# RTB Digital, Inc.: Form 10-Q/A for the period ended Sep 30, 2018

- Company: [RTB Digital, Inc.](/companies/rtb.md) (CIK 1419275)
- Form: 10-Q/A
- Filed: 2019-03-13
- Accepted by EDGAR: Mar 13, 2019, 12:36 ET
- Period: 2018-09-30
- Accession: 0001185185-19-000348
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1419275/000118518519000348/greenbox20180930_10qa.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1419275/000118518519000348/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2018-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Interest expense | 3 months, 2018-07-01 to 2018-09-30 | $24.8k | us-gaap:InterestExpense |
| Interest expense | 9 months, 2018-01-01 to 2018-09-30 | $48.5k | us-gaap:InterestExpense |
| Net income | 3 months, 2018-07-01 to 2018-09-30 | −$22.1k | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2018-01-01 to 2018-09-30 | −$26.6k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2018-07-01 to 2018-09-30 | $0.00 | us-gaap:EarningsPerShareBasicAndDiluted |
| Diluted EPS | 9 months, 2018-01-01 to 2018-09-30 | $0.00 | us-gaap:EarningsPerShareBasicAndDiluted |
| Operating cash flow | 9 months, 2018-01-01 to 2018-09-30 | $92.5k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2018-09-30 | $0 | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2018-09-30 | $252.7k | us-gaap:AssetsCurrent |
| Total assets | at 2018-09-30 | $252.7k | us-gaap:Assets |
| Current liabilities | at 2018-09-30 | $421.9k | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2018-09-30 | $421.9k | us-gaap:Liabilities |
| Shareholders' equity | at 2018-09-30 | −$169.2k | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 10,822 characters.

The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the audited financial statements and the related notes thereto included in the annual report for the period ended December 31, 2017. The annual report for the period ended December 31, 2017 contains certain forward-looking statements and the Company's future operating results could differ materially from those discussed herein. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments.

### OVERVIEW

GreenBox POS LLC (" GreenBox" or "The Company" or "Our" or "We") efforts prior to April 12, 2018 were focused on our mission to be the bridge between China and the Western world. GreenBox is a holding company that assisted Chinese institutional and high net worth individuals with acquisition advisory and asset management of U.S. hotels.

Our investors included AVIC International USA, Junson Capital, Urban Commons, Sky Harbor Management, Shenzhen New World, American Curvet, and USA Heritage.

From August 2010 until April 12,2018, our group provided consulting services regarding purchasing 20 hotels primarily in California, Florida, Colorado, Connecticut, Georgia and Michigan. Hotel brands include Marriott, Hilton, Westin, Doubletree by Hilton, Four Points by Sheraton, and Holiday Inn.

As shown in the accompanying financial statements and as discussed in Note 3, all assets and liabilities of the Company were acquired on April 12, 2018 by person who was previously a related party to the Company. As a result, the previous operations of the Company have been removed.

On March 23, 2018, Frank Yuan, the controlling shareholder of the Company, entered into a stock purchase agreement whereby it sold 144,445,000 shares of the Company’s common stock to GreenBox POS LLC, representing 90% of the Company’s issued and outstanding shares of common stock. Pursuant to this transaction, 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. in consideration of assumption of the entirety of its liabilities.

The transaction contemplated in the March 23rd stock purchase agreement was closed on May 3, 2018, and a change of control of the Company was effected. Thereafter, the Company changed its name to "GreenBox POS LLC."

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

On August 7, 2018, in anticipation of a merger, the Company entered into a Promissory Note with GreenBox POS, LLC, a Washington Limited Liability Company (the “Washington LLC”), whereby the Washington LLC received $250,000 to be used to facilitate business operations in anticipation of transferring such operations from the Washington LLC to the Company and promised to pay the Company $250,000 plus interest at maturity (the "Note Receivable"). The Washington LLC is an affiliated company. The Note Receivable bears interest at a rate of 7.25% per annum and matures on February 28, 2019. As of September 30, 2018, the balance of the Note Receivable was $250,000 and the balance of interest receivable was $2,731. This is a related party loan from the Company to the Washington LLC in anticipation of the merger between the two entities.

On September 20, 2018, the Company and the Washington LLC entered into a definitive material agreement pursuant to which the Company will be assigned any and all assets related to the Washington LLC'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 the Seller in consideration of assuming any and all liabilities incident to the operation of the Business that have been incurred in the normal course of business. The transfer has not been effected as of this date as the Company is currently accounting for the transaction.

### RESULTS OF OPERATIONS

### Net Income

The Company recorded a net loss of $22,060 for the three months ended September 30, 2018 as compared to a net income of $22,155 for the same period last year. The decrease in net income was mainly due to the cessation of the previous operations of the Company after consummation of the Transaction on April 12, 2018 and costs related to the execution of a convertible note payable in August 2018, which was partially offset by Other Income resulting from interest income earned on a note receivable from an affiliated company.

The Company recorded a net loss of $26,614 for the nine months ended September 30, 2018 as compared to a net income of $55,913 for the same period last year. The decrease in net income was mainly due to a loss on settlement of debt and the cessation of the previous operations of the Company after consummation of the Transaction on April 12, 2018.

### LIQUIDITY AND CAPITAL RESOURCES

After the consummation of the transaction embodied in the definitive material agreement dated September 20, 2018, the Company will have assumed substantially all of the assets and operations of the Washington LLC. The transfer has not been effected as of this date as the Company is currently accounting for the transaction.

Liquidity and Capital Resources

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

|  | As of September 30, 2018 | As of December 31, 2017 |
| --- | ---: | ---: |
| Current assets | $252,731 | $- |
| Current liabilities | 421,943 | - |
| Working capital | $(169,212) | $- |

The following table shows cash flows for the periods presented:

|  | Nine Months Ended September 30, 2018 | 2017 |
| --- | ---: | ---: |
| Net cash provided by (used in) operating activities | $92,464 | $194,177 |
| Net cash provided by (used in) investing activities | (327,492) | 2,093 |
| Net cash provided by (used in) financing activities | 235,028 | (191,449) |
| Net increase (decrease) in cash | $- | $4,821 |

### Operating Activities

For the nine months ended September 30, 2018, net cash provided by operating activities was $92,464, which was primarily due to a net loss of $22,060 from continuing operations, adjusted by non-cash related expenses of amortization of the discount on the Company's convertible note payable of $20,527, amortization of debt issuance costs of $452, increases in accrued interest expense of $3,812 and discontinued operations of $92,464, offset by an increase in accrued interest receivable from an affiliated company of $2,731.

For the nine months ended September 30, 2017, net cash provided by operating activities of discontinued operations was $194,177. This was primarily due to a net income of discontinued operations of $55,913, adjusted by non-cash related expenses of depreciation of discontinued operations of $8,085 and non-cash capital gain of discontinued operations of $5,277, then increased by favorable changes in working capital of discontinued operations of $135,457. The favorable changes in working capital resulted from an increase in accounts payable and accrued expenses of discontinued operations of $75,366 and income tax payable of discontinued operations of $60,090.

### Investing activities

For the nine months ended September 30, 2018, net cash used in investing activities was $327,492, resulting from a payment for note receivable in anticipation of merger for $250,000 and discontinued operations of $77,492.

For the nine months ended September 30, 2017, net cash provided by investing activities was $2,093. This was primarily due to payment from affiliated company of 9,333, offset by acquisitions of property and equipment of $7,240.

### Financing activities

For the nine months ended September 30, 2018, net cash provided by financing activities was $235,028, which resulted from the issuance of a convertible note payable $253,000, offset by payments for loan origination fees of $3,000, and cash flows related to discontinued operations of $14,972.

For the nine months ended September 30, 2017, net cash used in financing activities was $191,449 which was mainly due to net repayment to note payable from officers of $188,683 and payments on auto loan of $2,766.

### CRITICAL 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 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, 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 Securities and Exchange Commission. Management believes the Company's revenue recognition policies conform to ASC 606.

### Income Taxes

The Company accounts for income taxes under ASC 740, *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.

## Market risk

As filed, 3,627 characters.

Our management evaluated, with the participation of our Chief Executive Officer and Executive Vice President, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Report. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures are not effective to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and (ii) is accumulated and communicated to our management, as appropriate, to allow timely decisions regarding required disclosure. Our disclosure controls and procedures include components of our internal control over financial reporting and, as such, are designed to provide reasonable assurance that such information is accumulated and communicated to our management. Management's assessment of the effectiveness of our internal control over financial reporting is expressed at the level of reasonable assurance that the control system, no matter how well designed and operated, can provide only reasonable, but not absolute, assurance that the control system's objectives will be met (see the section below in this Item 3 entitled *Limitations on the Effectiveness of Internal Controls).*

### Changes in Internal Controls Over Financial Reporting

There have been no changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended) that occurred during the period covered by this Report, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### Limitations on the Effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Executive Vice President concluded that our disclosure controls and procedures are effective at that reasonable assurance level. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Filed Mar 13, 2019.
Source: SEC EDGAR, the filing index for accession 0001185185-19-000348. Last ingested by Listed: Nov 4, 2026, 18:58 ET. No prices; not investment advice.