GreenBox POS Reports Second Quarter 2020 Financial Results

Q2 2020 Processing Volume of $34.4 Million Drives Significant Sequential Increase in Revenue, Gross Profit and Net Income

SAN DIEGO, CA / ACCESSWIRE / August 18, 2020 / GreenBox POS (OTCQB:GRBX) ("GreenBox", the "Company"), an emerging financial technology company leveraging proprietary blockchain security to build customized payment solutions, has provided its financial results for the second quarter ended June 30, 2020.

Financial Summary:

Q2 2020

Q1 2020

Change (%)

Processing volume

$34.4 million

$1.7 million

1,893%

Revenue

$2.3 million

$0.2 million

1,125%

Gross profit

$0.9 million

($0.1) million

N/A

Gross profit margin

38.4%

(32.1%)

N/A

Operating Expense

$1.1 million

$1.0 million

6%

Net Income

$4.9 million

($5.2) million

N/A

EPS – Basic and Diluted

$0.03

($0.03)

N/A

Operational Highlights:

Updated QuickCard Payment System, which has provided clients processing speed increases of approximately 300% and reduced approximately 50% of costs
Acquired Canadian money service business MoltoPay, expanding its international footprint and licensing capabilities to deploy its proprietary blockchain payment solutions
Added Crypto currency and FOREX as acceptable forms of payment in the GreenBox ecosystem to expand capabilities globally
Expanded international capabilities by adding the acceptance of SEPA payments to GreenBox's ecosystem, Europe's fastest and least expensive payment option
Repurchased 6.0 million shares of common stock in a transaction as part of the settlement agreement option with RB Capital Partners Inc
Completed the retirement of its last convertible note held by Vista Capital
Engaged MZ Group to lead a comprehensive strategic investor relations and financial communications program across all key markets

Management Commentary
"Our second quarter 2020 results marked the successful launch of our highly scalable, next-generation payment platform," said Fredi Nisan, Chief Executive Officer of GreenBox POS. "Since this launch, our processing volume and revenue accelerated throughout the quarter, totaling $34.4 million and $2.3 million, respectively, representing significant sequential increases that we expect to not only continue, but accelerate through the second half of 2020 driven by strong growth in the United States and Europe.

"Subsequent to the end of the second quarter, we also announced the strategic acquisition of MoltoPay, which bolstered our presence in Canada and allowed us to deploy our proprietary technology and expand our global presence. Significant steps were also taken to strengthen our capital structure and market awareness as we grow, as evidenced by the repurchase and cancelation of a large share block, retirement of our last convertible note, uplisting to the OTCQB market, and the engagement of MZ Group, an investor relations firm."

"Looking ahead, we see tremendous growth in our proprietary, highly scalable blockchain platform. Not only do we believe transaction volume and revenues will accelerate, but we also expect to become much more profitable as we grow. Clearly, we will continue to focus on developing key partnerships, improving our technology and building our customer base to create sustainable long-term value for our shareholders," concluded Nisan.

Second Quarter 2020 Financials

Revenues in the second quarter of 2020 were $2.3 million, compared to revenues of $3.3 million in the same quarter a year ago. Sequentially, revenues increased significantly when compared to $0.2 million in the first quarter of 2020.
Gross profit in the second quarter of 2020 increased 228% to $0.9 million, or 38.4% of total revenue, compared to gross profit of $0.3 million, or 8.1% of total revenue, in the same quarter a year ago.
Total operating expenses in the second quarter of 2020 totaled $1.1 million, compared to $1.2 million in the same quarter a year ago, and $1.1 million in the first quarter of 2020.
Loss from operations in the second quarter of 2020 was $0.2 million, compared to an operating loss of $0.9 million in the same quarter a year ago.
Net income in the second quarter of 2020 was $4.9 million, or $0.03 per basic and diluted share, compared to a net loss of $1.3 million, or ($0.01) per basic and diluted share, in the same quarter a year-ago. The increase in net income was primarily related to changes in the fair value of a derivative security and gain from extinguishment of convertible debt.

About GreenBox POS
GreenBox POS (OTCQB:GRBX) 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.

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
GRBX@mzgroup.us
www.mzgroup.us

GreenBox POS
Consolidated Balance Sheets
June 30, 2020 and December 31, 2019
(unaudited)

 
(Unaudited)
 
 
 
 

 
June 30,
 
 
December 31,
 

 
2020
 
 
2019
 

ASSETS

Current Assets:

Cash and cash equivalents

 
$ 
–
 
 
$ 
–
 

Restricted cash

 
 
697,232
 
 
 
763,110
 

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

 
 
10,000
 
 
 
70,257
 

Accounts receivables from fines and penalties from merchants, net of allowance for
bad debt of $6,665,031

 
 
2,789,230
 
 
 
2,776,687
 

Cash due from gateways, net

 
 
5,297,642
 
 
 
8,426,844
 

Prepaid and other current assets

 
 
75,403
 
 
 
42,062
 

Total current assets

 
 
8,869,507
 
 
 
12,078,960
 

Non-current Assets:

Property and equipment, net

 
 
65,603
 
 
 
66,491
 

Operating lease right-of-use assets, net

 
 
175,442
 
 
 
229,639
 

Total non-current assets

 
 
241,045
 
 
 
296,130
 

Total assets

 
$ 
9,110,552
 
 
$ 
12,375,090
 

Current Liabilities:

Accounts payable

 
$ 
470,761
 
 
$ 
504,505
 

Other current liabilities

 
 
29,454
 
 
 
15,100
 

Accrued interest

 
 
84,000
 
 
 
368,071
 

Payment processing liabilities, net

 
 
12,944,341
 
 
 
14,021,892
 

Short-term notes payable, net of debt discount of $78,000 and $32,418, respectively

 
 
617,184
 
 
 
741,253
 

Convertible debt

 
 
225,000
 
 
 
807,500
 

Derivative liability

 
 
–
 
 
 
1,050,063
 

Current portion of operating lease liabilities

 
 
58,898
 
 
 
113,935
 

Total current liabilities

 
 
14,429,638
 
 
 
17,622,319
 

Operating lease liabilities, less current portion

 
 
120,111
 
 
 
120,110
 

Total liabilities

 
 
14,549,749
 
 
 
17,742,429
 

Commitments and contingencies

Stockholders' Equity:

Common stock, par value $0.001, 495,000,000 shares authorized, shares issued and
outstanding of 181,050,238 and 169,862,933, respectively

 
 
181,150
 
 
 
169,863
 

Common stock – issuable

 
 
–
 
 
 
695
 

Additional paid-in capital

 
 
1,396,360
 
 
 
1,179,272
 

Accumulated deficit

 
 
(7,016,707)
 
 
 
(6,717,169)
 

Total stockholders' equity

 
 
(5,439,197)
 
 
 
(5,367,339)
 

Total liabilities and stockholder's equity

 
$ 
9,110,552
 
 
$ 
12,375,090
 

GreenBox POS
Consolidated Statements of Operations
For the Three and Six Months Ended June 30, 2020 and 2019
(unaudited)

 
Three Months Ended June 30,
 
 
 
 
 
 
 

 
2020
 
 
2019
 
 
Changes
 

 
 
 
 
% of
 
 
 
 
 
% of
 
 
 
 
 
 
 

 
Amount
 
 
Revenue
 
 
Amount
 
 
Revenue
 
 
Amount
 
 
%
 

Revenue

 
$ 
2,292,859
 
 
 
100.0
%
 
$ 
3,309,747
 
 
 
100.0
%
 
$ 
(1,016,888
)
 
 
-30.7
%

Cost of revenue

 
 
1,411,683
 
 
 
61.6
%
 
 
3,042,022
 
 
 
91.9
%
 
 
(1,630,339
)
 
 
-53.6
%

Gross profit

 
 
881,176
 
 
 
38.4
%
 
 
267,725
 
 
 
8.1
%
 
 
613,451
 
 
 
229.1
%

Operating expenses:

Advertising and marketing

 
 
15,384
 
 
 
0.7
%
 
 
12,603
 
 
 
0.4
%
 
 
2,781
 
 
 
22.1
%

Research and development

 
 
267,686
 
 
 
11.7
%
 
 
600,264
 
 
 
18.1
%
 
 
(332,578
)
 
 
-55.4
%

Payroll and payroll taxes

 
 
428,758
 
 
 
18.7
%
 
 
309,719
 
 
 
9.4
%
 
 
119,039
 
 
 
38.4
%

Professional fees

 
 
293,622
 
 
 
12.8
%
 
 
127,473
 
 
 
3.9
%
 
 
166,149
 
 
 
130.3
%

General and administrative

 
 
113,653
 
 
 
5.0
%
 
 
119,699
 
 
 
3.6
%
 
 
(6,046
)
 
 
-5.1
%

Depreciation and amortization

 
 
5,716
 
 
 
0.2
%
 
 
3,615
 
 
 
0.1
%
 
 
2,101
 
 
 
58.1
%

Total operating expenses

 
 
1,124,819
 
 
 
49.1
%
 
 
1,173,373
 
 
 
35.5
%
 
 
(48,554
)
 
 
-4.1
%

Loss from operations

 
 
(243,643
)
 
 
-10.6
%
 
 
(905,648
)
 
 
-27.4
%
 
 
662,005
 
 
 
-73.1
%

Other Income (Expense):

Interest expense

 
 
(30,659
)
 
 
-1.3
%
 
 
(24,738
)
 
 
-0.7
%
 
 
(5,921
)
 
 
23.9
%

Interest expense – debt discount

 
 
(8,342
)
 
 
-0.4
%
 
 
–
 
 
 
0.0
%
 
 
(8,342
)
 
 
n/a
 

Derivative expense

 
 
(4,373
)
 
 
-0.2
%
 
 
–
 
 
 
0.0
%
 
 
(4,373
)
 
 
n/a
 

Changes in fair value of derivative liability

 
 
2,619,250
 
 
 
114.2
%
 
 
(412,158
)
 
 
-12.5
%
 
 
3,031,408
 
 
 
-735.5
%

Gain from extinguishment of convertible debt

 
 
2,612,246
 
 
 
113.9
%
 
 
–
 
 
 
0.0
%
 
 
2,612,246
 
 
n/a
 

Other income or expense

 
 
(2,177
)
 
 
-0.1
%
 
 
–
 
 
 
0.0
%
 
 
(2,177
)
 
 
n/a
 

Total other income (expense)

 
 
5,185,945
 
 
 
226.2
%
 
 
(436,896
)
 
 
-13.2
%
 
 
5,622,841
 
 
 
-1287.0
%

Loss before provision for income taxes

 
 
4,942,302
 
 
 
215.6
%
 
 
(1,342,544
)
 
 
-40.6
%
 
 
6,284,846
 
 
 
-468.1
%

Provision for income taxes

 
 
–
 
 
 
0.0
%
 
 
–
 
 
 
0.0
%
 
 
–
 
 
 
0.0
%

Net loss

 
$ 
4,942,302
 
 
 
215.6
%
 
$ 
(1,342,544
)
 
 
-40.6
%
 
$ 
6,284,846
 
 
 
-468.1
%

 
Six Months Ended June 30,
 
 
 
 
 
 
 

 
2020
 
 
2019
 
 
Changes
 

 
 
 
 
% of
 
 
 
 
 
% of
 
 
 
 
 
 
 

 
Amount
 
 
Revenue
 
 
Amount
 
 
Revenue
 
 
Amount
 
 
%
 

Revenue

 
$ 
2,480,064
 
 
 
100.0
%
 
$ 
4,277,745
 
 
 
100.0
%
 
$ 
(1,797,681
)
 
 
-42.0
%

Cost of revenue

 
 
1,658,988
 
 
 
72.4
%
 
 
3,768,355
 
 
 
88.1
%
 
 
(2,109,367
)
 
 
-56.0
%

Gross profit

 
 
821,076
 
 
 
35.8
%
 
 
509,390
 
 
 
11.9
%
 
 
311,686
 
 
 
61.2
%

Operating expenses:

Advertising and marketing

 
 
27,269
 
 
 
1.2
%
 
 
25,609
 
 
 
0.6
%
 
 
1,660
 
 
 
6.5
%

Research and development

 
 
554,234
 
 
 
24.2
%
 
 
704,186
 
 
 
16.5
%
 
 
(149,952
)
 
 
-21.3
%

Payroll and payroll taxes

 
 
842,958
 
 
 
36.8
%
 
 
547,047
 
 
 
12.8
%
 
 
295,911
 
 
 
54.1
%

Professional fees

 
 
507,593
 
 
 
22.1
%
 
 
307,018
 
 
 
7.2
%
 
 
200,575
 
 
 
65.3
%

General and administrative

 
 
246,422
 
 
 
10.7
%
 
 
199,252
 
 
 
4.7
%
 
 
47,170
 
 
 
23.7
%

Depreciation and amortization

 
 
11,092
 
 
 
0.5
%
 
 
6,455
 
 
 
0.2
%
 
 
4,637
 
 
 
71.8
%

Total operating expenses

 
 
2,189,568
 
 
 
95.5
%
 
 
1,789,567
 
 
 
41.8
%
 
 
400,001
 
 
 
22.4
%

Loss from operations

 
 
(1,368,492
)
 
 
-59.7
%
 
 
(1,280,177
)
 
 
-29.9
%
 
 
(88,315
)
 
 
6.9
%

Other Income (Expense):

Interest expense

 
 
(319,249
)
 
 
-13.9
%
 
 
(174,953
)
 
 
-4.1
%
 
 
(144,296
)
 
 
82.5
%

Interest expense – debt discount

 
 
(38,418
)
 
 
-1.7
%
 
 
(188,273
)
 
 
-4.4
%
 
 
149,855
 
 
 
-79.6
%

Derivative expense

 
 
(4,373
)
 
 
-0.2
%
 
 
(634,766
)
 
 
-14.8
%
 
 
630,393
 
 
 
-99.3
%

Changes in fair value of derivative liability

 
 
(1,203,135
)
 
 
-52.5
%
 
 
(365,370
)
 
 
-8.5
%
 
 
(837,765
)
 
 
229.3
%

Gain from extinguishment of convertible debt

 
 
2,630,795
 
 
 
114.7
%
 
 
–
 
 
 
0.0
%
 
 
2,630,795
 
 
n/a
 

Other income or expense

 
 
3,334
 
 
 
0.1
%
 
 
–
 
 
 
0.0
%
 
 
3,334
 
 
 
n/a
 

Total other income (expense)

 
 
1,068,954
 
 
 
46.6
%
 
 
(1,363,362
)
 
 
-31.9
%
 
 
2,432,316
 
 
 
-178.4
%

Loss before provision for income taxes

 
 
(299,538
)
 
 
-13.1
%
 
 
(2,643,539
)
 
 
-61.8
%
 
 
2,344,001
 
 
 
-88.7
%

Provision for income taxes

 
 
–
 
 
 
0.0
%
 
 
–
 
 
 
0.0
%
 
 
–
 
 
 
0.0
%

Net loss

 
$ 
(299,538
)
 
 
-13.1
%
 
$ 
(2,643,539
)
 
 
-61.8
%
 
$ 
2,344,001
 
 
 
-88.7
%

GreenBox POS
Consolidated Statements of Cash Flows
For the six months ended June 30, 2020 and 2019
(unaudited)

 
Six Months Ended June 30,
 

 
2020
 
 
2019
 

Cash flows from operating activities:

Net loss

 
$ 
(299,538)
 
 
$ 
(2,643,539)
 

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

Depreciation expense

 
 
11,092
 
 
 
6,456
 

Noncash lease expense

 
 
(839)
 
 
 
3,219
 

Stock compensation expense

 
 
12,130
 
 
 
85,640
 

Interest expense – debt discount

 
 
38,418
 
 
 
188,273
 

Derivative expense

 
 
4,373
 
 
 
634,766
 

Gain (loss) on extinguishment of debt

 
 
(2,630,795)
 
 
 
–
 

Changes in fair value of derivative liability

 
 
1,203,135
 
 
 
365,370
 

Changes in assets and liabilities:

Other receivable, net

 
 
47,714
 
 
 
–
 

Prepaid and other current assets

 
 
(33,341)
 
 
 
35,110
 

Cash due from gateways, net

 
 
3,502,426
 
 
 
(3,184,361)
 

Accounts payable

 
 
(33,597)
 
 
 
(39,054)
 

Other current liabilities

 
 
14,354
 
 
 
15,356
 

Accrued interest

 
 
(290,021)
 
 
 
9,442
 

Payment processing liabilities, net

 
 
(1,077,551)
 
 
 
6,364,927
 

Net cash provided by (used in) operating activities

 
 
467,960
 
 
 
1,841,605
 

Cash flows from investing activities:

Purchases of property and equipment

 
 
(10,244)
 
 
 
(41,634)
 

Net cash used in investing activities

 
 
(10,244)
 
 
 
(41,634)
 

Cash flows from financing activities:

Borrowings from convertible debt

 
 
–
 
 
 
482,500
 

Repayments on convertible debt

 
 
(445,000)
 
 
 
(496,500)
 

Borrowings from notes payable

 
 
744,480
 
 
 
–
 

Principal payments on notes payable

 
 
(823,074)
 
 
 
–
 

Repayment on long-term debt

 
 
–
 
 
 
(75,000)
 

Net cash provided by (used in) financing activities

 
 
(523,594)
 
 
 
(89,000)
 

Net increase in cash, cash equivalents, and restricted cash

 
 
(65,878)
 
 
 
1,710,971
 

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

 
 
763,110
 
 
 
284,978
 

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

 
$ 
697,232
 
 
$ 
1,995,949
 

Supplemental disclosures of cash flow information

Cash paid during the period for:

Interest

 
$ 
525,270
 
 
$ 
125,511
 

Income taxes

 
$ 
800
 
 
$ 
800
 

Non-cash financing activities:

Convertible debt conversion to common stock

 
$ 
137,500
 
 
$ 
(150,000)
 

Interest accrual from convertible debt converted to common stock

 
$ 
78,050
 
 
$ 
–
 

 
Six Months Ended June 30,
 

 
 
2020
 
 
 
2019
 

Cash flows from operating activities:

Net loss

 
$ 
(299,538)
 
 
$ 
(2,643,539)
 

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

Depreciation expense

 
 
11,092
 
 
 
6,456
 

Noncash lease expense

 
 
(839)
 
 
 
3,219
 

Stock compensation expense

 
 
12,130
 
 
 
85,640
 

Interest expense – debt discount

 
 
38,418
 
 
 
188,273
 

Derivative expense

 
 
4,373
 
 
 
634,766
 

Gain (loss) on extinguishment of debt

 
 
(2,630,795)
 
 
 
–
 

Changes in fair value of derivative liability

 
 
1,203,135
 
 
 
365,370
 

Changes in assets and liabilities:

Other receivable, net

 
 
47,714
 
 
 
–
 

Prepaid and other current assets

 
 
(33,341)
 
 
 
35,110
 

Cash due from gateways, net

 
 
3,502,426
 
 
 
(3,184,361)
 

Accounts payable

 
 
(33,597)
 
 
 
(39,054)
 

Other current liabilities

 
 
14,354
 
 
 
15,356
 

Accrued interest

 
 
(290,021)
 
 
 
9,442
 

Payment processing liabilities, net

 
 
(1,077,551)
 
 
 
6,364,927
 

Net cash provided by (used in) operating activities

 
 
467,960
 
 
 
1,841,605
 

Cash flows from investing activities:

Purchases of property and equipment

 
 
(10,244)
 
 
 
(41,634)
 

Net cash used in investing activities

 
 
(10,244)
 
 
 
(41,634)
 

Cash flows from financing activities:

Borrowings from convertible debt

 
 
–
 
 
 
482,500
 

Repayments on convertible debt

 
 
(445,000)
 
 
 
(496,500)
 

Borrowings from notes payable

 
 
744,480
 
 
 
–
 

Principal payments on notes payable

 
 
(823,074)
 
 
 
–
 

Repayment on long-term debt

 
 
–
 
 
 
(75,000)
 

Net cash provided by (used in) financing activities

 
 
(523,594)
 
 
 
(89,000)
 

Net increase in cash, cash equivalents, and restricted cash

 
 
(65,878)
 
 
 
1,710,971
 

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

 
 
763,110
 
 
 
284,978
 

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

 
$ 
697,232
 
 
$ 
1,995,949
 

Supplemental disclosures of cash flow information

Cash paid during the period for:

Interest

 
$ 
525,270
 
 
$ 
125,511
 

Income taxes

 
$ 
800
 
 
$ 
800
 

Non-cash financing activities:

Convertible debt conversion to common stock

 
$ 
137,500
 
 
$ 
(150,000)
 

Interest accrual from convertible debt converted to common stock

 
$ 
78,050
 
 
$ 
–
 

SOURCE: GreenBox POS, LLC

ReleaseID: 602176