Q4 2021 Greenbox Pos Earnings Call
Good afternoon, ladies and gentlemen.
Gent.
and welcome to the GreenBox POS fourth quarter and full-year 2021 earnings conference call.
And welcome to the Green Bucks P O S fourth quarter and full year 2021 earnings conference call.
During today's presentation, all parties will be in a listen-only mode.
During today's presentation, all parties will be in at least in only mode.
Following management remarks, the conference will be open for questions.
All the way management remarks, the conference will be open for questions.
The earnings press release accompanying this conference call was issued at the close of the market today.
The earnings press release accompanying this conference call was he should at the close of the market today.
The annual report, which includes the company's results of operations for the year and December 31, 2021, was filed with the SEC today.
The annual report the which includes the company's results of operations for the year ended December 31st 2021 was filed with the S. C C. Today.
Speaker Change: On our call today is Greenbox POS Chairman Ben Erez and Chief Financial Officer Ben Chang.
On our call today is green box P O S Chairman, Ben Arris, and Chief Financial Officer of Ben Cheung.
Ben: I'd like to remind everyone that statesmen made on today's call and webcast including those regarding future financial results and industry prospects are for a look.
I'd like to remind everyone that statesmen made on today's call and webcast, including those regarding future financial results and industry prospects at four am looking.
Ben: and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call.
And may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call.
Ben: Please refer to the company's regulatory filing for a list of associated
Please refer to the companies regulatory filing for the least of associated risks.
Ben: The replay of this call and webcast will be available for the next 90 days on the company's website under the Events section.
The replay of this call and webcast will be available for the next 90 days on the company's website under the events section.
Ben: At this time, I would like to turn the conference over to Ben Erez, the company's chairman. Ben, the floor is yours.
At this time I would like to turn the conference over to Ben areas. The company's chairman Ben the floor is yours.
Ben: Hello everyone and thank you for joining us today for our fourth quarter and full year 2021 financial results call.
Hello, everyone and thank you for joining us today fourthquarter.
Once I mentioned results cool.
Ben: 2021 was the record-setting year for Greenbox. We continue to rapidly expand our payment processing footprint and processed approximately 2 billion US dollars in transaction volume, which makes it about 10 times the processing volume of fiscal year 2020.
Maybe to any one vehicle.
Green box you continue to rapidly expand our payment processing with Britain.
Closest approximately 2 billion U S.
Dollars in transaction volume.
Which makes it about 10 times, the grocery volume with fiscal year 2020.
Ben: As we've discussed previously, processing volume is currently our primary KPI.
As we've discussed previously processing volume discount <unk> primary kpa.
And business focal points.
Ben: It is indicative of the scalability of our technology, our market share growth.
It is indicative of the scalability of our technologies are market share growth.
Ben: our ability to remain compliant, and our investment in good quality people, technology,
Our ability to remain compliant and our investment in good quality people technology.
Ben: development, infrastructure, and acquisition.
Development infrastructure and acquisitions.
Ben: We also achieved record company revenues during 2021 of 26.3 million representing tremendous growth of over 209% when compared to 2020 full year revenue.
We also achieved Jacob company revenues during 2021 of 26 43 million rep tremendous growth of over 290%.
When compared to 2020 full year revenue.
Ben: As a reminder, Generation 3 technology was only deployed at the onset of 2021 in January of last year.
As a reminder.
Generation through technology.
Only deployed at the onset of 2021 in January of last year.
Ben: To achieve impressive scale so quickly with no major setback is a demonstration of the quality and capabilities of our talent team and technology.
To achieve impressive scale, so quickly with no major setback is a demonstration of the quality and capabilities of our talented team in technology.
Ben: With that, I'd like to walk through some key operational highlights and provide updates on several of our core objectives that we have been diligently working on towards.
With that I'd like to walk through some key operational highlights and provides updates on several of our core objectives that we have been diligently working on.
Towards.
Ben: acquisitions are a vital part of our growth strategy.
Acquisitions are a vital part of our growth strategy.
Ben: They allow us to purchase merchant portfolios, adding processing volume to our platform and provide a way to obtain key licensing assets, both domestically and globally, that enable us to branch out and service more verticals and geographic locations.
They allow us to purchase merchant portfolios, adding processing volume two.
Our platform and provide the way to obtain key licensing assets.
Both domestically and globally that enable us to branch out in service more vertical and geographic location.
Ben: In 2021, we announced three such acquisitions including North East merchant services, Charles Savi and Transact Europe .
In 2021.
We announced theories such acquisitions, including northeast merchant services charged.
Charge savvy and transact Europe .
Ben: The first two acquisitions have been completed and successfully integrated with the green box operation.
The first two acquisitions have been completed and successfully integrated with the Green books operations.
Ben: As an indication of their success, just six months after integration, Charles Savie recorded the best water in its nine year history.
As an indication of their success just six months after integration John Savill recorded the best quarter.
It's 90 year history.
Ben: as a result of improved technology and efficiencies.
As a result of improved technology and this and efficiencies.
Regarding transact euro.
Ben: After a lengthy review process, I'm excited to report that after receiving final approval from the Bank of Bulgaria, we produced the report.
After a lengthy review process I'm excited the reports that after receiving final approval from the bank of in the area.
We proceed with closing.
Ben: Gonzac Europe or PEU is an incredibly important purchase for us.
Sounds like Europe , or do you even.
An incredibly important purchase for us.
Ben: given that it opens doors for us globally for expansions both in Europe and as a stepping stone into markets in Asia-Pacific regions.
Even though it opens doors for us globally.
For extensions, both in Europe , and as a stepping stone into markets in Asia Pacific region.
Ben: It gives credibility to Greenbox, further establishing us as a premier global fintech.
It gives us the ability to green box further establishing us.
Premier Global Syntech.
Ben: Greenbox and PEU are a natural complement to each other with PEU licenses and infrastructure combined with our suite of customized payment solutions and technology.
You're in Boston D U.
Nachos complement to each other.
With the use licenses and infrastructure combined with our resource customize statements solutions and technology.
Ben: We believe there is a powerful synergy that we can capitalize on.
We believe there is a powerful synergy that we can capitalize on.
Ben: drive coin adoption and ultimately achieve significant revenue.
Drive pointing adoption and ultimately achieved significant revenue.
And earnings.
Ben: And 8K filing was just made based on the amendment to the purchase agreement regarding the purchase price of the acquisition.
An 8-K filings was just made based on the amendment to the purchase agreement regarding the purchase price of the acquisition.
Ben: which was reduced to 26 million euros from the original 30 million.
Which was reduced to 26 million euro from the original $30 million.
Ben: while not complete just yet. We are confident this will cross the finish line in the next couple of days.
While not complete just yet.
We are confident this will cross the finish line in the next couple of days.
Ben: So we can announce that this transaction is in completion mode. Earlier this year...
But we can announce that this transaction is in completion mode.
Earlier this year Green books launched.
Ben: vast new payment vertical by offering bulk ACH processing abilities to merchants.
A vast new payments Dorothy call, but also in bulk ACTH processing abilities to merchants.
Ben: ACH market is a lucrative opportunity for us as it offers merchants a low cost execution alternative to more expensive
Hh bucket is it lucrative opportunity for us offers millions of low cost execution alternative.
Two more expensive debit and credit cards.
Ben: Since our launch of this initiative, we've already booked commitments in excess of $50 million per month and drive-in.
Since our launch of this initiative.
Already booked commitments in excess of $50 million per month and driving.
Ben: This is a profitable multi-million dollar revenue stream for Greenbox that we expect will continue to grow over time.
This is a profitable multimillion dollar revenue stream for Green box, which we expect will continue to grow over time.
Establishing strategic partnerships.
Ben: with leading, tax-forward financial companies is also an integral part of our growth strategy.
With leading takes forward.
Financial companies.
There is also an integral part of our growth strategy.
We recently announced.
Ben: such a partnership with Cross River Bank, a very well-respected financial technology infrastructure company, following a very thorough evaluation process by them of GreenBot.
Such a partnership with cross through the bank.
Well respected financial technology infrastructure company.
Following a very thorough evaluation process by them of Green box.
Ben: And I would like to take this opportunity to congratulate Cross River for raising $620 million last week.
And I would like to take this opportunity to congratulate.
Grocery, though for raising $620 million last week.
Ben: We entered into a licensing partnership as the initial step towards the first of its kind banking as a service initiative.
We entered.
Enter a licensee partnership as the initial steps towards the first of its kind banking as a service initiative.
Ben: This is a truly massive opportunity for us that significantly expands the potential universe of clients that Greenbox can service while allowing us to offer existing merchant accounts.
This is a truly massive opportunity for us that's significantly expands the potential universe of clients that green books can service, while allowing us to offer existing merchant accounts.
Ben: more services, including banking solutions. The Cross-River Partnership single-handedly closes the gap.
Most services, including banking solutions.
A partnership singlehandedly closes the gap.
Ben: towards green was becoming a vertically integrated end to end financial technology solution.
Towards Green goes to becoming a vertically integrated into ends I mentioned technology solution.
Ben: While in the early innings of this partnership, we expect great things from it and over time believe it will lead to a substantial revenue generation.
While in the early innings of this partnership we expect great things from it and over time believe it will lead to a substantial revenue generation for us.
Ben: Through 2021 and into the new year, we continue to strengthen the composition of our management team. Recently, we welcome Mean Way as our new
For all of 2021 and into the new year, we continue to strengthen the composition of our management team.
Recently, we will come mean way.
The new Chief operating officer.
Ben: Min has extensive background in operational efficiencies and growing technology companies, particularly on a global basis, which is critical for us given our expansion plan.
Man has extensive beck odds and operational efficiencies and growing technology.
Companies, particularly on a global basis, which is critical for us given our expansion plans.
Speaker Change: Min Hui will be available at the end of this call as well as Ben and I for Q&A.
Mainly will be available at the end of the school as well has been an eye for Q&A.
Speaker Change: Given these aspirations, we set out to find the right marketing and branding leader.
Given this us durations, we set out to find the right marketing and branding leader.
Speaker Change: And we found that perfect fit with the appointment of Jacqueline Reynolds as chief marketing officer.
And we found that perfect fit with the appointment of Jacqueline Raynaud's as Chief marketing Officer.
Speaker Change: There are decades of experience leading some of the most highly coveted brands. Jacqueline is respected as a world-class global marketer.
Decades of experience, leading some of the most highly coveted brands Jacqueline is respected.
As a world class global market, though.
Speaker Change: She's also spearheading our recently announced transformational global initiative.
She is also spearheading.
Recently announced a transformational global initiative.
Speaker Change: to raise the Greenbox brand awareness with the appointment of an award-winning advertising agency.
To raise the Green books brand awareness with the appointment.
Often award winning advertising agency.
In Ocean.
Speaker Change: in ocean as our advertising and branding agency of record.
Cause our advertising and branding agency of record.
Speaker Change: In January , we once again demonstrated our commitment to our shareholders.
In January we once again demonstrated a commitment to our shareholders.
Speaker Change: and confidence in our ability to execute on the growth opportunity in front of us with the approval of an accelerated share repurchase program of up to $10 million. Our commitment to defend our stock
And confidence in our ability to execute on the growth opportunity in front of us with the approval of an accelerated share repurchase program of up to $10 million commitment to defend our stock.
Speaker Change: is unwavering and we will continue to utilize this strategy when we feel it is prudent.
Is unwavering and we will continue to utilize this strategy when we feel it is prudent.
Speaker Change: Additional details regarding this stock purchase plan can be found in our 10-K filing.
Details regarding this stock purchase plan can.
Can be found in a 10-K filing.
Speaker Change: Last but certainly not least, let's talk about Coiny, our stablecoin and digital payment platform.
Last but certainly not least let's talk about koine are stable going in digital payment platform.
Speaker Change: All of the aforementioned items I've discussed.
All of the aforementioned items I've discussed.
Speaker Change: lay the foundation for us to drive adoption for coin.
Lay the foundation for us to drive adoption for <unk>.
Speaker Change: After much internal discussion, we believe the most effective path for us, initially at least, is to deploy and grow the business.
After much internal discussion we believe the most effective path for us initial.
Initially at least is to deploy and grow the business.
Under the Green books umbrella.
Speaker Change: There are several key advantages that we can leverage such as compliance, sales, and more effectively execute on its growth.
There are several key advantages that we can leverage such as compliance sales.
More effectively execute on its growth.
Speaker Change: The Coiny app has gone through a vigorous beta testing.
The cleaning out.
Has gone through vigorous beta testing.
Speaker Change: as well as three auditor attestations. And we plan to make the Coiny app available on the App Store in a few weeks, perhaps by the end of April .
As well as three audit or at the stations and we plan to make the coining up available on the App store in a few weeks.
By the end of April .
Speaker Change: We remain 100% committed to rewarding our loyal shareholders from the success of COINI and our acquisitions by way of a dividend in the same parameters as we have done.
We remain 100 per cent committed to rewarding a loyal shareholders.
From the success of Koine and our acquisitions by way of dividend.
And the same parameters as we have discussed before.
Speaker Change: And now I turn the call over to our Chief Financial Officer, Ben Chung, to walk through our financial results.
And now I've done the call over to our Chief Financial Officer, Ben Cheung.
To walk through our financial results.
Ben scores yours.
Ben chchang: Thank you, Ben. I will limit my portion to key results of our financials. A full breakdown is available in our 10-K filing and in the press release that will be distributed after market closes today.
Thank you Ben.
I was living in my portion <unk> results of our financial a full breakdown is available in our 10-K filing and in the press release that will be distributed after market closes today.
Ben chchang: Please note that I'll be referring to adjusted EBITDA and other non-GAT measures, and for the calculation of adjusted EBITDA for other non-GAT measures, please refer to the MD&A, which is available in our 10-K filing, which you can find on our website under SEC filings.
Please note that I'll be referring to adjust that EBITDA and other non-GAAP measures and for the calculation of adjusted EBITDA for other non-GAAP measures. Please refer to the N D N a which is available in our 10-K finally, which you can find on our website under SEC filings.
Ben chchang: Our 2021 total net revenue increased by 17.8 million or 208.6 percent to 26.3 million from 8.5 million for the full year 2020.
Or 2021 total net revenue increased by $17.8 million or 208.6% to 26.3 million from $8.5 million for the full year 2020. The increase was primarily due to an increase in processing volume from two.
Ben chchang: The increase was primarily due to an increase in processing volume from 2022. I'm sorry, 20.2 million for the year ended December 31, 2020 and 1.95 billion for the year ended December 31, 2021.
Thousand 22, I'm, sorry, 22 million for the year ended December 31, 2020, and $1.95 billion for the year ended December 31.
2021.
Ben chchang: The increase in processing volume was due to a number of factors including growth of our customer merchant base as a result of expanded sales and marketing efforts. An increase in average merchant transaction volume as a result of greater strategic focus on larger merchants.
The increase in processing volume, what's due to a number of factors, including growth of our customer merchant date as a result of extended sales and marketing efforts and increase in average merchant transaction volume as a result of greater strategic focus on larger merchants the expansion and grow.
Ben chchang: the expansion and growth of our advanced blockchain ledger-based payment solution product offerings.
Of our our dance blockchain Ledger base payment solutions product offerings, combined with an expanding ISO and partnership network and our strategic acquisition strategy too.
Ben chchang: combined with an expanding ISO and partnership network and our strategic acquisition strategy.
Ben chchang: 2021 gross profit was $16.9 million, or 64% of net revenue, an increase of 357% compared to $3.7 million in the prior 43% of net revenue. Our margins increased significantly due to increased processing efficiency, greater utilization of lower cost gateways, and decreased cost to scale.
2021, gross profit was $16.9 million or 64% of net revenue.
An increase of 357% compared to $3.7 million in the prior year or 43% of net revenue our margins increase significantly.
Increased processing efficiency greater utilization of lower cost gateway and decreased cost of scale.
<unk> yeah.
Ben chchang: I would like now to discuss our operating expenses.
I would like now to discuss our operating expenses, we categorize our operating expenses into two categories normal operating expense and non-cash operating expenses normal operating expenses include marketing research and development payroll professional fee.
Ben chchang: We categorize our operating expenses into two categories, normal operating expenses and non-cash operating expenses.
Ben chchang: Normal operating expenses include marketing, research and development, payroll, professional fees, and general expenses, while non-cash operating expenses include stock compensation expenses for employees and for services, including depreciation.
And general expenses, while non-cash operating expenses include stock compensation expenses for employee and for services, including depreciation.
Ben chchang: Our normal operating expense was $20.8 million and $5.7 million for full year 2021 and 2020 respectively. An increase of $15.1 million primarily due to an increase in general and administrative expenses related to bad debt expense.
Our normal operating expense was 20.8 million and five 7 million for full year 2021, and 2020, respectively. An increase of $15 1 million, primarily due to an increase in general and administrative expenses related too bad that extent.
Ben chchang: but also related to our heavy investment in research and development to improve our technology and headcount to support operations and sales growth.
But also related to our heavy investment in research and development to improve our technology and head count to support operations and sales growth.
Ben chchang: Our non-cash operating expenses primarily relate to stock compensation expense for employees and services. Our stock compensation expense for services are non-recurring charges, which will not recur going forward.
Our non-cash operating expenses, primarily relate to stock compensation expense for employees and services are stock compensation expense for services are non recurring charges, which will not recur going forward.
Ben chchang: We ended 2021 with a loss from operations of $20.8 million compared to a loss of $5.0 million in the same year prior years.
We ended 2021 with a loss from operations of 28 million compared to a loss of four 5.0 million in the same year prior year.
Ben chchang: If our non-cash operating expenses such as bad debts, stock compensation expense for employees and services, and depreciation are added back, we had net income from operations of $3.1 million for 2021 and a net loss of $5.1 million for the same period prior year.
If our non-cash operating expenses such as bad debt.
[noise] compensation expense for employees and services and depreciation or add it back we had net income from operations of 3.1 million for 2021, and a net loss of 5.1 million for the same period prior year.
Speaker Change: I would now like to go to our other expense categories.
I would now like to go to our other expense category are total other expense for full year 2021 were at approximately five 7 million compared to other income of zero point $1 million in the prior year or other expenses consisted of interest expense related.
Speaker Change: Our total other expense for full year 2021 were approximately 5.7 million compared to other income of 0.1 million in the prior year.
Speaker Change: Our other expenses consisted of interest expense related to debt discount of 2.9 million, interest expense of 1.9 million, derivative expense of 3.4 million, offset by changes in share value of derivative liability of 2.8 million, a merchant liability settlement gain of 0.4 million, and other income of 0.2 million.
Too bad discount that that discount of 2.9 million interest expense of 1000 9 million derivative expense of $3 4 million offset by changes in fair valley of derivative liability of 2.8 million a merchant liability settlement game of zero.
<unk> 4 million and other income of 0.2 million.
Speaker Change: The company sustained a net loss of in 2021 of $26.5 million or $0.65.
The company sustained a net loss of in 2021 of 26.5 million or 0.65.
Speaker Change: per basic and diluted share compared to a net loss of 5.0 million or 0.17 per basic and diluted share during 2020. The increase in net loss was primarily due to bad debt write-offs, increased in operating expenses from our heavy investment in growth related to such areas as research and development, sales and marketing, staff.
<unk> <unk>.
Basic and diluted share compared to a net loss of 5.0 million or 0.17 cent per basic and diluted share during 2020.
The increase in net loss was primarily due to bad debt write offs increase in operating expenses from our heavy investment and growth related to such areas as research and development sales and marketing staff.
Speaker Change: Costs associated with due diligence for acquisitions, stock-based compensation for services, as well as increase in general administrative expenses. Adjusted net income, a non- GAAP financial measure for 2021 was $3.1 million of net income. You can find a reconciliation in our earnings press release.
That's associated with due diligence for acquisitions stock based compensation for services as well as increase in general administrative expenses.
Ah just at net income a non-GAAP financial measure for 2021 was $3.1 million of net income you can find a reconciliation in our earnings press release.
Speaker Change: Our cash flows from operating activities adjusted was negative 6.9 million for the 12 months ended December 31, 2021.
Our cash flows from operating activities adjust it was negative 6.9 million for the 12 months ended December 31 2021.
Speaker Change: Greenbox continues to be in a financially healthy position with a strong cash balance of $89.6 million as of December 31, 2021 following the recent $100 million convertible financing which allows us the flexibility to aggressively pursue our growth initiatives.
Green box continues to be in a financially healthy position with a strong cash balance of 89.6 million as of December 31, 2021. Following the recent 100 million convertible financing, which allows us the flexibility to aggressively pursue our growth initiatives.
Speaker Change: I'll now turn the call back to Ben Harris for some final remarks prior to our Q&A.
I will now turn the call back to Ben areas for some final remarks prior to our Q&A.
But it's been.
Ben: On a final note, we fully acknowledge the performance metric hurdles for Q1 are specified in the convertible note agreement, so called the $100 million note and the ramifications of such.
On a final note, we fully acknowledge the performance metrics or those for Q1 specified in the convertible notes agreement Ah So called the 100 million dollar note.
And the ramifications of such based on the performance. We've seen in Q1, we are confident that this conversion to renewable north come into play.
Ben: Based on the performance we have seen in Q1, we are confident that this conversion trigger will not come into play. Our revenues far exceed the requirements of this trigger.
Our revenue far exceed the requirements will distribute.
Ben: While much work remains to be done to accomplish our ambitious agenda, we have made tremendous progress in relatively short periods of time.
While much work remains to be done to accomplish our ambitious agenda you have made tremendous progress in relatively short period of time.
Ben: As your chairman, you have my unwavering commitment.
As your chairman you have my unwavering commitment.
Ben: to the many initiatives that we have set out to achieve.
To the many initiatives that we have set out to achieve.
Ben: We have invested heavily in good people, built a robust and scalable infrastructure, developed innovative payment technology, and added world-class marketing.
We have invested heavily in good people.
Built a robust and scalable infrastructure develop innovative payment technology and others World class marketing.
Ben: We're well positioned for growth over the course of the next several years.
We're well positioned for growth over the course of the mix several U.
Ben: and to deliver long-term, sustainable value for shareholders.
And to deliver long term sustainable value for shareholders.
Speaker Change: I'd like to thank each of you for listening to today's call and for your interesting green box. We are truly grateful for your ongoing support.
I would like to thank each of you for listening to today's call and for your interest in Green balls were truly grateful for your ongoing support.
With that I'd like to turn it back to the operator to begin the question and answer session.
Speaker Change: With that, I'd like to turn it back to the operator to begin the question and answer session.
Operator.
Speaker Change: Thank you Ben. We will now begin the question and answer session.
And we will now begin the question and answer session.
Speaker Change: To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request.
The joined the question queue. You May press started then one on your telephone keypad.
You will hear a tone and knowledge in your request.
Speaker Change: If you are using a speakerphone, please pick up your handset before pressing any key.
If you're using a speaker phone please pick up your handset before pressing any keys.
Speaker Change: to withdraw your question, please press star then 2. We will pause for a moment.
To withdraw your question. Please press Star then too.
We will pause for a moment as Carlos joined the queue.
Speaker Change: Thank you operator. I will just mention again that the main way our new chief operating officer is available for questions as well.
Thank you operator, I will just mentioned again that the main way our new.
Operating officer, usually available for questions as well.
And I won't wait for the first question.
Speaker Change: Our first question is from Ben Pickett with EF Hutton. Please go ahead.
Our first question is from Ben pick up with E. F. Hatton. Please go ahead.
Okay perfect.
Ben Picgot: than just maybe a little bit more color on the thought process around
And then just maybe a little bit more color on the thought process around.
Internal.
Ben Picgot: internal from on the onset versus
On the onset versus.
Speaker Change: I'm sorry, Ben, you're pretty garbled. Would you repeat your question? Yeah, just...
Alright.
Already been you know pretty garbled would you repeat your question.
Yeah, just can you hear me better now.
Think so.
Speaker Change: Just a little bit more color on the thought process of keeping Coini internal under the green box umbrella versus spinning out. What would be great? Yes. Yeah.
Just a little bit more color on the thought process of keeping queenie internal under the green box umbrella versus spinning out what would be great. Yes.
Yeah.
Thanks for the question, but.
So.
Speaker Change: Koini is an infrastructure and it's a major
Koine is an infrastructure.
And it's a major a play for Green box.
Speaker Change: Koini started its life initially as a manifestation of the
Koine started its life.
Initially as a manifestation of the.
Speaker Change: smart contract technology that Greenbox had in its infrastructure beginning in 2019. Later on it was...
Ah Smart contract technology, the Green books.
Infrastructure beginning in 2019.
Later on it was.
Speaker Change: formed again as a wholly owned subsidiary, and this is now we're talking about the middle of last year.
Formed again as a wholly owned subsidiary and this is now we're talking about the middle of last year.
Speaker Change: with the anticipation of it becoming a stand-alone IPO opportunity for the company. So a few things happened since. Number one, obviously, capital markets are vastly different now than they were last year.
With the anticipation of the.
Becoming.
A stand alone.
The ico opportunity.
Oh for the company.
So if he can happen since number one.
Obviously capital markets are vastly different now than they were last year.
Speaker Change: Second, opportunities that the company has in terms of, say,
Second opportunities there to the company.
Has in terms of faith.
Speaker Change: acquisitions, international portfolios.
Acquisitions.
International portfolios.
Speaker Change: licensing opportunities onshore in Europe and Asia Pacific region.
Licensing opportunities onshore in Europe , and Asia Pacific region.
Speaker Change: in other developments make Coiny a very, very powerful.
And other developments make koine very very powerful.
Speaker Change: add-on to this infrastructure.
Head on to.
To this infrastructure.
Speaker Change: It makes sense for us to merge these capabilities first within GreenBoss and its new acquisition.
It makes sense for us to manage these capabilities first.
Within Green boss and his new acquisition.
Speaker Change: launches through our global expansion plan.
Launches through our global expansion plans.
Speaker Change: and then do a spin-off perhaps when capital markets regain foothold.
And then do a spinoff, perhaps when capital markets.
He gained footholds.
Speaker Change: At the same time, as I said in the call, we remain committed to the...
At the same time as I said in the call.
You remain.
Committed to the dividend.
Speaker Change: uh... rewards for our shareholders
Mm rewards for our shareholders.
Speaker Change: uh... as we were before the fact that they clearly uh...
As we were before so the fact that the economy.
Speaker Change: launch as a separate entity may be delayed and may take even different shape at the end of the day.
Launch a separate entity may.
May be delayed and may take even different shape at the end of the day.
Speaker Change: the reward commitment remains unchanged. I hope that answers your question.
The reward commitment remains unchanged I hope that answers your question.
Oh that's helpful. Thank you.
Okay.
Speaker Change: Our next question is from Howard Halpern with The English Brothers. Please go ahead. Good afternoon, guys.
Our next question is from Howard how tender with Tasteless brothers. Please go ahead.
Good afternoon guys.
Howard: I'm curious about, you know, the potential for that new line, the ACH bulk process.
Hi, curious about you know that the potential for that new line ACTH bulb processing, you say you have commitment.
Howard: say you have commitment, has volume started yet and revenue flowing? Or when do you expect that to begin to kick in?
Yes, it's volume started yet and revenue falling or when do you expect that begin to kick in.
Howard: We have already booked these volumes on our backlog. So what happens now is that we are in the process of onboarding all of this activity.
We.
Have already.
Books these volumes on a backlog so what.
So what happens now is that we are in the process of Onboarding all of this activity.
Howard: Onboarding takes a little bit of time, ACH business is slightly different.
On boarding takes a little bit of time, a CH businesses slightly different.
Howard: I see this as a process that will take
I see this.
Crosses that will take.
Howard: maybe four weeks or so. But this performance is imminent. We know that it's there, it's committed. Technology has already been integrated to allow for that. This is now in launch process.
Maybe four weeks or so.
But this performance is imminent.
We know that the if there is committed.
Technology has already been integrated to allow for that.
This is it now.
Launch and launched procedures.
Speaker Change: Okay. And that source of revenue, is that going to be additive to what you?
Okay, and and that source of revenue was that going to be.
E additive to what you.
Speaker Change: that $4 billion in transaction revenue for this year, or is that part of that 4K?
That 4 billion in transaction rebel revenue for this year or is that part of that forecast.
Speaker Change: I guess it's a little bit of both, you know, the onset committed volume is higher than we budgeted, so you'll see some bumps to the overall projections, but some of it was already budgeted in the four to six billion volume range for next year.
I guess, it's a little bit of both you know the answer to commit the volume is higher than we budgeted.
So you see some some bump to the overall projections.
But some of it was already budgeted in the four to 6 billion.
Mm volume range for next year.
Speaker Change: Okay. And... Oh, sorry. For this year? Yeah, for this year now. And now with Transact, it's going to close soon. You still need another one or two acquisitions to get to that $4 billion, the minimum of that $4 billion, or are you pretty much on track with the blocking attack?
Okay and Ah sorry for this year. So this year. So this year now and.
Now with transact Gonna close soon you still need another one or two acquisitions to get to that 4 billion. The minimum of that 4 billion or are you pretty much on track with a blocking and tackling.
Speaker Change: Yeah, so we are on track with the current acquisition map.
Yeah. So we are we are on track with the cards acquisition map.
Speaker Change: And although not fully committed to another acquisition yet, we definitely see that as something that we would like to execute.
And the.
Although not fully committed to another acquisition.
Yes.
We definitely see that say something that we would like to execute.
Speaker Change: in a big way during 2022. We don't have further details that we can share at this point, but they do expect a big move on that front from us, perhaps one that will require shareholder approval.
In a big way during 2022.
We don't have further details that we can share this point.
But they do expect a big move.
On the phone from us, perhaps one that will require a shareholder approval.
Speaker Change: And you investors, this means something in terms of the size
Okay.
You invest a as they see me.
Something in terms of the size of it.
Speaker Change: Okay, and in turn, this is more on the fourth quarter question, the gross margin
Okay and insurance.
More on what quarter question.
Quite the gross margin.
Speaker Change: uh... came down a little bit with their something in the cost of sales because it you know it dropped compared to the first three quarters and should we look at
Came down a little bit was there something in the cost of sales because it. It you know a drop compared to the first three quarters and should we look at.
Speaker Change: going forward, a return back to what you had seen in the first three quarters of 2021.
Flowing forward a return back to what you had seen in the first three quarters of 2021.
Speaker Change: I'm going to let Ben C tackle this first, and then I'll add my own comments.
Alright, I'm gonna, let the been see tackle this first and then I'll add my own comments.
Okay.
Ben C: Yes. Can you repeat that one more time? I think your message somehow is going in and out. Yes. Q4 gross margin seemed to dip compared to the first three quarters. I don't know if it was a one-time item in the cost of sales, but are we looking for a return back to what we've seen in the first three quarters of 2021 into 2022?
Yeah can you repeat that one more time I didn't get your message somehow with Ya, yeah going in and yeah, yeah, Okay that queue for a gross margin seemed to dip compared to the first three quarters.
I don't know if there was a one time item and the cost of sales.
But I was looking for a return back to what we've seen in the first three quarters of 2021 into 2022.
Ben C: Yeah, when you're saying gross profit, are you at the off-grid margin or the gross profit margin? The gross margin was 43, I think you said, versus 56. And in the prior three quarters, you were in the 60s towards 70, actually, in gross margin.
Yeah. When you were saying gross profit are you at the at the opera margin or.
Rosemont.
Most margin was 43, I think you said versus 56 and in the prior three quarters. You were you know you were above.
You you know you were in the sixties towards 70 actually in gross margin.
Speaker Change: Yeah, I don't think I gave out the Q4 gross margin. That was in the press release. It said… Oh, okay, okay. Yeah, gross profit was $3 million versus $1.7 million, $43 million versus $56 million.
Yeah, I don't think I gave out the Q4 girls Martin.
I was I was in the press release it it said Oh, okay. Okay. Yeah. Yeah gross project was 3 million versus 1.7 43 versus 66.
Speaker Change: Got it, got it. Yeah, the margin change is based on the timing of the ISO settlements, based on the revenue that we recognize in that period. And so in Q4, we onboarded more ISOs, and so we process more commission payments or to the ISOs in Q4. Okay, so it's a timing. It's more of a timing.
Got it got it yeah. The the margin changes based on the timing of the ice so settlements based on the revenue that we recognize in that period and so.
Or we.
We onboard it more iso's until we process more commission payments or or to the ice those in queue for.
Okay. So it's a tiny it's more of a timing issue than anything else, that's correct and and then I think than he had you know uhm alluded that you know, we're we're trying to utilize our blockchain technology adjourn three more effectively and we're <unk>, we're growing our own salesforce. So that means that will have less.
Speaker Change: That's correct. And I think Ben, he had alluded that we're trying to utilize our blockchain technology, the Gen 3 more effectively, and we're growing our own sales force. So that means that we'll have less ISOs to deal with, and so we'll have a much higher margin as we go along.
<unk> to deal with and so we'll have a much higher margin as we go along.
Speaker Change: Okay. And just one final question. What's the status of getting, you know, American Samoa up and running?
Okay and just one final question, what's the status of getting you know American Samoa up and running.
Speaker Change: So first let me just add a comment on your previous question then I'll get to American Samoa
So first let me just end the.
Comment on your previous question and then I'll get two Americans tomorrow.
Speaker Change: Okay. So, Ben is right. And this is something that I wanted to get to during this Q and A. Timing,
Okay. So vintage like and this is something that I wanted to get to.
During this Q&A.
Timing.
Of revenues.
<unk>.
Speaker Change: It clearly impacts our financials and accruals.
Clearly impacts our financials and the cruise.
Uhm so.
Speaker Change: you know, you can expect a pretty flat
You know you can expect pretty slash.
Speaker Change: you know, trends on the operating margin, even though, you know, the.
You know trends on the operating margin.
Even though.
You know the.
Speaker Change: The nature of the business doesn't change. We add a lot of volume. It's very difficult to add volume and maintain profit margins. So that will have tendency to reduce margins.
The nature of the business doesn't change.
You know, we add a lot of volume it's very difficult.
To add volume and maintain profit margins. So that's we will have a tendency to reduce margin.
Speaker Change: But on the flip side, this is mitigated through technology advancements and the move to native hosting.
But on the flip side this is mitigated through technology.
Technology advancements.
And the move to.
Maybe hosting of that business.
Speaker Change: Ben alluded to that by saying move to blockchain, but essentially it means move to the native ledger.
Been alluded to that by saying moved to to blockchain.
But essentially it means moved to the <unk> native ledger.
Speaker Change: that the company owns 100%. So every volume that moves there automatically increased inefficiency and balances out the tendency to lose points when you go to a much larger volume.
That the company owns 100%, but every volume that moves there.
Automatically increase in efficiency and balances out the pendant.
Tendency to lose.
Lose points when you go to a much larger.
Speaker Change: The second part of your question with regards to American Samoa, so we project...
Okay. The second part of your question with regards to American Samoa.
So we project.
Fool.
Speaker Change: impact of the green box technology on America and Samoa towards the fourth quarter of this year. Right now we have technology already launched there. We have merchants that are being served over there through green box.
Impact of the Grim books technology on American Samoa.
Towards the fourth quarter of this year right now we have technology already launched there.
We have many items that are being served over there through green box.
Speaker Change: Later on, Coining will be integrated into the financial infrastructure of the island.
Later on cleaning will be integrated into the financial infrastructure of the island.
Speaker Change: leading to a complete coverage of the entire financial and economic infrastructure of the island through Greenbox technology. This is an amazing development for the company. We put a lot of emphasis and resources in getting this done right.
Leading to a complete coverage.
The entire financial and economic infrastructure of the island through Green books Technology. This is.
Amazing developing for the company, we put a lot of emphasis on resources and getting this done right.
Speaker Change: We have our own officers assigned to launching this project with full commitment. They don't have anything else that they do.
We have our.
Our own Ah officers aside.
Assigned to launching this project with full commitment they don't have anything else that they do.
Speaker Change: These are very, very high-level executives with the company and in charge of launching this project to the maximum efficiency.
There's a very very high level executives with the company.
And in charge of launching this project to the maximum efficiency.
Speaker Change: This, to me, is one of the most exciting features of Greenbox and its financial performance.
This to me is one of the most exciting features of green.
Green books and financial performance.
Okay. Thanks, guys keep up the good work.
Thanks, I would appreciate it.
Speaker Change: Once again, if you have a question, please press star then 1 on your telephone.
Once again, if you have a question. Please press started then one on your telephone.
Speaker Change: Our next question is from Chris Sakai with Singular Research. Please go ahead.
Our next question is from Chrissa Sakai with Cingular Research. Please go ahead.
Oh, Hi, Hi, Ben E and then see.
Chrissa Sakai: I just had a question, I guess on, I know you're saying the Transact Europe is going to close soon, can you provide any color as to, I mean, the, how the revenue share is coming, how, you know, how much revenue is currently coming from Transact Europe ?
I just had a quick just had a question I guess on.
I know you are saying the transact Europe is gonna close and can you provide any color is too I didn't the how the revenue share is coming how how much revenue was currently coming from transact your.
So.
Chrissa Sakai: Transact Europe , first of all on the status itself.
It turns out to Europe first of all on the status itself.
Chrissa Sakai: I already stated that we are in the closing phases of this transaction, we already wired our funds to escrow, the approval for the acquisition is on hand.
<unk> stated that we are in the closing phases of this transaction you already.
Why are the funds to escrow.
The approval for the acquisition is on hand.
Chrissa Sakai: There's nothing further for us to perform on this acquisition except for the closing itself.
There's nothing further for us to perform in this acquisition, except for the closing itself.
Chrissa Sakai: And as we speak, closing procedures are taking place in Europe .
And as we speak closing procedures are taking place in Europe .
Chrissa Sakai: Our own Freddie Nissan, our CEO , will be traveling in the next few weeks to Bulgaria and first-hand
Our own for the Nissan our CEO will be traveling in the next few weeks to Bulgaria, and the first hand.
Chrissa Sakai: experience with the control of the company and its workforce, procedures, technology. And I expect the big numbers to come out of this.
Experience with the control of the.
Of the company and its.
Workforce procedures technology.
And I expect a big numbers to come out of this.
Chrissa Sakai: transaction, materially impacting Green Book's bottom line.
Transaction materially impacting grin books bottom line.
In terms of volume.
Chrissa Sakai: Transact Europe is an acquisition that for us was basically a composition of two objectives.
Transact Europe as an acquisition before I was basically a composition of two objectives.
Chrissa Sakai: The first one is, it's set of the...
The first one is it sets of but.
Chrissa Sakai: licenses and
Licenses.
And.
Chrissa Sakai: commercial linkages to the economic infrastructure in Europe .
Commercials.
The linkages too.
Is the economic infrastructure in Europe .
Chrissa Sakai: are positioned in a great way for us to take advantage of our technology and especially in our future expansion into Asia Pacific.
<unk>.
Greatly.
<unk> or position in a in a great way for us to take advantage of our technology.
And especially in our future expansion into Asia Pacific.
Chrissa Sakai: APAC region is critical for the company, it's critical for the entire payment world. It is predicted that APAC will be responsible for more than half of all payments
But region.
Is critical for the company.
It's critical for the entire payment world.
It is predicted that the APEC will be responsible for more than half.
Of all payments.
Chrissa Sakai: transactions around the world by 2024. And clearly we need to have a foothold in that region.
Transactions around the world by 2024, and clearly we need to have a foothold in that region.
Chrissa Sakai: So the primary objective in transactual probably responsible for more than 80% of the value.
So the the primary objective and turns out too.
Probably responsible for more than 80% of the value.
Chrissa Sakai: was to get control over this licensing and relationship capabilities that they have.
Was to get control over this.
Licensing in relationships capabilities that they have.
Chrissa Sakai: The volume is a secondary, or the existing volume, I should say, is secondary to the rationale behind this acquisition. So I think they do about...
The volume is a secondary or the existing volume I should say is secondary to.
To the rationale behind this acquisition, so I think they do about it.
Chrissa Sakai: $20 million per month, which is a minor amount for us. It doesn't impact our revenues in any significant way.
$20 million per month, which is a.
A minor amount for us it doesn't impact our revenues in any significant way.
At this point.
Chrissa Sakai: But we believe that Transact Europe within the next few quarters, perhaps within the year, will reach volumes that parallel and exceed what we do today with Charge Savvy, for example.
But we believe that transact Europe within.
The next few quarters, perhaps within the year.
Will reach.
Volumes, there's two taller than exceed.
What we do today with the charge savvy for example.
Chrissa Sakai: And Chatsavi is in the 500 million a year range as we speak.
Chuck savvy is in the 500 million a year range as as we speak.
Chrissa Sakai: So I think that.
So I think that.
Chrissa Sakai: These two objectives with the addition of the ability of the company to negotiate down the price by 4 million euros.
These two objectives with the addition of the ability of the company to negotiate down.
The price by 4 million euros.
Chrissa Sakai: is a very good acquisition for the company. We're very happy with it, looking forward to completing it and beginning executing on it, perhaps as soon as next week.
Is a very good acquisition for the company, we're very happy with it looking forward to completing it.
And beginning executing on it perhaps as soon as next week.
Chrissa Sakai: The transaction itself is scheduled to close today, but they may be delayed by a few days pending international wires and currency exchanges and things like that.
The transaction itself is scheduled to close today.
But they may be delayed by a few days.
No pending international.
<unk> and currency exchanges and things like that.
Chrissa Sakai: But we're very excited about this opportunity.
But we're very excited about this opportunity.
And thanks, great Okay.
Speaker Change: OK, great. I know you mentioned some bigger acquisition in 2022. And I know there's some talk about, I guess, partnerships with Greenbox and or Coiny. Can you talk about any sort of comments on any future partnerships that you may have?
Okay, Great I know you mentioned some some bigger acquisition in 2022 can you I know, there's an than others. Some talk about our I guess.
Partnerships.
Green box <unk> can you talk about any sort of comments on on any future partnerships set.
You may have.
Speaker Change: Well, Coini is a technology that is 100% owned by Greenbox, so Coini has one role and that is
Well Courtney is a technology that is 100% owned by Green box. So.
Courtney has one role and that is.
To be accretive.
Speaker Change: to the green box bottom line and shareholder value.
To the Green box bottom line and shareholder value.
Speaker Change: So from time to time, even though it may change focus.
So from time to time, even though it may change focus.
Speaker Change: But it would change focus or would do such thing only to improve its bottom line contribution to the company and its value as an asset to the company, which impacts in turn shareholder value.
But it would change.
Ange focus or would do such a thing.
Only to improve it.
It's a bottom line contributions of the company.
And it's value as an S.
So the company, which impacts in term shareholder value.
Speaker Change: So, you know, I spoke before about integrating COINI with other opportunities, the first one of which is Transact Europe .
So you know I spoke before about integrating koine.
With other opportunities.
The first one was which it sounds like you're.
Speaker Change: Koini makes Transact Europe .
Mm Koine makes transact Europe .
Speaker Change: process cross-border international funds instantly. No one else has.
Process Cross border international funds instantly.
No one else has that capability.
Speaker Change: Koini has an immediate.
Koine has an immediate.
Value.
Speaker Change: and not derivative value. It's actually based on cash. No one else has that.
And not derivative value, it's actually based on cash no one else has that.
Speaker Change: COINI has the ability to do all of that.
Koine has the ability to do all of that.
Speaker Change: with the option of being reversible. Again, no one else has that.
With the option of being a reversible.
[noise] again, no one else has that.
Speaker Change: So, we're very excited to continue to execute on the COINI mission with the same overall objective.
So.
We were very excited to continue execute on the according to emission.
With the same overall objective Ah.
Speaker Change: And that is to continue and contribute to the company and its shareholders.
And that is to continue and contribute to the company and its shareholders.
Speaker Change: OK, thanks. And I know you mentioned, so you've got, what, 90 million of cash minus, what, the 26 for transact.
Okay.
And.
I know you mentioned so there you got what 996 or 80 $90 million cash minus what the 26 for 10 Zack.
Speaker Change: Any comments there as far as, I mean, you mentioned one acquisition. Is there possibly two in there for the year?
Any any comments there as far as I mean, you mentioned one acquisition is there possibly too.
And there for the year [laughter].
Speaker Change: Chris, you know I can't say anything about that. But thanks for the question. And yes, you can expect the
A curious you know I can't say anything about that but thanks for the question and yes, you can expect the.
More.
Speaker Change: both the one currently being executed and those planned.
Both the one currently being executed.
And those plan.
Speaker Change: I can't really divulge any further information, as it would be material non-public information, MNPI.
I can't really divulge any further.
Information as it would be material non-public information M M P I.
Speaker Change: But do expect to hear from us very, very soon about such activity, both small and very large.
But do expect to hear from us.
Very very soon.
Such activity, both small and very large.
Speaker Change: Okay. And lastly, I mean, how many shares have been repurchased in this new $10 million plan?
Okay.
And lastly, I mean, how many shares have been repurchased in the in this new 10 million dollar plan.
So.
Speaker Change: I believe that information is in the 10K, but I can tell you that so far we bought back approximately 1.4 million shares.
I I believe that information is in the Saint K, but I can tell you that they're so far.
We bought back approximately 1.4 million chairs.
Speaker Change: And we intend to continue and purchase so long that the
And we intend to continue and purchase so long that the.
Speaker Change: uh... we perceive the
We perceive the.
Speaker Change: the value or the price of the stock to be unfairly stated.
The value or the price of the stock to be unfairly stated.
Speaker Change: That aside, please notice that our 10-K also include what's called a 10-B-5-1 provision where we specify the buyback plans.
That aside.
Please notice that they are 10-K also include.
What's called the 10 B five this one provision.
Where are we specify the buyback plans.
Speaker Change: And from here on after, in fact, starting tomorrow, this will be executed automatically.
And from here on out there in fact, starting tomorrow this will be executed automatically.
Speaker Change: as all 10b5 programs do, so do expect that.
I was all Tenby five programs do.
So do expect that.
Speaker Change: Okay, and then I think someone asked this before, but for your projections of 4 to 5 billion in processing volume, does that include this acquisition that you're talking about in the future, or is that only with what we have now?
Okay, and then I think someone asked this before but.
For your project since with four to 5 billion in processing volume.
Is that does that include this this acquisition that you're talking about in the future or is that only with what what we have now.
Speaker Change: Yeah, we haven't yet amended our models and we couldn't do that before the acquisitions are completed, but we will rework the models and perhaps provide amended projections in the near future. Now that this transaction is essentially closed, we have an opportunity to do that.
Yeah, we we haven't yet.
Amended our models and we couldn't do that before the acquisitions are completed.
But we will rework the motives and perhaps provide amended projections.
In in the near future.
Now that this transaction is.
Essentially closed.
We we have an opportunity to do that.
Okay, great. Thanks, then.
Speaker Change: Thanks, Chris. I also wanted to thank you specifically for being one of our early adopters, testers on our Coini application. I look forward to your feedback and remarks.
Thanks, Chris I also wanted to thank you specifically for being one of our early adopters.
That's those on a recording your application.
I look forward to your feedback and remarks.
Speaker Change: And I believe that this is the last question we have. Yeah, sorry, Chris, go ahead.
And I believe the question we have yeah, sorry curious go ahead.
Speaker Change: Oh, I just would say I hope to try it, definitely be excited to try it.
Oh, I would say I hope to try it definitely can be excited to try it.
Thank you.
Speaker Change: So, operator, I believe this is the end of the Q&A. Dr. Kim? That was the last question, sir. Yes.
So oprah either I believe this is the end of the Q&A, but again that was the last question Sir yes.
Okay.
So.
Speaker Change: At this time, this concludes our Q&A session.
At this time this concludes our Q&A session.
I would like to thank all of you for joining or owning conference call today.
We look forward to continuing update you in our ongoing progress and growth.
Speaker Change: If we were unable to answer any of your questions, please reach out to us either via mzgroup who you all know
If we were unable to answer any of your questions. Please reach out to us.
Either via M V group, we all know.
R. I O a firm all directly to me most of you have my.
Email address of the company and I tried.
Try to answer all questions directly.
Thank you all at this time.
This concludes today's conference call you may disconnect. Your life. Thank you for participating and have a pleasant day.
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