GreenBox POS (Form: 8-K, Received: 11/12/2021 17:16:02)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 11, 2021

GREENBOX POS

(Exact name of registrant as specified in its charter)

Nevada		001-34294		22-3962936
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(IRS Employer Identification No.)

3131 Camino Del Rio North, Suite 1400

San Diego, CA 92108

(Address of principal executive offices)

(619) 631 8261

(Registrant’s telephone number, including area code)

N/A

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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

Item 2.02. Results of Operations and Financial Condition.

On November 11, 2021, GreenBox POS (the “Company”), issued a press release announcing its financial results for the period ended September 30, 2021. The Company notes that there was typographical error in the press release and the following sentence should have had the number $5.1 million instead of $5.5 million:” Gross proﬁt in the third quarter of 2021 was $5.6 million, or 69.5% of total revenue, compared to gross proﬁt of $1.2 million, or 39.6% of total revenue, in the same quarter a year ago. Sequentially, gross proﬁt increased from $5.5 million $5.1 million, or 79.3% of total revenue, in the second quarter of 2021.” A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information furnished pursuant to Item 2.02 herein, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 9.01. Exhibits.

(d) Exhibits

Exhibit No.		Exhibit
99.1		Press release dated November 11, 2021.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GREENBOX POS

Dated: November 12, 2021	By:	/s/ Ben Errez
		Executive Vice President and Chairman

	(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 30,710,645, 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

	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			-			3,253,855			-

Net income (loss)	$	(6,049,755	)	$	(489,810	)	$	(19,418,747	)	$	(789,348	)


Earnings (loss) per share:
Basic and diluted	$	(0.14	)	$	(0.02	)	$	(0.49	)	$	(0.03	)

Weighted average number of common shares outstanding:
Basic and diluted		42,065,842			29,488,393			39,949,732			29,488,393

	Nine Months Ended September 30,
	2021			2020
Cash flows from operating activities:
Net loss	$	(19,418,747	)	$	(789,348	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation expense		477,886			16,856
Noncash lease expense		(1,202	)		(966	)
Stock compensation expense		5,867,072			162,633
Common stocks issued for professional fees		10,418,996			4,130
Common stocks - issued donation		-			8,000
Proceeds from exercise of stock options		-			32,500
Stock compensation issued for interest		598,994			-
Interest expense - debt discount		2,993,408			121,918
Derivative expense		-			925,576
Gain (loss) on extinguishment of debt		-			(2,630,795	)
Changes in fair value of derivative liability		-			383,769
Changes in assets and liabilities:
Other receivable, net		(154,556	)		47,714
Inventory		(53,278	)		-
Prepaid and other current assets		(184,172	)		(34,878	)
Cash due from gateways, net		(12,114,404	)		3,124,085
Other assets		679,558			(70,000	)
Accounts payable		370,487			220,465
Other current liabilities		3,384,258			32,107
Accrued interest		-			(286,461	)
Payment processing liabilities, net		(6,898,339	)		(1,397,810	)
Net cash provided by (used in) operating activities		(14,034,039	)		(130,505	)

Cash flows from investing activities:
Purchases of property and equipment		(97,818	)		(12,332	)
Acquisition of Northeast		(2,500,000	)		-
Net cash used in investing activities		(2,597,818	)		(12,332	)

Cash flows from financing activities:
Treasury stock repurchase		(2,679,633	)		-
Proceeds from stock option exercises		2,250			-
Borrowings from convertible debt		-			178,000
Repayments on convertible debt		-			(670,000	)
Borrowings from notes payable		350,000			1,954,480
Principal payments on notes payable		-			(1,147,919	)
Proceeds from exercise of warrant		3,731,200			-
Repurchase of common stock from stockholder		(4,194,000	)		(810,000	)
Proceeds from issuance of common stock		45,805,491			-
Net cash provided by (used in) financing activities		43,015,308			(495,439	)

Cash acquired from acquisition of Northeast and ChargeSavvy		1,491,068			-

Net increase in cash, cash equivalents, and restricted cash		27,874,519			(638,276	)

Cash, cash equivalents, and restricted cash – beginning of period		1,832,735			763,110

Cash, cash equivalents, and restricted cash – end of period	$	29,707,254		$	124,834

Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest	$	4,639		$	575,014
Income taxes	$	800		$	800

Non-cash financing and investing activities:
Convertible debt conversion to common stock	$	3,850,000		$	137,500
Common stock issued for acquisition of ChargeSavvy	$	12,140,000		$	-
Interest accrual from convertible debt converted to common stock	$	594,355		$	78,050
Short-term notes payable converted to common stock	$	-		$	810,000

	*Q2 2021*			*Q3 2021*			*Nine Months Ended* *September 30, 2021*

Net loss	$	(39,560	)	$	(6,049,755	)	$	(19,418,747	)

Adjustments to net loss:

Non-cash adjustments - income (loss):
Stock compensation expense for employees		1,291,887			3,777,572			5,867,072
Stock compensation expense for services		726,933			238,238			10,418,996
Merchant settlement liability		-			-			364,124
Total non-cash adjustments		2,018,820			4,015,810			16,650,192

EBIDTA Adjustment:
Depreciation		14,244			457,633			477,886
Income taxes		-			3,253,855			3,253,855
Interest expense - debt discount and other interest		-			4,736			2,993,408
Interest expense - interest on convertible debt		-			-			598,994
Total EBIDTA adjustments		14,244			3,716,224			7,324,143

Total adjustments to net loss:		2,033,064			7,732,034			23,974,335

Adjusted net income	$	1,993,504		$	1,682,279		$	4,555,588



Adjusted cash flows from operations:

Cash flows used in operations per financial statements							$	(14,034,039	)

Adjustments:
Increase in cash due from gateways - receivables								12,114,404
Decrease in payment processing liabilities - payables								6,898,339
Total adjustments								19,012,743

Cash flows provided by operating activities - Adjusted							$	4,978,704