ADVERTISEMENT
Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

GreenBox POS Reports Third Quarter 2021 Financial Results

November 11, 2021 GMT

SAN DIEGO, CA, Nov. 11, 2021 (GLOBE NEWSWIRE) -- 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.

ADVERTISEMENT

“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.

ADVERTISEMENT

“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:

  • Processed a quarterly record $540 million in transaction volume, growth of approximately 1,400% when compared to the same period a year ago.
    • Year to date processing volume to $1.4 billion as of September 30, 2021
  • Revenues in the third quarter of $8.0 million, representing an increase of 163% when compared to the same period a year ago.
  • Fortified balance sheet with a $100 million convertible note financing to facilitate the Company’s acquisition strategy, fund our Coyni stablecoin revolver and additional technology development
  • Appointed Paul Levine, a technology innovator and the former President of Planet Payment, as Chief Executive Officer and Co-Founder of Coyni stablecoin spinoff company
    • Selected Miami as corporate headquarters for Coyni
  • Strengthened our technology leadership with the hiring of Robert Houghton as Chief Technology Officer to lead GreenBox payment technology roadmap and ensure efficient integration of acquisitions
  • Engaged in revenue sharing and licensing cooperation with Transact Europe enabling GreenBox to leverage key licensing assets and recognize processing volume. The TEU acquisition is currently pending regulatory bank approval.

Third Quarter 2021 Financial Summary

  • Revenues in the third quarter of 2021 were $8.0 million, an increase of 163% compared to revenues of $3.0 million in the same quarter a year ago. Sequentially, revenues increased by 26% when compared to $6.4 million in the second quarter of 2021.
  • Gross profit in the third quarter of 2021 was $5.6 million, or 69.5% of total revenue, compared to gross profit of $1.2 million, or 39.6% of total revenue, in the same quarter a year ago. Sequentially, gross profit increased from $5.5 million, or 79.3% of total revenue, in the second quarter of 2021.
  • Total operating expenses in the third quarter of 2021 totaled $8.4 million, compared to $1.5 million in the same quarter a year ago, and $5.1 million in the second quarter of 2021. The year over year increase was due primarily to an increase in stock compensation for employees as well as increases in research and development and payroll.
  • The Company’s net income in the third quarter of 2021 was ($6.0) million, or ($0.14) per basic and diluted share, compared to net income of ($0.5) million, or ($0.02) per basic and diluted share, in the same quarter a year ago. Net income in the second quarter of 2021 was ($0.4) million or ($0.02) per basic and diluted share. The decrease was primarily due to increases in stock-based compensation expenses related to employees and services, research and development and professional fees
  • Adjusted Net Income, a non-GAAP financial measure, for the third quarter 2021 was $1.7 million.

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
GBOX@mzgroup.us
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.