Docoh
Loading...

GBOX GreenBox POS

Document And Entity Information

Document And Entity Information - shares9 Months Ended
Sep. 30, 2020Nov. 09, 2020
Document Information Line Items
Entity Registrant NameGreenBox POS, LLC
Document Type10-Q
Current Fiscal Year End Date--12-31
Entity Common Stock, Shares Outstanding181,050,238
Amendment Flagfalse
Entity Central Index Key0001419275
Entity Current Reporting StatusYes
Entity Filer CategoryNon-accelerated Filer
Document Period End DateSep. 30,
2020
Document Fiscal Year Focus2020
Document Fiscal Period FocusQ3
Entity Small Businesstrue
Entity Emerging Growth Companyfalse
Entity Shell Companyfalse
Document Quarterly Reporttrue
Entity Interactive Data CurrentYes

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)Sep. 30, 2020Dec. 31, 2019
Current Assets:
Cash and cash equivalents $ 0 $ 0
Restricted cash124,834 763,110
Accounts receivable, net of allowance for bad debt of $0 and $0, respectively10,000 70,257
Accounts receivables from fines and penalties from merchants, net of allowance for bad debt of $6,665,0312,789,230 2,776,687
Cash due from gateways, net5,680,356 8,426,844
Prepaid and other current assets59,766 24,888
Total current assets8,664,186 12,061,786
Non-current Assets:
Property and equipment, net62,555 66,491
Other assets87,174 17,174
Operating lease right-of-use assets, net146,984 229,639
Total non-current assets296,713 313,304
Total assets8,960,899 12,375,090
Current Liabilities:
Accounts payable725,558 504,505
Other current liabilities47,207 15,100
Accrued interest87,560 368,071
Payment processing liabilities, net12,624,082 14,021,892
Short-term notes payable, net of debt discount of $39,000 and $32,418, respectively731,232 741,253
Convertible debt, net of debt discount of $133,500 and $0, respectively44,500 807,500
Derivative liability284,210 1,050,063
Current portion of operating lease liabilities30,314 113,935
Total current liabilities14,574,663 17,622,319
Operating lease liabilities, less current portion120,110 120,110
Total liabilities14,694,773 17,742,429
Commitments and contingencies
Stockholders' Equity:
Common stock, par value $0.001, 495,000,000 shares authorized, shares issued and outstanding of 181,6550,138 and 169,862,933, respectively181,650 169,863
Common stock - issuable0 695
Additional paid-in capital1,590,993 1,179,272
Accumulated deficit(7,506,517)(6,717,169)
Total stockholders' equity(5,733,874)(5,367,339)
Total liabilities and stockholder's equity $ 8,960,899 $ 12,375,090

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($)Sep. 30, 2020Dec. 31, 2019
Statement of Financial Position [Abstract]
Accounts receivable, allowance for bad debt (in Dollars) $ 0 $ 0
Accounts receivables from fines and penalties from merchants, allowance for bad debt (in Dollars) $ 6,665,031 $ 6,665,031
Common stock, par value (in Dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized495,000,000 495,000,000
Common stock, shares issued1,816,550,138 169,862,933
Common stock, shares outstanding1,816,550,138 169,862,933

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019
Income Statement [Abstract]
Revenue $ 3,056,271 $ 14,793,117 $ 5,536,335 $ 19,070,861
Cost of Goods Sold1,845,295 6,834,198 3,504,283 10,602,555
Gross Profit1,210,976 7,958,919 2,032,052 8,468,306
Operating expenses:
Advertising and marketing59,099 10,319 86,368 35,928
Research and development243,923 381,112 798,157 1,085,298
Cash due from gateway reserve expense0 5,665,031 0 5,665,031
General and administrative366,734 176,120 613,156 375,373
Payroll and payroll taxes436,216 420,074 1,279,174 967,121
Professional fees344,641 281,659 852,234 588,677
Depreciation and amortization5,764 4,897 16,856 11,352
Total operating expenses1,456,377 6,939,212 3,645,945 8,728,780
Loss from operations(245,401)1,019,707 (1,613,893)(260,474)
Other income (expense):
Interest expense(48,931)3,837 (372,553)(171,193)
Interest expense - debt discount(83,500)0 (121,918)(188,273)
Derivative expense(925,576)0 (925,576)(634,689)
Changes in fair value of derivative liability819,366 236,184 (383,769)(129,186)
Gain from extinguishment of convertible debt0 0 2,630,795 0
Other income or expense(5,768)0 (2,434)0
Total other expense, net(244,409)240,021 824,545 (1,123,341)
Loss before provision for income taxes(489,810)1,259,728 (789,348)(1,383,815)
Income tax provision0 0 0 0
Net Income (loss) $ (489,810) $ 1,259,728 $ (789,348) $ (1,383,815)
Earnings (loss) per share:
Basic and diluted (in Dollars per share) $ 0 $ 0.01 $ 0 $ (0.01)
Weighted average number of common shares outstanding:
Basic and diluted (in Shares)176,930,358 168,492,966 176,930,358 167,136,344

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($)Common Stock [Member]Convertible Debt [Member]Common Stock [Member]Additional Paid-in Capital [Member]Convertible Debt [Member]Additional Paid-in Capital [Member]Warrants Issuable Under Convertible Debt [Member]Additional Paid-in Capital [Member]Retained Earnings [Member]Common Stock to be Issued [Member]Convertible Debt [Member]Common Stock to be Issued [Member]Warrants Issuable Under Convertible Debt [Member]Common Stock to be Issued [Member]Convertible Debt [Member]Warrants Issuable Under Convertible Debt [Member]Total
Balance at Dec. 31, 2018 $ 166,390 $ 945,940 $ (2,032,595) $ 1,000 $ (919,265)
Balance (in Shares) at Dec. 31, 2018166,390,363 1,000,000
Issuable under convertible debt $ 55,311 $ 4,500 $ 55,311 4,500
Issuable under convertible debt (in Shares)125,000 25,000
Common stock and warrants issuable forfeited(55,311) $ (4,500)(59,811)
Common stock and warrants issuable forfeited (in Shares)(150,000)
Shares issuable from conversion of convertible debt $ 2,308 $ 147,692 $ 2,308 $ (2,308) $ 150,000
Shares issuable from conversion of convertible debt (in Shares)2,307,692 2,307,692 (2,307,692)
Common stocks issued $ 860 85,640 86,500
Common stocks issued (in Shares)860,000
Net loss(1,383,815)(1,383,815)
Balance at Sep. 30, 2019 $ 169,558 1,179,272 (3,416,410) $ 1,000 (2,066,580)
Balance (in Shares) at Sep. 30, 2019169,558,055 1,000,000
Balance at Jun. 30, 2019 $ 167,250 1,179,272 (4,676,138) $ 3,308 (3,326,308)
Balance (in Shares) at Jun. 30, 2019167,250,363 3,307,692
Shares issuable from conversion of convertible debt $ 2,308 $ (2,308)
Shares issuable from conversion of convertible debt (in Shares)2,307,692 (2,307,692)
Net loss1,259,728 1,259,728
Balance at Sep. 30, 2019 $ 169,558 1,179,272 (3,416,410) $ 1,000 (2,066,580)
Balance (in Shares) at Sep. 30, 2019169,558,055 1,000,000
Balance at Dec. 31, 2019 $ 169,863 1,179,272 (6,717,169) $ 695 $ (5,367,339)
Balance (in Shares) at Dec. 31, 2019169,862,933 695,122 169,862,933
Shares to be issued695 $ (695)
Shares to be issued (in Shares)(695,122)
Common stocks issued - donation $ 100 7,900 $ 8,000
Common stocks issued - donation (in Shares)100,000
Stock compensation expense162,633 162,633
Common stock issued for stock options exercised $ 500 32,000 32,500
Common stock issued for stock options exercised (in Shares)500,000
Common stock repurchased from common stock issued $ (6,000)(804,000)(810,000)
Common stock repurchased from common stock issued (in Shares)(6,000,000)
Shares issuable from conversion of convertible debt $ 6,000 $ 11,128 $ 804,000 204,422 $ 810,000 215,550
Shares issuable from conversion of convertible debt (in Shares)6,000,000 11,128,205
Common stocks issued $ 59 4,071 4,130
Common stocks issued (in Shares)59,000
Net loss(789,348)(789,348)
Balance at Sep. 30, 2020 $ 181,650 1,590,993 (7,506,517) $ (5,733,874)
Balance (in Shares) at Sep. 30, 2020181,650,138 1,816,550,138
Balance at Jun. 30, 2020 $ 181,150 1,396,360 (7,016,707) $ (5,439,197)
Balance (in Shares) at Jun. 30, 2020181,150,138
Common stocks issued - donation $ 500 32,000 32,500
Common stocks issued - donation (in Shares)500,000
Stock compensation expense162,633 162,633
Common stock repurchased from common stock issued $ (6,000)(804,000)(810,000)
Common stock repurchased from common stock issued (in Shares)(6,000,000)
Shares issuable from conversion of convertible debt $ 6,000 804,000 810,000
Shares issuable from conversion of convertible debt (in Shares)6,000,000
Net loss(489,810)(489,810)
Balance at Sep. 30, 2020 $ 181,650 $ 1,590,993 $ (7,506,517) $ (5,733,874)
Balance (in Shares) at Sep. 30, 2020181,650,138 1,816,550,138

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)9 Months Ended
Sep. 30, 2020Sep. 30, 2019
Cash flows from operating activities:
Net loss $ (789,348) $ (1,383,815)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation expense16,856 11,352
Noncash lease expense(966)4,292
Stock compensation expense162,633 85,640
Common stocks issued for professional fees4,130 0
Common stocks - issued donation8,000 0
Proceeds from exercise of stock options32,500 0
Interest expense - debt discount121,918 188,273
Derivative expense925,576 634,766
Gain (loss) on extinguishment of debt(2,630,795)0
Changes in fair value of derivative liability383,769 129,186
Changes in assets and liabilities:
Other receivable, net47,714 (3,810,776)
Prepaid and other current assets(34,878)(4,919)
Cash due from gateways, net3,124,085 (12,562,634)
Other assets(70,000)0
Accounts payable220,465 79,768
Other current liabilities32,107 (6,609)
Accrued interest(286,461)20,243
Payment processing liabilities, net(1,397,810)16,678,995
Net cash provided by (used in) operating activities(130,505)64,622
Cash flows from investing activities:
Purchases of property and equipment(12,332)(5,984)
Net cash used in investing activities(12,332)(5,984)
Cash flows from financing activities:
Borrowings from convertible debt178,000 482,500
Repayments on convertible debt(670,000)(496,500)
Borrowings from notes payable1,954,480 0
Principal payments on notes payable(1,147,919)0
Repayment on long-term debt0 (75,000)
Repurchase of common stocks outstanding(810,000)0
Net cash used in financing activities(495,439)(89,000)
Net increase in cash, cash equivalents, and restricted cash(638,276)(30,362)
Cash, cash equivalents, and restricted cash – beginning of period763,110 284,978
Cash, cash equivalents, and restricted cash – end of period124,834 254,616
Cash paid during the period for:
Interest575,014 110,873
Income taxes800 800
Non-cash financing activities:
Convertible debt conversion to common stock137,500 (150,000)
Interest accrual from convertible debt converted to common stock78,050 0
Short-term notes payable converted to common stock $ 810,000 $ 0

DESCRIPTION OF BUSINESS AND BAS

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]1.
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Organization GreenBox POS (the “Company” or “PubCo”) is a tech company formed with the intent of developing, marketing and selling innovative blockchain-based payment solutions, which the Company believes will cause favorable disruption in the payment solutions marketplace. The Company’s core focus is to develop and monetize disruptive blockchain-based applications, integrated within an end-to-end suite of financial products, capable of supporting a multitude of industries. The Company’s proprietary, blockchain-based systems are designed to facilitate, record and store a virtually limitless volume of tokenized assets, representing cash or data, on a secured, immutable blockchain-based ledger. The Company was formerly known as GreenBox POS, Inc (“ASAP”), which was incorporated April 10, 2007 under the laws of the State of Nevada. On January 4, 2020, PubCo and GreenBox POS LLC, a Washington limited liability company (“PrivCo”), entered into an Asset Purchase Agreement (the “Agreement”), to memorialize a verbal agreement (the “Verbal Agreement”) entered into on April 12, 2018, by and among PubCo (the buyer) and PrivCo, which was formed on August 10, 2017 (the seller). 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, and 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 (collectively, 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.” Name Change 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. Unless the context otherwise requires, all references to “the Company,” “we,” “our”, “us” and “PubCo” refer to GreenBox POS. Unless the context otherwise requires, all references to “PrivCo” or the “Private Company” refer to GreenBox POS LLC, a limited liability company, formed in the state of Washington. Unaudited Interim Financial Information These unaudited interim financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2020. The balance sheets and certain comparative information as of December 31, 2019 are derived from the audited financial statements and related notes for the year ended December 31, 2019 (“2019 Annual Financial Statements”), included in the Company’s 2019 Annual Report on Form 10-K. These unaudited interim financial statements should be read in conjunction with the 2019 Annual Financial Statements. Basis of Presentation and Consolidation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The financial statements include the combined accounts of PubCo and PrivCo. All amounts are presented in U.S. Dollars unless otherwise stated. The accompanying financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”). Going Concern As of September 30, 2020, the Company had cash and cash equivalents of $0, has incurred a net loss of $789,348 for the nine months ended September 30, 2020, and has accumulated a deficit of $7,506,517. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Additionally, as the GreenBox ecosystem grows, substantially larger volumes of working capital financing will be required to support our platform’s growth. The Company intends to raise additional capital through private placements of debt and equity securities, but there can be no assurance that these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully complete its development activities or sustain operations. If the Company is unable to raise sufficient additional funds, we will have to develop and implement a plan to further extend payables, reduce overhead or scale back our business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful. Accordingly, the accompanying financial statements have been prepared in conformity with GAAP, which contemplate our continuation as a going concern, and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty. Use of Estimates The preparation of financial statements in conformity with the GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash, Cash Equivalents and Restricted Cash The Company’s cash, cash equivalent and Restricted cash represents the following:

Cash and cash equivalents

Restricted Cash – The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows.
September 30, 2020
December 31, 2019
Cash and cash equivalents $ - $ -
Restricted cash 124,834 763,110
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 124,834 $ 763,110

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash Due from Gateways and Payment Processing Liabilities The Company’s primary source of revenues continues to be payment processing services for its merchant clients. When such merchant makes a sale, the process of receiving the payment card information, engaging the banks for transferring the proceeds to the merchant’s account via digital gateways, and recording the transaction on a blockchain ledger are the activities for which the Company gets to collect fees. In 2019 the Company utilized several gateways. The gateways have strict guidelines pertaining to scheduling of the release of funds to merchants based on several criteria, such as return and chargeback history, associated risk for the specific business vertical, average transaction amount and so on. In order to mitigate processing risks, these policies determine reserve requirements and payment in arear strategy. While reserve and payment in arear restrictions are in effect for a merchant payout, the Company records gateway debt against these amounts until released. Therefore, the total gateway balances reflected in the Company’s books represent the amount owed to the Company for processing – these are funds from transactions processed and not yet distributed. Advertising and Marketing Costs Advertising and marketing costs are recorded as general and administrative expenses when they are incurred. Advertising and marketing expenses were $59,099 and $10,319 for the three months ended September 30, 2020 and 2019, respectively, and $86,368 and $35,928 for the nine months ended September 30, 2020 and 2019, respectively. Research and Development Costs Research and development costs, which are expensed as incurred, are primarily comprised of costs and expenses for salaries and benefits for research and development personnel, outsourced contract services, and supplies and materials costs. Research and development expenses were $243,923 and $381,112 for the three months ended September 30, 2020 and 2019, respectively, and $798,157 and $1,085,298 for the nine months ended September 30, 2020 and 2019, respectively. 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. 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.

Payment processing revenue is based on a percentage of each transaction’s value and/or upon fixed amounts specified per each transaction or service and is recognized as such transactions or services are performed.

Licensing revenue is paid in advance and is recorded as unearned income, which is amortized monthly over the period of the licensing agreement.

Equipment revenue is generated from the sale of POS products, which is recognized when goods are shipped. Accounts Receivables from Fines and Fees from Merchants The fines and penalties charged to the Company’s merchants is a normal course of business and historically, the Company has had more than 90% collections success rate. These fees and penalties represent certain chargebacks which are at fault by the Company’s merchants and are imposed as the merchant agreement between the Company and the merchant. The Company has legal rights under the merchant agreement to claim the chargeback. These chargebacks, fees, and fines are earned and delivered because the Company has been “chargebacked” by the Gateways and the Company has legal rights under the agreement to claim this against the merchants. At the end of Q3 2019, GreenBox received constructive notice of potential violations of its Terms of Service by a merchant, The Good People Farms (“TGPF”). An ongoing audit and investigation of this account resulted in the discovery of a number of violations GreenBox believes TGPF is responsible for, including but not limited to violations of VISA, Mastercard, and American Express’s rules. This investigation is ongoing, but initial results indicate that excessively high chargeback percentages are connected with fraudulent activity and / or transaction laundering. These issues lead to the implementation of aggressive bank reserves, stunting GreenBox’s ability to conduct business and contributed to undetermined consequential damages. GreenBox promptly terminated the merchant account and placed all processed funds on reserve. Although the investigation is ongoing, GreenBox estimates that the total amount of fees, fines, and chargebacks are currently $9,441,718. The Company has provided for an allowance for bad debt of $6,665,031 on the gross balance of $9,441,718 bringing to net balance of $2,776,687 which is included as accounts receivables from fines and penalties from merchants. To date, GreenBox has successfully recouped $840,739.33 (collected in 2019). The Company may assess $100,000 per fraudulent transactions but the Company used $5,000 per transaction to calculate the fees and fines. The Company recorded net balance of $2,776,687 as other income in the statements of operations for the year ended December 31, 2019. Accounts Receivable and Allowance for Bad Debt The Company maintains an allowance for doubtful accounts for estimated losses from the inability of customers to make required payments. The allowance for doubtful accounts is evaluated periodically based on the aging of accounts receivable, the financial condition of customers and their payment history, historical write-off experience and other assumptions, such as current assessment of economic conditions. Property and Equipment Property and equipment are stated at cost. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the assets, which range from three to eight years. Leasehold improvements are amortized over the shorter of the useful life of the related assets or the lease term. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in income for the period. Fair Value of Financial Instruments The Company utilizes ASC 820-10, Fair Value Measurement and Disclosure, for valuing financial assets and liabilities measured on a recurring basis. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1. Observable inputs such as quoted prices in active markets; Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The Company’s financial instruments consisted of cash, accounts payable and accrued liabilities, advances to due to or from affiliated companies, notes payable to officers. The estimated fair value of cash, accounts payable and accrued liabilities, due to or from affiliated companies, and notes payable approximates its carrying amount due to the short maturity of these instruments. The table below describes the Company’s valuation of financial instruments using guidance from ASC 820-10:
September 30, 2020
Level 1
Level 2
Level 3
Derivative liability $ - $ - $ 284,210
December 31, 2019
Level 1
Level 2
Level 3
Derivative liability $ - $ - $ 1,050,063 Income Taxes Income taxes are accounted for under the asset and liability method. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, net of operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than not that some portion or all of the deferred tax assets will be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. Long-Lived Asset Impairments The Company reviews long-lived assets, including property and equipment and intangible assets, for impairment when events or changes in business conditions indicate that their carrying value may not be recovered, and at least annually. The Company considers assets to be impaired and writes them down to estimated fair value if expected associated undiscounted cash flows are less than the carrying amounts. Fair value is the present value of the associated cash flows. Earnings Per Share A basic earnings per share is computed by dividing net income to common stockholders by the weighted average number of shares outstanding for the year. Dilutive earnings per share include the effect of any potentially dilutive debt or equity under the treasury stock method, if including such instruments is dilutive. The Company’s diluted earnings/loss per share is the same as the basic earnings/loss per share for the three and nine months ended September 30, 2020 and 2019, as there are no potential shares outstanding that would have a dilutive effect. Leases Prior to January 1, 2019, the Company accounted for leases under Accounting Standards Codification (ASC) 840, Accounting for Leases. Effective from January 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases On February 25, 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. ASC 842 requires that lessees recognize right of use assets and lease liabilities calculated based on the present value of lease payments for all lease agreements with terms that are greater than twelve months. ASC 842 distinguishes leases as either a finance lease or an operating lease that affects how the leases are measured and presented in the statement of operations and statement of cash flows. ASC 842 supersedes nearly all existing lease accounting guidance under GAAP issued by the Financial Accounting Standards Board (“FASB”) including ASC Topic 840, Leases. For operating leases, we calculated right of use assets and lease liabilities based on the present value of the remaining lease payments as of the date of adoption using the IBR as of that date. Recently Issued Accounting Updates In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which requires lessees to recognize on the balance sheet assets and liabilities for leases with lease terms of more than 12 months. Consistent with prior GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend primarily on its classification as a finance or operating lease. However, unlike prior GAAP—which required only finance (formerly capital) leases to be recognized on the balance sheet—the new ASU requires both types of leases to be recognized on the balance sheet. The ASU took effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This standard can be applied at the beginning of the earliest period presented using the modified retrospective approach, which includes certain practical expedients that an entity may elect to apply, including an election to use certain transition relief. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, which make improvements to Accounting Standards Codification (“ASC”) 842 and allow entities to not restate comparative periods in transition to ASC 842 and instead report the comparative periods under ASC 840. The adoption of ASC 842 resulted in recording an adjustment to operating lease right of use assets and operating lease liabilities of liabilities of $307,531 and $309,677, respectively as of March 31, 2019. The difference between the operating lease ROU assets and operating lease liabilities at transition represented tenant improvements, and indirect costs that was derecognized. The adoption of ASC 842 did not materially impact our results of operations, cash flows, or presentation thereof. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The standard removes, modifies, and adds certain disclosure requirements for fair value measurements. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. While the Company is currently in the process of evaluating the effects of this standard on the consolidated financial statements, the Company plans to adopt ASU No. 2018-13 in the first quarter of fiscal 2020, coinciding with the standard’s effective date, and expects the impact from this standard to be immaterial. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The Company’s accounting for the service element of a hosting arrangement that is a service contract is not affected by the proposed amendments and will continue to be expensed as incurred in accordance with existing guidance. This standard does not expand on existing disclosure requirements except to require a description of the nature of hosting arrangements that are service contracts. This standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted, including adoption in any interim period for which financial statements have not been issued. Entities can choose to adopt the new guidance prospectively or retrospectively. The Company plans to adopt the updated disclosure requirements of ASU No. 2018-15 prospectively in the first quarter of fiscal 2020, coinciding with the standard’s effective date, and expects the impact from this standard to be immaterial. Other recently issued accounting updates are not expected to have a material impact on the Company’s Interim Financial Statements.

SETTLEMENT PROCESSING

SETTLEMENT PROCESSING9 Months Ended
Sep. 30, 2020
Settlement Processing [Abstract]
Settlement Processing [Text Block]3.
SETTLEMENT PROCESSING The Company’s proprietary blockchain-based technology serves as the settlement engine for all transactions within the Company’s ecosystem. The blockchain ledger provides a robust and secure platform to log immense volumes of immutable transactional records in real time. Generally speaking, blockchain is a distributed ledger that uses digitally encrypted keys to verify, secure and record details of each transaction conducted within an ecosystem. Unlike general blockchain-based systems, GreenBox uses proprietary, private ledger technology to verify every transaction conducted within the GreenBox ecosystem. The verification of transaction data comes from trusted partners, all of whom have been extensively vetted by us. GreenBox facilitates all financial elements of our closed-loop ecosystem and we act as the administrator for all related accounts. Using our TrustGateway technology, we seek authorization and settlement for each transaction from Gateways to the issuing bank responsible for the credit/debit card used in the transaction. When the Gateway settles the transaction, our TrustGateway technology composes a chain of blockchain instructions to our ledger manager system. When consumers use credit/debit cards to pay for transactions with merchants who use our ecosystem, the transaction starts with the consumer purchasing tokens from us. The issuance of tokens is accomplished when we load a virtual wallet with a token, which then transfers credits to the merchant’s wallet on a dollar for dollar basis, after which the merchant releases its goods or services to the consumer. These transfers take place instantaneously and seamlessly, allowing the transaction experience to seem like any other ordinary credit/debit card transaction to the consumer and merchant. While our blockchain ledger records transaction details instantaneously, the final cash settlement of each transaction can take days to weeks, depending upon contract terms between us and the gateways we use, between us and our ISOs, and between us and/or our ISOs and merchants who use our services. In the case where we have received transaction funds, but not yet paid a merchant or an ISO, we hold funds in either a trust account or as cash deemed restricted within our operating accounts. We record the total of such funds as Cash held for Settlements – a Current Asset. Of these funds, we record the sum balance due to Merchants and ISOs as Settlement Liabilities to Merchants and Settlement Liabilities to ISOs, respectively. The table below shows the status of transaction settlements:
September 30, 2020
December 31, 2019
Settlement Processing Assets:
Cash held for settlements $ 124,834 $ 763,110
Cash due from gateways 2,377,909 3,073,183
Amount due from gateways and merchants – hold and fees 6,818,892 4,831,938
Reserves (2) 3,302,447 5,353,661
Total before allowance for uncollectable 12,624,082 14,021,892
Allowance for uncollectable – hold and fees (6,818,892 ) (4,831,938 )
Cash held for settlement (124,834 ) (763,110 )
Total – settlement processing assets $ 5,680,356 $ 8,426,844
Settlement Processing Liabilities:
Settlement liabilities to merchants 12,624,082 14,021,892
Totals $ 12,624,082 $ 14,021,892

CASH DUE FROM GATEWAYS

CASH DUE FROM GATEWAYS9 Months Ended
Sep. 30, 2020
Disclosure Text Block Supplement [Abstract]
Other Current Assets [Text Block]4.
CASH DUE FROM GATEWAYS Cash due from gateways consisted of the following:
September 30, 2020
December 31, 2019
Cash due from Gateways $ 2,377,909 $ 3,073,183
Amount due from gateways and merchants – hold and fees 6,818,892 4,824,223
Reserves (2) 3,302,447 5,353,661
Total cash due from gateways 12,499,248 13,251,067
Chargeback Allowances (1) - -
Allowance of uncollectable – hold and fees (6,818,892 ) (4,824,223 )
Total cash due from gateways, net $ 5,680,356 $ 8,426,844 (1) During 2018, the Company absorbed all chargeback costs as a cost of services provided – essentially a sales promotion tool to onboard customers in 2018. The Chargeback Allowance shown in the table above reflects our estimate of potential chargebacks that are likely to be realized in 2019, which are connected to sales transactions that occurred in 2018. The allowance decreases the amount that GreenBox is owed from the Gateways we use in our proprietary ecosystem. In 2019, the actual dollar amount of chargebacks will be reconciled with our allowance. (2) Reserves are essentially an escrow fund that protects a gateway/card issuer from financial losses. In the Reserve, funds are held until chargeback time limits expire.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT9 Months Ended
Sep. 30, 2020
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment Disclosure [Text Block]5.
PROPERTY AND EQUIPMENT Property and equipment consisted of the following:
September 30, 2020
December 31, 2019
Computers $ 48,289 $ 38,938
Furniture 40,320 37,339
Kiosks 6,472 12,750
Vehicles 4,578 4,578
Total property and equipment 99,659 93,605
Less: Accumulated depreciation (37,104 ) (27,114 )
Total property and equipment, net $ 62,555 $ 66,491 Depreciation expense was $5,764 and $4,897 for the three months ended September 30, 2020 and 2019, respectively, and $16,856 and $11,352 for the nine months ended September 30, 2020 and 2019, respectively.

PAYMENT PROCESSING LIABILITIES,

PAYMENT PROCESSING LIABILITIES, NET9 Months Ended
Sep. 30, 2020
Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract]
Other Liabilities Disclosure [Text Block]6.
PAYMENT PROCESSING LIABILITIES, NET Payment processing liabilities consisted of the following:
September 30, 2020
December 31, 2019
Settlement liabilities to merchants $ 12,624,082 $ 14,021,892
Settlement liabilities to ISOs - -
Total processing liabilities 12,624,082 14,021,892
Refund allowances - -
Total payment processing liabilities $ 12,624,082 $ 14,021,892 The Refund Allowance shown in the table above reflects our estimate of potential refunds that may be realized in 2019, which are connected to sales transactions that occurred in 2018. The allowance decreases the amount that GreenBox owes to Merchants using our proprietary ecosystem. In 2019, the actual dollar amount of refunds with be reconciled with our allowance.

CONVERTIBLE NOTES PAYABLE

CONVERTIBLE NOTES PAYABLE9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]
Debt Disclosure [Text Block]7.
CONVERTIBLE NOTES PAYABLE Convertible notes payable consisted of the following:
September 30, 2020
December 31, 2019
March 11, 2019 ($500,000) $ - $ 500,000
November 26, 2018 ($200,000) - 200,000
March 15, 2018 ($300,00) - 107,500
June 22, 2020 ($178,000) 178,000 -
Total convertible notes payable 178,000 807,500
Debt discount (133,500 ) -
Total convertible notes payable $ 44,500 $ 807,500 Vista Capital Investments, LLC - $500,000 (original received $375k) On March 11, 2019, PubCo issued a convertible promissory note for $500,000 to Vista Capital Investments, LLC (“Vista”) (the “Vista Note”), due October 6, 2019 (the “Maturity Date”). The Vista Note incurred a onetime interest charge of 8%, which was recorded at issuance, and was due upon repayment of the Vista Note. The Vista Note included an original issue discount of $125,000, netting the balance received by PubCo from Vista at $375,000. The Vista transaction included commitment fees, which took the form of an obligation by PubCo to issue Vista 25,0000 shares and a four-year warrant to purchase 125,000 shares (the “Commitment Shares”) which are only provided in the event of default. Upon the occurrence of an event of default, as defined in the Vista Note, the conversion price shall become equal to a 65% of the lowest traded price for the Company’s common stock in the 25 consecutive trading days preceding the notice of conversion and the balance due shall be multiplied by 130% (the “Default Provision”). The Vista Note’s principal and interest were due to be paid October 6, 2019. The Company and Vista amended the convertible debt agreement as follows:

First Amendment

Second Amendment

Third Amendment On April 21, 2020, Vista converted $100,000 of convertible debt by receiving 5,128,205 common shares. On June 15, 2020, the Company and Vista entered into a settlement agreement, whereby, the Company will pay $225,000 on June 19, 2020 and $225,000 on July 19, 2020 and issuing 5,128,205 common shares to settle all of the outstanding balance including accrued interest. The Company has provided payment on those dates to fully settle the balance accordingly. RB Cap – $200,000 On November 26, 2018, PubCo issued a convertible promissory note for $200,000 to RB Cap (the “RB Cap $200K Note”). The note incurs interest at 12% per year and the outstanding principal and accrued interest are due November 26, 2019. RB Cap may elect to convert the note at any time from six months from the date of issuance at a fixed price per share of $4.50. This note became part of a claim/counter claim suit with RB Capital. The Company paid the loan with full settlement during the quarter ended March 31, 2020. As part of the payment settlement for all RB Cap convertible notes, the Company collectively provided 6,000,000 common shares. RB Cap – $300,000 On or about March 15, 2018, PrivCo issued a twelve-month, $300,000 convertible promissory note to RB Capital Partners (“RB Cap”), with an interest rate of 12% per annum (“RB Cap 300K Note”). The note’s convertibility feature commenced six months after the note’s issuance, at a conversion rate of $0.001 per share of the Company’s common stock. Under the terms of the Agreement which memorialized the Verbal Agreement, we assumed the note, however, PrivCo agreed to pay $185,000 of the principal balance due on this note. On or about June 8, 2018, PrivCo transferred 440,476 restricted shares of Common Stock from the Control Block, with a market value of $185,000, to a purported designee of RB Cap, as a payment of principal of the note. Subsequently, RB Cap disputed the reduction in principal and subsequently, and we, along with PrivCo, disputed whether these shares should have been issued by PrivCo, and sought their return. On or about October 23, 2018, we issued 7,500,000 newly issued, restricted shares of our stock to RB Cap, in repayment of $7,500 of the RB Cap $300,000 Note. Subsequently, we disputed whether these shares should have been issued to RB Cap. As of December 31, 2018, our recorded principal balance for the note was $107,500 and accrued interest on the note was $15,880. On or about March 13, 2019, we issued a final cash payment towards the RB Cap 300K Note of approximately $126,092 (the “Payoff Funds”). However, RB Cap contested the amount of the Payoff Funds. The Company paid the loan of $50,000 during the quarter ended March 31, 2020 and settled the rest of the outstanding balance including interest with shares issuances. As part of the payment settlement for all RB Cap convertible notes, the Company collectively provided 6,000,000 common shares. Power Lending – $178,000 On June 22, 2020 (funded in July 2020), PubCo issued a convertible promissory note for $178,000 to Power Lending. The note incurs interest at 8% per year and the outstanding principal and accrued interest are due June 22, 2021. Power Lending may elect to convert the note at any time from the date issuance at a fixed price per share of $0.01.

SHORT-TERM NOTES PAYABLE

SHORT-TERM NOTES PAYABLE9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]
Short-term Debt [Text Block]8.
SHORT-TERM NOTES PAYABLE Short-term notes payable consisted of the following:
September 30, 2020
December 31, 2019
December 10, 2019 ($260,000) $ - $ 213,671
December 9, 2019 ($200,000) - 160,000
November 12, 2019 ($400,000) - 400,000
June 3, 2020 ($300,000) – 94,286 -
June 9, 2020 ($150,000) 149,900 -
April 29, 2020 ($272,713) – 272,713 -
July 10, 2020 ($400,000) 253,333 -
Total short-term notes payable $ 770,232 773,671
Debt discount (39,000 ) (32,418 )
Total short-term notes payable, net of debt discount $ 731,232 $ 741,253 Fox Capital Group, Inc. - $260,000 On or about December 5, 2019, PubCo entered into a Secured Merchant Agreement with Fox Capital Group, Inc. (“Fox”). Under the terms of the Secured Merchant Agreement, the Company agreed to sell Fox $366,000 of future incoming cashflow from the GreenBox Business, to be delivered to Fox in daily installments of $4,073, for $260,000, from which $26,000 in fees was deducted, providing the Company with net cash of $234,000. For accounting purposes, the Company recorded this transaction as a loan of $260,000, with interest of $106,000, which will be repaid over the following four months. Both Nisan and Errez, individually, signed personal guarantees for this Secured Merchant Agreement. The amount was fully paid and settled as of September 30, 2020. Complete Business Solutions Group, Inc. - $200,000 On or about December 9, 2019, PubCo entered into an Agreement for the Purchase and Sale of Future Receivables (the “Purchase and Sale Agreement”) with Complete Business Solutions Group Inc, (“CBSG”). Under the terms of the Purchase and Sale Agreement, we agreed to sell CBSG $240,000 of future incoming cashflow from the GreenBox Business, to be delivered to CBSG in weekly installments of $16,000, for $200,000, from which $35 in fees was deducted, providing us with net cash of $199,965. For accounting purposes, we recorded this transaction as a loan of $200,000, with interest of $40,000, which will be repaid over the following four months. Both Nisan and Errez, individually, signed personal guarantees for this Purchase and Sale Agreement. The amount was fully paid and settled as of September 30, 2020. West Coast Business Capital, LLC - $400,000 On or about November 12, 2019, the Company entered into a Purchase Agreement with West Coast Business Capital, LLC (“West Coast”). Under the terms of the Purchase Agreement, the Company agreed to sell West Coast $596,000 of future incoming cashflow from the GreenBox Business, to be delivered to West Coast in daily installments of $5,960, for $400,000, from which $16,000 in fees was deducted, providing the Company with net cash of $384,000. For accounting purposes, the Company recorded this transaction as a loan of $400,000, with interest of $196,000, which will be repaid over the following four months. Both Nisan and Errez, individually, signed personal guarantees for this Purchase Agreement. Itria Ventures - $300,000 On June 3, 2020, the Company entered into a loan agreement with Itria Ventures in the amount of $300,000. The loan requires weekly payment of $13,714 for total of 28 payments until fully paid. The loan bears 4.09% interest per annum. Both Nisan and Errez, individually, signed personal guarantees for this Purchase Agreement. SBA CARES Act Loan - $150,000 On June 9, 2020, the Company entered into a loan agreement with SBA under CARES Act in the amount of $150,000. The loan requires monthly payment of $731 after 12 months with maturity date of June 1, 2050 with interest rate at 3.75% per annum. Both Nisan and Errez, individually, signed personal guarantees for this Purchase Agreement. Preferred Bank - Paycheck Protection Program – CARES Act - $272,713 On April 29, 2020, the Company entered into a loan agreement with Preferred Bank under Paycheck Protection Program administered by SBA in the amount of $272,713. Under this loan program, the loan may be forgiven if utilized for specific purpose specified under the CARES Act and PPP guideline. The loan bears interest of 1.00% per annum and matures on April 29, 2022. West Coast Business Capital, LLC - $400,000 On or about July 10, 2020, the Company entered into a Purchase Agreement with West Coast Business Capital, LLC (“West Coast”). Under the terms of the Purchase Agreement, the Company agreed to sell West Coast $536,000 of future incoming cashflow from the GreenBox Business, to be delivered to West Coast in weekly installments of $17,867 (includes principal and interest) for 30 weeks, which includes imputed interest of 25% per annum. Both Nisan and Errez, individually, signed personal guarantees for this Purchase Agreement.

DERIVATIVE LIABILITY

DERIVATIVE LIABILITY9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]
Derivatives and Fair Value [Text Block]9.
DERIVATIVE LIABILITY Derivative liability consisted of the following:
September 30, 2020
December 31, 2019
Beneficial conversion feature – convertible debt $ 284,210 $ 1,050,063
Total derivative liability $ 284,210 $ 1,050,063 On March 11, 2019, PubCo issued a convertible promissory note for $500,000 to Vista Capital Investments, LLC (“Vista”) (the “Vista Note”), due October 6, 2019 (the “Maturity Date”). The Vista Note incurred a onetime interest charge of 8%, which was recorded at issuance, and was due upon payback of the Vista Note. The Vista Note included an original issue discount of $125,000, netting the balance received by PubCo from Vista at $375,000. The Vista transaction included commitment fees, which took the form of an obligation by PubCo to issue Vista 25,0000 shares and a four-year warrant to purchase 125,000 shares (the “Commitment Shares”) which are only provided in the event of default. Upon the occurrence of an event of default, as defined in the Vista Note, the conversion price shall become equal to a 65% of the lowest traded price for the Company’s common stock in the 25 consecutive trading days preceding the notice of conversion and the balance due shall be multiplied by 130% (the “Default Provision”). On June 22, 2020, PubCo issued a convertible promissory note for $178,000 to Power Up Lending (“Power Note”), due June 22, 2021 (the “Maturity Date”). The Power Note provides for interest charge of 8% per annum and is due upon payback of the Power Note. The Power Note can be converted with the conversion price of 65% of the 5 days lowest traded price for the Company’s common stock in the 10 consecutive trading days preceding the notice of conversion. Derivative financial instruments, as defined in ASC 815, “Accounting for Derivative Financial Instruments and Hedging Activities”, consist of financial instruments or other contracts that contain a notional amount and one or more underlying (e.g. interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or, in rare instances, assets. The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option and warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. As a result of entering into warrant agreements, for which such instruments contained a variable conversion feature with no floor, the Company has adopted a sequencing policy in accordance with ASC 815-40-35-12 whereby all future instruments may be classified as a derivative liability with the exception of instruments related to share-based compensation issued to employees or directors. Based on ASC 815, the Company determined that the convertible debt contained embedded derivatives and valued the derivative using the Black-Scholes method. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates (such as volatility, estimated life and interest rates) that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of our common stock, which has a high-historical volatility. Since derivative financial instruments are initially and subsequently carried at fair values, the Company’s operating results will reflect the volatility in these estimate and assumption changes. The Company performs valuation of derivative instruments at the end of each reporting period. The fair value of derivative instruments is recorded and shown separately under current liabilities as these instruments can be converted anytime. Changes in fair value are recorded in the consolidated statement of income under other income (expenses).

INCOME TAXES

INCOME TAXES9 Months Ended
Sep. 30, 2020
Income Tax Disclosure [Abstract]
Income Tax Disclosure [Text Block]10.
INCOME TAXES The Company did not have income tax provision (benefit) due to net loss and deferred tax assets having a full valuation allowances as of and for the three and nine months ended September 30, 2020 and 2019. The provision for income taxes differs from the amounts computed by applying the federal statutory tax rate of 21% to earnings before income taxes, as follows:
Three and Nine Months Ended September 30,
2020
2019
Book income at statutory rate 21.00 % 21.00 %
Others 0 % -0.80 %
Change in Valuation Allowance -21.00 % -20.14 %
Effective income tax rate 0 % 0.06 % Deferred tax assets and liabilities consist of the following tax-effected temporary differences:
September 30, 2020
December 31, 2019
Deferred tax assets (liabilities):
Charitable contributions $ - $ -
Unearned revenue - -
Depreciation - -
Net operating loss carryforward 777,000 498,888
Total deferred tax assets, net 777,000 498,888
Valuation allowance (777,000 ) (498,888 )
Net deferred tax assets (liabilities) $ - $ - The Company uses the liability method of accounting for income taxes as set forth in ASC 740. Under the liability method, deferred taxes are determined based on differences between the financial statement and tax bases of assets and liabilities using enacted tax rates. As of September 30, 2020, the Company had federal and California net operating loss carryforwards of approximately $3.7 million. The federal and California net operating loss carryforwards will expire at various dates from 2026 through 2028; however, $3.7 million of the Federal operating loss does not expire and will be carried forward indefinitely. As of September 30, 2020 and December 31, 2019, the Company maintained full valuation allowance for net operating loss carryforward deferred tax asset. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The amount of the deferred tax asset considered realizable, however, could be reduced if estimates of future taxable income are reduced. The Company files a consolidated federal income tax return and files tax returns in various state and local jurisdictions. The statutes of limitations for its consolidated federal income tax returns are open for years 2016 and after, and state and local income tax returns are open for years 2015 and after.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS9 Months Ended
Sep. 30, 2020
Related Party Transactions [Abstract]
Related Party Transactions Disclosure [Text Block]12.
RELATED PARTY TRANSACTIONS The Company had the following related party transactions:

Related Party Employees and Employee Entity: Dan Nusinovich Liron Nusinovich Pop N Pay, LLC

Related Party Entities: IPX Referral Payments, LLC – America 2030 Capital Limited and Bentley Rothschild Capital Limited

Kenneth Haller and the Haller Companies Kenneth Haller (“Haller”) became the Company’s Senior Vice President of Payment Systems in November 2018. The Company began working indirectly with Haller earlier in 2018, both individually and through our relationship with MTrac Tech Corporation (“MTrac”), which in turn has business relationships with Haller. Haller brings considerable advantages to the Company’s platform development and business development efforts and capabilities, including transactional business relations and a large network of agents, which the Company believes, are capable of processing $1 billion transactions annually (the “Haller Network”). The Haller Network is an amalgamation of the collective networks of Haller and three companies owned or majority-owned by Haller, which are Sky Financial & Intelligence, LLC (“Sky”), Charge Savvy, LLC, Cultivate, LLC (collectively, the “Haller Companies”), each of which has formalized business relationships with the Company, as well as with some of the Company’s partners, which the Company believes allows the Company to maximize and diversity the Company’s market penetration capabilities. Haller, through Sky, owns controlling interests in Charge Savvy, LLC and Cultivate, LLC, with whom we do business indirectly, through their respective business relationship with MTrac. We also do business directly with Cultivate LLC, through a three-party agreement, which includes us, MTrac and Cultivate. The following are certain transactions between the Company and the Haller Companies:
o
MTrac Agreement
o
Sky Financial & Intelligence, LLC
§
Charge Savvy, LLC
§
Cultivate, LLC
o
Haller Commissions
o
GreenBox, Cultivate and MTrac Agreement
o
Sky Mid
o
Verbal Agreement The Company did not pay any commissions to Charge Savvy or Cultivate for the three and nine months ended September 30, 2020 and 2019.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES9 Months Ended
Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies Disclosure [Text Block]13.
COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company has the following legal proceedings:

MTrac, Global Payout, Inc. and Cultivate Technologies, LLC

America 2030 Capital Limited and Bentley Rothschild Capital Limited

RB Capital Partners, Inc.

Dahan Operating Leases The Company entered into the following operating facility lases:

Hyundai Rio Vista – On October 4, 2018, the Company entered into an operating facility lease for its corporate office located in San Diego with 38 months term and with option to renew. The lease started on October 4, 2018 and expires on October 3, 2021 For operating leases, we calculated right of use assets and lease liabilities based on the present value of the remaining lease payments as of the date of adoption using the incremental borrowing rate. The adoption of ASC 842 resulted in recording an adjustment to operating lease right of use asset and operating lease liabilities of $146,984 and $150,424 respectively, as of September 30, 2020. The difference between the operating lease ROU asset and operating lease liabilities at transition represented existing deferred rent expenses and tenant improvements, and indirect costs that was derecognized. The adoption of ASC 842 did not materially impact our results of operations, cash flows, or presentation thereof. In accordance with ASC 842, the components of lease expense were as follows:
Three months ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
Amortization of right-of-use assets, net of liability amortization $ 115 $ 1,073 $ 344 $ (3,219 )
Operating lease expense 32,904 31,945 98,711 102,273
Total lease expense $ 33,018 $ 33,018 $ 99,054 $ 99,054

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS9 Months Ended
Sep. 30, 2020
Subsequent Events [Abstract]
Subsequent Events [Text Block]14.
SUBSEQUENT EVENTS The Company follows the guidance in FASB ASC Topic 855, Subsequent Events (“ASC 855”), which provides guidance to establish general standards of accounting for and disclosures of events that occur after the balance sheet date but before the consolidated financial statements are issued or are available to be issued. ASC 855 sets forth (i) the period after the balance sheet date during which management of a reporting entity evaluates events or transactions that may occur for potential recognition or disclosure in the consolidated financial statements, (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its consolidated financial statements, and (iii) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. Accordingly, the Company did not have any subsequent events that require disclosure other than the following: October 27, 2020 (Convertible Debentures) These Convertible Debentures were used to pay-off the following loans outstanding:

Itria Venture - $123,428 (includes interest)

Power Up Lending - $228,059 (includes interest)

West Coast Business Capital -$285,862 (includes interest) The Debentures include a 10% original issuance discount, carry an interest rate of 10% per annum and mature on July 27, 2021 (the “Maturity Date”). The Debentures contain a voluntary conversion mechanism whereby the holders may convert, in whole or in part, the outstanding balance of the Debentures into shares of the Common Stock at a conversion price of $0.33 per share, subject to adjustment as provided therein. Additionally, the Debentures contain a mandatory conversion mechanism whereby any principal and accrued interest on the Debentures converts into shares of the Company’s Common Stock on the date in which the Company’s Common Stock is listed for trading on a senior national exchange. The mandatory conversion mechanism shall take effect only if (i) the shares of Common Stock underlying the Debentures are registered on an effective registration statement, (ii) the average closing bid price of the Common Stock over the preceding 5 Trading Days is above $0.80 per share and (iii) the average trading volume of Common Stock over the preceding 5 Trading Days is at least $200,000. The mandatory conversion mechanism contains a conversion price of $0.33 per share, subject to adjustment as provided therein. The Debentures contain customary events of default (each an “Event of Default”). If an Event of Default occurs, interest under the Debentures will accrue at a rate of eighteen percent (18%) per annum and the outstanding principal amount of the Debentures, plus accrued but unpaid interest, liquidated damages and other amounts owing with respect to the Debentures will become, at the Debenture holder’s election, immediately due and payable in cash. Pursuant to the Purchase Agreements, each investor received a Warrant in an amount equal to 100% of the shares of Common Stock initially issuable to each Investor pursuant to such Investor’s Debenture. The Warrants contain an exercise price of $0.33 per share, subject to adjustment as provided therein. In connection with the closing of the Offering, Warrants were issued to purchase an aggregate of 11,666,666 shares of Common Stock.

Accounting Policies, by Policy

Accounting Policies, by Policy (Policies)9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]
Receivable [Policy Text Block]Cash Due from Gateways and Payment Processing Liabilities The Company’s primary source of revenues continues to be payment processing services for its merchant clients. When such merchant makes a sale, the process of receiving the payment card information, engaging the banks for transferring the proceeds to the merchant’s account via digital gateways, and recording the transaction on a blockchain ledger are the activities for which the Company gets to collect fees. In 2019 the Company utilized several gateways. The gateways have strict guidelines pertaining to scheduling of the release of funds to merchants based on several criteria, such as return and chargeback history, associated risk for the specific business vertical, average transaction amount and so on. In order to mitigate processing risks, these policies determine reserve requirements and payment in arear strategy. While reserve and payment in arear restrictions are in effect for a merchant payout, the Company records gateway debt against these amounts until released. Therefore, the total gateway balances reflected in the Company’s books represent the amount owed to the Company for processing – these are funds from transactions processed and not yet distributed.
Advertising Cost [Policy Text Block]Advertising and Marketing Costs Advertising and marketing costs are recorded as general and administrative expenses when they are incurred. Advertising and marketing expenses were $59,099 and $10,319 for the three months ended September 30, 2020 and 2019, respectively, and $86,368 and $35,928 for the nine months ended September 30, 2020 and 2019, respectively.
Research and Development Expense, Policy [Policy Text Block]Research and Development Costs Research and development costs, which are expensed as incurred, are primarily comprised of costs and expenses for salaries and benefits for research and development personnel, outsourced contract services, and supplies and materials costs. Research and development expenses were $243,923 and $381,112 for the three months ended September 30, 2020 and 2019, respectively, and $798,157 and $1,085,298 for the nine months ended September 30, 2020 and 2019, respectively.
Revenue [Policy Text Block]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. 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.

Payment processing revenue is based on a percentage of each transaction’s value and/or upon fixed amounts specified per each transaction or service and is recognized as such transactions or services are performed.

Licensing revenue is paid in advance and is recorded as unearned income, which is amortized monthly over the period of the licensing agreement.

Equipment revenue is generated from the sale of POS products, which is recognized when goods are shipped.
Accounts Receivable [Policy Text Block]Accounts Receivables from Fines and Fees from Merchants The fines and penalties charged to the Company’s merchants is a normal course of business and historically, the Company has had more than 90% collections success rate. These fees and penalties represent certain chargebacks which are at fault by the Company’s merchants and are imposed as the merchant agreement between the Company and the merchant. The Company has legal rights under the merchant agreement to claim the chargeback. These chargebacks, fees, and fines are earned and delivered because the Company has been “chargebacked” by the Gateways and the Company has legal rights under the agreement to claim this against the merchants. At the end of Q3 2019, GreenBox received constructive notice of potential violations of its Terms of Service by a merchant, The Good People Farms (“TGPF”). An ongoing audit and investigation of this account resulted in the discovery of a number of violations GreenBox believes TGPF is responsible for, including but not limited to violations of VISA, Mastercard, and American Express’s rules. This investigation is ongoing, but initial results indicate that excessively high chargeback percentages are connected with fraudulent activity and / or transaction laundering. These issues lead to the implementation of aggressive bank reserves, stunting GreenBox’s ability to conduct business and contributed to undetermined consequential damages. GreenBox promptly terminated the merchant account and placed all processed funds on reserve. Although the investigation is ongoing, GreenBox estimates that the total amount of fees, fines, and chargebacks are currently $9,441,718. The Company has provided for an allowance for bad debt of $6,665,031 on the gross balance of $9,441,718 bringing to net balance of $2,776,687 which is included as accounts receivables from fines and penalties from merchants. To date, GreenBox has successfully recouped $840,739.33 (collected in 2019). The Company may assess $100,000 per fraudulent transactions but the Company used $5,000 per transaction to calculate the fees and fines. The Company recorded net balance of $2,776,687 as other income in the statements of operations for the year ended December 31, 2019.
Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block]Accounts Receivable and Allowance for Bad Debt The Company maintains an allowance for doubtful accounts for estimated losses from the inability of customers to make required payments. The allowance for doubtful accounts is evaluated periodically based on the aging of accounts receivable, the financial condition of customers and their payment history, historical write-off experience and other assumptions, such as current assessment of economic conditions.
Property, Plant and Equipment, Policy [Policy Text Block]Property and Equipment Property and equipment are stated at cost. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the assets, which range from three to eight years. Leasehold improvements are amortized over the shorter of the useful life of the related assets or the lease term. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in income for the period.
Fair Value Measurement, Policy [Policy Text Block]Fair Value of Financial Instruments The Company utilizes ASC 820-10, Fair Value Measurement and Disclosure, for valuing financial assets and liabilities measured on a recurring basis. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1. Observable inputs such as quoted prices in active markets; Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The Company’s financial instruments consisted of cash, accounts payable and accrued liabilities, advances to due to or from affiliated companies, notes payable to officers. The estimated fair value of cash, accounts payable and accrued liabilities, due to or from affiliated companies, and notes payable approximates its carrying amount due to the short maturity of these instruments. The table below describes the Company’s valuation of financial instruments using guidance from ASC 820-10:
September 30, 2020
Level 1
Level 2
Level 3
Derivative liability $ - $ - $ 284,210
December 31, 2019
Level 1
Level 2
Level 3
Derivative liability $ - $ - $ 1,050,063
Income Tax, Policy [Policy Text Block]Income Taxes Income taxes are accounted for under the asset and liability method. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, net of operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than not that some portion or all of the deferred tax assets will be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block]Long-Lived Asset Impairments The Company reviews long-lived assets, including property and equipment and intangible assets, for impairment when events or changes in business conditions indicate that their carrying value may not be recovered, and at least annually. The Company considers assets to be impaired and writes them down to estimated fair value if expected associated undiscounted cash flows are less than the carrying amounts. Fair value is the present value of the associated cash flows.
Earnings Per Share, Policy [Policy Text Block]Earnings Per Share A basic earnings per share is computed by dividing net income to common stockholders by the weighted average number of shares outstanding for the year. Dilutive earnings per share include the effect of any potentially dilutive debt or equity under the treasury stock method, if including such instruments is dilutive. The Company’s diluted earnings/loss per share is the same as the basic earnings/loss per share for the three and nine months ended September 30, 2020 and 2019, as there are no potential shares outstanding that would have a dilutive effect.
Lessee, Leases [Policy Text Block]Leases Prior to January 1, 2019, the Company accounted for leases under Accounting Standards Codification (ASC) 840, Accounting for Leases. Effective from January 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases On February 25, 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. ASC 842 requires that lessees recognize right of use assets and lease liabilities calculated based on the present value of lease payments for all lease agreements with terms that are greater than twelve months. ASC 842 distinguishes leases as either a finance lease or an operating lease that affects how the leases are measured and presented in the statement of operations and statement of cash flows. ASC 842 supersedes nearly all existing lease accounting guidance under GAAP issued by the Financial Accounting Standards Board (“FASB”) including ASC Topic 840, Leases. For operating leases, we calculated right of use assets and lease liabilities based on the present value of the remaining lease payments as of the date of adoption using the IBR as of that date.
New Accounting Pronouncements, Policy [Policy Text Block]Recently Issued Accounting Updates In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which requires lessees to recognize on the balance sheet assets and liabilities for leases with lease terms of more than 12 months. Consistent with prior GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend primarily on its classification as a finance or operating lease. However, unlike prior GAAP—which required only finance (formerly capital) leases to be recognized on the balance sheet—the new ASU requires both types of leases to be recognized on the balance sheet. The ASU took effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This standard can be applied at the beginning of the earliest period presented using the modified retrospective approach, which includes certain practical expedients that an entity may elect to apply, including an election to use certain transition relief. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, which make improvements to Accounting Standards Codification (“ASC”) 842 and allow entities to not restate comparative periods in transition to ASC 842 and instead report the comparative periods under ASC 840. The adoption of ASC 842 resulted in recording an adjustment to operating lease right of use assets and operating lease liabilities of liabilities of $307,531 and $309,677, respectively as of March 31, 2019. The difference between the operating lease ROU assets and operating lease liabilities at transition represented tenant improvements, and indirect costs that was derecognized. The adoption of ASC 842 did not materially impact our results of operations, cash flows, or presentation thereof. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The standard removes, modifies, and adds certain disclosure requirements for fair value measurements. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. While the Company is currently in the process of evaluating the effects of this standard on the consolidated financial statements, the Company plans to adopt ASU No. 2018-13 in the first quarter of fiscal 2020, coinciding with the standard’s effective date, and expects the impact from this standard to be immaterial. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The Company’s accounting for the service element of a hosting arrangement that is a service contract is not affected by the proposed amendments and will continue to be expensed as incurred in accordance with existing guidance. This standard does not expand on existing disclosure requirements except to require a description of the nature of hosting arrangements that are service contracts. This standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted, including adoption in any interim period for which financial statements have not been issued. Entities can choose to adopt the new guidance prospectively or retrospectively. The Company plans to adopt the updated disclosure requirements of ASU No. 2018-15 prospectively in the first quarter of fiscal 2020, coinciding with the standard’s effective date, and expects the impact from this standard to be immaterial. Other recently issued accounting updates are not expected to have a material impact on the Company’s Interim Financial Statements.

DESCRIPTION OF BUSINESS AND B_2

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Tables)9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]
Schedule of Cash and Cash Equivalents [Table Text Block]The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows.
September 30, 2020
December 31, 2019
Cash and cash equivalents $ - $ -
Restricted cash 124,834 763,110
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 124,834 $ 763,110

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]
Schedule of Derivative Liabilities at Fair Value [Table Text Block]The table below describes the Company’s valuation of financial instruments using guidance from ASC 820-10:
September 30, 2020
Level 1
Level 2
Level 3
Derivative liability $ - $ - $ 284,210
December 31, 2019
Level 1
Level 2
Level 3
Derivative liability $ - $ - $ 1,050,063

SETTLEMENT PROCESSING (Tables)

SETTLEMENT PROCESSING (Tables)9 Months Ended
Sep. 30, 2020
Settlement Processing [Abstract]
Schedule of Settlement Processing [Table Text Block]The table below shows the status of transaction settlements:
September 30, 2020
December 31, 2019
Settlement Processing Assets:
Cash held for settlements $ 124,834 $ 763,110
Cash due from gateways 2,377,909 3,073,183
Amount due from gateways and merchants – hold and fees 6,818,892 4,831,938
Reserves (2) 3,302,447 5,353,661
Total before allowance for uncollectable 12,624,082 14,021,892
Allowance for uncollectable – hold and fees (6,818,892 ) (4,831,938 )
Cash held for settlement (124,834 ) (763,110 )
Total – settlement processing assets $ 5,680,356 $ 8,426,844
Settlement Processing Liabilities:
Settlement liabilities to merchants 12,624,082 14,021,892
Totals $ 12,624,082 $ 14,021,892

CASH DUE FROM GATEWAYS (Tables)

CASH DUE FROM GATEWAYS (Tables)9 Months Ended
Sep. 30, 2020
Disclosure Text Block Supplement [Abstract]
Schedule of Other Current Assets [Table Text Block]Cash due from gateways consisted of the following:
September 30, 2020
December 31, 2019
Cash due from Gateways $ 2,377,909 $ 3,073,183
Amount due from gateways and merchants – hold and fees 6,818,892 4,824,223
Reserves (2) 3,302,447 5,353,661
Total cash due from gateways 12,499,248 13,251,067
Chargeback Allowances (1) - -
Allowance of uncollectable – hold and fees (6,818,892 ) (4,824,223 )
Total cash due from gateways, net $ 5,680,356 $ 8,426,844 (1) During 2018, the Company absorbed all chargeback costs as a cost of services provided – essentially a sales promotion tool to onboard customers in 2018. The Chargeback Allowance shown in the table above reflects our estimate of potential chargebacks that are likely to be realized in 2019, which are connected to sales transactions that occurred in 2018. The allowance decreases the amount that GreenBox is owed from the Gateways we use in our proprietary ecosystem. In 2019, the actual dollar amount of chargebacks will be reconciled with our allowance. (2) Reserves are essentially an escrow fund that protects a gateway/card issuer from financial losses. In the Reserve, funds are held until chargeback time limits expire.

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)9 Months Ended
Sep. 30, 2020
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment [Table Text Block]Property and equipment consisted of the following:
September 30, 2020
December 31, 2019
Computers $ 48,289 $ 38,938
Furniture 40,320 37,339
Kiosks 6,472 12,750
Vehicles 4,578 4,578
Total property and equipment 99,659 93,605
Less: Accumulated depreciation (37,104 ) (27,114 )
Total property and equipment, net $ 62,555 $ 66,491

PAYMENT PROCESSING LIABILITIE_2

PAYMENT PROCESSING LIABILITIES, NET (Tables)9 Months Ended
Sep. 30, 2020
Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract]
Other Current Liabilities [Table Text Block]Payment processing liabilities consisted of the following:
September 30, 2020
December 31, 2019
Settlement liabilities to merchants $ 12,624,082 $ 14,021,892
Settlement liabilities to ISOs - -
Total processing liabilities 12,624,082 14,021,892
Refund allowances - -
Total payment processing liabilities $ 12,624,082 $ 14,021,892

CONVERTIBLE NOTES PAYABLE (Tabl

CONVERTIBLE NOTES PAYABLE (Tables)9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]
Convertible Debt [Table Text Block]Convertible notes payable consisted of the following:
September 30, 2020
December 31, 2019
March 11, 2019 ($500,000) $ - $ 500,000
November 26, 2018 ($200,000) - 200,000
March 15, 2018 ($300,00) - 107,500
June 22, 2020 ($178,000) 178,000 -
Total convertible notes payable 178,000 807,500
Debt discount (133,500 ) -
Total convertible notes payable $ 44,500 $ 807,500

SHORT-TERM NOTES PAYABLE (Table

SHORT-TERM NOTES PAYABLE (Tables)9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]
Schedule of Short-term Debt [Table Text Block]Short-term notes payable consisted of the following:
September 30, 2020
December 31, 2019
December 10, 2019 ($260,000) $ - $ 213,671
December 9, 2019 ($200,000) - 160,000
November 12, 2019 ($400,000) - 400,000
June 3, 2020 ($300,000) – 94,286 -
June 9, 2020 ($150,000) 149,900 -
April 29, 2020 ($272,713) – 272,713 -
July 10, 2020 ($400,000) 253,333 -
Total short-term notes payable $ 770,232 773,671
Debt discount (39,000 ) (32,418 )
Total short-term notes payable, net of debt discount $ 731,232 $ 741,253

DERIVATIVE LIABILITY (Tables)

DERIVATIVE LIABILITY (Tables)9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]
Schedule of Derivative Instruments [Table Text Block]Derivative liability consisted of the following:
September 30, 2020
December 31, 2019
Beneficial conversion feature – convertible debt $ 284,210 $ 1,050,063
Total derivative liability $ 284,210 $ 1,050,063

INCOME TAXES (Tables)

INCOME TAXES (Tables)9 Months Ended
Sep. 30, 2020
Income Tax Disclosure [Abstract]
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]The provision for income taxes differs from the amounts computed by applying the federal statutory tax rate of 21% to earnings before income taxes, as follows:
Three and Nine Months Ended September 30,
2020
2019
Book income at statutory rate 21.00 % 21.00 %
Others 0 % -0.80 %
Change in Valuation Allowance -21.00 % -20.14 %
Effective income tax rate 0 % 0.06 %
Schedule of Deferred Tax Assets and Liabilities [Table Text Block]Deferred tax assets and liabilities consist of the following tax-effected temporary differences:
September 30, 2020
December 31, 2019
Deferred tax assets (liabilities):
Charitable contributions $ - $ -
Unearned revenue - -
Depreciation - -
Net operating loss carryforward 777,000 498,888
Total deferred tax assets, net 777,000 498,888
Valuation allowance (777,000 ) (498,888 )
Net deferred tax assets (liabilities) $ - $ -

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)9 Months Ended
Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Lease, Cost [Table Text Block]In accordance with ASC 842, the components of lease expense were as follows:
Three months ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
Amortization of right-of-use assets, net of liability amortization $ 115 $ 1,073 $ 344 $ (3,219 )
Operating lease expense 32,904 31,945 98,711 102,273
Total lease expense $ 33,018 $ 33,018 $ 99,054 $ 99,054

DESCRIPTION OF BUSINESS AND B_3

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) - USD ($)3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019Dec. 31, 2019
Accounting Policies [Abstract]
Net Income (Loss) Attributable to Parent $ (489,810) $ 1,259,728 $ (789,348) $ (1,383,815)
Retained Earnings (Accumulated Deficit)(7,506,517)(7,506,517) $ (6,717,169)
Cash and Cash Equivalents, at Carrying Value $ 0 $ 0 $ 0

DESCRIPTION OF BUSINESS AND B_4

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) - Schedule of Cash and Cash Equivalents - USD ($)Sep. 30, 2020Dec. 31, 2019Sep. 30, 2019Dec. 31, 2018
Schedule of Cash and Cash Equivalents [Abstract]
Cash and cash equivalents $ 0 $ 0
Restricted cash124,834 763,110
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 124,834 $ 763,110 $ 254,616 $ 284,978

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)3 Months Ended9 Months Ended12 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019Dec. 31, 2019Mar. 31, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Marketing and Advertising Expense $ 59,099 $ 10,319 $ 86,368 $ 35,928
Research and Development Expense243,923 $ 381,112 798,157 $ 1,085,298
Accounts Receivable, before Allowance for Credit Loss9,441,718 9,441,718
Accounts Receivable, Allowance for Credit Loss6,665,031 6,665,031 $ 6,665,031
Accounts and Other Receivables, Net, Current2,776,687 $ 2,776,687
Proceeds, Accounts Receivable, Previously Written Off, Recovery840,739.33
Receivable, Description of Fees and FinesThe Company may assess $100,000 per fraudulent transactions but the Company used $5,000 per transaction to calculate the fees and fines
Operating Lease, Right-of-Use Asset146,984 $ 146,984 $ 229,639 $ 307,531
Operating Lease, Liability $ 150,424 $ 150,424 $ 309,677
Minimum [Member]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Property, Plant and Equipment, Useful Life3 years
Maximum [Member]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Property, Plant and Equipment, Useful Life8 years

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Derivative Liabilities at Fair Value - USD ($)Sep. 30, 2020Dec. 31, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Derivative Liabilities at Fair Value [Line Items]
Derivative liability $ 284,210 $ 1,050,063
Fair Value, Inputs, Level 1 [Member]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Derivative Liabilities at Fair Value [Line Items]
Derivative liability0 0
Fair Value, Inputs, Level 2 [Member]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Derivative Liabilities at Fair Value [Line Items]
Derivative liability $ 0 $ 0

SETTLEMENT PROCESSING (Details)

SETTLEMENT PROCESSING (Details) - Schedule of Settlement Processing - USD ($)Sep. 30, 2020Dec. 31, 2019
Settlement Processing Assets:
Cash held for settlements $ 124,834 $ 763,110
Cash due from gateways2,377,909 3,073,183
Amount due from gateways and merchants – hold and fees6,818,892 4,831,938
Reserves[1]3,302,447 5,353,661
Total before allowance for uncollectable12,624,082 14,021,892
Allowance for uncollectable – hold and fees(6,818,892)(4,831,938)
Cash held for settlement(124,834)(763,110)
Total – settlement processing assets5,680,356 8,426,844
Settlement Processing Liabilities:
Settlement liabilities12,624,082 14,021,892
Totals12,624,082 14,021,892
Settlement liabilities to merchants [Member]
Settlement Processing Liabilities:
Settlement liabilities $ 12,624,082 $ 14,021,892
[1]Reserves are essentially an escrow fund that protects a gateway/card issuer from financial losses. In the Reserve, funds are held until chargeback time limits expire.

CASH DUE FROM GATEWAYS (Details

CASH DUE FROM GATEWAYS (Details) - Schedule of Other Current Assets - USD ($)Sep. 30, 2020Dec. 31, 2019
Schedule of Other Current Assets [Abstract]
Cash due from Gateways $ 2,377,909 $ 3,073,183
Amount due from gateways and merchants – hold and fees6,818,892 4,831,938
Reserves[1]3,302,447 5,353,661
Total cash due from gateways12,499,248 13,251,067
Chargeback Allowances[2]0 0
Allowance of uncollectable – hold and fees(6,818,892)(4,824,223)
Total cash due from gateways, net $ 5,680,356 $ 8,426,844
[1]Reserves are essentially an escrow fund that protects a gateway/card issuer from financial losses. In the Reserve, funds are held until chargeback time limits expire.
[2]During 2018, the Company absorbed all chargeback costs as a cost of services provided – essentially a sales promotion tool to onboard customers in 2018. The Chargeback Allowance shown in the table above reflects our estimate of potential chargebacks that are likely to be realized in 2019, which are connected to sales transactions that occurred in 2018. The allowance decreases the amount that GreenBox is owed from the Gateways we use in our proprietary ecosystem. In 2019, the actual dollar amount of chargebacks will be reconciled with our allowance.

PROPERTY AND EQUIPMENT (Details

PROPERTY AND EQUIPMENT (Details) - USD ($)3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019
Property, Plant and Equipment [Abstract]
Depreciation $ 5,764 $ 4,897 $ 16,856 $ 11,352

PROPERTY AND EQUIPMENT (Detai_2

PROPERTY AND EQUIPMENT (Details) - Schedule of Equipment - USD ($)Sep. 30, 2020Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, gross $ 99,659 $ 93,605
Less: Accumulated Depreciation(37,104)(27,114)
Total Fixed Assets (net)62,555 66,491
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, gross48,289 38,938
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, gross40,320 37,339
Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, gross6,472 12,750
Automobiles [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, gross $ 4,578 $ 4,578

PAYMENT PROCESSING LIABILITIE_3

PAYMENT PROCESSING LIABILITIES, NET (Details) - Other Current Liabilities - USD ($)Sep. 30, 2020Dec. 31, 2019
PAYMENT PROCESSING LIABILITIES, NET (Details) - Other Current Liabilities [Line Items]
Settlement liabilities $ 12,624,082 $ 14,021,892
Refund allowances0 0
Total payment processing liabilities12,624,082 14,021,892
Settlement liabilities to merchants [Member]
PAYMENT PROCESSING LIABILITIES, NET (Details) - Other Current Liabilities [Line Items]
Settlement liabilities12,624,082 14,021,892
Settlement liabilities to ISOs [Member]
PAYMENT PROCESSING LIABILITIES, NET (Details) - Other Current Liabilities [Line Items]
Settlement liabilities $ 0 $ 0

CONVERTIBLE NOTES PAYABLE (Deta

CONVERTIBLE NOTES PAYABLE (Details) - USD ($)Apr. 21, 2020Jan. 28, 2020Dec. 11, 2019Oct. 16, 2019Mar. 13, 2019Mar. 11, 2019Nov. 26, 2018Oct. 23, 2018Jun. 08, 2018Mar. 31, 2020Sep. 30, 2020Sep. 30, 2019Jun. 22, 2020Jan. 22, 2020Dec. 31, 2019Dec. 31, 2018Jul. 30, 2018Apr. 12, 2018Mar. 15, 2018
CONVERTIBLE NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount $ 5,700,000
Debt Instrument, Interest Rate, Stated Percentage5.85%
Debt Instrument, Unamortized Discount $ 39,000 $ 32,418
Proceeds from Convertible Debt178,000 $ 482,500
Stock Issued During Period, Shares, Other (in Shares)5,128,205
Repayments of Notes Payable1,147,919 $ 0
Convertible Debt [Member]
CONVERTIBLE NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount $ 300,000
Debt Instrument, Interest Rate, Stated Percentage12.00%
Convertible Debt $ 107,500
Debt Conversion, Original Debt, Amount $ 7,500 $ 185,000
Debt Conversion, Converted Instrument, Shares Issued (in Shares)7,500,000 440,476 6,000,000
Debt Instrument, Convertible, Conversion Price (in Dollars per share) $ 0.001
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Long-term Debt $ 185,000
Interest Payable $ 15,880
Repayments of Notes Payable $ 126,092 $ 50,000
Vista $500K Note [Member]
CONVERTIBLE NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount $ 500,000
Debt Instrument, Maturity DateFeb. 29,
2020
Jan. 15,
2020
Nov. 6,
2019
Oct. 6,
2019
Debt Instrument, Interest Rate, Stated Percentage8.00%
Debt Instrument, Unamortized Discount $ 125,000
Proceeds from Convertible Debt $ 375,000
Stock Issued During Period, Shares, Other (in Shares)25
Warrants and Rights Outstanding, Term4 years
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)125,000
Debt Instrument, Convertible, Terms of Conversion Featurethe conversion price shall become equal to a 65% of the lowest traded price for the Company’s common stock in the 25 consecutive trading days preceding the notice of conversion and the balance due shall be multiplied by 130% (the “Default Provision”)
Convertible Debt $ 482,856 $ 487,858 $ 464,625 $ 634,213
Debt Instrument, Periodic Payment20,000 $ 10,000
Debt Instrument, Periodic Payment, Principal $ 5,000
Debt Conversion, Original Debt, Amount $ 100,000
Debt Conversion, Converted Instrument, Shares Issued (in Shares)5,128,205
Vista $500K Note [Member] | Payment Due on June 19, 2020 [Member]
CONVERTIBLE NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Periodic Payment $ 225,000
Vista $500K Note [Member] | Payment Due July 19, 2020 [Member]
CONVERTIBLE NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Periodic Payment $ 225,000
RB Cap $200K Note [Member]
CONVERTIBLE NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount $ 200,000
Debt Instrument, Interest Rate, Stated Percentage12.00%
Debt Instrument, Convertible, Terms of Conversion FeatureRB Cap may elect to convert the note at any time from six months from the date of issuance at a fixed price per share of $4.50.
Debt Conversion, Converted Instrument, Shares Issued (in Shares)6,000,000
Convertible Debt [Member]
CONVERTIBLE NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount $ 500,000 $ 178,000
Debt Instrument, Maturity DateOct. 6,
2019
Debt Instrument, Interest Rate, Stated Percentage8.00%8.00%
Debt Instrument, Unamortized Discount $ 125,000
Proceeds from Convertible Debt $ 375,000
Stock Issued During Period, Shares, Other (in Shares)25
Warrants and Rights Outstanding, Term4 years
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)125,000
Debt Instrument, Convertible, Terms of Conversion Featurethe conversion price shall become equal to a 65% of the lowest traded price for the Company’s common stock in the 25 consecutive trading days preceding the notice of conversion and the balance due shall be multiplied by 130% (the “Default Provision”)
Convertible Debt $ 178,000 $ 807,500
Debt Instrument, Convertible, Conversion Price (in Dollars per share) $ 0.01

CONVERTIBLE NOTES PAYABLE (De_2

CONVERTIBLE NOTES PAYABLE (Details) - Convertible Debt - Convertible Debt [Member] - USD ($)Sep. 30, 2020Dec. 31, 2019
CONVERTIBLE NOTES PAYABLE (Details) - Convertible Debt [Line Items]
Convertible notes payable $ 178,000 $ 807,500
Debt discount(133,500)0
Total convertible notes payable44,500 807,500
Debt Date March 11, 2019 [Member]
CONVERTIBLE NOTES PAYABLE (Details) - Convertible Debt [Line Items]
Convertible notes payable0 500,000
Debt Date November 26, 2018 [Member]
CONVERTIBLE NOTES PAYABLE (Details) - Convertible Debt [Line Items]
Convertible notes payable0 200,000
Debt Date March 15, 2018 [Member]
CONVERTIBLE NOTES PAYABLE (Details) - Convertible Debt [Line Items]
Convertible notes payable0 107,500
Debt Date June 22, 2020 [Member]
CONVERTIBLE NOTES PAYABLE (Details) - Convertible Debt [Line Items]
Convertible notes payable $ 178,000

CONVERTIBLE NOTES PAYABLE (De_3

CONVERTIBLE NOTES PAYABLE (Details) - Convertible Debt (Parentheticals) - Convertible Debt [Member] - USD ($)9 Months Ended12 Months Ended
Sep. 30, 2020Dec. 31, 2019
Debt Date March 11, 2019 [Member]
CONVERTIBLE NOTES PAYABLE (Details) - Convertible Debt (Parentheticals) [Line Items]
DueOct. 6,
2019
Oct. 6,
2019
Interest8.00%8.00%
Principal $ 500,000 $ 500,000
DateMar. 11,
2019
Mar. 11,
2019
Debt Date November 26, 2018 [Member]
CONVERTIBLE NOTES PAYABLE (Details) - Convertible Debt (Parentheticals) [Line Items]
DueNov. 26,
2019
Nov. 26,
2019
Interest12.00%12.00%
Principal $ 200,000 $ 200,000
DateNov. 26,
2018
Nov. 26,
2018
Debt Date March 15, 2018 [Member]
CONVERTIBLE NOTES PAYABLE (Details) - Convertible Debt (Parentheticals) [Line Items]
DueMar. 15,
2019
Mar. 15,
2019
Interest12.00%12.00%
Principal $ 300,000 $ 300,000
DateMar. 15,
2018
Mar. 15,
2018
Debt Date June 22, 2020 [Member]
CONVERTIBLE NOTES PAYABLE (Details) - Convertible Debt (Parentheticals) [Line Items]
DueJun. 22,
2021
Interest8.00%
Principal $ 178,000
DateJun. 22,
2020

SHORT-TERM NOTES PAYABLE (Detai

SHORT-TERM NOTES PAYABLE (Details) - USD ($)Jul. 10, 2020Jun. 09, 2020Jun. 03, 2020Dec. 09, 2019Dec. 05, 2019Nov. 12, 2019Sep. 30, 2020Apr. 29, 2020
Fox Capital Group Secured Merchant Agreement [Member]
SHORT-TERM NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Frequency of Periodic Paymentdailydaily
Debt Instrument, Periodic Payment $ 4,073 $ 4,073
Notes Payable260,000
Debt Instrument, Fee Amount26,000
Proceeds from Short-term Debt234,000
Debt Instrument, Increase, Accrued Interest $ 106,000 $ 106,000
Debt Instrument, Term4 months
Complete Business Solutions Sale of Future Receivables [Member]
SHORT-TERM NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Frequency of Periodic Paymentweeklyweekly
Debt Instrument, Periodic Payment $ 16,000 $ 16,000
Notes Payable200,000
Debt Instrument, Fee Amount35
Proceeds from Short-term Debt199,965
Debt Instrument, Increase, Accrued Interest $ 40,000 $ 40,000
Debt Instrument, Term4 months
West Coast Purchase Agreement [Member]
SHORT-TERM NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Frequency of Periodic Paymentdailydaily
Debt Instrument, Periodic Payment $ 5,960 $ 5,960
Notes Payable400,000
Debt Instrument, Fee Amount16,000
Proceeds from Short-term Debt384,000
Debt Instrument, Increase, Accrued Interest $ 196,000 $ 196,000
Debt Instrument, Term4 months
Itria Ventures [Member]
SHORT-TERM NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Frequency of Periodic Paymentweekly
Debt Instrument, Periodic Payment $ 13,714 $ 13,714
Debt Instrument, Fee Amount $ 300,000
Debt Instrument, Interest Rate, Stated Percentage4.09%
SBA CARES Act Loan [Member]
SHORT-TERM NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Frequency of Periodic Paymentmonthly
Debt Instrument, Periodic Payment $ 731 $ 731
Debt Instrument, Fee Amount $ 150,000
Debt Instrument, Interest Rate, Stated Percentage3.75%3.75%
Preferred Bank [Member]
SHORT-TERM NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Fee Amount $ 272,713
Debt Instrument, Interest Rate, Stated Percentage1.00%1.00%
Future Incoming Cash Flow from GreenBox Business [Member] | Fox Capital Group Secured Merchant Agreement [Member]
SHORT-TERM NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Collateral Amount $ 366,000
Future Incoming Cash Flow from GreenBox Business [Member] | Complete Business Solutions Sale of Future Receivables [Member]
SHORT-TERM NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Collateral Amount $ 240,000
Future Incoming Cash Flow from GreenBox Business [Member] | West Coast Purchase Agreement [Member]
SHORT-TERM NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Collateral Amount $ 536,000 $ 596,000
Debt Instrument, Frequency of Periodic Paymentweekly
Debt Instrument, Periodic Payment $ 17,867
Proceeds from Short-term Debt $ 400,000
Debt Instrument, Term210 days
Debt Instrument, Interest Rate, Stated Percentage25.00%

SHORT-TERM NOTES PAYABLE (Det_2

SHORT-TERM NOTES PAYABLE (Details) - Schedule of Short-term Debt - USD ($)Sep. 30, 2020Dec. 31, 2019
Short-term Debt [Line Items]
Short-Term Notes Payable $ 770,232 $ 773,671
Debt discount(39,000)(32,418)
Total short-term notes payable, net of debt discount731,232 741,253
Fox Capital Group Secured Merchant Agreement [Member]
Short-term Debt [Line Items]
Short-Term Notes Payable0 213,671
Complete Business Solutions Sale of Future Receivables [Member]
Short-term Debt [Line Items]
Short-Term Notes Payable0 160,000
West Coast Purchase Agreement [Member]
Short-term Debt [Line Items]
Short-Term Notes Payable0 400,000
Itria Ventures [Member]
Short-term Debt [Line Items]
Short-Term Notes Payable94,286 0
SBA CARES Act Loan [Member]
Short-term Debt [Line Items]
Short-Term Notes Payable149,900 0
Preferred Bank [Member]
Short-term Debt [Line Items]
Short-Term Notes Payable272,713 0
West Coast Purchase Agreement #2 [Member]
Short-term Debt [Line Items]
Short-Term Notes Payable $ 253,333 $ 0

SHORT-TERM NOTES PAYABLE (Det_3

SHORT-TERM NOTES PAYABLE (Details) - Schedule of Short-term Debt (Parentheticals) - USD ($)Jun. 09, 2020Jun. 03, 2020Dec. 09, 2019Dec. 05, 2019Nov. 12, 2019Sep. 30, 2020Apr. 29, 2020
Fox Capital Group Secured Merchant Agreement [Member]
Short-term Debt [Line Items]
Installments $ 4,073 $ 4,073
Installmentsdailydaily
Total $ 260,000
Interest Charge $ 106,000 106,000
Totaling366,000
Complete Business Solutions Sale of Future Receivables [Member]
Short-term Debt [Line Items]
Installments $ 16,000 $ 16,000
Installmentsweeklyweekly
Total $ 200,000
Interest Charge $ 40,000 40,000
Totaling240,000
West Coast Purchase Agreement [Member]
Short-term Debt [Line Items]
Installments $ 5,960 $ 5,960
Installmentsdailydaily
Total $ 400,000
Interest Charge $ 196,000 196,000
Totaling596,000
Itria Ventures [Member]
Short-term Debt [Line Items]
Installments $ 13,714 $ 13,714
Installmentsweekly
Total $ 300,000
Interest rate4.09%
SBA CARES Act Loan [Member]
Short-term Debt [Line Items]
Installments $ 731 $ 731
Installmentsmonthly
Total $ 150,000
Interest rate3.75%3.75%
Preferred Bank [Member]
Short-term Debt [Line Items]
Total $ 272,713
Interest rate1.00%1.00%
Maturity dateApr. 29,
2022
West Coast Purchase Agreement #2 [Member]
Short-term Debt [Line Items]
Installments $ 17,867
Installmentsweekly
Total $ 400,000
Interest rateimputed interest of 25%

DERIVATIVE LIABILITY (Details)

DERIVATIVE LIABILITY (Details) - Convertible Debt [Member] - USD ($)Jun. 22, 2020Mar. 11, 2019
DERIVATIVE LIABILITY (Details) [Line Items]
Debt Instrument, Face Amount $ 178,000 $ 500,000
Debt Instrument, Maturity DateOct. 6,
2019
Debt Instrument, Interest Rate, Stated Percentage8.00%8.00%
Debt Instrument, Unamortized Discount $ 125,000
Proceeds from Convertible Debt $ 375,000
Stock Issued During Period, Shares, Other (in Shares)25
Warrants and Rights Outstanding, Term4 years
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)125,000
Debt Instrument, Convertible, Terms of Conversion Featurethe conversion price shall become equal to a 65% of the lowest traded price for the Company’s common stock in the 25 consecutive trading days preceding the notice of conversion and the balance due shall be multiplied by 130% (the “Default Provision”)
Debt Conversion, DescriptionThe Power Note can be converted with the conversion price of 65% of the 5 days lowest traded price for the Company’s common stock in the 10 consecutive trading days preceding the notice of conversion.

DERIVATIVE LIABILITY (Details)

DERIVATIVE LIABILITY (Details) - Schedule of Derivative Instruments - USD ($)Sep. 30, 2020Dec. 31, 2019
Schedule of Derivative Instruments [Abstract]
Beneficial conversion feature – convertible debt $ 284,210 $ 1,050,063
Total derivative liability $ 284,210 $ 1,050,063

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Millions9 Months Ended
Sep. 30, 2020Sep. 30, 2019
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent21.00%21.00%
Deferred Tax Assets, Operating Loss Carryforwards, State and Local $ 3.7
Deferred Tax Assets, Operating Loss Carryforwards, Not Subject to Expiration $ 3.7

INCOME TAXES (Details) - Sched

INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation9 Months Ended
Sep. 30, 2020Sep. 30, 2019
Schedule of Effective Income Tax Rate Reconciliation [Abstract]
Book income at statutory rate21.00%21.00%
Others0.00%(0.80%)
Change in Valuation Allowance(21.00%)(20.14%)
Effective income tax rate0.00%0.06%

INCOME TAXES (Details) - Sch_2

INCOME TAXES (Details) - Schedule of Deferred Tax Assets and Liabilities - USD ($)Sep. 30, 2020Dec. 31, 2019
Deferred tax assets (liabilities):
Charitable Contributions $ 0 $ 0
Unearned Revenue0 0
Depreciation0 0
Net Operating Loss Carryforward777,000 498,888
Net deferred tax assets before valuation allowance777,000 498,888
Valuation Allowance(777,000)(498,888)
Net deferred tax assets (liabilities) $ 0 $ 0

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($)Jun. 18, 2019Aug. 01, 2018Jul. 30, 2018Feb. 19, 2018Nov. 30, 2018Oct. 31, 2018Aug. 31, 2018Jul. 31, 2018Jun. 30, 2018Sep. 30, 2020Sep. 30, 2020Sep. 30, 2019Dec. 31, 2019Dec. 31, 2018Aug. 20, 2018
RELATED PARTY TRANSACTIONS (Details) [Line Items]
Commission, Percentage10.00%
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture $ 162,633 $ 162,633
Equity Method Investment, Ownership Percentage100.00%
Debt Instrument, Face Amount $ 5,700,000
Debt Instrument, Interest Rate, Stated Percentage5.85%
Debt Instrument, Term10 years
Debt Instrument, Collateral1,600,000
Debt Instrument, Collateral Amount $ 2,144,000
Monthly Consulting Fee [Member]
RELATED PARTY TRANSACTIONS (Details) [Line Items]
Related Party Transaction, Amounts of Transaction $ 10,000
Development and Testing Manger [Member]
RELATED PARTY TRANSACTIONS (Details) [Line Items]
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture (in Shares)160,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture $ 16,000
Salary and Wage, NonOfficer, Excluding Cost of Good and Service Sold $ 96,000
Risk Analyst [Member]
RELATED PARTY TRANSACTIONS (Details) [Line Items]
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture (in Shares)110,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture $ 11,000
Salary and Wage, NonOfficer, Excluding Cost of Good and Service Sold $ 92,000
Affiliated Entity [Member]
RELATED PARTY TRANSACTIONS (Details) [Line Items]
Equity Method Investment, Ownership Percentage100.00%
Related Party Transaction, Amounts of Transaction55,365 $ 3,000
Affiliated Entity [Member] | Consulting Fees [Member]
RELATED PARTY TRANSACTIONS (Details) [Line Items]
Related Party Transaction, Amounts of Transaction30,000 $ 1,830
Affiliated Entity [Member] | Travel and Relocation Expense Reimbursement [Member]
RELATED PARTY TRANSACTIONS (Details) [Line Items]
Related Party Transaction, Amounts of Transaction $ 23,365
Employee [Member]
RELATED PARTY TRANSACTIONS (Details) [Line Items]
Related Party Transaction, Description of TransactionPouya Moghavem, an employee since August 1, 2018, owns 25% of IPX Referral Payments, LLC (“IPX”). In addition to the $5,000 monthly salary we pay Moghavem, the Company entered into a Referral Agreement with IPX wherein the Company agreed to compensate IPX for referrals, which subsequently become the Company’s customer. For the three months ended March 31, 2019 and 2018, IPX did not earn any commissions. Additionally, in or about October 2018, IPX provided GreenBox with a merchant trust account in Mexico through Affinitas Bank, one of the Gateways that process payment transactions on the Company’s behalf. The Company did not pay IPX for this service, however, IPX reported that Affinitas paid IPX approximately $1,830.
Officer [Member] | Haller Commissions [Member]
RELATED PARTY TRANSACTIONS (Details) [Line Items]
Related Party Transaction, Amounts of Transaction $ 321 $ 8,396 $ 210
Management [Member]
RELATED PARTY TRANSACTIONS (Details) [Line Items]
Other Commitments, DescriptionAs part of Haller’s remuneration, the Company and Haller have a verbal agreement for Haller to be issued approximately 14 to 18 million shares of the Company’s stock.
Charge Savvy [Member]
RELATED PARTY TRANSACTIONS (Details) [Line Items]
Related Party Transaction, Description of TransactionSky owns 68.4% of Charge Savvy, LLC (“Charge Savvy”), an Illinois limited liability company. Haller serves as one of three Managing Members of Charge Savvy, along with Higher Ground Capital, LLC (owns 14%), and Jeff Nickel (owns 17.4%). It is through Charge Savvy, that the Haller Network is most visible as part of our operations, as Charge Savvy is the ISO through which revenue generated from Haller Network Agents is processed, under a contract between Sky and MTrac, who in turn, has a contract with us. The three managing members of Charge Savvy own the same percentages of Cultivate (see below), as they do Charge Savvy.
Cultivate [Member]
RELATED PARTY TRANSACTIONS (Details) [Line Items]
Related Party Transaction, Description of TransactionSky owns 68.4% of Cultivate, LLC (“Cultivate”), an Illinois limited liability company, and serves as one of three Managing Members, along with Higher Ground Capital, LLC (owns 14%), and Jeff Nickel (owns 17.4%). When Cultivate was first formed, it was the licensor of certain proprietary point of sale software, retail point of sale operations, and complementary support of Cultivate’s software and related hardware for on-site credit and debit card processing. Subsequently, Cultivate the entity became exclusively a software provider, ceasing all service and support operations. Eventually certain beneficial aspects of the Cultivate software functionality were integrated into QuickCard, then upgraded and replaced with certain updates.

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES (Details) - USD ($)Oct. 31, 2018Sep. 30, 2020Dec. 31, 2019Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Loss Contingency, Damages SoughtOn or about October 31, 2018, Nisan and Errez received constitutive notice, regarding arbitration against Nisan, Errez, PrivCo and possibly PubCo, from Bentley Rothschild Capital Limited ("Bentley") and America 2030 Capital Limited (“America 2030”), both located in Nevis, West Indies, and both claiming breach of contract by Nisan and Errez of Nisan and Errez’s respective individual Master Loan Agreements (see Note 7 – Related Party Transactions above) and seeking forfeiture of 1,600,000 PubCo shares that PrivCo had transferred, on or about August 1, 2018, from PrivCo’s Control Shares under the terms of the MLAs.
Operating Lease, Right-of-Use Asset $ 146,984 $ 229,639 $ 307,531
Operating Lease, Liability $ 150,424 $ 309,677

COMMITMENTS AND CONTINGENCIES_3

COMMITMENTS AND CONTINGENCIES (Details) - Lease, Cost - USD ($)3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019
Lease, Cost [Abstract]
Amortization of right-of-use assets, net of liability amortization $ 115 $ 1,073 $ 344 $ (3,219)
Operating lease expense – Hyundai Rio Vista32,904 31,945 98,711 102,273
Total lease expense $ 33,018 $ 33,018 $ 99,054 $ 99,054

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - Subsequent Event [Member]Oct. 28, 2020USD ($)Oct. 28, 2020USD ($)Oct. 27, 2020USD ($)$ / sharesshares
SUBSEQUENT EVENTS (Details) [Line Items]
Number of Accredited Investors13
Proceeds from Convertible Debt $ 3,500,000 $ 480,450 $ 3,019,550
Warrants and Rights Outstanding, Term5 years
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ / shares $ 0.001
Debt Instrument, Face Amount $ 3,850,000
Debt Instrument, Interest Rate, Stated Percentage10.00%
Debt Instrument, Maturity DateJul. 27,
2021
Debt Conversion, DescriptionThe Debentures contain a voluntary conversion mechanism whereby the holders may convert, in whole or in part, the outstanding balance of the Debentures into shares of the Common Stock at a conversion price of $0.33 per share, subject to adjustment as provided therein. Additionally, the Debentures contain a mandatory conversion mechanism whereby any principal and accrued interest on the Debentures converts into shares of the Company’s Common Stock on the date in which the Company’s Common Stock is listed for trading on a senior national exchange. The mandatory conversion mechanism shall take effect only if (i) the shares of Common Stock underlying the Debentures are registered on an effective registration statement, (ii) the average closing bid price of the Common Stock over the preceding 5 Trading Days is above $0.80 per share and (iii) the average trading volume of Common Stock over the preceding 5 Trading Days is at least $200,000. The mandatory conversion mechanism contains a conversion price of $0.33 per share, subject to adjustment as provided therein
Debt Instrument, DescriptionThe Debentures contain customary events of default (each an “Event of Default”). If an Event of Default occurs, interest under the Debentures will accrue at a rate of eighteen percent (18%) per annum and the outstanding principal amount of the Debentures, plus accrued but unpaid interest, liquidated damages and other amounts owing with respect to the Debentures will become, at the Debenture holder’s election, immediately due and payable in cash.
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ / shares $ 0.33
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares) | shares11,666,666
Itria Ventures [Member]
SUBSEQUENT EVENTS (Details) [Line Items]
Repayments of Debt $ 123,428
Power Up Lending [Member]
SUBSEQUENT EVENTS (Details) [Line Items]
Repayments of Debt228,059
West Coast Purchase Agreement [Member]
SUBSEQUENT EVENTS (Details) [Line Items]
Repayments of Debt $ 285,862