greenbox20210930

greenbox20210930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)
☒	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2021

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
	For the transition period from ______________ to ______________

Commission file number: 001-34294

GREENBOX POS

(Exact name of small business issuer as specified in its charter)

Nevada	22-3962936
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

3131 Camino Del Rio North, Suite 1400

San Diego, CA

92108

(Address of principal executive offices)

(Zip Code)

(619)-631-8261

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	GBOX	The Nasdaq Stock Market LLC (Nasdaq Capital Market)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares outstanding of the issuer’s classes of common equity, as of November 9, 2021 was 43,179,241 Shares of Common Stock (One Class)

TABLE OF CONTENTS

		Page
PART I Consolidated Financial Information

Item 1.	Unaudited Condensed Consolidated Financial Statements	3
	Unaudited Condensed Consolidated Balance Sheets	3
	Unaudited Condensed Consolidated Statements of Operations	4
	Unaudited Condensed Consolidated Statements of Stockholders’ Deficit	5
	Unaudited Condensed Consolidated Statements of Cash Flows	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis or Plan of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk
Item 4.	Controls and Procedures	28

PART II Other Information

Item 1.	Legal Proceedings	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
Signatures		31

PART I - FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

GREENBOX POS

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	September 30,			December 31,
	2021			2020

ASSETS

Current Assets:
Cash and cash equivalents	$	29,707,254		$	-
Restricted cash		-			1,832,735
Accounts receivable, net of allowance for bad debt of $288,764 and $0, respectively		229,346			10,000
Accounts receivable from fines and penalties from merchants, net of allowance for bad debt of $6,665,031		2,789,231			2,789,230
Inventory		177,779			-
Cash due from gateways, net		19,418,353			7,303,949
Prepaid and other current assets		260,963			70,130
Total current assets		52,582,926			12,006,044

Non-current Assets:
Property and equipment, net		1,630,379			57,264
Other assets		197,954			81,636
Goodwill		6,049,487			-
Intangible Assets, net		7,992,432			-
Operating lease right-of-use assets, net		668,865			117,795
Total non-current assets		16,539,117			256,695

Total assets	$	69,122,043		$	12,262,739

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable	$	801,598		$	210,094
Other current liabilities		3,583,956			68,138
Payment processing liabilities, net		6,634,457			10,199,956
Note payable, payroll protection plan loan		272,713			272,713
Short-term notes payable, net of debt discount of…		3,448			-
Convertible debt, net of debt discount of $0 and $2,993,408, respectively		-			856,592
Current portion of operating lease liabilities		375,488			120,110

Total current liabilities		11,671,660			11,727,603
Long term liabilities		645,131			149,900
Operating lease liabilities, less current portion		294,490			-

Total liabilities		12,611,281			11,877,503

Commitments and contingencies

Stockholders' Equity:
Common stock, par value $0.001, 82,500,000 shares authorized, shares issued and outstanding of 42,865,022 and 30,275,023, respectively.		42,865			30,711
Additional paid-in capital		90,290,826			12,079,074
Accumulated deficit		(31,143,296	)		(11,724,549	)
Less: Treasury stock, at cost; 300,000 and 0 shares, respectively		(2,679,633	)		-
Total stockholders' equity		56,510,762			385,236

Total liabilities and stockholder's equity	$	69,122,043		$	12,262,739

The accompanying notes are an integral part of these condensed unaudited financial statements.

Table of Contents

GREENBOX POS

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020

Revenue	$	8,045,469		$	3,056,271		$	19,174,089		$	5,536,335
Cost of revenue		2,420,748			1,845,295			5,337,999			3,504,283

Gross profit		5,624,721			1,210,976			13,836,090			2,032,052

Operating expenses:
Advertising and marketing		37,179			59,099			84,509			86,368
Research and development		1,043,385			243,923			2,504,976			798,157
General and administrative		784,158			366,734			1,648,383			613,156
Payroll and payroll taxes		1,250,451			436,216			2,871,581			1,279,174
Professional fees		789,772			344,641			2,114,996			852,234
Stock compensation for employees		3,777,572			-			5,867,072			-
Stock compensation for services		238,238			-			10,418,996			-
Depreciation and amortization		457,633			5,764			477,886			16,856
Total operating expenses		8,378,388			1,456,377			25,988,399			3,645,945

Income (Loss) from operations		(2,753,667	)		(245,401	)		(12,152,309	)		(1,613,893	)

Other income (expense):
Interest expense		(4,736	)		(48,931	)		(598,994	)		(372,553	)
Interest expense - debt discount		-			(83,500	)		(2,993,408	)		(121,918	)
Derivative expense		-			(925,576	)		-			(925,576	)
Changes in fair value of derivative liability		-			819,366			-			(383,769	)
Gain from extinguishment of convertible debt		-			-			-			2,630,795
Merchant liability settlement		-			-			(364,124	)		-
Other income or expense		(37,497	)		(5,768	)		(56,057	)		(2,434	)
Total other expense, net		(42,233	)		(244,409	)		(4,012,583	)		824,545

Income (Loss) before provision for income taxes		(2,795,900	)		(489,810	)		(16,164,892	)		(789,348	)

Income tax provision		3,253,855

SEC Form 10-Q filed by Greenbox POS