GreenBox POS Reports First Quarter 2021 Financial Results
Following the launch of Gen3 in January, the rapid pace of client onboardings drove record processing volume in Q1,\xe2\x80\x9d said Fredi Nisan, Chief Executive Officer of GreenBox POS.
SAN DIEGO, CA, May 13, 2021 (GLOBE NEWSWIRE) -- GreenBox POS (NASDAQ: GBOX) ("GreenBox", the "Company"), an emerging financial technology company leveraging proprietary blockchain security to build customized payment solutions, has provided its financial results for the first quarter ended March 31, 2021.
First Quarter 2021 and Subsequent Operational Highlights:
- Revenue grew 2,437% to $4.7 million in the first quarter of 2021, as compared to $0.2 million in the same year-ago quarter.
- Launched Generation3 software which propelled processing volume to a company quarterly record of $315 million, an increase of 141% sequentially from the fourth quarter of 2020.
- Announced the development of new smart-contract token technology to accelerate processing volume growth and open new possible revenue streams in money service business
- Selected Signature Bank as a banking solutions partner for the smart-contract token technology infrastructure
- Appointed two new independent Directors to the Board
- Carl Williams, a veteran global payments executive
- Dennis James, an accomplished financial professional in banking, accounting and M&A
- Announced the appointment of Benjamin Chung as Chief Financial Officer
- Announced the planned acquisition and agreed to final terms with ChargeSavvy, a specialty retail payment solutions company
- Completed a $50.1 million public offering and uplisted to the NASDAQ Capital Market
- Joined Visa’s Fintech Fast Track Program, enabling the company to have direct push-to-card payments and co-branded Visa card issuance capabilities
Management Commentary
“The first quarter 2021 built on top of the strong momentum generated towards the end of the fourth quarter 2020. Following the launch of Gen3 in January, the rapid pace of client onboardings drove record processing volume in Q1,” said Fredi Nisan, Chief Executive Officer of GreenBox POS. “We made significant strides towards the launch of the smart contract token technology in announcing our partnership with Signature Bank for banking solutions. We also demonstrated our commitment to improving our internal controls and governance by announcing a new Chief Financial Officer and two new Board appointees. Additionally, we completed an uplist to the Nasdaq along with a $50.1 million public offering significantly enhancing our financial position while raising our profile in the capital markets.
“As we look to the second quarter, we are focused on completing the deployment of our token technology and beginning to realize revenues and believe we are well positioned to do so. Furthermore, by successfully onboarding a considerable amount of low-risk merchant portfolios in the first quarter, we are now able to ramp up the onboarding of higher margin, higher risk portfolios. The land-grab for market share in the digital financial payments space is underway and we are well positioned to gain traction through our superior technology.
“We expect to see robust year-over-year growth throughout the remainder of 2021, empowering our drive to improve the speed and security of digital transactions globally. I look forward to providing our shareholders with further updates in the near-term as we launch our token technology and successfully execute upon our business plan,” concluded Nisan.
First Quarter 2021 Financial Summary
- Revenues in the first quarter of 2021 were $4.7 million, an increase of 2,437% compared to revenues of $0.2 million in the same quarter a year ago. Sequentially, revenues increased by 59% when compared to $3.0 million in the fourth quarter of 2020. The increase in revenue was primarily due to increased processing volume
- Gross profit in the first quarter of 2021 was $3.2 million, or 66.4% of total revenue, compared to gross profit of ($0.1) million, in the same quarter a year ago. Sequentially, gross profit increased 89% from $1.7 million, or 55.8% of total revenue, in the fourth quarter of 2020. The increase in gross profit was primarily due to increase processing volume and efficiency to scale.
- Total operating expenses in the first quarter of 2021 totaled $12.5 million, compared to $1.1 million in the same quarter a year ago, and $5.3 million in the fourth quarter of 2020. The increase in operating expenses was due to an increase in one-time charges and non-cash stock-based compensation expenses as well as an increase in interest expense
- The Company’s net income in the first quarter of 2021 was ($13.3) million, or ($0.38) per basic and diluted share, compared to net income of ($5.2) million, or ($0.18) per basic and diluted share, in the same quarter a year ago. Net income in the fourth quarter of 2020 was ($4.5) million or ($0.15) per basic and diluted share. The sequential decrease was primarily due to an increase in one-time charges and non-cash stock-based compensation expenses related to the public offering and Nasdaq uplisting that was completed in the quarter.
- Adjusted Net Income, a non-GAAP financial measure, for the first quarter 2021 was $0.5 million.
First Quarter 2021 Results Conference Call
Management will host a conference call on Thursday, May 13, 2021 at 4:30 p.m. Eastern time to discuss GreenBox’s first quarter 2021 financial results. The call will conclude with Q&A from participants. To participate, please use the following information:
Q1 2021 Conference Call and Webcast
Date: Thursday, May 13, 2021
Time: 4:30 p.m. Eastern time
U.S. Dial-in: 1-888-394-8218
International Dial-in: 1-323-794-2588
Conference ID: 6367518
Webcast: http://public.viavid.com/player/index.php?id=144886
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 August 13, 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 6367518 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, 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.
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
[email protected]
www.mzgroup.us
GreenBox POS
Consolidated Balance Sheets
March 31, 2021 and December 31, 2020
(unaudited)
| March 31, | December 31, | |||||||
| 2021 | 2020 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 35,696,589 | $ | - | ||||
| Restricted cash | - | 1,832,735 | ||||||
| Accounts receivable, net | 10,000 | 10,000 | ||||||
| Accounts receivables from fines and fees from merchant, 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 | 11,848,709 | 7,303,949 | ||||||
| Prepaid and other current assets | 2,452,753 | 70,130 | ||||||
| Total current assets | 52,797,281 | 12,006,044 | ||||||
| Non-current Assets: | ||||||||
| Property and equipment, net | 62,362 | 57,264 | ||||||
| Operating lease right-of-use assets, net | 87,837 | 117,795 | ||||||
| Other assets | 81,636 | 81,636 | ||||||
| Total non-current assets | 231,835 | 256,695 | ||||||
| Total assets | $ | 53,029,116 | $ | 12,262,739 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 178,038 | $ | 210,094 | ||||
| Other current liabilities | 98,995 | 68,138 | ||||||
| Payment processing liabilities, net | 5,355,115 | 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 | 89,017 | 120,110 | ||||||
| Total current liabilities | 5,993,878 | 11,727,603 | ||||||
| Long-term debt | 149,900 | 149,900 | ||||||
| Total liabilities | 6,143,778 | 11,877,503 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' Equity: | ||||||||
| Common stock, par value $0.001, 82,500,000 shares authorized, shares issued and outstanding of 40,917,331 and 30,710,646, respectively |
40,918 | 30,711 | ||||||
| Additional paid-in capital | 71,898,401 | 12,079,074 | ||||||
| Accumulated deficit | (25,053,981 | ) | (11,724,549 | ) | ||||
| Total stockholders' equity | 46,885,338 | 385,236 | ||||||
| Total liabilities and stockholder's equity | $ | 53,029,116 | $ | 12,262,739 | ||||
GreenBox POS
Consolidated Statements of Operations
For the Three Months Ended March 31, 2021 and 2020
(unaudited)
| Three Months Ended March 31, | ||||||||
| 2021 | 2020 | |||||||
| Net revenue | $ | 4,749,441 | $ | 187,205 | ||||
| Cost of revenue | 1,593,771 | 247,305 | ||||||
| Gross profit (loss) | 3,155,670 | (60,100 | ) | |||||
| Operating expenses: | ||||||||
| Advertising and marketing | 24,725 | 11,885 | ||||||
| Research and development | 653,381 | 286,548 | ||||||
| Payroll and payroll taxes | 559,201 | 402,462 | ||||||
| Professional fees | 457,752 | 212,298 | ||||||
| General and administrative | 566,195 | 142,050 | ||||||
| Stock compensation for employees | 797,613 | 4,130 | ||||||
| Stock compensation for services | 9,453,825 | - | ||||||
| Depreciation and amortization | 6,009 | 5,376 | ||||||
| Total operating expenses | 12,518,701 | 1,064,749 | ||||||
| Loss from operations | (9,363,031 | ) | (1,124,849 | ) | ||||
| Other income (expense): | ||||||||
| Interest expense - debt discount | (2,993,408 | ) | (30,076 | ) | ||||
| Interest expense | (594,258 | ) | (288,590 | ) | ||||
| Changes in fair value of derivative liability | - | (3,822,385 | ) | |||||
| Merchant liability settlement | (364,124 | ) | - | |||||
| Merchant fines and penalty income | - | 24,060 | ||||||
| Other income or expense | (14,611 | ) | - | |||||
| Total other expense, net | (3,966,401 | ) | (4,116,991 | ) | ||||
| Loss before provision for income taxes | (13,329,432 | ) | (5,241,840 | ) | ||||
| Income tax provision | - | - | ||||||
| Net loss | $ | (13,329,432 | ) | $ | (5,241,840 | ) | ||
| Earnings (loss) per share: | ||||||||
| Basic and diluted | $ | (0.38 | ) | $ | (0.18 | ) | ||
| Weighted average number of common shares outstanding: | ||||||||
| Basic and diluted | 34,917,106 | 28,993,402 | ||||||
GreenBox POS
Consolidated Statements of Cash Flows
For the Three months ended March 31, 2021 and 2020
(unaudited)
| Three Months Ended March 31, | ||||||||
| 2021 | 2020 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (13,329,432 | ) | $ | (5,241,840 | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation expense | 6,010 | 5,376 | ||||||
| Interest expense - debt discount | 2,993,408 | 30,076 | ||||||
| Stock compensation expense for employees | 797,613 | 4,130 | ||||||
| Stock compensation expense for services | 9,453,825 | - | ||||||
| Shares issued for interest | 594,355 | - | ||||||
| Changes in fair value of derivative liability | - | 3,822,385 | ||||||
| Noncash lease expense | (1,135 | ) | 4,406 | |||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | - | 37,205 | ||||||
| Prepaid and other current assets | (2,382,623 | ) | (42,614 | ) | ||||
| Cash due from gateways, net | (4,544,760 | ) | 5,024,520 | |||||
| Accounts payable | (32,056 | ) | (6,271 | ) | ||||
| Other current liabilities | 30,857 | (15,100 | ) | |||||
| Accrued interest | - | 7,135 | ||||||
| Payment processing liabilities, net | (4,844,841 | ) | (3,361,564 | ) | ||||
| Net cash provided by (used in) operating activities | (11,258,779 | ) | 267,844 | |||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (11,108 | ) | (12,564 | ) | ||||
| Net cash used in investing activities | (11,108 | ) | (12,564 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Repayments on convertible debt | - | (270,000 | ) | |||||
| Borrowings from short-term notes payable | - | (441,911 | ) | |||||
| Proceeds from stock option exercises | 2,250 | - | ||||||
| Proceeds from exercise of warrant | 3,520,000 | - | ||||||
| Repurchase of common stock from stockholder | (4,194,000 | ) | - | |||||
| Proceeds from issuances of common stock | 45,805,491 | - | ||||||
| Net cash provided by financing activities | 45,133,741 | (711,911 | ) | |||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 33,863,854 | (456,631 | ) | |||||
| Cash, cash equivalents, and restricted cash – beginning of period | 1,832,735 | 763,110 | ||||||
| Cash, cash equivalents, and restricted cash – end of period | $ | 35,696,589 | $ | 306,479 | ||||
| Supplemental disclosures of cash flow information | ||||||||
| Cash paid during the period for: | ||||||||
| Interest` | $ | - | $ | 339,505 | ||||
| Income taxes | $ | - | $ | 800 | ||||
| Disclosures of non-cash activities under investing activities: | ||||||||
| Convertible debt converted to common stock | $ | 3,850,000 | $ | 57,500 | ||||
| Interest accrual from convertible debt converted to common stock | $ | - | $ | 58,050 | ||||
Reconciliation of Net Income (Loss) attributable to GreenBox POS, Inc., to Adjusted Net Income* for the Three Months Ended March 31, 2021
| Three months ended March 31, 2021 | |||||
| Net loss | $ | (13,329,432 | ) | ||
| Adjustments to net loss: | |||||
| Non-cash adjustments - income (loss): | |||||
| Stock compensation expense for employees | 797,613 | ||||
| Stock compensation expense | 9,453,825 | ||||
| Interest expense - debt discount | 2,993,408 | ||||
| Interest expense - common stock issued for interest on convertible debt | 594,258 | ||||
| Total non-cash adjustments | 13,839,104 | ||||
| EBIDTA Adjustment: | |||||
| Depreciation | 6,009 | ||||
| Total EBIDTA adjustments | 6,009 | ||||
| Total adjustments to net loss: | $ | 13,845,113 | |||
| Adjusted net income | $ | 515,681 | |||
* 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.
