SAN DIEGO, CA, Aug. 12, 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 second quarter ended June 30, 2021.
Second Quarter 2021 and Subsequent Operational Highlights:
- Revenue of $6.4 million in the second quarter of 2021, an increase of 178% as compared to $2.3 million in the same year-ago quarter
- Processed a company quarterly record of $440 million in transaction volume
- Deployed our smart contract technology stablecoin, branded as COYNI, in a pilot launch and deposited $5 million in initial seed capital with Signature Bank
- Engaged Armanino to provide real-time attestation of the token collateral
- Announced the acquisition of Transact Europe, currently pending regulatory approval. Transact Europe is a Principal Visa and Mastercard Member with key licensing assets and significant processing volume portfolio
- Announced the planned spin off of our Coin Platform, Coyni, and implementation of a special dividend series to be issued in two parts to GreenBox common stockholders
- Acquired Northeast Merchant Services, a provider of comprehensive merchant credit card processing services bringing over 700 potential new retail merchant accounts and a highly coveted BIN
- Closed the accretive acquisition of ChargeSavvy LLC, a financial technology company specializing in retail payment processing and POS systems with an attractive book of processing volume
- Selected by Territorial Bank of American Samoa (TBAS) to provide customized payment solutions software to consumers and businesses throughout American Samoa for financial transactions
- Announced a partnership with isMedia Co. Ltd to jointly develop a blockchain-based NFT (non-fungible token) platform
- GBOX added to Russell 2000® and Russell Microcap Indexes
Management Commentary
“GreenBox continued to make excellent progress towards execution of its long-term growth strategy during the second quarter 2021. With the deployment of Coyni, a smart contract stablecoin technology, we launched a significant upgrade to our payment solutions capabilities for the second consecutive quarter,” said Fredi Nisan, Chief Executive Officer of GreenBox POS. “Our Generation 3 technology, launched in Q1 2021, continued to reap rewards as we processed a company record $440 million during the second quarter.
We continued to grow our core blockchain processing business organically while also making strategic acquisitions such as the purchase of Northeast Merchant Services, ChargeSavvy, and most recently, the pending purchase of Transact Europe. These acquisitions are part of our strategy to acquire crucial licensing assets and expand our footprint globally while simultaneously opening avenues for us to drive adoption of our Coin platform. Acquisitions will continue to play a vital role in our strategy to quickly become a large player in the financial payments space.
Looking ahead, we look to rapidly drive adoption of Coyni to generate value for our announced spinoff of that business. By continuing to expand our core blockchain business using our extensive ISO and agent network and through selective acquisitions, we believe we are well positioned to do so. In announcing a special dividend series based on the planned spin-off of our stablecoin platform asset, we demonstrate our commitment to rewarding our long-term shareholders. We are encouraged with our progress as we continue to strive towards disrupting the digital payments space globally and look forward to continuing to execute our long-term vision,” concluded Nisan.
Second Quarter 2021 Financial Summary
- Revenues in the second quarter of 2021 were $6.4 million, an increase of 178% compared to revenues of $2.3 million in the same quarter a year ago. Sequentially, revenues increased by 36% when compared to $4.7 million in the first quarter of 2021. The increase in revenue was primarily due to increased processing volume.
- Gross profit in the second quarter of 2021 was $5.1 million, or 79.5% of total revenue, compared to gross profit of $0.9 million, or 38.4% of total revenue, in the same quarter a year ago. Sequentially, gross profit increased 59% from $3.2 million, or 66.4% of total revenue, in the first quarter of 2021. The increase in gross profit was primarily due to increase processing volume efficiency from Generation 3 technology
- Total operating expenses in the second quarter of 2021 totaled $5.1 million, compared to $1.1 million in the same quarter a year ago, and $12.5 million in the first quarter of 2021. The year over year increase was due primarily to an increase in stock compensation for services and employees as well as increases in research and development and payroll.
- The Company’s net income in the second quarter of 2021 was $0.0 million, or $0.00 per basic and diluted share, compared to net income of $4.9 million, or $0.03 per basic and diluted share, in the same quarter a year ago. Net income in the first quarter of 2021 was ($13.3) million or ($0.38) per basic and diluted share. The sequential increase was primarily due to an increase in processing volume and revenue and decrease in non-cash stock-based compensation expenses related to the public offering and Nasdaq uplisting.
- Adjusted Net Income, a non-GAAP financial measure, for the second quarter 2021 was $2.0 million.
Second Quarter 2021 Results Conference Call
Management will host a conference call on Thursday, August 12, 2021 at 4:30 p.m. Eastern time to discuss GreenBox’s second quarter 2021 financial results. The call will conclude with Q&A from participants. To participate, please use the following information:
Q2 2021 Conference Call and Webcast
Date: Thursday, August 12, 2021
Time: 4:30 p.m. Eastern time
US Dial In: 1-800-945-8198
International Dial In: 1-212-231-2900
Conference ID: 21996558
Webcast: http://public.viavid.com/index.php?id=146243
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 November 12, 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 21996558 A webcast will also be available for 30 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 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
June 30, 2021 and December 31, 2020
(unaudited)
| June 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 29,796,748 | $ | - | ||||
| Restricted cash | - | 1,832,735 | ||||||
| Accounts receivable, net of allowance for bad debt of $0 and $0, respectively | 75,444 | 10,000 | ||||||
| Accounts receivable from fines and penalties from merchants, net of allowance for bad debt of $6,665,031 and $6,665,031, respectively | 2,789,230 | 2,789,230 | ||||||
| Cash due from gateways, net | 15,759,069 | 7,303,949 | ||||||
| Prepaid and other current assets | 2,028,552 | 70,130 | ||||||
| Total current assets | 50,449,043 | 12,006,044 | ||||||
| Non-current Assets: | ||||||||
| Property and equipment, net | 113,836 | 57,264 | ||||||
| Other assets | 180,636 | 81,636 | ||||||
| Goodwill | 2,305,394 | - | ||||||
| Intangible Assets, net | 257,748 | - | ||||||
| Operating lease right-of-use assets, net | 832,636 | 117,795 | ||||||
| Total non-current assets | 3,690,250 | 256,695 | ||||||
| Total assets | $ | 54,139,293 | $ | 12,262,739 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 520,478 | $ | 210,094 | ||||
| Other current liabilities | 135,991 | 68,138 | ||||||
| Payment processing liabilities, net | 4,295,519 | 10,199,956 | ||||||
| Note payable, payroll protection plan loan | 272,713 | 272,713 | ||||||
| Convertible debt, net of debt discount of $0 and $2,993,408, respectively | - | 856,592 | ||||||
| Current portion of operating lease liabilities | 431,487 | 120,110 | ||||||
| Total current liabilities | 5,656,188 | 11,727,603 | ||||||
| Long term liabilities | 149,900 | 149,900 | ||||||
| Operating lease liabilities, less current portion | 401,744 | - | ||||||
| Total liabilities | 6,207,832 | 11,877,503 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' Equity: | ||||||||
| Common stock, par value $0.001, 82,500,000 shares authorized, shares issued and outstanding of 42,236,219 and 30,710,646, respectively | 42,327 | 30,711 | ||||||
| Additional paid-in capital | 73,916,018 | 12,079,074 | ||||||
| Accumulated deficit | (25,093,541 | ) | (11,724,549 | ) | ||||
| Less: Treasury stock, at cost; 90,000 and 0 shares, respectively | (933,343 | ) | - | |||||
| Total stockholders' equity | 47,931,461 | 385,236 | ||||||
| Total liabilities and stockholder's equity | $ | 54,139,293 | $ | 12,262,739 | ||||
GreenBox POS
Consolidated Statements of Operations
For the Three Months and Six Months Ended June 30, 2021 and 2020
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue | $ | 6,379,179 | $ | 2,292,859 | $ | 11,128,620 | $ | 2,480,064 | ||||||||
| Cost of revenue | 1,323,480 | 1,411,683 | 2,917,251 | 1,658,988 | ||||||||||||
| Gross profit | 5,055,699 | 881,176 | 8,211,369 | 821,076 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Advertising and marketing | 22,605 | 15,384 | 47,330 | 27,269 | ||||||||||||
| Research and development | 808,210 | 267,686 | 1,461,591 | 554,234 | ||||||||||||
| General and administrative | 298,030 | 101,523 | 864,225 | 234,292 | ||||||||||||
| Payroll and payroll taxes | 1,061,929 | 428,758 | 1,621,130 | 842,958 | ||||||||||||
| Professional fees | 867,472 | 293,622 | 1,325,224 | 507,593 | ||||||||||||
| Stock compensation for employees | 1,291,887 | 12,130 | 2,089,500 | 12,130 | ||||||||||||
| Stock compensation for services | 726,933 | - | 10,180,758 | - | ||||||||||||
| Depreciation and amortization | 14,244 | 5,716 | 20,253 | 11,092 | ||||||||||||
| Total operating expenses | 5,091,310 | 1,124,819 | 17,610,011 | 2,189,568 | ||||||||||||
| Income (Loss) from operations | (35,611 | ) | (243,643 | ) | (9,398,642 | ) | (1,368,492 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | - | (30,659 | ) | (594,258 | ) | (319,249 | ) | |||||||||
| Interest expense - debt discount | - | (8,342 | ) | (2,993,408 | ) | (38,418 | ) | |||||||||
| Derivative expense | - | (4,373 | ) | - | (4,373 | ) | ||||||||||
| Changes in fair value of derivative liability | - | 2,619,250 | - | (1,203,135 | ) | |||||||||||
| Gain from extinguishment of convertible debt | - | 2,612,246 | - | 2,630,795 | ||||||||||||
| Merchant liability settlement | - | - | (364,124 | ) | - | |||||||||||
| Other income or expense | (3,949 | ) | (2,177 | ) | (18,560 | ) | 3,334 | |||||||||
| Total other expense, net | (3,949 | ) | 5,185,945 | (3,970,350 | ) | 1,068,954 | ||||||||||
| Income (Loss) before provision for income taxes | (39,560 | ) | 4,942,302 | (13,368,992 | ) | (299,538 | ) | |||||||||
| Income tax provision | - | - | - | - | ||||||||||||
| Net income (loss) | $ | (39,560 | ) | $ | 4,942,302 | $ | (13,368,992 | ) | $ | (299,538 | ) | |||||
| Earnings (loss) per share: | ||||||||||||||||
| Basic and diluted | $ | (0.00 | ) | $ | 0.17 | $ | (0.43 | ) | $ | (0.01 | ) | |||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic and diluted | 31,078,605 | 28,983,034 | 31,208,102 | 29,492,180 | ||||||||||||
GreenBox POS
Consolidated Statements of Cash Flows
For the Six months ended June 30, 2021 and 2020
(unaudited)
| Six Months Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (13,368,992 | ) | $ | (299,538 | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation expense | 13,338 | 11,092 | ||||||
| Amortization expense | 6,915 | - | ||||||
| Noncash lease expense | (1,720 | ) | (839 | ) | ||||
| Stock compensation expense | 2,089,500 | 12,130 | ||||||
| Common stocks issued for professional fees | 10,180,758 | - | ||||||
| Stock compensation issued for interest | 594,258 | - | ||||||
| Interest expense - debt discount | 2,993,408 | 38,418 | ||||||
| Derivative expense | - | 4,373 | ||||||
| Gain (loss) on extinguishment of debt | - | (2,630,795 | ) | |||||
| Changes in fair value of derivative liability | - | 1,203,135 | ||||||
| Changes in assets and liabilities: | ||||||||
| Other receivable, net | (65,444 | ) | 47,714 | |||||
| Prepaid and other current assets | (1,958,422 | ) | (33,341 | ) | ||||
| Cash due from gateways, net | (8,455,120 | ) | 3,502,426 | |||||
| Other assets | (99,000 | ) | - | |||||
| Accounts payable | 239,131 | (33,597 | ) | |||||
| Other current liabilities | 67,853 | 14,354 | ||||||
| Accrued interest | - | (290,021 | ) | |||||
| Payment processing liabilities, net | (5,904,437 | ) | (1,077,551 | ) | ||||
| Net cash provided by (used in) operating activities | (13,667,974 | ) | 467,960 | |||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (68,411 | ) | (10,244 | ) | ||||
| Cash provided for acquisition | (2,500,000 | ) | - | |||||
| Net cash used in investing activities | (2,568,411 | ) | (10,244 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Treasury stock repurchase | (933,343 | ) | - | |||||
| Proceeds from stock option exercises | 2,250 | - | ||||||
| Repayments on convertible debt | - | (445,000 | ) | |||||
| Borrowings from notes payable | - | 744,480 | ||||||
| Principal payments on notes payable | - | (823,074 | ) | |||||
| Proceeds from exercise of warrant | 3,520,000 | - | ||||||
| Repurchase of common stock from stockholder | (4,194,000 | ) | - | |||||
| Proceeds from issuance of common stock | 45,805,491 | - | ||||||
| Net cash provided by (used in) financing activities | 44,200,398 | (523,594 | ) | |||||
| Net increase in cash, cash equivalents, and restricted cash | 27,964,013 | (65,878 | ) | |||||
| Cash, cash equivalents, and restricted cash – beginning of period | 1,832,735 | 763,110 | ||||||
| Cash, cash equivalents, and restricted cash – end of period | $ | 29,796,748 | $ | 697,232 | ||||
| Supplemental disclosures of cash flow information | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | - | $ | 525,270 | ||||
| Income taxes | $ | 800 | $ | 800 | ||||
| Non-cash financing activities: | ||||||||
| Convertible debt conversion to common stock | $ | 3,850,000 | $ | 137,500 | ||||
| Interest accrual from convertible debt converted to common stock | $ | - | $ | 78,050 | ||||
| Short-term notes payable converted to common stock | $ | - | $ | - | ||||
Reconciliation of Net Income (Loss) attributable to GreenBox POS, Inc., to Adjusted Net Income* for the Three Months Ended June 30, 2021
| Three months ended June 30, 2021 | |||||
| Net loss | $ | (39,560 | ) | ||
| Adjustments to net loss: | |||||
| Non-cash adjustments - income (loss): | |||||
| Stock compensation expense for employees | 1,291,887 | ||||
| Stock compensation expense for services | 726,993 | ||||
| Total non-cash adjustments | 2,018,820 | ||||
| EBIDTA Adjustment: | |||||
| Depreciation | 14,244 | ||||
| Total EBIDTA adjustments | 14,244 | ||||
| Total adjustments to net loss: | $ | 2,033,064 | |||
| Adjusted net income | $ | 1,993,504 | |||
* 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.
