,000 | ) | (810,000 | ) | ||||
| Proceeds from issuance of common stock | 45,805,491 | - | ||||||
| Net cash provided by (used in) financing activities | 43,015,308 | (495,439 | ) | |||||
| Cash acquired from acquisition of Northeast and ChargeSavvy | 1,491,068 | - | ||||||
| Net increase in cash, cash equivalents, and restricted cash | 27,874,519 | (638,276 | ) | |||||
| Cash, cash equivalents, and restricted cash – beginning of period | 1,832,735 | 763,110 | ||||||
| Cash, cash equivalents, and restricted cash – end of period | $ | 29,707,254 | $ | 124,834 | ||||
| Supplemental disclosures of cash flow information | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | 4,639 | $ | 575,014 | ||||
| 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 | $ | 594,355 | $ | 78,050 | ||||
| Short-term notes payable converted to common stock | $ | - | $ | 810,000 | ||||
Reconciliation of Net Income (Loss) attributable to GreenBox POS, Inc., to Adjusted Net Income* for the Three Months Ended September 30, 2021
| Q2 2021 | Q3 2021 | Nine Months Ended September 30, 2021 | ||||||||||
| Net loss | $ | (39,560 | ) | $ | (6,049,755 | ) | $ | (19,418,747 | ) | |||
| Adjustments to net loss: | ||||||||||||
| Non-cash adjustments - income (loss): | ||||||||||||
| Stock compensation expense for employees | 1,291,887 | 3,777,572 | 5,867,072 | |||||||||
| Stock compensation expense for services | 726,933 | 238,238 | 10,418,996 | |||||||||
| Merchant settlement liability | - | - | 364,124 | |||||||||
| Total non-cash adjustments | 2,018,820 | 4,015,810 | 16,650,192 | |||||||||
| EBIDTA Adjustment: | ||||||||||||
| Depreciation | 14,244 | 457,633 | 477,886 | |||||||||
| Income taxes | - | 3,253,855 | 3,253,855 | |||||||||
| Interest expense - debt discount and other interest | - | 4,736 | 2,993,408 | |||||||||
| Interest expense - interest on convertible debt | - | - | 598,994 | |||||||||
| Total EBIDTA adjustments | 14,244 | 3,716,224 | 7,324,143 | |||||||||
| Total adjustments to net loss: | 2,033,064 | 7,732,034 | 23,974,335 | |||||||||
| Adjusted net income | $ | 1,993,504 | $ | 1,682,279 | $ | 4,555,588 | ||||||
| Adjusted cash flows from operations: | ||||||||||||
| Cash flows used in operations per financial statements | $ | (14,034,039 | ) | |||||||||
| Adjustments: | ||||||||||||
| Increase in cash due from gateways - receivables | 12,114,404 | |||||||||||
| Decrease in payment processing liabilities - payables | 6,898,339 | |||||||||||
| Total adjustments | 19,012,743 | |||||||||||
| Cash flows provided by operating activities - Adjusted | $ | 4,978,704 | ||||||||||
* Adjusted Net Income 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$1.06 |
| Daily Change: | -0.15 -12.40 |
| Daily Volume: | 140,210 |
| Market Cap: | US$7.170M |
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