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
[email protected]
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 | |||||||
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Supplemental disclosures of cash flow information
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Cash paid during the period for:
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Interest
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$ | 525,270 | $ | 125,511 | |||||||
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Income taxes
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$ | 800 | $ | 800 | |||||||
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Non-cash financing activities:
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Convertible debt conversion to common stock
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$ | 137,500 | $ | (150,000) | |||||||
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Interest accrual from convertible debt converted to common stock
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$ | 78,050 | $ | - | |||||||
SOURCE: GreenBox POS, LLC