UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 20182019

Commission File Number: 001-51554001-34294

Registrant’s telephone number, including area code: (619) 631-8261

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

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes ☐No☐  No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☐  No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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☒  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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒No☒  No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

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 Act). Yes ☐No☐  No ☒

The aggregate market value of the 7,992,16921,216,372 voting common stock held by non-affiliates of the registrant as of June 30, 201828, 2019 was $1,598,433$2,758,128 based on the closing price of $0.20$0.13 per share of the registrant’s common stock as quoted on the OTC Pink Current Information marketplace on that date.

As of April 12, 2019,May 10, 2020, there were 166,390,363175,921,933 shares of registrant's common stock outstanding.

Documents Incorporated by Reference:Reference: None.

EXPLANATORY NOTE

On March 25, 2020, the Securities and Exchange Commission (“SEC”) issued an order and guidance (collectively, the “Order”) providing regulatory relief to public companies whose operations may be affected by the novel coronavirus disease (“COVID-19”). The Order provided public companies with a 45-day extension to file certain disclosure reports, including their Annual Report on 10-K (“Annual Report”), that would otherwise have been due between March 1, 2020 and July 1, 2020.

Due to its operations being impacted by COVID-19, GreenBox POS (the “Company”) was unable to meet its filing deadline with respect to its Annual Report and on April 10, 2020 submitted a Current Report on Form 8-K in reliance upon the Order.

Due to the outbreak of coronavirus disease 2019 (COVID-19), starting from early March 2020, the Company’s employees and external auditors have been asked to work remotely. As a result, the Company’s books and records have not been easily accessible and communication among internal financial staff and external auditors has been challenging, resulting in delay in preparation and completion of its consolidated financial statements. Based on the foregoing, on April 10, 2020, the Company filed a Current Report on Form 8-K to avail itself of a 45-day extension to file this Form 10-K relying on the exemptions provided by the SEC Order. This Form 10-K is being filed in reliance on the SEC Order.

TABLE OF CONTENTS

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “would” or the negative or plural of these words or similar expressions or variations. Such forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein including those discussed in the section titled “Risk Factors”, set forth in Part I, Item 1A of this Annual Report on Form 10-K and in our other SEC filings. You should not rely upon forward-looking statements as predictions of future events. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. 

In this Annual Report on Form 10-K, the terms “the Company,” “we,” “our”, “us” and “us”“PubCo” refer to GreenBox POS.

PART I

Item 1 – Business

Corporate StructureOrganization

The CompanyOn January 4, 2020, PrivCo and GreenBox POS, a Nevada corporation (“PubCo”) entered into an Asset Purchase Agreement (the “Agreement”), to memorialize a verbal agreement (the “Verbal Agreement”) entered into on April 12, 2018, by and between PubCo and PrivCo.

On April 12, 2018, pursuant to the Verbal Agreement, PubCo acquired PrivCo’s blockchain gateway and payment system business, point of sale system business, delivery business and kiosk business, bank and merchant accounts, as well as all intellectual property related thereto (the “GreenBox Business”). As consideration for the GreenBox Business, on April 12, 2018, PubCo assumed PrivCo’s liabilities that had been incurred in the normal course of the GreenBox Business (the “GreenBox Acquisition”).

For accounting and reporting purposes, PubCo deemed the GreenBox Acquisition a “Reverse Acquisition”with PrivCo designated the “accounting acquirer” and PubCo designated the “accounting acquiree.”

On May 3, 2018, PubCo formally changed its name to GreenBox POS LLC, then subsequently changed its name to GreenBox POS on December 13, 2018. Prior to the name changes, PubCo was originallyknown as ASAP Expo, Inc (“ASAP”). ASAP was incorporated on April 10, 2007 under the laws of the State of Nevada as ASAP Expo, Inc. Prior(collectively, “PubCo”).

Our primary office is in San Diego, California. Our website is www.greenboxpos.com.

Unless the context otherwise requires, all references to July 2011,“the Company,” “we,” “our”, “us” and “PubCo” refer to GreenBox POS.

Unless the investment banking services division wascontext otherwise requires, all references to “PrivCo” or the core business“Private Company” refer to GreenBox POS LLC, a limited liability company, formed in the state of ASAP Expo. ASAP Expo helped small and medium sized businesses raise funds and promote business through capital markets. In July 2011, ASAP Expo transitioned its core business to providing real estate advisory services for Chinese companies and high net worth individuals.Washington.

Significant Transactions

On March 23, 2018, the then controlling shareholder and then sole officer and sole director of ASAP Expo, Inc.PubCo, Frank Yuan, along with his wife, Vicky PMW Yuan (collectively, the “Yuans”), entered into a stock purchase agreement whereby ASAP Expo, Inc. soldPurchase Agreement with PrivCo (the “Yuan SPA”).

Pursuant to the Yuan SPA, the Yuans agreed to sell 144,445,000 restricted shares of ASAP Expo Inc.’sPubCo’s common stock, to GreenBox POS LLC (“GreenBox POS”par value $0.001 per share (the “Common Stock”), to PrivCo for a Washington limited liability company,consideration of $500,000: $250,000 in cash, paid at closing, and $250,000 in restricted shares of Common Stock (the “Shares Due”) to be issued within 30 days of the close of the Yuan SPA.

On or about March 29, 2018, Frank Yuan converted a portion of a line of credit that he had previously issued to PubCo, in exchange for 144,445,000 restricted shares of Common Stock, representing approximately 90% of ASAP Expo, Inc.’sPubCo’s issued and outstanding common stock. Followingshares of Common Stock (the “Control Block”). Subsequently, on or about June 8, 2018, PrivCo paid the signingShares Due, by transferring 609,756 restricted shares of this stock purchase agreement, ASAP Expo, Inc. entered intoCommon Stock from the Control Block to the Yuan’s designees, Frank Yuan and closed,his son, Jerome Yuan.

Pursuant to the Yuan SPA, on April 12, 2018, an asset purchase agreement whereby it assignedFrank Yuan caused the entirety of its assetsControl Block to be transferred to PrivCo.

On April 12, 2018, all business being conducted at that time by PubCo (the “ASAP Business”) was transferred from PubCo to ASAP Property Holdings Inc. in, a company owned and operated by Frank Yuan (“Holdings”). In consideration of assumptionfor the ASAP Business, Holdings assumed all liabilities related to the ASAP Business. On April 12, 2018, following the consummation of the entiretyYuan SPA and the transfer of its liabilities.the ASAP Business to Holdings, Ben Errez (“Errez”) and Fredi Nisan (“Nisan”) became the sole acting officers and sole acting directors of PubCo.

The transaction contemplated in the March 23, 2018 stock purchase agreement was closed on May 3, 2018, and a change of control of ASAP Expo, Inc. was effected. On May 3, 2018, Frank Yuan formally resigned, and Errez and Nisan were formally appointed the Company changed its name to GreenBox POS LLC.sole officers and sole directors of PubCo.

Below areOn April 12, 2018, pursuant to the namesVerbal Agreement, PubCo acquired the GreenBox Business and positionsassumed PrivCo’s liabilities per the terms of the Company’s executive officers and directors who were appointed effective asAgreement. The value of the May 3,assets acquired on April 12, 2018 closingwas $843,694, which excluded the Control Shares, which remain a PrivCo asset. The value of PrivCo’s assumed liabilities on April 12 was $589,078. The difference between assets and liabilities was $254,616, which PubCo booked as a “Gain on Bargain Purchase.” However, because we are using Reverse Acquisition accounting, PubCo subsequently recorded the gain as Paid in Capital.

From April 12, 2018 through January 4, 2020 (the “In Between Period”), because there was ambiguity regarding the validity of the stock purchase agreement.Verbal Agreement, PubCo filed required quarterly and annual reports with the Securities and Exchange Commission as if there had not been a Reverse Acquisition. During the In Between Period, PrivCo continued to operate as if it still owned the GreenBox Business, which included maintaining records of GreenBox Business financial transactions on PrivCo’s accounting software, and entering into contracts and agreements as PrivCo, while PubCo paid all expenses, including expenses related to PrivCo contracts entered into prior to and after April 12, 2018, as well as expenses incurred as a result of litigation resulting from disagreements between PrivCo and other parties. During the In Between Period, PubCo represented itself in press releases, as being the owner/operator of the GreenBox Business. Additionally, from April 12, 2018 through approximately December 31, 2018, PubCo and PrivCo shared control of PrivCo’s bank accounts, and on or about January 1, 2019, PubCo assumed control of PrivCo’s bank accounts.

By virtue of the payment of PrivCo’s litigation expenses by PubCo, by virtue of PubCo representing itself in press releases, as being the owner/operator of the GreenBox Business, and by virtue of the shared control of PrivCo’s bank accounts starting on April 12, 2018, both PubCo and PrivCo concluded that the Verbal Agreement was valid and the GreenBox Business Acquisition took place on April 12, 2018.

Reverse Acquisition Reporting Requirements

In accordance with SEC Financial Reporting Manual, Topic 12 - Reverse Acquisitions and Reverse Recapitalizations, Section 12200 - Reporting Issues, Sub-section 12210.2 - Reverse Acquisition with a domestic registrant that is not a shell company, PubCo is required to file two years of audited Financials for PrivCo. However, since PrivCo was formed in August 2017, only the period from August 2017 through December 31, 2018 was audited. PubCo is also required to file on a combined basis with PrivCo starting with PubCo’s 10-Q filing for the period ending June 30, 2018.

Given these considerations, PubCo:

On December 13, 2018, the Company changed its name to GreenBox POS.Our Business

Business Overview

Since April 12, 2018, the Company’s operations have consisted of providing management and business development services. 

Related Party Note

On August 7, 2018, in anticipation of a merger, the Company entered into a Promissory Note with GreenBox POS, whereby GreenBox POS received $250,000 to be used to facilitate business operations in anticipation of transferring such operations from GreenBox POS to the Company. GreenBox POS promised to pay the Company $250,000 plus interest at maturity (the “Note Receivable”). GreenBox POS is an affiliated company. The Note Receivable bears interest at a ratetech company formed with the intent of 7.25% per annumdeveloping, marketing and matures following the closing of the transaction. As of December 31, 2018, the balance of the Note Receivable was $250,000 and the balance of interest receivable was $6,275. This is a related party loan from the Company to GreenBox POS in anticipation of a transaction between the two entities. As the transaction has not yet closed, the loan has not yet matured.

Advance to Related Entity

As of December 31,2018, the Company had issued funds to a related entityselling innovative blockchain-based payment solutions, which we believe will cause favorable disruption in the amountpayment solutions marketplace. Our core focus is to develop and monetize disruptive blockchain-based applications, integrated within an end-to-end suite of $736,000 in anticipationfinancial products, capable of acquiringsupporting a multitude of industries. Our proprietary, blockchain-based ecosystem is designed to facilitate, record and store a virtually limitless volume of tokenized assets, representing cash or merging with the Company. This amount includes the August 7, 2018 Note Receivable referenced above.data, on a secured, immutable blockchain-based ledger.

Convertible Promissory NotesWe’ve been awarded five provisional patents for our technology, each directly related to our core business focus. Subsequently, we filed non-provisional patent application 16/212,627 on December 6, 2018, under which we claimed the benefit of the five provisional patents.

AsIn March 2018, we formally announced DEL, PAY, QuickCard, POS and Loopz to an international audience, during a presentation at the Israel International Innovation Expo, in Tijuana, Mexico.

In March 2018, our QuickCard Payment System was comprised of December 31,PAY, proprietary kiosks and e-wallet management.

In June 2018, we commenced a soft launch of our system, onboarded our initial customers and began generating revenue.

In July 2018, we introduced TrustGateway, a new fraud prevention component for our QuickCard payment system.

Throughout the Company entered into a seriesremainder of promissory convertible notes (see Note 62018, we continued to the audited financial statements) totaling $486,000.build, expand and improve our system, which allowed for an escalation in merchants using our system, as well as increasing revenues.

On August 6,or about October 4, 2018, the Companywe entered into a Securities Purchase Agreementlease agreement with respectHyundai Rio Vista, Inc. for our current office space at 8880 Rio San Diego Drive, Suite 102, San Diego, CA 92108.

In March and April of 2020, we added new features to our ecosystem, including RTP (Real Time Payments), same day ACH capabilities, and SEPA payments options.

In December 2019, the issuancecompany received PCI (Payment Card Industry) Level 1 certificate for its technology, its security, privacy, reliability and other aspects of its payment infrastructure.

In March of 2020, we added two platforms to our technology spectrum: we are now able to complete payouts in crypto currency, and we are also able to process same day international FOREX transactions.

Q1/20 signified the return of operations in full scale for the Company. In Q4/2019, the Company invested in research and development, improving its acquiring platform and enabling safer, faster and significantly more scalable services. These technology improvements allow for major new capabilities, including Real Time Payments (RTP), a promissory note (the “August 6 Note”) convertible into equity issuedvery sought-after payment feature. This change also reduces the Company COGS. Although the Company saw a decrease in operations in Q4/2019, the improved platform is expected to perform better than its predecessor platform and increase total volumes while increasing profit margins and operating sustainability. The Company returned to ramping up commercial large-scale operations, on-boarding large number of clients, and increasing the Company operational bandwidth to accommodate the needs of its clients. To date in 2020, we continue to execute on these management directives.

Management is focused on the same date with gross proceeds of $253,000. The August 6th Note shall bear interest at a rate of 10% per annum until the same becomes due and payable, whether pursuant to the one-year term or upon acceleration or prepayment. The note holder may elect to convert the August 6th Note at any time from 180 days from the date of issuance at a variable price of per share equal to 65% of the average of the 3 lowest trading prices in the 10 days prior to such conversion.following KPI (Key Performance Indices):

[Table 1]

On September 27, 2018,In order to process the targeted ATPV goal, $1B, the Company issuedmust be able to process close to $90M/month, or $3M/day, in a promissory note convertible into equity with gross proceeds of $53,000 (the “September 27 Note”).consistent fashion. The September 27 Note shall bear interest atCompany needed to invest further in its core technologies to reach this capacity, a rate of 10% per annum untiltask now completed. The Company now has the same becomes duerequired bandwidth and payable, whether pursuanttechnical capabilities to achieve this goal. The Company projects it will process transactions in volumes greater than $1M/day within Q2/2020 and will ramp up the one-year term or upon acceleration or prepayment. The note holder may elect to converttargeted Average Daily Volumes in Q4/2020. We believe the September 27th Note at any time from 180 days fromcurrent operational bandwidth for the date of issuance at a variable price of per share equal to 65% of the average of the 3 lowest trading prices in the 10 days prior to such conversion.Company is virtually unlimited.

[Table 2]

On November 26, 2018,Based on the above and the current traction in Q2/20, the Company issued a promissory note convertible into equity with gross proceeds of $200,000 (the “November 26 Note”). The November 26 Note shall bear interest at a rate of 12% per annum until the same becomes due and payable, whether pursuant to the one-year term or upon acceleration or prepayment. The note holder may elect to convert the November 26th Note at any time from 180 days from the date of issuance at a fixed price of per share equal to $4.50.

On December 13, 2018, the Company issued a promissory note convertible into equity with gross proceeds of $83,000 (the “December 13 Note”). The December 13 Note shall bear interest at a rate of 10% per annum until the same becomes due and payable, whether pursuant to the one-year term or upon acceleration or prepayment. The noted holder may elect to convert the December 13th Note at any time from 180 days from the date of issuance at a variable price of per share equal to 65% of the average of the 3 lowest trading pricesis comfortable projecting approximately $12-14M EBITDA in the 10 days prior to such conversion.

On December 17, 2018, the Company issued a promissory note convertible into equity with gross proceeds of $150,000 (the “December 17 Note”). The December 17 Note shall bear interest at a rate of 12% per annum until the same becomes due and payable, whether pursuant to the one-year term or upon acceleration or prepayment. The note holder may elect to convert the December 17th Note at any time from 180 days from the date of issuance at a variable price of per share equal to 50% of the closing price of the stock on the day of such conversion.

EmployeesFY20. 

The Company owns all the IP rights for operations in its space: tokenizer, gateway, ledger manager and blockchain substrate. Other, supporting patents, such as fraud proofing, on-boarding accelerators, and an all new blockchain implementation, are pending.

With the visibility into the Company’s operation management has two part-time employees.at the end of Q1/2020 the Company plans on uplisting to a senior exchange by Q1 of FY21 and does not plan on an artificial stock price increase, such as a reverse split. The current plan is to grow the company organically to the size and value required by the exchange.

The ATPV, Profitability and other major KPIs remain sensitive to regulatory changes global and national economic trends. These will impact and influence the Company’s product line, its potential mergers and acquisitions targets, its joint ventures and the Company’s technology emphasis.

Item 1A – Risk Factors

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and are not required to provide the information under this item.

Item 1B – Unresolved Staff Comments

Not applicable.

Item 2 – Properties

We do not own any real estate or other physical properties material to our operations. We operate from leased space. Our executive offices are located within the Rio Vista Tower, at 8880 Rio San Diego Drive, Suite 102, San Diego, CA 92108, and our telephone number is (619) 631-8261. 

In October 2017, we secured our first office in San Diego, California. During the first six months of 2018, we entered into additional, separate lease agreements for additional offices in San Diego. In October 2018, we executed a lease agreement with Hyundai Rio Vista, Inc. within the Rio Vista Tower, which we moved into on or about December 1, 2018. Our lease commenced effective December 1,agreement with Hyundai Rio Vista is through January 15, 2022, with monthly rent starting at $10,648 and increasing to $11,636 over the period of the lease.

On or about February 20, 2018, forwe secured a term of 5 years.virtual Canadian office, located at 885 West Georgia Street Suite 1500, Vancouver, British Columbia, V6C 3E8, under an Office Agreement with Regus Canada. Subsequently, on or around May 3, 2018 we added a physical office at the same location, on a month-to-month basis. We vacated the office in or about July 2019.

Monthly lease rates during 2019 are shown in the table below:

(1) The base rent is $10,882 per month.Company leases residential space to house visiting consultants and prospective employees.

Item 3 – Legal Proceedings

The Company is not a party to any legal proceedings. 

Item 4 – Mine Safety Disclosures

Not applicable.

PART II

Item 5 – Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock tradesis currently quoted for trading on theOTC Markets, OTC Pink Current Information marketplaceSheets tier, under the symbol “GRBX.”

Holders

As of April 12, 2019,May 6, 2020, there were 166,390,363181,330,260 shares of common stock outstanding held by approximately 145163 holders of record (not including an indeterminate number of beneficial holders of stock held in street name).

Warrants

There were no warrants issued nor outstanding as of December 31, 2019.

Dividends

There have been no cash dividends declared on our common stock, and we do not anticipate paying cash dividends in the foreseeable future. Dividends are declared at the sole discretion of our Board of Directors.

Securities Authorized for Issuance Under Equity Compensation Plans

The Company has never had an equity compensation plan.

Recent SalesIssuance of Unregistered Securities

During the year ended December 31, 2018,2019, we issued the following securities that were not registered under the Securities Act and were not previously reported on a Current Report on Form 8-K or a Quarterly Report on Form 10-Q.Act. Except where noted, all of the securities discussed in this Item 5 were issued in reliance on the exemption under Section 4(a)(2) of the Securities Act.

In October 2018, and in anticipation of a merger, the Company

The following three share transactions summarized below, totaling 1,085,000 shares, were each inadvertently transferred from PrivCo’s Control Block rather than PubCo issuing new shares. Subsequently, on or about August 14, 2019, PubCo issued 7,500,0001,085,000 shares to an investor at a price per sharePrivCo, as reimbursement of $0.001 in conversionthe shares inadvertently transferred by PrivCo.

Item 6 – Selected Financial Data 

Not applicable.We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and are not required to provide the information under this item.

Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect Management's current views with respect to future events and financial performance. You can identify these statements by forward-looking words such as “may” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words. Those statements include statements regarding the intent, belief or current expectations of us and members of its management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission. Important factors currently known to us could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. We believe that its assumptions are based upon reasonable data derived from and known about our business and operations and the business and operations of the Company. No assurances are made that actual results of operations or the results of our future activities will not differ materially from its assumptions. Factors that could cause differences include, but are not limited to, expected market demand for the Company's services, fluctuations in pricing for materials, and competition.

OverviewOrganization

The CompanyGreenBox POS (the “Company” or “PubCo”) was originallyformerly known as ASAP Expo, Inc (“ASAP”), which was incorporated on April 10, 2007 under the laws of the State of Nevada as ASAP Expo, Inc. Prior to July 2011, the investment banking services division was the core business of ASAP Expo. ASAP Expo helped small and medium sized businesses raise funds and promote business through capital markets. In July 2011, ASAP Expo transitioned its core business to providing real estate advisory services for Chinese companies and high net worth individuals.Nevada.

On March 23,April 12, 2018, pursuant to the controlling shareholderVerbal Agreement, PubCo acquired PrivCo’s blockchain gateway and payment system business, point of ASAP Expo, Inc., entered into a stock purchase agreement whereby ASAP Expo, Inc., sold 144,445,000 shares of ASAP Expo Inc.’s common stock to GreenBox POS LLCsale system business, delivery business and kiosk business, bank and merchant accounts, as well as all intellectual property related thereto (the “GreenBox POS”Business”), a Washington limited liability company, representing 90% of ASAP Expo, Inc.’s issued and outstanding common stock. Following. As consideration for the signing of this stock purchase agreement, ASAP Expo, Inc. entered into and closed,GreenBox Business, on April 12, 2018, an asset purchase agreement whereby it assignedPubCo assumed PrivCo’s liabilities that had been incurred in the entirety of its assets to ASAP Property Holdings, Inc. in consideration of assumptionnormal course of the entirety of its liabilities.GreenBox Business (the “GreenBox Acquisition”).

The transaction contemplated in On January 4, 2020, PrivCo and GreenBox POS, a Nevada corporation (“PubCo”) entered into the March 23, 2018 stock purchase agreementAgreement to memorialize the Verbal Agreement with PrivCo which was closedformed on May 3, 2018,August 10, 2017 (the seller).

For accounting and reporting purposes, PubCo deemed the GreenBox Acquisition a change of control of ASAP Expo, Inc. was effected. “Reverse Acquisition”with PrivCo designated the “accounting acquirer” and PubCo designated the “accounting acquiree.”

New Name

On May 3, 2018, the CompanyPubCo formally changed its name to GreenBox POS LLC.   

On December 13, 2018, the CompanyLLC, then subsequently changed its name to GreenBox POS.POS on December 13, 2018.

Since April

Results of Operations

Net loss from continuing operations RESULTS OF OPERATIONS

The following results are for the years ended December 31, 2019 and 2018.

Revenue

For the year ended December 31, 2019 and 2018, we recognized revenue of $10,002,857and $910,808, respectively. Throughout 2018, we conducted numerous tests of our products and services, and began to sign up our initial customers. After a soft launch of the GreenBox Network during the last few days of June 2018, when we began processing transactions, we processed approximately $5,100,000 in completed transactions on behalf of merchants. We believe this accomplishment to be indicative of the validity of our proprietary blockchain-based systems, which are the foundation of the GreenBox Network, and indicative of our future potential.

Cost of Goods Sold

Our Cost of Goods Sold (“COGS”) for payment processing consists of various processing fees paid to Gateways, as well as commission payments to the Independent Sales Organizations (“ISO”) responsible for establishing and maintaining merchant relationships, from which the processing transactions ensue. For the year ended December 31, 2019 and 2018, our COGS associated with payment processing was $11,091,140 and $670,539, respectively, which included the absorption by us, of chargebacks, which was limited to 2018, as a promotional tool. As regards Licensing Revenue, we do not incur any direct costs of services or products, thus we did not record COGS for Licensing Revenue.

Operating Expenses

Overall, operating expenses increased during 2019 as the Company recorded a net lossramped up operations. For the year ended December 31, 2019 and 2018, our general and administrative expense was $10,188,241 and $1,951,724, respectively; our legal and professional expenses, most of which were outsourced, were $1,026,556 and $767,869, respectively; and our R&D expense was $1,255,296 and $376,871, respectively. We incurred $5,665,031 of cash due from continuing operations of $53,298gateway reserve expense for the year ended December 31, 2018. The decrease2019 and none in net income was mainly due to the cessation of the previous operations of the Company after consummation of the transaction between the Company and ASAP Property Holdings, Inc. on April 12, 2018. prior year.

LiquidityNon-Operating Expenses

For the year ended December 31, 2019 and Capital Resources2018, we recorded non-operating expenses of $1,849,768 and $181,821, respectively, of which $604,504 and $106,821, respectively, were for interest, $634,766 represented derivative expense for the year ended December 31, 2019. We also recorded $75,000 as asset impairment for the year ended December 31, 2019.

LIQUIDITY AND CAPITAL RESOURCES

Our working capital for the periods presented is summarized as follows:

Cash Requirements

We incurred a working capital deficit of $4,429,424 as of December 31, 2019. For December 31, 2018, our working capital was $874,980. Based on our revenues, operational expenses, cash on hand and future operational needs, we will need to continue procuring capital from external sources, which may include equity, debt or hybrid financing, in order to fund operations.

Cash Flow

The following table shows cash flows for the periods presented:

Operating Activities –

For the yearyears ended December 31, 2019 and 2018, net cash provided by (used in) operating activities was $92,464, which$(165,556) and $(1,601,851), respectively, was primarily due to a net loss and timing of $53,298 from continuing operations, adjusted by non-cash related expensessettlement of amortization of the discount on the Company's convertible note payable of $43,381, amortization of debt issuance costs of $1,000, increases in accrued interest expense of $15,192assets and discontinued operations of $92,464, offset by an increase in accrued interest receivable from an affiliated company of $6,275.

For the year ended December 31, 2017, net cash provided by operating activities was $467,324. This was primarily due to a net income of $89,471, adjusted by non-cash related expenses of depreciation of $11,086 and non-cash related gain on disposal of fixed assets of $5,277, then increased by favorable changes in working capital of $372,044. The favorable changes in working capital resulted from an increase in accounts payable and accrued expenses and accrued expenses - officer of $314,968, an increase in income tax payable of $48,350, and a decrease in due from affiliated companies of $8,727.liabilities.

Investing activitiesActivities

– For the yearyears ended December 31, 2019 and 2018, net cash used in investing activities was $813,492, resulting from a payment for note receivable in anticipation of merger for $736,000$(49,795) and discontinued operations of $77,492.

For the year ended December 31, 2017, net cash provided by investing activities was $1,487. This was$(31,254), respectively, primarily due to the acquisitioncash used for purchases of property and equipment of $7,239.equipment.

Financing activitiesActivities

– For the yearyears ended December 31, 2019 and 2018, net cash provided by financing activities was $721,028, which resulted from the issuance$684,671 and $1,834,730, respectively, primarily due to borrowings and repayments of convertible notes payabledebt and proceeds from issuances of $739,000, offset by payments for loan origination fees of $3,000, and cash flows related to discontinued operations of $14,972.common stock.

For the year ended December 31, 2017, net cash used in financing activities was $402,564 which was mainly due to net repayment to note payable from officers

Critical Accounting PoliciesCRITICAL ACCOUNTING POLICIES

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in the our financial statements and the accompanying notes. The amounts of assets and liabilities reported on our balance sheet and the amounts of revenues and expenses reported for each of our fiscal periods are affected by estimates and assumptions.assumptions, which are used for, but not limited to, the accounting for revenue recognition, stock based compensation and the valuation of deferred taxes. Actual results could differ from these estimates. The following critical accounting policies are significantly affected by judgments, assumptions and estimates used in the preparation of the financial statements:

Revenue Recognition

Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers outlines the basic criteria that must be met to recognize revenue and provide guidance for presentation of revenue and for disclosure related to revenue recognition policies in financial statements filed with the Securities and Exchange Commission. Management believes the Company’s revenue recognition policies conform to ASC 606.As of December 31, 2018, the Company has not recognized any revenue.606.

The Company recognizes revenue when 1) it is realized or realizable and earned, 2) there is persuasive evidence of an arrangement, 3) delivery and performance has occurred, 4) there is a fixed or determinable sales price, and 5) collection is reasonably assured.

The Company generates revenue from payment processing services, licensing fees and equipment sales.

Income Taxes

The Company accounts for income taxes under ASC 740, Income Taxes.“Income Taxes.” Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Management provides a valuation allowance for significant deferred tax assets when it is more likely than not that such asset will not be recovered.

Item 7A – Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 8 – Financial Statements and Supplementary Data

OurThe consolidated financial statements and accompanying notes and the report of our independent registered public accounting firm are listed in Part IV startingrequired by this item begin on page F-1.

Item 9 – Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

NoneNone.

Item 9A – Controls and Procedures

(a) Evaluation of disclosure controls and procedures.

Our management, with the participation of our Chief Executive Officer and Executive Vice President, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15Rules 13a-15(e) and 15d-15(e) under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on management's evaluation, our Chief Executive Officer and Executive Vice President concluded that, as a result of the material weaknesses described below, as of December 31, 2018,2019, our disclosure controls and procedures are not designed at a reasonable assurance level and are ineffective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Executive Vice President, as appropriate, to allow timely decisions regarding required disclosure. The material weaknesses, which relate to internal control over financial reporting, that were identified are: 

(i) We did not have sufficient

a)

We did not have enough personnel in our accounting and financial reporting functions. As a result, we were not able to achieve adequate segregation of duties and were not able to provide for adequate reviewing of the financial statements. This control deficiency, which is pervasive in nature, results in a reasonable possibility that material misstatements of the financial statements will not be prevented or detected on a timely basis.

Management believes that the hiring of additional personnel who have the technical expertise and knowledge with the non-routine or technical issues we have encountered in the past will result in both proper recording of these transactions and a much more knowledgeable finance department as a whole. Due to the fact that our accounting staff consists of a ChiefPrincipal Financial Officer, a bookkeeper and external accounting consultants, additional personnel will also ensure the proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support us if personnel turnover issues within the department occur. We believe this will eliminate or greatly decrease any control and procedure issues we may encounter in the future.

We will continue to monitor and evaluate the effectiveness of our disclosure controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

(ii) Changes in internal control over financial reporting.

b)

Changes in internal control over financial reporting.

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or 15d-15 under the Exchange Act that occurred during the year ended December 31, 2018 that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

(iii) Management's report on internal control over financial reporting.

c)

Management's report on internal control over financial reporting.

Our managementManagement is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of December 31, 20182019 for the reasons discussed above.

This annual report does not include an attestation report by Pinnacle Accountancy Group of Utah (a DBA of Heaton & Co., PLLC), our independent registered public accounting firm regarding internal control over financial reporting. As a smaller reporting company, our management's report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report.

Item 9B – Other Information

None.

PART III

Item 10 – Directors, Executive Officers and Corporate Governance

The names of our executive officers and directors and their age, title, and biography as of April 12, 2019May ___, 2020, are set forth below:

Ben Errez, Chairman of the Board of Directors, Executive Vice President, Principal Financial Officer

Mr. Errez has had a storied career as a pioneer in the tech industry. HisBen Errez’s (“Errez”) past positions have included positions at large companies like Microsoft and Intel. He has brought this expertise to the Company to help buildlead the Company into being at the forefront of blockchainthe blockchain-based financial software, services and hardware.hardware market.

Mr. Errez was one of the early managers of Microsoft in 1991. From 1991 to 2004, he served as S/WSoftware Development Lead for the Microsoft International Product Group. He led the International Microsoft Office Components team (Word, Excel, PowerPoint) team in design, engineering, development and successful deployment. He also served as Executive Representative of Microsoft Office and was a founding member of the Microsoft Trustworthy Computing Forum, both within the company, and internationally. Mr. Errez co-authored the first Microsoft Trustworthy Computing Paper on Reliability. At Microsoft, Mr. Errez was responsible for the development of the first Microsoft software translation SDKSoftware Development Kit (“SDK”) in Hebrew, Arabic, Thai and Simplified Chinese, as well as the development of the first bidirectional extensions to RTFRich Text Format (“RTF”) file format, all bidirectional extensions in text converters for Microsoft Office, and contributed to the development of the international extensions to the Unicode standard to include bidirectional requirements under the w3c consortium.World Wide Web Consortium (“W3C”).

In 2004, Mr. Errez transitioned into the world of consulting, forming the start-up IHC Capital, and holdingwhere he held the position of Principal Consultant from founding to the present date, through which he advises clients in the South Pacific region with market capitalizations ranging from $50M to $150M on matters such as commerce, security, reliability and privacy.

From IHC Mr. Errez was courted into AuroraView where he assumedIn 2017, immediately before partnering with Fredi Nisan to launch the positions of Director and Principal Consultant which he held from August 2015 to March 2016. Here his duties included the creation ofGreenBox Business, Intelligence Programs, Business Metrics and Analysis tools, from concept development through deployment over varying network and mobile platforms for a Fortune 500 client. Mr. Errez personally developed all Excel, VBA and SharePoint back-end tools: metrics, statistical modeling, gauges, reporting engines, data distribution, direct connection to all data sources and GUI for customized reports. Mr. Errez designed and deployed E2E team and client views and customize-able dashboards supporting A-Level executives through team leads and individual contributors and deployed consumable reports over Microsoft PowerBI front-end. He also added support for reporting in a host of output formats, including XLS, XML, PDF, HTML and DOC.

From AuroraView, Mr. Errez was asked to take over the Microsoft Alumni Network for the Southern California region as a regional director immediately before launching the Washington LLC. Here he helped to formally organize the network, develop success metrics, goals and objectives, KPI reports, web content, social media strategies, and funding strategies. Mr.director. Errez was also key to the deploymenthas been a principal of the University Ambassador Program.GreenBox Business since its inception in 2017.

Fredi Nisan, Director, Chief Executive Officer

Mr. Nisan’sFredi Nisan (“Nisan”)’s career in tech began during his years of service in 2005 in Israel,the Israeli Defense Forces, where he workedserved as IT Manager for all of Israel’s Northern Bases. After serving in the military, Nisan opened and operated a computer hardware store before becoming the Inventory Operations Manager for Zicon Israel in 2005, a hardware and software producer. At Zicon, he supervised all of Zicon’s inventory operations, worked on quality controls for motherboards and chips, and educated customers andon software and hardware product functionality. From Zicon, Mr.Subsequently, Nisan moved to the United States, where he worked for One Coach, in San Diego, CA, where he wasas a business coach for One Coach.coach. One Coach specializedspecializes in customized growth solutions for small business owners. At One Coach, he hit the ground running and consistently ranked as the top sales person for small business coaching for the company and provided his clients withowners, including the latest strategies for sales, internet marketing, branding and ROI. Nisan was consistently ranked as the top salesperson for small business coaching while working with One Coach.

From One Coach, Mr.In 2010, Nisan took the plunge into the world of start-ups and launched his own company, Brava POS, where he served as President until 2015. Brava POS provided point of sale (“POS”) systems for specialty retail companies. Mr. Nisan developed software to provide clients with solutions for issues ranging from inventory management to payroll to processing a high volume of transactions in the form of a cloud-based point of salePOS system. This system had the capability to manage multiple stores with centralized inventory and process sales without an internet connection, and offered a secure login for each employee. It includedemployee, as well as including advanced inventory management and reporting, plus powerful functionality for its end users.

In May 2016, Mr. Nisan founded QuickCitizen for which he has served as CEO and Director since its founding.Firmness, LLC. Through QuickCitizen, Mr.Firmness, Nisan conceptualized and created “QuickCitizen,” a software program that simplifies the immigration paperworkonboarding process for lawyers andnew clients of law firms reducing thespecializing in immigration issues. The QuickCitizen software significantly reduced law firm’s onboarding processing time from approximatelymore than three hours to approximately fifteen minutes. The software breaks down immigration processes into simple stepsNisan has been a principal of the GreenBox Business since its August 2017 inception. In January 2018, Firmness sold QuickCitizen to GreenBox (See QuickCitizen Acquisition, included in Item 13 - Certain Relationships and translates the instructions into the client’s chosen language, so they can clearly understand it. Mr. Nisan developed the reporting dashboard, step-by-step questionnaire, forms, cloud document storage, automated workflow, and client portal for the software.Related Transactions below).

Employment Agreements

The Company has not entered into employment agreements or other compensation agreements with its executive officers. The Company’s agreement with existing employees are all “at will” agreements.

Family Relationships

The Company employs two of our CEO’s brothers, Dan and Liron Nusonivich, who are paid approximately $96,000 and $92,000 per year, respectively. There are no family relationships between any of ourother directors or executive officers and any other employees or directors or executive officers. The Company made charitable donations to a 501(c)(3) no-profit organizations in which Nate Errez, the son of Ben Errez, is a member, and may be seen as the primary beneficiary of the donations.

Delinquent Section 16(a) Beneficial Owner Reporting ComplianceReports

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our officersDirectors and directors,executive officers and persons who beneficially own more than 10% of a registered class of our equity securities to file various reports of ownership and changes in ownership with the SEC. Officers, directorsSecurities and greater than 10% owners areExchange Commission concerning their holdings of, and transactions in, securities we issued. Each such person is required by certain SEC regulations to furnishprovide us with copies of all Section 16(a) forms they file.

Based solely upon a review of copies of such forms filed on Forms 3, 4, and 5, and amendments thereto furnished to us, we believe that as of December 31, 2018 our executive officers, directors and greater than 10 percent beneficial owners have complied on a timely basis with all Section 16(a) filing requirements, with the exception of the following: ourreports filed. Our two executive officers and directors have not yet filed a Formany Forms 3, following the closing of the change in control of the Company.4 or 5.

Code of Ethics

We have not previously adopted a Code of Ethics due to the small number of officers and employees and the size of our operations. It is anticipated that during 20192020 we will adopt a Code of Ethics that applies to all of the Company’s directors and executive officers serving in any capacity, including our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.

Board Composition, Committees, and Independence

We are not required to have any independent members of the Board of Directors. As we do not have any board committees nor any “independent directors,” the board as a whole carries out theall functions that might otherwise be delegated to board committees. of nominating and compensation committees, and such “independent director” determination has been made pursuant to the committee independence standards.

Involvement in Certain Legal Proceedings

Our two executive officers and directors have not been involved in any of the following events during the past ten years:

Item 11 – Executive Compensation

Summary Compensation Table

The following table summarizes information concerning the compensation awarded to, earned by, or paid to, our Chief Executive Officer (Principal Executive Officer) and our two most highly compensated executive officers other than the Principal Executive Officer during fiscal years 20182019 and 20172018 (collectively, the “Named Executive Officers”)

   *Both Errez and Nisan were paid as consultants in 2018and as employees in 2019.

Option/SARStock Appreciation Grants in Fiscal Year Ended December 31, 2018201

The Company has never had an equity compensation plan.

Outstanding Equity Awards at Fiscal Year-End Table9

The Company has never had an equity compensation plan.

Outstanding Equity Awards at Fiscal Year-End Table

The Company has no outstanding equity awards as of December 31, 2019.

Employment/Consulting Contracts, Termination of Employment, Change-in-Control Arrangements

The Company has not entered into employment agreements or other compensation agreements with its executive officers. All employee contracts are “at will.”

Director Compensation

Our two current directors are executive officers and majority shareholders through their shared majority ownership of the Company. Our former director was also an executive officerPrivCo, which held approximately 85% of the Company.our issued and outstanding shares as of December 31, 2019. During 20182019, we did not separately compensate our Directorsdirectors for their service on the Board of Directors.

Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

The following table sets forth certain information, based on the 181,330,260 shares of our common stock outstanding as of April 12, 2019, certain information as of theMay 5, 2020 date hereof with respect to the holdings of: (1) each person known to us to be the beneficial owner of more than 5% of our common stock; (2) each of our directors, nominees for director and named executive officers; and (3) all directors and executive officers as a group. To the best of our knowledge, each of the persons named in the table below as beneficially owning the shares set forth therein has sole voting power and sole investment power with respect to such shares, unless otherwise indicated. Unless otherwise specified, the address of each of the persons set forth below is in care of the Company, at the address of: 8880 Rio San Diego Drive, Suite 102, San Diego, CA.California.

⁽¹⁾ GreenBox POS LLC (“PrivCo”) holds 141,735,244 shares of the Company’s issued and outstanding stock. PrivCo is managed by its two managing members, Ben Errez and Fredi Nisan, both of whom serve as our sole officers and directors. Errez and Nisan have equal ownership of PrivCo.

⁽²⁾ A corporate investor, RB Capital Partners (“RB Cap”), has a disputed claim to approximately six million shares, and possibly more, currently held by PrivCo. The numbers in the table above assume RB Cap will not receive any of PrivCo’s shares. It is possible that the dispute will be settled, in part, by PubCo issuing six million new shares to RB Cap, however, as of February 3, 2020 a settlement between the parties has not been finalized. In a matter related to the RB Capital claim, the GreenBox Parties are negotiating a return of a previous transfer of 440,476 shares by PrivCo to a third party. Likewise, these shares are excluded from the table (see Section C. Legal Matters under Note 11 – Subsequent Events).

⁽³⁾ Ben Errez is Chairman of the Board of Directors and Executive Vice President of the Company. These shares are held via Mr. Errez’s controlThrough his shared majority ownership of 48% of GreenBox POS which purchased 144,445,000PrivCo, Errez owns 70,867,622 shares of the Company formerly controlled by Mr. Yuan.Company’s issued and outstanding stock. As one of two managing members of PrivCo, Errez has influence over PrivCo’s entire holding of 141,735,244 shares of the Company’s issued and outstanding stock.

(2)

⁽⁴⁾ Fredi Nisan is a Director serving on our Board of Directors and is the Company’s Chief Executive OfficerOfficer. Through his shared majority ownership of the Company. These shares are held via Mr. Nisan’s control of 48% of GreenBox POS which purchased 144,445,000PrivCo, Nisan owns 70,867,622 shares of the Company formerly controlledCompany’s issued and outstanding stock. As one of two managing members of PrivCo, Nisan has influence over PrivCo’s entire holding of 141,735,244 shares of the Company’s issued and outstanding stock. Additionally, relatives of Nisan, who may be influenced by Mr. Yuan.Nisan, hold 270,000 shares of the Company’s issued and outstanding stock.

There are no arrangements, known to the Company, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company.

Item 13 – Certain Relationships and Related Transactions and Director Independence.Independence

At December 31, 2018 and December 31, 2017, the Company was owed $0 and $20,881 from affiliated companies in which the Company’s officers were also owners and officers. This was related to the Company’s former CEO.QuickCitizen Acquisition

The Company hadOn or about January 18, 2018, we purchased QuickCitizen, a revolving line of credit totaling $1,800,000 with Frank Yuan,client interfacing charge card platform, from Firmness, LLC (“Firmness”), an affiliated company, which was 50% owned by Fredi Nisan our CEO and Jerome Yuan, his son. The lineco-owner of credit bore interest at 6% per annum and was due upon demand, as amended.  On December 31, 2014, the convertible note was amended to waive the right of conversion and wasPrivCo, our controlling shareholder, for $75,000. Nisan believed there to be used as a line of credit. On April 12, 2018, Frank Yuan converted $144,445 ofgreat long-term value in his involvement with GreenBox, therefore, Nisan and Firmness’s other owner, Marlena Chang Sharvit, agreed that Nisan would forgo any compensation contemplated or realized by the line of credittransaction, and that Sharvit would receive the entire consideration paid to 144,445,000 shares. During the years ended December 31, 2018 and 2017, the Company incurred interest expense totaling $3,333 and $32,100 in connection with the Line. The balance of the credit line as of December 31, 2018 was $0 and the accrued interest on the line of credit was $0. The balance of the credit line as of December 31, 2017 was $212,140 and the accrued interest was $32,100 and were reclassed to current liabilities of discontinued operations.

The son of the Company’s officer (“Son”) received salary from the Company for work performed. During twelve months ended December 31, 2018 and 2017, the Son received salary of $0 and $120,000, respectively.Firmness.

On April 12, 2018, the Company entered into an asset purchase agreement whereby it assigned the entirety of its assets to ASAP Property Holdings, Inc., an affiliated entity ownedAmerica 2030 Capital Limited and operated by Frank Yuan, in consideration of assumption of the entirety of its liabilities.Bentley Rothschild Capital Limited

On August 7,or about July 30, 2018, in anticipationNisan and Errez, the sole officers and directors of a transaction,PubCo, and the Companymajority owners of PrivCo, each entered into a Promissory Noteseparate Master Loan Agreement (each an "MLA"): Errez with GreenBox POS, whereby GreenBox POSAmerica 2030 Capital Limited (“America 2030”) and Nisan with Bentley Rothschild Capital Limited ("Bentley"), a company affiliated with America 2030, both located in Nevis, West Indies. Each MLA was for a $5,700,000 loan, at 5.85% interest, maturing in ten years.

Per the MLA’s terms, Nisan and Errez caused PrivCo to transfer 1,600,000 PubCo shares, valued at $2,144,000 at close of trading on the day of issuance, as "Transferred Collateral" from the Control Block (not a new issuance by PubCo) to Bentley (although both contracts acknowledge receipt of 1.6 million shares, there was only was transference of 1.6 million shares). The transfer occurred on or about August 1, 2018. To date, there has been no funding under either of the MLAs.

Subsequently, both Nisan and Errez received $250,000constitutive notice, regarding arbitration of an alleged breach of their respective MLAs (see Item 3 – Legal Proceedings above).

Charitable Contributions

During 2018, PrivCo made $13,355 in charitable donations to be usedorganizations in which Nate Errez (“Nate”) is a member, including sponsorship of the San Diego Kayak Team (a 501(c)(3) no-profit organization). Nate, the son of Ben Errez, is a competitive athlete and races Surf Skis for the US National Team.

Brothers

We hired Dan Nusinovich on or about February 19, 2018 as our Development and Testing Manager. Dan is the brother of Fredi Nisan, our CEO and Director. Subsequently, we entered into a Referral Commission Agreement with Dan in November 2018, which expired November 2019, under which Dan is to facilitatereceive 10% for new business operations in anticipation of transferring such operationsresulting from GreenBox POS tohis direct introductions. To date, no new business has been generated by Dan, thus Dan has not been paid under the Company. GreenBox POS promised to payReferral Agreement. On or about June 18, 2019, the Company $250,000 plus interestissued 160,000 restricted shares to Dan, who was one of nine employees to receive a performance bonus in stock on this day. The shares were fully vested upon issuance and worth $16,000 at maturity (the “Note Receivable”). GreenBox POSclosing, on the day of issuance. We pay Dan approximately $96,000 per year.

We hired Liron Nusinovich on or about July 16, 2018 as our Risk Analyst. Liron is an affiliated company. The Note Receivable bears interest at a ratethe brother of 7.25% per annumFredi Nisan, our CEO and matured on February 28, 2019. As of December 31, 2018, the balance of the Note Receivable was $250,000 and the balance of interest receivable was $6,275. This is a related party loan fromDirector.On or about June 18, 2019, the Company issued 110,000 restricted shares to GreenBox POSLiron, who was one of nine employees to receive a performance bonus in anticipationstock on this day. The shares were fully vested upon issuance and worth $11,000 at closing, on the day of issuance. We pay Liron approximately $92,000 per year.

Pop N Pay, LLC

In addition to his employment with the Company, Dan Nusinovich owns 100% of Pop N Pay, LLC (“PNP”), a transaction betweenDelaware registered limited liability company, that he formed August 20, 2018.

During the two entities. The transaction has not yet closedlate summer of 2018, when both market opportunity and demand necessitated opening additional bank accounts to support our payment processing products and services, we turned to PNP to open new accounts, as a trustee, on our behalf. For his assistance, Dan, through his ownership of PNP, received approximately $3,000 (in addition to Dan’s salary) in early 2019, for services rendered in the loan has not yet been repaid.fourth quarter of 2018.

Inadvertent Share Transfers

On September 20,or about December 27, 2018 the Company and GreenBox POS entered into a definitive material agreement pursuant to which the Company will be assigned any and all assets related to GreenBox POS’s blockchain gateway and payment system business, point of sale system business, delivery business, kiosk business (collectively, the “Business”), and all intellectual property thereto owned by GreenBox POS in consideration of assuming any and all liabilities incident to the operationJanuary 4, 2019, 1,085,000 shares, worth approximately $325,500 as of the Business that have been incurred inclose of trading on the normal coursedays of business. The transfer has not been effected asissuance, were inadvertently transferred from PrivCo instead of this date asbeing issued by the Company is currently accounting for the transaction.

As of December 31, 2018, the Company is owed $736,000 by a related entity in anticipation of a mergerCompany. Subsequently, on or acquisition of the entity. This amount includes theabout August 7, 2018 Note Receivable referenced above.

In October 2018, and in anticipation of a merger,14, 2019, the Company issued 7,500,0001,085,000 shares to an investor at a price per sharePrivCo, as repayment of $0.001 in conversionthe shares that had been previously inadvertently transferred.

Item 14 – Principal Accounting Fees and Services

Audit Fees. The aggregate fees billed for the two most recently completed fiscal periods ended December 31, 2019 and December 31, 2018 for professional services rendered by our independent registered public accounting firm Pinnacle Accountancy Groupauditors for the audit of Utah, PLLC (a DBAour annual consolidated financial statements, quarterly reviews of Heaton & Co., PLLC)our interim consolidated financial statements and services normally provided by independent accountants in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

In the above table, Audit Fees are fees billed by our company’s external auditor for services provided in auditing our company’s annual financial statements for the subject year. “Tax fees” are fees billed for professional services rendered for tax compliance, tax advice and tax planning. The audit fees include review of our interim financial statements and year-end audit. The aggregate fees billed collectively by BF Borgers CPA PC (“Borgers”), for professional services rendered for the audit of our amended annual financial statements for the years ended December 31, 2018, and 2017, including review of our interim amended financial statements were $12,000 and $14,400, respectively.

Audit Related Fees. We incurred fees to our independent registered public accounting firm of $0 and $0 for audit related fees during the fiscal years ended December 31, 2018 and 2017, respectively, which related to filings with the SEC.

Tax and Other Fees. We incurred fees to our independent registered public accounting firm of $0 and $0 for tax and fees during the fiscal years ended December 31, 2018 and 2017.

The Board of Directors pre-approves all auditing services and all permitted non-auditing services (including the fees and terms thereof) to be performed by our independent registered public accounting firm.statements.

PART IV

Item 15 – Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this Annual Report on Form 10-K:

Our financial statements and the Report of Independent Registered Public Accounting Firm are included herein on page F-1.

The financial statement schedules are omitted as they are either not applicable or the information required is presented in the financial statements and notes thereto on page F-1.F-6.

 * In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

GREENBOX POS

Index Toto Financial Statements

Report of Independent Registered Public Accounting Firm

To the Boardshareholders and the board of Directors and Shareholders

directors of GreenBox POS:POS

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheetsheets of GreenBox POS (the “Company”) as of December 31, 20182019 and 2017, and2018, the related statements of operations, stockholders’ deficit,equity (deficit), and cash flows for the years then ended, December 31, 2018 and 2017 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and 2017, and the resultresults of its operations and its cash flows for the yearyears then ended, December 31, 2018 and 2017, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph Regarding Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred losses, and has not yet generated revenue These factors raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.States.

Basis for Opinion

These financial statements are the responsibility of the Company’sCompany's management. Our responsibility is to express an opinion on the Company’sCompany's financial statements based on our audits.audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the auditsaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Pinnacle Accountancy GroupSubstantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of Utahthis uncertainty.

/S/ BF Borgers CPA PC

BF Borgers CPA PC

We have served as the Company’sCompany's auditor since 2017.2019

Lakewood, CO

Farmington, Utah

April 16, 2019May 15, 2020

GREENBOX POS

CONSOLIDATED BALANCE SHEETS