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$GBOX - Wirecard in the Making?

Occasional newsletter of Mostly Borrowed Short Ideas
Occasional newsletter of Mostly Borrowed Short Ideas
First off, wanted to start this write-up by thanking the others who post their ideas and are part of the greater dialogue. The following takes inspiration from you and will probably just expand upon your ideas. Just trying to add to the discourse.
The following thread (it’s a long one) seeks to explore the details around one such company: Greenbox POS (h/t @StockJabber). It’s almost a certainty that some will disagree with the findings presented here.
If you have constructive criticism, please reply to the connected Twitter account. This write-up is comprised only of information that is publicly available for all to see (as long as you know where to look). Links & screenshots are included where they might be helpful. If the link breaks, try the URL in the Wayback Machine - most if not all that could have reason to be taken down have been archived there. The thread might start slow, but it gets interesting quickly.
Before we get started – this thread is meant to be thought provoking. What do you really own here? Why are so many of these questions unanswered? Does this pass the sniff test? This is *NOT* investment advice. This is not intended to be interpreted to be investment advice. This is merely a presentation of publicly available information followed by the questions you might ask yourself when presented with such information. Assume the author has a position in $GBOX.

What is Greenbox POS?
And we’re off. Since many people don’t subscribe to the newsletter published by @StockJabber or didn’t catch them on Newsmax yesterday morning, they might be unfamiliar with Greenbox POS ($GBOX). $GBOX is a San Diego-based company that says it develops proprietary blockchain tech for payments processing. This was a penny stock as recently as last summer, but currently has a market cap of ~$650M.
They generate revenue through fees on the payments processed, licensing their technology, and selling point-of-sale payment processing equipment. They’re also working on a token technology (appears to be a private stablecoin) that they intend for a NASDAQ-listed spinoff. Let’s just say that after watching many interviews of management and reading the filings, it’s not exactly clear what they’re planning on doing or, rather, why anyone would want/need to partner with them in particular for what they’re proposing.
From the investor deck on the $GBOX website
From the investor deck on the $GBOX website
It’s also interesting to note how the business has changed over time. Note the moving target for a prior acquisition, QuickCitizen (founded by CEO Fredi Nisan):
Over time, they have also moved away from discussing the patents/patent applications backing their technology and focused more on the blockchain. They also note that they halted previous patent efforts in favor of new tech. 
From the 2019 10-K
From the 2019 10-K
From the 2020 10-K
From the 2020 10-K
Their historical filings/lawsuits also help us learn more about the business. It appears that they have specialized in cannabis payments. It’s unclear if this is just limited to CBD or also includes marijuana, but this is where the first set of questions arises. Note of acknowledgement: these lawsuits are no longer active and are being used more to understand what the company’s customer base looked like in the past. Some bulls felt that it was unfair to say that the company faced lawsuits that are no longer active (and in the US, what company hasn’t gotten sued?), so this clarification is here for that reason.
You can find more by keyword searching "cannabis" in their filings.
You can find more by keyword searching "cannabis" in their filings.
DCSM, INC ET AL VS GLOBAL PAYOUT INC | Court Records - UniCourt
Here are the natural questions given this information:
  1. How much of the business today is driven by cannabis-related entities?
  2. Has the company ever processed marijuana (not just CBD) transactions and does this matter to its partners in the payments ecosystem?
  3. If they have processed marijuana payments in the past, are they still processing them today?
  4. If Congress passes the SAFE Banking Act, what would the implications be for $GBOX and would they potentially lose a large portion of their customers to larger payments processors that can then accept these types of payments?
Cultivate is majority-owned by a related party, and MTrac was a former partner. You can read the filings here, it's a lot to explain and it probably doesn't end up clearing much up.
Cultivate is majority-owned by a related party, and MTrac was a former partner. You can read the filings here, it's a lot to explain and it probably doesn't end up clearing much up.
No sweat on these points - normal businesses face similar (albeit perhaps not as difficult or existential) questions every day. There’s a few more things to observe before we get into the really interesting parts…
The Auditors/Historical Financials
Greenbox POS uses BF Borgers as its auditor. It’s understandable if you’ve never heard of them before - they mostly cater to smaller public companies, many of which trade OTC. In fact, until its uplisting to the NASDAQ this February, $GBOX fit into the same category.
Borgers is based in Colorado and has less than 20 employees, per LinkedIn and its most recent PCAOB inspection. Interestingly enough, in this inspection, the PCAOB observed deficiencies in seven of the audits that they examined, and included the below text as a part of their write-up.
While it’s also necessary to note that the PCAOB cautions against overextrapolating from their reports, and that not all deficiencies cause material misstatements to reported financials, it’s certainly not a great showing. A quick review of other auditors shows a lower volume of deficiencies (looked at Mazars, Moss Adams, and RSM), however. Additionally, Borgers also employed an audit director who was suspended from working at a CPA firm for a year because of a lack of engagement quality review for audits upon which he signed off.
A taste of the linked report above.
A taste of the linked report above.
Let’s also consider that Greenbox POS is located in San Diego, but Borgers and the majority of its employees are located in Colorado. While Ben Borgers himself serves as the engagement partner for $GBOX, it’s probably safe to assume that at least some of the work on the audits of $GBOX was performed by the employees in its Orange County, CA location, Jaslyn Sellers and Kai Lin. Screenshots from their LinkedIns are below:
The image below breaks out Sellers' experience below.
The image below breaks out Sellers' experience below.
Interestingly enough, it appears as if Sellers and Lin have spent time at a couple of different audit firms in the past: KSP Group, Anton & Chia, and Kabani & Company. More interesting is that both Kabani & Company and Anton & Chia have been sanctioned by the SEC, forced to dissolve, and seen its leaders barred for life from the industry. Aiding and abetting the violation of securities laws, backdating work papers, etc. are just some of the evidence against these firms - it’s included in the linked reports above.
Now, it’s possible that these employees were the “good eggs” and somehow managed to avoid what seemed to be culturally ingrained issues with the proper operations of auditing firms. Most investors would likely look upon this setup unfavorably, but let’s reserve judgement for the time being.
It is interesting, however, to try and reconcile some of the recent financial statements for Greenbox POS, starting with its presentation of financials from FY 2019 through September, and compare this to the reported financials for the full year.
Note that revenue is just over $19M through September 2019.
Note that revenue is just over $19M through September 2019.
So, given what’s been presented here, you would assume that the company reported about $19.5M in revenues in 2019, right? $19.07M + $0.4M? Wrong.
Clearly, something here isn’t adding up. Let’s keep in mind that all of the information here has been unaudited.
But it looks like the audited financials for 2019 seem to match the unaudited presentation. Surely there must be some MD&A about a revenue reversal, change in revenue recognition, or something that can square this, right? Again, you’re on your own here. Seemingly no explanation for why revenue basically gets cut in half. And this is from 2019, so they should’ve had a year to insert any language or corrections, right? As in it should’ve come up in the 2019 and the 2020 audit. But apparently BF Borgers doesn’t see anything here.
It’s one thing to have to restate revenues, but it’s something completely different to show numbers that clearly don’t tie out and make no effort to discuss why this is the case. One might be sympathetic to an innocent explanation, some difference between “revenue” and “net revenue”, but why pretend as if there’s nothing to see?
This looks even worse when you consider the history of inflated or outright misleading press releases put out by Greenbox POS.
Shot
Shot
Chaser
Chaser
Chasing the chaser, from the FY20 10-K
Chasing the chaser, from the FY20 10-K
So essentially you go from acquiring a massive book of business, to acquiring a company capable of onboarding a massive book of business, to not actually acquiring the business after all. Sure, why not. Why don’t software businesses do this - just make a small acquisition, press release the TAM of the acquired business as the ARR, and call it a day? Food for thought, as it seems like an analogous situation here.
But there’s more. $GBOX made some fairly rosy projections for their business in 2019. $40M gross profit, $20M EBITDA, $9M in net profits. Actual results: $10M net revenue, -$1M gross profit. Seems to be a disconnect between expectation & reality on this one as well.
How could they have been so far off the real results? Was this perhaps just a pump of a press release to draw in investors? It also seems like the company was off on its timing on getting onto the NASDAQ - just by a couple of years.
With all of this in mind, how believable are management’s projections for this year?
The Management Team
Now let’s get into the interesting stuff: the executive management team. There’s 5 execs listed on the $GBOX website today: Ben Errez, Fredi Nisan, Vanessa Luna, Ken Haller, & Pouya Moghavem. Note that the CFO Ben Chung is not listed - we will briefly cover him as well.

Starting with Ben Errez - it seems like he has a reasonably solid background. Fairly early employee at Microsoft, math and CS degree; the information he includes here appears to check out. But what’s more important here is what Ben isn’t including in his bio as it looks like he left a few steps out of the story that might be informative.
For example, during the early to mid 2000s, Ben became a developer of water parks. Interesting career choice to voluntarily leave Microsoft to go build water parks, but to each his own.
Errez then branched into commercial property development, and by all measures, it seems like he was successful in his ventures - at least until the easy money stopped flowing. It probably doesn’t take a real estate expert to tell you that having trees growing in your unfinished properties is likely a sign that things aren’t going well…
There's more articles from Syracuse discussing this that you can find; additional links can also be provided upon request.
There's more articles from Syracuse discussing this that you can find; additional links can also be provided upon request.
And then there’s this absolutely heartbreaking story from the Seattle Times, where a local family lost substantially their entire net worth in partnering with Errez on a development deal gone bad.
This led to Errez being sued (among other suits against him) and to him file for bankruptcy in 2008. Interestingly enough, in April 2019, he signed and attested to the following:
It appears as if Errez, therefore, lied by failing to disclose the bankruptcy to which he was a party that was within two years prior to the previous 10 years at that point in time. Interesting…
Next, Fredi Nisan. We know from the filings that Fredi has hired his brothers, Dan and Liron, to work for the company. However, they use the last name Nusinovich. Why use a different last name? There’s probably a reasonable explanation but it seems odd given the disclosure about the brothers.
More interesting, however, is that he didn’t join the most recent earnings call. Why not take the time to speak to your investors? Even when the company does media appearances, Ben Errez usually does all the talking. Why?
Newsmax Interview with Ben Errez
Moving on to Vanessa Luna. Ms. Luna joined the company in January, after previously serving as the CEO of a related-party company for several years. This company, like $GBOX, was OTC traded and went through several forms during her tenure.
Most notably, this partner helped $GBOX in its cannabis payments business and was also party to legal proceedings for allegedly illegally withholding processed funds from its clients. It appears that this matter was settled out of court. 
Ken Haller. Seems like an odd fit with the rest of the bunch. While the others have been on the West Coast for most of the past decade (if not all of it), Ken is a Midwestern guy who doesn’t seem like he’d have reason to run into these folks.
Per $GBOX filings, it looks like he came to know them after using their technology in 2018 at his business, Sky Financial & Intelligence LLC, which appears to be a HFT currency trading firm (?!?!?) per its website. More on this later – let’s get to know Ken.
Graduated University of Iowa with degrees in Spanish and Psychology, opened up a cell phone repair/reseller in Chicago, and ran that while he got his law degree. Seems very entrepreneurial, in line with his early start selling on eBay. But it does look like he had his fair share of critics…
It looks like after he got his law degree, he entered the payments processing business. Perhaps the phone reselling didn’t work out, might be difficult with reviews like that. More details on Ken’s businesses later.
And on to potentially the most damning member of the exec team, Pouya Moghavem. He seems to also be enterprising, has a payments business on the side, and looks to have stood up an import/export business to sell to PPE to state governments during Covid.
IPX Referral Payments, LLC
IPX Referral Payments, LLC
It also appears as if Mr. Moghavem has a business (among others) called Intelitruth, LLC that specializes in know-your-customer (KYC) compliance on behalf of other businesses. Their website doesn’t seem to show much.
But they did develop apps through the Apple App Store. You can see the one for IPX ($GBOX partner), as well as several others. But let’s focus on the one for Lifetime Technology Co., Ltd. This is really interesting…
You see, Lifetime was a Thai company that operated “CryptoMining.Farm”, a blockchain-mining website, that allegedly bilked people out of over $1M. This brings up a lot of questions…
Victims report alleged blockchain mining scam
Such as: Who processed these payments? Was Greenbox involved? Why would a senior executive of a publicly traded company, who runs a KYC business on the side, get involved with a crypto scam? If he’s doing KYC checks, how could he not figure out that it was a scam? There’s probably more to ask, but for the sake of brevity, let’s keep moving.
Closing the loop on Moghavem. Look back at the public filing for what IPX did for $GBOX. Provided them with a merchant account in Mexico through Affinitas Bank, which processes payments on their behalf. Let’s take a closer look here.
While searching for Affinitas Bank yields no results, there is a Grupo Affinitas in Mexico that provides payment processing, which is assumed to be their partner. The website seems light on details of what they actually do, but that’s not a huge problem.
Affinitas does list a US address on their website – one that they apparently share with a podiatrist in Georgia. If using a related party to help you get a merchant account with a payments business in Mexico didn’t seem off to you, this is also fine?
Finally, Ben Chung, the new CFO. According to Ben Errez, Chung was the contracted head of compliance to Greenbox POS for over a year and a half prior to joining the company (see the 13:43 minute mark here). Given what we’ve seen out of the company in terms of reporting and compliance so far, it’s not clear that this is a positive.
Let’s also note that Chung has led several different independent audit firms (or starts new ones under different names), and the state of Arizona recommended a denial of registration to his firm in 2018. He’s also been posting all over LinkedIn about his accounting firm’s newest rebranding within the past few months, but has made no mention to his employment at Greenbox POS on his profile. Hmm…
ChargeSavvy
Now that the executive team is out of the way, it’s time to move on to ChargeSavvy, a business partially owned by Ken Haller that used to be one of the largest ISOs in the Greenbox POS ecosystem, which it is now acquiring (buckle up, because it just gets crazier from here).
The initial press release for the acquisition put a $31.2M value on ChargeSavvy, with another potential $20M in earnout in the year after the deal close. Nisan is quoted as saying that the transaction will add over $500MM in processing volume to their business.
Later the same day, they rerelease a very similar press release; this time, however, they describe ChargeSavvy as state-of-the-art with a focus on retail transactions but capabilities for ecommerce. They also claim it generated >$30M in revenue.
  1. Do most state-of-the-art technologies sell for ~2x trailing EBITDA?
  2. Does this seem like a bona fide transaction that an arms-length party would accept?
  3. Why did Haller sell this to them after pulling it out of the $GBOX ecosystem less than 1 year prior? 
Less than 3 months later, the company re-negotiated the purchase price for ChargeSavvy to $12M, and now note that they’re getting the Chicagoland office as a part of the deal, expected to close in early April. What a steal for $GBOX shareholders, right? 
In fact, they note that ChargeSavvy should add another $450M in processing volume in 2021 post deal-close, implying $600M for the year, so assuming margins aren’t deteriorating, the acquisition is even more of a steal! Wow! Does this make logical sense? 
So we’re told that ChargeSavvy is focused on retail, in-person transactions, but is also ideally suited for the ecommerce market. It would be great to know what the typical customer looks like, right? Let’s look at ChargeSavvy’s website to check it out. Their website shows a point-of-sale (POS) system on an iPad and shows details of their products. Don’t try and click on the link to see what ChargeSavvy Companion is – the hyperlink just sends you back to the top of the page (this is a hallmark of many $GBOX affiliated sites).
Let’s try clicking on the Point of Sale tab at the top of the page. Here we find out that they’ve processed over $2B, and we also see their target customer: nightclubs. Makes sense given the screenshots of the iPad. More on this in a bit. 
At the bottom of the home page, they show icons for social media (you would assume this takes you to their Twitter or Facebook pages, but again, the links don’t take you anywhere). You can also see their contact information, and that their app is available on the App Store. 
However, if you try to search for a ChargeSavvy app in the App Store, you won’t find one. In fact, it appears as if the app was removed, and was last updated in October 2017. That seems odd – why wouldn’t the app for the POS system be available in the App Store? 
Don’t worry, it looks like they have a Zendesk page. But upon further review, it hasn’t been updated in 5 years. Twitter – nothing since March 2017. Anyone else feel like something is off here? 
It appears as if there’s some old industry magazines that reference ChargeSavvy. Here we find out that ChargeSavvy was created by Swift Pay Systems, and we get a couple of names: Mike Kehoe and Jeff Nickel, the latter of whom is referenced in $GBOX filings. Mike Kehoe’s name is also used on the app screenshot with the McLovin photo, so these are the right guys.
Let’s try calling them on the phone. Using the 708 number first, goes to voicemail. Try calling again on a different day, same thing. Hmm…. Is the 800 number any different? Nope. It looks like people from the online stock message boards have known this fact for awhile. 
Maybe that’s just how business is conducted in this world? No one picks up the phone? It seems like you’d want to speak with your potential customers when they’re calling you, but maybe this business is so revolutionary they can do it their way. But hold on a second. That 800 number is the same as the one as the one on Ken Haller’s Sky Financial & Intelligence page. Maybe the 708 number is also being used for different businesses? Let’s give it a shot and search that phone number in Google. 
And what do we have here? ChatYourMD.com? A telehealth website? Except the page descriptions are talking about digital VIP rooms for strip clubs! It also looks like the tabs at the top of the website flip from “Models” to “Doctors” depending on where you access it! 
They're likely to take this one down, so use the Wayback Machine link.
They're likely to take this one down, so use the Wayback Machine link.
  1. Why would this website exist? Most people would probably believe ChatYourMD.com provided telehealth services.
  2. Could this be a clever way to hide adult content from the card networks and/or be a “discreet” way to cover it up on a credit card bill for the end purchaser?
  3. What processing codes does ChargeSavvy/Greenbox POS use for payments on this website?
Interestingly enough, if you check out the list of payment facilitators (PayFacs) for Visa and Mastercard, $GBOX only comes up as partnering with Mastercard. The same $MA that, just a few months ago, swore off processing payments for unverified adult content.
They show up under Mastercard...
They show up under Mastercard...
but not Visa
but not Visa
The same $MA that so thoroughly wanted to convince investors of its reform that it published a blog post on its reformation and had its PR team ensure journalists wrote about it. Why would $MA want to involve themselves with Greenbox POS? From all publicly available information, it looks like they’re involved in cannabis and adult content. If the Thai Bitcoin incident is any indication of their KYC practices and types of people that their head of business development partners with, can we be sure that everything they’re doing is on the up-and-up?
Protecting our network, protecting you: Preventing illegal adult content on our network
Mastercard updates policy for adult content sellers | TheHill
Mastercard Lays Down New Rules For Streaming Sites That Require Them To Review Content Before Publication | Techdirt
Regardless, it looks like whatever Greenbox POS is doing with ChatYourMD.com, it won’t comply with the rules set out by Mastercard. One has to wonder, though, if Mastercard is aware of what they’re doing…
Additionally, if you search for ChargeSavvy customers, you’ll probably also find that they were partnered with Renaissance Health Publishing, LLC. Who is that, you might ask. Why don’t you read it straight from the FTC.
Renaissance Health Publishing, LLC | Federal Trade Commission
ChargeSavvy sure has put together a portfolio of interesting partners!
Greenbox Staff & Technology Development
Let’s look at a recent $GBOX investor deck. The company claims to have 112 employees in its investor presentation, but only 18 employees in the 10-K. In YouTube videos, Errez explains that they make use of outsourced help and that accounts for the difference in headcount.
It’s also very easy to find these outsourced “employees” - just check out the Google Reviews for Greenbox POS and ChargeSavvy. You’ll find that a lot of the reviewers are from the Philippines, and many of them reviewed both Greenbox POS and ChargeSavvy.
They also made these reviews at least 8 months ago, which brings up the question: did ChargeSavvy and Greenbox POS just happen to use the same BPO firm, or were they acting as a single financial entity? Is there any reasonable explanation why substantially all of your Google reviews are from your own employees/contractors?
Interestingly enough, the reviews that come from the US/real people seem to be much less positive on Greenbox POS…
It’s not even like they tried to hide this. How believable is this review?
Thanks for your effort, Geenbox
Thanks for your effort, Geenbox
Of the employees that actually work at Greenbox POS (now up to 22), it appears that very few of them are actually involved in technology development.
Most employees that show up on LinkedIn are either in support staff type roles (office manager, etc.), sales roles, or some sort of fraud/underwriting role. Many of the employees appear dramatically underqualified for their positions as well. You’ve got the now former head of KYC and underwriting, whose previous job experience was managing a tanning salon in Idaho (she graduated in 2018!).
You’ve also got Itamar Green, who it appears mostly has experience as a bartender. He was your previous head of chargebacks and disputes, now a senior processing analyst. While he does have a degree from IDC Herzliya (nothing to scoff at), it does seem like without a lot of experience in the industry/role, he’s been underqualified for his positions.
Ask the Barman: Deli does it - The Jerusalem Post
And then we come back to Fredi’s brothers, Liron and Dan Nusinovich. Neither has a discernable background or experience in technology, payments, or software, but both were placed into significant roles in the company.
However, that doesn’t mean that Dan can’t be useful. Here’s a couple of morsels from their SEC filings:
So they had the brother of the CEO open up an account on their behalf. The CEO’s brother owns 100% of it, but it’s controlled by Ben Errez, and its transactions are included within Greenbox POS’ financial records. Uh huh. Totally normal, nothing to see here. But upon further review of some odd internet forums, it looks like Greenbox POS was using this as a vehicle to avoid attaching the cannabis payments that it wanted to process to the Greenbox name/account.
Anyone heard of "Pop N Pay LLC?" Rando credit card charge | Page 2 | Bob Is The Oil Guy
Board of Directors
Did you think that the board of directors here would be squeaky clean? Not a chance.
Let’s start with William Caragol. While it’s not clear that he’s done anything wrong per se (from a cursory look), it does appear that he doesn’t appear to be the best CFO. It appears that most of the businesses with which he’s been involved in the CFO capacity have either gone bankrupt during his tenure/shortly thereafter, or experienced significant drops in the stock price. He’s also spent a lot of time at microcap companies/OTC/penny stocks.
Interview of a former Condor Technology employee from 2002
Interview of a former Condor Technology employee from 2002
GovInfo
Let’s not forget his roles on the board as well…
Next, Genevieve Baer.
Just off the top. She’s 43 years old, yet has been working at JKH for 11+ years, was at Magnet for 6, and Piper Jaffray for 9. Unless there was some overlap that isn’t well explained here, that implies that she started working in the industry at 17. Hmm…
It’s also really difficult to find any information on Ms. Baer. But if we realize that Magnet Industrial Bank actually refers to MagnetBank, we can start getting some more information.
This helps explain some of the timing issues. If she joined the bank in August 2005 and the bank was shut down by the UDFI in January 2009, then she could have only been there for ~3.5 years, not 6 years.
Also, it’s nice to know that she goes by Jenny. This will also help. In fact, with a little bit of digging, we can find where “Jenny” is and what she’s doing! It looks like she’s…. a residential real estate agent in suburban Boise?
This starts to beg a lot of questions.
  1. What is JKH?
  2. If JKH has advised on transactions with a collective value of over $10B, this would imply over $900MM a year in transaction volume. In Boise. Is this even plausible?
  3. How did they find Ms. Baer, and is she really suitable as a director of the company given these revelations?
But wait, there’s more!
We can finally find a reference to JKH if we find the filing for Bristol Venture Group, an LLC on which she is an organizer.
Her co-founder also appears to be a residential real estate agent.
Now here’s where things get interesting. We can observe from the ProPublica search that Bristol Venture Group applied for 2 rounds of PPP loans for their 2 employees. Not going to judge, people have been hit hard by the pandemic, things happen. Sure, this doesn’t exactly line up with >$10B in transaction volume upon which they’ve advised, but okay.
But Jenny Baer also applied as a sole proprietor towards the end of the PPP window.
Now it’s been frustrating to try to understand the ins and outs of the PPP, but it does appear that applying to receive funds in this manner might not be fully on the up-and-up. Not only would it bring into question how she makes so much money through both her LLC and sole proprietorship to qualify for that large of a loan (and still require PPP loans), but also whether this is allowed by the program. Given the lack of listings and lack of business information on JKH it seems like something is off, but might require more help. Perhaps @Keubiko can help educate us given the deep-dive into Fuser’s loans for the motorcycle dealership. Maybe this is something that should just be referred to the SBA OIG.
And moving to the final and most egregious board member, Ezra Laniado.
Again, it’s more about the omissions than the information that’s provided. First - Laniado didn’t co-found Shonglulu Group, he co-founded Shongolulu Group. With this corrected spelling of the firm, we also find out that Mr. Laniado never goes by Ezra, but rather “Oz”.
It’s really quite something that he can’t manage to alert the rest of the board that his director bio has a misspelling of the company he co-founded. Or maybe this is purposeful so that people don’t find out what Oz really does for a living.
If you search hard enough, you’ll come to realize that Laniado, while involved with the Friends of the IDF, also has a day job as … a real estate agent!?! How did they find another real estate agent to sit on the board?
Let’s check out his California RE license:
And upon further review, The Stoz Group employs … the wife and mother-in-law of CEO Fredi Nisan!!! What a crazy coincidence!!!
Now you might be thinking to yourself. STOZ… STOZ… Stephanie + Oz? And you’d be right!
Your Greenbox POS independent director, Ezra Laniado, is actually the CFO of the real estate company run by the wife of the CEO. It was great of them to disclose this seemingly material fact to all of their investors. And it’s a certainty that he’ll be a great fit for the audit committee.
In Conclusion
It’s pretty clear that this company has a lot of hair on it. If you’re still convinced that there’s nothing wrong with the company and you’d be willing to bet your life savings going long this stock, please reply to this account on Twitter with your other top long ideas.
And to address the management team here for a brief moment, as it’s likely that they’ll end up reading this too.
On the last earnings call, Ben Errez effectively declared war on short sellers, and refused to address the size of the stock buyback program that they initiated. He gave the logic that this would be equivalent to letting the enemy count the number of bullets they had left.
It should be clear to Ben that while this is a lot of information, there’s plenty more that didn’t make the first cut here but is just as damning. Fighting it will be like trying to get free from a boa constrictor - the more you fight, the worse off you’ll be. Good luck.
And just to recap:
  • Former penny stock with no discernable change in underlying business
  • “Technology” with goalposts and descriptions that constantly change
  • Questions about stickiness of customers in a world where cannabis becomes bankable
  • Using a low-quality audit firm with local employees coming from firms that were shut down by the PCAOB
  • Has financials that don’t tie out with seemingly no explanation for why
  • History of overpromising and massively underdelivering in terms of the business
  • Chairman lies on financial statements about not having filed for bankruptcy over given time frame
  • President of Payments dogged by fraud accusations
  • Chief Business development officer abetting a $1M+ cryptocurrency scam
  • Questionable relationship with a Mexican processor that claims to have an office co-located with a suburban Atlanta podiatrist
  • CFO who updates his LinkedIn but makes sure to steer clear of putting Greenbox POS on his profile
  • Related-party acquisition of a business at a price well below market value (assuming presented financials are legitimate) that is then negotiated down even lower, just months after the business pulled back on working with Greenbox POS
  • App-driven payments technology that hasn’t been in the App Store for almost 4 years with zero updates to any social media, etc. in the same time frame; no one picks up the phone
  • 1x1 VIP Porn site operated by the company masquerading as a telehealth website for no apparently good reason
  • Other customers include “miracle” supplement sellers shut down by the FTC
  • Paying people in the Philippines to cover up poor Google Reviews of the business
  • Substantially no engineering or product staff to develop any technology
  • Underqualified or unqualified employees in critical roles for compliance and anti-money laundering and know-your-customer roles
  • Using a bank account owned by the brother of the CEO but controlled by the Chairman to provide payment services for cannabis
  • Board member overstating historical experience and potentially committing PPP fraud
  • A different board member declared to be independent is actually a business partner of the wife and mother-in-law of the CEO
Remember - this is not investment advice, and please invest some time into fundamentally researching the companies in which you invest. You hate to see people lose, and it’s even worse when it’s like the Cavanaugh’s from Seattle that lost nearly everything by partnering with Ben Errez. Fiat lux.
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Occasional newsletter of Mostly Borrowed Short Ideas
Occasional newsletter of Mostly Borrowed Short Ideas

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