GreenBox POS Reports Second Quarter 2020 Financial Results

Rhea-AI Summary

GreenBox POS (GRBX) announced its Q2 2020 financial results, showcasing a robust sequential growth. Processing volume surged to $34.4 million, up 1,893% from Q1 2020. Revenue reached $2.3 million, marking a 1,125% increase. Gross profit improved to $0.9 million with a margin of 38.4%. A significant net income of $4.9 million was achieved, compared to a net loss of $5.2 million in Q1 2020. Key operational highlights include the acquisition of MoltoPay and enhancements to the QuickCard Payment System, enhancing speed and reducing costs.

Positive

• Processing volume increased to $34.4 million, up 1,893% from Q1.
• Revenue rose to $2.3 million, a 1,125% sequential increase.
• Gross profit improved to $0.9 million with a margin of 38.4%.
• Net income achieved was $4.9 million, compared to a loss of $5.2 million in Q1.
• Acquisition of MoltoPay expands international presence.
• Updated QuickCard Payment System increases processing speed by 300%.

Negative

• Revenue declined by $1 million year-over-year from $3.3 million in Q2 2019.
• Operating loss of $0.2 million was reported in Q2.

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

FAQ

What are the Q2 2020 earnings results for GRBX?

In Q2 2020, GreenBox POS reported revenues of $2.3 million and a net income of $4.9 million.

How did GreenBox's processing volume change in Q2 2020?

Processing volume for Q2 2020 reached $34.4 million, showing a 1,893% increase sequentially.

What key operational changes occurred for GRBX in Q2 2020?

GreenBox acquired MoltoPay and updated its QuickCard Payment System, enhancing its service capabilities.

What is the gross profit margin reported by GRBX for Q2 2020?

The gross profit margin for Q2 2020 was 38.4%.

What challenges did GRBX face in Q2 2020?

Despite significant growth, GRBX experienced a $1 million revenue decline compared to the same quarter the previous year.