GreenBox POS (NASDAQ: GBOX) ("GreenBox" or the "Company"), an
emerging financial technology company leveraging proprietary
blockchain security and token technology to build customized
payment solutions, today issued a letter to shareholders from the
Company’s Chairman, Ben Errez.
Dear Valued Shareholders,
It has been a productive year for GreenBox POS
thus far and we are grateful for your ongoing support. We continue
to make great strides in advancing our blockchain ledger-based
payment solutions and more recently, the deployment of our new
smart contract technology, branded as Coyni, that we view as a type
of stablecoin since they are settled in US dollars. As the world
steadily shifts towards cashless payments, smart contracts and
stablecoin based payments, we believe GreenBox is at the forefront
of these trends and well positioned to be a key player in the
financial payments space. We are constantly challenging ourselves
to be an innovative and forward-thinking industry leader in today’s
competitive financial payments market.
Our core business remains on track with previous
estimates of approximately $1.65 billion in transaction volume for
FY2021, which is projected to drive an estimated $58 million FY2021
in gross revenues. These values include the expected contribution
from our acquisition of ChargeSavvy, LLC but does not include
estimated contributions from Coyni. We are proud of our work and
progress so far this year. We look forward to updating shareholders
at our second quarter earnings announcement.
Recently, we made several major announcements
that we believe demonstrate our progress towards continued
execution of our global strategy. To ensure proper understanding of
these milestones, we felt it appropriate to issue this shareholder
letter in addition to hosting a corporate update webinar on Tuesday
August 3rd, at 4:30 p.m. ET. Details for the webinar are provided
below:
Date:
Tuesday,
August
3rd, 2021Time:
4:30 p.m. Eastern timeDial-in: 1-877-407-4018International Dial-in:
1-201-689-8471Conference Code: 13722012Webcast:
http://public.viavid.com/index.php?id=146102
Current volume and revenue guidance is due to
expected increased volume and revenues from the scalability
achieved with our Generation 3 launch, the growing agent network
being cultivated by the GreenBox team, and in large part, strategic
acquisitions. Partnerships are essential for successful payment
processing businesses, and based on our technological advancements
with Generation 3, an eye towards enhanced customer support,
renewed integration strategies, and evolving compliance, we
continue to build our ISO and agent network, resulting in expected
high volume books of business brought into our processing
ecosystem.
While our ISO and agent network is vital to our
growth, acquisitions will play a primary and an integral role in
our strategy. As such, we successfully completed two accretive
acquisitions this year - Northeast Merchant Services, which added
banking capabilities through a BIN, and ChargeSavvy, LLC, which
carried over a substantial and attractive book of processing
volume. Both will contribute to increased processing volume in what
we believe are higher margin business verticals while expanding our
banking capabilities and bandwidth.
Most recently, we announced we entered into a
binding MOU for the acquisition of Transact Europe, for which we
expect regulatory approval in approximately 60 days. This strategic
acquisition, if completed, is expected to allow an aggressive
expansion into the European market by leveraging Transact Europe’s
principal level membership of Visa, worldwide membership of
Mastercard, and as a principal member of China UnionPay. Given
Europe’s large void in the payment processing space due to the
departure of Wirecard, we believe that our technology paired with
the right licensing assets will position GreenBox as a key player
in that region. Additionally, our robust agent and ISO network will
help us bring together more strategic partnerships with the goal of
creating what we believe will be our own significant processing
footprint in the EU, all while driving adoption of Coyni. Global
expansion remains a core objective of GreenBox and will be key to
the adoption and growth of our payment and smart contract token
technologies.
The recently announced partnership with the
Territorial Bank of American Samoa, whereby we expect to launch a
fully customized financial solution to support the entire island of
American Samoa, is an opportunity to showcase the impact of an
adoption of our technologies in closed loop systems. The initial
proof of concept will be fully dependent on the GreenBox ecosystem
which supports merchant services, peer-to-peer payments, electronic
bank transfer (EBT), ATM, blockchain ledger financial backing, card
issuing, and banking related services. The possibility for GreenBox
through a proof of concept to ultimately be the recognized provider
for the island’s financial services would be an important
demonstration of our ecosystem.
We are most excited about our smart-contract US
dollar denominated token technology, recently branded as Coyni. As
previously discussed, Coyni has features unlike many other
stablecoins, cryptocurrencies or tokens in existence such as
instant settlement on our proprietary blockchain ledger,
reversibility and the ability to be deleted. The instant settlement
feature on our proprietary blockchain ledger gives our customers
faster access to funds in many locations and currencies, crypto or
fiat, all at lower fees and on a tokenized secure ecosystem. We
anticipate that the combination of our payment acquiring division
with Coyni will help solve two very important problems for global
or multinational companies: the first is accurate and centralized
monthly reporting; and the second is access to the underlying
capital, quickly, in the parent company location.
We expect Coyni to be a major growth driver for
the company, and ultimately function in a similar fashion to
financial transaction leaders like Circle with its USDC, and PayPal
with Venmo,
As part of our long-term strategy to unlock
shareholder value, we have explored a number of strategic options
and currently believe that Coyni is best structured as a spinoff
company (a “SpinCo”). We are continuing, however, to evaluate
different strategies and alternatives. The assets of the SpinCo are
expected at this time to include the smart contract token
technology, Coyni branding, and associated revenue, although we
will continue to evaluate and assess other possible strategies. We
believe the SpinCo strategy is advantageous to GreenBox and its
shareholders in several ways. First, both GreenBox and the SpinCo
may be valued as pure-play financial technology and financial
services companies, respectively. Second, it allows for the SpinCo,
and its new management team, to focus wholly and entirely on
growing and enriching the Coyni business model, positioning it as a
focused competitor with clear differentiated technology advantages
relative to traditional payment systems. Third, it allows both
GreenBox and the SpinCo to potentially maximize the utility of
their respective capital structures, without diluting either
investment thesis. We spent countless hours evaluating the best
strategy for maximizing shareholder value of both assets – the core
GreenBox technology platform and the Coyni smart contract US dollar
denominated tokenized platform – and we believe we are making the
right decision for stockholders in spinning off Coyni.
For these reasons, we announced our intent to
implement a special dividend series to reward long-term, loyal
shareholders of GreenBox. While our analysis of the strategies and
record dates are still under considerations, there are two possible
opportunities we expect to be awarded representation of shares in
the SpinCo IPO. First, every shareholder of record of GreenBox on
or about August 16, 2021, will receive 0.30 shares representation
in the SpinCo for each share of GreenBox common stock held. Second,
approximately 45 days prior to the SpinCo IPO, which is expected to
occur in the fourth quarter of 2021— shareholders of record of
GreenBox may be awarded 0.15 shares representation in the SpinCo
for each share of GreenBox held. GreenBox shareholders of record on
both dates, under our current thinking, can therefore receive up to
0.45 shares representation in the SpinCo for each share of GreenBox
common stock held. It is our anticipation that SpinCo shares will
be listed at the time of the IPO on the NASDAQ or a similar major
exchange. GreenBox currently intends to maintain majority equity
ownership stake in the SpinCo after IPO and dividend.
We hope this summary provides additional clarity
to our corporate vision and objectives on how we are building
GreenBox to be, we believe, the newest, most agile, and robust
payment software technology to compete in the digital payment
space. Thank you for being a part of the GreenBox family. We are
grateful for your ongoing support and attention to our story.
Please continue to follow along in our journey. Your success is our
success!
Sincerely,
Ben ErrezGreenBox, Chairman
About GreenBox POS
GreenBox POS (NASDAQ: GBOX) is an emerging
financial technology company leveraging proprietary blockchain
security to build customized payment solutions. The Company's
applications enable an end-to-end suite of turnkey financial
products with fraud detection technology, improving the efficiency
of handling large-scale commercial processing volumes for its
merchant clients. For more information, please visit the Company's
website at www.greenboxpos.com.
Disclaimers
This press release does not constitute an offer
to sell or the solicitation of an offer to buy any securities and
shall not constitute an offer, solicitation or sale of any security
in any state or jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such state or jurisdiction. Any offers,
solicitations, or offers to buy, or any sales of securities will be
made in accordance with the registration requirements of the
Securities Act of 1933, as amended.
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 ContactMark SchwalenbergMZ
Group - MZ North
America312-261-6430GBOX@mzgroup.uswww.mzgroup.us
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