UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from to Commission file number: 001-34294 RYVYL INC. (Exact name of small business issuer as specified in its charter) (State or other jurisdiction of incorporation or organizat ...

Ryvyl Inc. (NASDAQ:RVYL) Q4 2022 Results Conference Call April 17, 2023 4:30 PM ET Company Participants Ben Errez - Chairman Mary Lay Hoitt - CFO Min Wei - COO Fredi Nisan - CEO Conference Call Participants Kevin Dede - H.C. Wainwright Operator Good afternoon, ladies and gentlemen, and welcome to the RYVYL fourth-quarter and full year 2022 earnings conference call. [Operator Instructions] The earnings press release accompanying this conference call was issued at the close of the market today. The annual rep ...

[Explanatory Note](index=4&type=section&id=Explanatory%20Note) The company is restating 2021-2022 financial statements due to accounting errors and internal control weaknesses, engaging experts for remediation - The company concluded that its financial statements from **January 2021 through September 2022** must be restated and are no longer reliable[10](index=10&type=chunk)[11](index=11&type=chunk)[13](index=13&type=chunk) - Material weaknesses in internal control over financial reporting were identified, particularly concerning **complex business transactions**[14](index=14&type=chunk) - Third-party technical accounting experts were engaged in **August 2022** to support proper accounting for complex transactions[15](index=15&type=chunk) [PART I](index=7&type=section&id=PART%20I) [Business](index=7&type=section&id=Item%201.%20Business) RYVYL Inc. is a fintech company specializing in blockchain-based payment solutions, generating revenue from processing fees and expanding through acquisitions - RYVYL develops and markets **blockchain-based payment solutions** focused on monetizing disruptive applications within an end-to-end financial product suite[23](index=23&type=chunk) - Primary revenue drivers include **payment processing services**, licensing fees, and equipment sales, with processing fees being the main source[31](index=31&type=chunk)[37](index=37&type=chunk) - Key products include the **QuickCard Payment System**, the **Coyni Platform** (a stablecoin), and **POS Solutions**, all powered by Gen3 technology[37](index=37&type=chunk) - Recent strategic acquisitions include **Northeast Merchant Systems** (May 2021), **Charge Savvy LLC** (July 2021), a merchant portfolio from **Sky Financial** (March 2022), and **Transact Europe** (April 2022)[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - A secure token, **'coyni'**, a USD-pegged smart contract-based asset, was launched in **Q3 2022** for transactional and custodial purposes[40](index=40&type=chunk)[41](index=41&type=chunk) - RYVYL serves approximately **2,000 business customers** across North America, Europe, the UK, and Asia, with no single customer exceeding **5% of processing volume or revenue**[44](index=44&type=chunk) [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces multiple risks including executive dependence, shareholder control, financial restatement impacts, funding needs, acquisition integration, intense competition, cybersecurity, and regulatory uncertainties - The company relies on a small number of **key executives**, and their loss could adversely affect operations; principal shareholders control approximately **38% of outstanding stock**[71](index=71&type=chunk)[72](index=72&type=chunk) - Restatement of historical financial statements consumed significant resources, and **material weaknesses in internal controls** pose a risk of future misstatements[74](index=74&type=chunk)[76](index=76&type=chunk) - Substantial competition exists from larger, better-resourced payment facilitators like **PayPal**, **Stripe**, and **Square**[90](index=90&type=chunk)[43](index=43&type=chunk) - Increasing dependence on information technology exposes the business to **cyberattacks**, security breaches, and evolving privacy regulations, potentially leading to significant liabilities and costs[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) - Future growth relies on acquisitions, which carry **integration risks**, and new product development, facing market demand and cost uncertainties[78](index=78&type=chunk)[83](index=83&type=chunk) [Unresolved Staff Comments](index=18&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments - Not applicable[98](index=98&type=chunk) [Properties](index=18&type=section&id=Item%202.%20Properties) The company operates from leased offices in San Diego, CA, and acquired a **64,000 square foot industrial building** valued at **$1.36 million** through acquisition - The company's executive offices are leased and located in **San Diego, CA**[99](index=99&type=chunk) - An approximately **64,000 square foot industrial building** was acquired as part of the **ChargeSavvy LLC** transaction in **July 2021**[99](index=99&type=chunk) [Legal Proceedings](index=19&type=section&id=Item%203.%20Legal%20Proceedings) RYVYL is involved in various legal proceedings, including settled disputes, ongoing arbitration, litigation with a former COO, and a class-action lawsuit alleging false financial statements - The company has settled litigation with **Corporate Performance Consulting, LLC** and **Pure Health, et al**[100](index=100&type=chunk) - Ongoing litigation includes arbitration with **The Good People Farms, LLC**, and mutual complaints between the company and its **former COO** regarding trade secrets and wrongful termination[100](index=100&type=chunk) - A purported class action lawsuit (**Cullen V. RYVYL Inc.**) was filed on **February 1, 2023**, alleging violations of the Securities Exchange Act due to false and misleading financial statements[103](index=103&type=chunk) [Mine Safety Disclosures](index=20&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[102](index=102&type=chunk) [PART II](index=21&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=21&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under 'RVYL', with **49.7 million shares outstanding** as of **December 31, 2022**, no cash dividends, and an active **$15 million** share repurchase program - The company's common stock is listed on the **Nasdaq Capital Market** under ticker symbol **RVYL**, effective **October 24, 2022**[105](index=105&type=chunk) - As of **December 31, 2022**, approximately **49.7 million shares** of common stock were outstanding, held by about **296 record holders**[106](index=106&type=chunk) - No cash dividends have been declared, and none are anticipated in the foreseeable future[107](index=107&type=chunk) Share Repurchase Program Status (as of Dec 31, 2022) | Metric | Value ($) | | :--- | :--- | | Total Authorization | $15,000,000 | | Total Shares Repurchased | 3,098,586 | | Aggregate Cost of Repurchases | $14,346,785 | | Remaining Value for Purchase | $653,215 | [[Reserved]](index=22&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial performance and condition, including restatement impacts, highlighting revenue growth, increased net loss, and liquidity challenges dependent on capital raises and a 2024 convertible note [Quantitative and Qualitative Disclosures about Market Risk](index=28&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This item is not applicable to the company - Not applicable[154](index=154&type=chunk) [Financial Statements and Supplementary Data](index=28&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section indicates the company's consolidated financial statements are included in the report, beginning on page F-1 - The consolidated financial statements required by this item begin on **page F-1** of this Annual Report on Form 10-K[155](index=155&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosures](index=29&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) The company reported no disagreements with its accountants on accounting and financial disclosures - None[156](index=156&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that as of **December 31, 2022**, disclosure controls were ineffective due to **material weaknesses** in internal control over financial reporting, with remediation efforts including third-party experts and enhanced reviews - Management concluded that as of **December 31, 2022**, the company's disclosure controls and procedures were not effective[157](index=157&type=chunk) - One or more **material weaknesses** exist in internal control, related to accounting for certain **complex business transactions**[158](index=158&type=chunk) - Remediation efforts include engaging **third-party technical accounting experts** and implementing enhanced reconciliation reviews and reporting of payment processing activities[158](index=158&type=chunk)[159](index=159&type=chunk) [Other Information](index=29&type=section&id=Item%209B.%20Other%20Information) On **April 12, 2023**, three directors resigned due to a disagreement over a **PrivCo related party transaction**, resulting in non-compliance with **Nasdaq listing rules** for board and audit committee independence - Effective **April 12, 2023**, three directors resigned from the Board[161](index=161&type=chunk) - The resignations stemmed from a disagreement with the Company regarding the **PrivCo related party transaction**[163](index=163&type=chunk) - Following the resignations, the Company is not in compliance with **Nasdaq Listing Rules** for board and audit committee independence[161](index=161&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=29&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - None[164](index=164&type=chunk) [PART III](index=30&type=section&id=PART%20III) [Directors, Executive Officers and Corporate Governance](index=30&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section details the company's leadership, including CEO Fredi Nisan and Chairman Ben Errez, noting **April 2023** director resignations that led to **Nasdaq non-compliance** regarding board independence and audit committee composition - Key executive officers include **Fredi Nisan** (CEO) and **Ben Errez** (Chairman of the Board and EVP)[167](index=167&type=chunk) - Three non-employee directors resigned on **April 12, 2023**, causing temporary non-compliance with **Nasdaq's board independence** and **audit committee composition rules**[161](index=161&type=chunk)[167](index=167&type=chunk) - The Board determined that directors **Genevieve Baer** and **Ezra Laniado** are independent under Nasdaq rules[178](index=178&type=chunk) - Multiple directors and officers had **late Section 16(a) filings** during the **2022 fiscal year**[189](index=189&type=chunk)[190](index=190&type=chunk) [Executive Compensation](index=35&type=section&id=Item%2011.%20Executive%20Compensation) This section details **Named Executive Officer (NEO)** compensation for **2022** and **2021**, including salary, bonus, and equity awards, with **Ben Errez** receiving **$366,698** and **Fredi Nisan $361,017** in **2022**, and outlines non-employee director compensation 2022 Summary Compensation Table for Named Executive Officers | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock/Option Awards ($) | All Other Comp ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Ben Errez, Chairman/EVP | 2022 | 201,539 | 48,000 | 66,616 | 80,496 | 366,698 | | Fredi Nisan, CEO/Director | 2022 | 201,539 | 48,000 | 66,616 | 74,816 | 361,017 | | Jacqueline Dollar, CMO | 2022 | 251,923 | 2,437 | 48,500 | 24,092 | 326,951 | - The company has not entered into formal employment agreements with its executive officers; all employment is **"at will"**[195](index=195&type=chunk) - Non-employee directors receive monthly cash compensation of **$2,500** and monthly equity compensation of **$2,500** in common stock[199](index=199&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=37&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of **April 11, 2023**, significant company control is concentrated with top executives; **PrivCo**, owned by **Ben Errez** and **Fredi Nisan**, beneficially owns **36.01%**, with all officers and directors collectively owning **37.21%** Security Ownership of Major Holders (as of April 11, 2023) | Name of Owner | Shares Owned Beneficially | Percent of Class | | :--- | :--- | :--- | | GreenBox POS LLC (1) | 18,489,208 | 36.01% | | Ben Errez (2) | 18,730,233 | 36.41% | | Fredi Nisan (2) | 18,707,018 | 36.37% | | All Officers and Directors (6 Persons) | 19,180,494 | 37.21% | - **GreenBox POS LLC (PrivCo)** is managed by **Ben Errez** and **Fredi Nisan**, who each own **50%** and share voting power over its holdings[203](index=203&type=chunk)[204](index=204&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=38&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company engaged in significant related-party transactions, including **2 million share repurchases** from **PrivCo** (controlled by CEO and Chairman), dealings with entities controlled by former SVP **Kenneth Haller** (including a problematic **Sky Financial** asset purchase), and substantial legal fees to a former director's law firm - The Company repurchased a total of **2 million shares** of its common stock from **PrivCo**, an entity controlled by CEO **Fredi Nisan** and Chairman **Ben Errez**, in two separate transactions[209](index=209&type=chunk) - The company acquired a merchant portfolio from **Sky Financial** for **$16 million cash** and **500,000 shares**, later writing off the purchase price due to non-delivery of assets[215](index=215&type=chunk) - The company acquired **Charge Savvy, LLC**, in which **Kenneth Haller's** company **Sky** held a **68.4% interest** at the time of the transaction[216](index=216&type=chunk) - Former director **N. Adele Hogan** was a partner at **Lucosky Bookman LLP**, a law firm to which the company paid **$817,432** in legal fees between **January 2022** and **April 2023**[218](index=218&type=chunk) - The CEO's two brothers, **Dan** and **Liron Nusonivich**, are employed by the company with annual salaries of approximately **$200,000** and **$110,000**, respectively[210](index=210&type=chunk)[408](index=408&type=chunk) [Principal Accounting Fees and Services](index=40&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) In **April 2022**, the company dismissed **BF Borgers CPA, PC** and appointed **Simon & Edward, LLP** as its new auditor, with total fees of **$475,400** in **2022** and **$372,600** in **2021**, all pre-approved Auditor Fees | Fee Type | 2022 ($) | 2021 ($) | | :--- | :--- | :--- | | Audit Fees | $445,400 | $372,600 | | All Other Fees | $30,000 | - | | **Total** | **$475,400** | **$372,600** | - On **April 19, 2022**, **BF Borgers CPA, PC** was dismissed, and **Simon & Edward, LLP** was appointed as the new independent registered public accounting firm[219](index=219&type=chunk) [PART IV](index=41&type=section&id=PART%20IV) [Exhibits and Financial Statement Schedules](index=41&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits filed as part of the **Form 10-K**, including corporate governance documents, debt instruments like the **8% Senior Convertible Note**, material contracts, and officer certifications, with financial statements on **page F-1** - The financial statements and the **Report of Independent Registered Public Accounting Firm** are included starting on **page F-1**[223](index=223&type=chunk) - Exhibits filed include corporate charters, debt indentures, material contracts (e.g., **Sky Financial asset purchase agreement**), and officer certifications (**SOX 302** and **906**)[223](index=223&type=chunk)[224](index=224&type=chunk) [Form 10-K Summary](index=42&type=section&id=Item%2016.%20Form%2010-K%20Summary) No summary is provided in this section - None[225](index=225&type=chunk) [Financial Statements](index=44&type=section&id=Financial%20Statements) The audited consolidated financial statements for **2022** and **2021** are presented, with the auditor's report highlighting **goodwill** and **convertible note** accounting as critical audit matters, reflecting a significant increase in net loss and a shift to a stockholders' deficit [Report of Independent Registered Public Accounting Firm](index=45&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor, **Simon & Edward, LLP**, issued a fair opinion on the financial statements, identifying **Goodwill impairment testing** and **Senior Convertible Note modification accounting** as critical audit matters due to significant estimates and complex judgments - The auditor, **Simon & Edward, LLP**, expressed an opinion that the financial statements are fairly presented in conformity with **GAAP**[233](index=233&type=chunk) - A **Critical Audit Matter** was identified regarding **Goodwill impairment**, as its valuation relies on significant management estimates and assumptions about future revenue and operating margins[238](index=238&type=chunk)[239](index=239&type=chunk) - A second **Critical Audit Matter** was the accounting for the modification of the **Senior Convertible Note**, involving complex judgments regarding its effect on future cash flows and variable conversion prices[241](index=241&type=chunk)[242](index=242&type=chunk) [Consolidated Financial Statements](index=47&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail the company's financial position and performance, showing **$97.7 million** in total assets and a **$1.9 million** stockholders' deficit as of **December 31, 2022**, with a **$49.2 million** net loss on **$32.9 million** revenue, and a **$48.7 million** net cash decrease [Consolidated Balance Sheets](index=47&type=section&id=Consolidated%20Balance%20Sheets) As of **December 31, 2022**, total assets decreased to **$97.7 million** from **$114.0 million** in **2021**, while total liabilities increased to **$99.6 million** from **$84.6 million**, resulting in a shift from **$29.5 million** stockholders' equity to a **$(1.9) million** deficit Consolidated Balance Sheet Highlights (as of Dec 31) | | 2022 ($ millions) | 2021 (Restated) ($ millions) | | :--- | :--- | :--- | | Cash and cash equivalents | $14.0M | $89.0M | | Total Assets | $97.7M | $114.0M | | Total Liabilities | $99.6M | $84.6M | | Total Stockholders' Equity (Deficit) | $(1.9)M | $29.5M | [Consolidated Statements of Operations](index=49&type=section&id=Consolidated%20Statements%20of%20Operations) For the year ended **December 31, 2022**, the company reported **$32.9 million** in net revenue but incurred a **$49.2 million** net loss, or **$(1.08)** per share, compared to a **$35.3 million** net loss on **$26.3 million** revenue in **2021**, primarily due to increased expenses Consolidated Statement of Operations Highlights (Year Ended Dec 31) | | 2022 ($) | 2021 (Restated) ($) | | :--- | :--- | :--- | | Net Revenue | $32,909,112 | $26,304,502 | | Gross Profit | $16,122,519 | $16,234,841 | | Loss from Operations | $(37,838,224) | $(29,206,094) | | Net Loss | $(49,235,698) | $(35,274,905) | | Net Loss Per Share (Basic & Diluted) | $(1.08) | $(0.87) | [Consolidated Statements of Cash Flows](index=52&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In **2022**, the company used **$9.3 million** in operating cash, **$47.6 million** in investing cash (due to acquisitions), and **$10.0 million** in financing cash, resulting in a net cash decrease from **$89.6 million** to **$40.8 million** Consolidated Statement of Cash Flows Highlights (Year Ended Dec 31) | | 2022 ($) | 2021 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | $(9,343,959) | $(27,165,885) | | Net cash used in investing activities | $(47,648,671) | $(2,658,858) | | Net cash (used in) provided by financing activities | $(10,048,781) | $116,060,635 | | **Net (decrease) increase in cash** | **$(48,725,973)** | **$87,726,960** | [Notes to Consolidated Financial Statements](index=54&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide critical context, detailing **restatements** (Note 3), **acquisitions** including a **$18.1 million Sky Financial write-off** (Note 4), the **$100 million senior convertible note** (Note 9), significant **related-party transactions** (Note 13), and ongoing **litigation** (Note 14) - **Restatement (Note 3):** Material misstatements were corrected for periods from **Q1 2021 to Q3 2022**, impacting commission revenue, stock repurchases, gateway fees, merchant liabilities, and convertible debt accounting[304](index=304&type=chunk)[307](index=307&type=chunk)[308](index=308&type=chunk)[313](index=313&type=chunk) - **Acquisitions (Note 4):** The company acquired **Northeast**, **Charge Savvy**, and **Transact Europe**, and acquired a merchant portfolio from **Sky Financial** for **$18.1 million**, which was subsequently written off due to non-delivery of assets[324](index=324&type=chunk)[328](index=328&type=chunk)[331](index=331&type=chunk)[335](index=335&type=chunk) - **Debt (Note 9):** The company holds a senior convertible note with an original principal of **$100 million**, issued in **2021** and maturing in **2024**, featuring complex conversion terms and an **8% interest rate** that increases to **15%** upon default[344](index=344&type=chunk)[349](index=349&type=chunk)[355](index=355&type=chunk) - **Related Party Transactions (Note 13):** The company repurchased **2 million shares** from **PrivCo**, an entity controlled by its CEO and Chairman, and engaged in transactions with companies controlled by former SVP **Kenneth Haller**[402](index=402&type=chunk)[403](index=403&type=chunk)[407](index=407&type=chunk) - **Commitments and Contingencies (Note 14):** The company is a defendant in a purported class action lawsuit filed in **February 2023**, alleging false and misleading statements regarding financial performance, with other ongoing litigation also disclosed[409](index=409&type=chunk)[413](index=413&type=chunk)

OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from to UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 Commission file number: 001-34294 RYVYL Inc. (Exact name of small business issuer as specified in its charter) Nevada 22-3962936 (State or other jurisdiction of inco ...

PART I Consolidated Financial Information [Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited Q2 2022 financial statements reflect increased assets and net income, driven by acquisitions and a significant derivative liability gain, with positive operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2022, total assets increased to **$139.8 million** due to acquisitions, while liabilities rose and stockholders' equity decreased Condensed Consolidated Balance Sheet Highlights (in USD) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $29,098,753 | $89,559,695 | | Goodwill | $26,625,946 | $6,048,034 | | Intangible Assets, net | $24,505,648 | $7,578,935 | | Total assets | $139,781,295 | $132,672,828 | | **Liabilities & Equity** | | | | Payment processing liabilities, net | $33,467,867 | $4,997,807 | | Derivative liability | $61,006 | $18,735,000 | | Total liabilities | $99,831,958 | $87,167,405 | | Total stockholders' equity | $39,949,337 | $45,505,423 | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Q2 2022 saw net revenue grow 9.2% to **$7.0 million**, but gross profit fell due to higher costs, with a **$26.4 million** derivative liability gain leading to **$10.4 million** net income Three Months Ended June 30, (in USD) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net revenue | $6,965,578 | $6,379,179 | | Gross profit | $2,822,700 | $5,055,699 | | Loss from operations | ($8,779,065) | ($35,611) | | Changes in fair value of derivative liability | $26,373,994 | - | | Net income (loss) | $10,410,085 | ($39,560) | | Basic and diluted EPS | $0.24 | ($0.00) | Six Months Ended June 30, (in USD) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net revenue | $11,861,104 | $11,128,620 | | Gross profit | $5,154,396 | $8,211,369 | | Loss from operations | ($14,954,165) | ($9,398,642) | | Changes in fair value of derivative liability | $18,673,994 | - | | Net income (loss) | ($10,905,902) | ($13,368,992) | | Basic and diluted EPS | ($0.26) | ($0.43) | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) For the six months ended June 30, 2022, total stockholders' equity decreased from **$45.5 million** to **$39.9 million**, primarily due to a **$10.9 million** net loss and treasury stock activity - Total stockholders' equity decreased from **$45,505,423** at the end of 2021 to **$39,949,337** as of June 30, 2022[13](index=13&type=chunk) - Key activities during the six months included the conversion of **$5 million** in convertible debt, stock compensation expenses, and a net loss of **$10.9 million**[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2022, operating cash flow was **$3.1 million** positive, while investing activities used **$45.6 million** for acquisitions, leading to a cash decrease Cash Flow Summary for Six Months Ended June 30, (in USD) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $3,094,938 | ($13,667,974) | | Net cash used in investing activities | ($45,559,088) | ($2,568,411) | | Net cash provided by (used in) financing activities | ($9,231,508) | $44,200,398 | | Net (decrease) increase in cash | ($33,018,798) | $27,964,013 | - Investing activities in 2022 included **$28.8 million** for the Transact Europe acquisition and **$16.0 million** for the Sky asset acquisition[16](index=16&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's blockchain payment business, recent acquisitions of Transact Europe and Sky Financial, accounting policies, a **$100 million** convertible note, and ongoing legal proceedings - The company is a financial technology firm focused on developing and monetizing blockchain-based payment applications[18](index=18&type=chunk) - On March 31, 2022, the company acquired Transact Europe Holdings for approximately **$28.8 million** in cash[23](index=23&type=chunk)[57](index=57&type=chunk) - On March 31, 2022, the company acquired a portfolio of merchant accounts from Sky Financial & Intelligence for **$18.1 million**[58](index=58&type=chunk) - The company has a **$100 million** convertible note issued in November 2021, with complex conversion features treated as a derivative liability. The fair value of this liability decreased by **$18.7 million** in the first six months of 2022, resulting in a gain[73](index=73&type=chunk)[77](index=77&type=chunk) - The company is involved in several legal proceedings, including disputes with Corporate Performance Consulting, The Good People Farms, and a lawsuit filed by Pure Health against its subsidiary ChargeSavvy[117](index=117&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q2 2022 revenue growth to increased volume, but gross margin declined due to higher costs, with net income primarily driven by a significant non-cash derivative liability gain Results of Operations Comparison - Three Months Ended June 30 | Metric | 2022 | 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Net revenue | $6,965,578 | $6,379,179 | 9.2% | | Cost of revenue | $4,142,878 | $1,323,480 | 213.0% | | Gross profit | $2,822,700 | $5,055,699 | -44.2% | | Total operating expenses | $11,601,765 | $5,091,310 | 127.9% | | Net income (loss) | $10,410,085 | ($39,560) | -26414.7% | - The increase in cost of revenue and resulting decrease in gross margin was due to higher processing fees paid to Gateways and commission payments to ISOs[127](index=127&type=chunk) - The significant increase in Other Income was primarily due to a **$26.4 million** gain on the change in fair value of derivative liability related to the convertible note issued in November 2021[129](index=129&type=chunk) - The company believes its current cash balances are sufficient to cover operating needs for the next twelve months, despite the **$89 million** convertible note maturing in November 2023[136](index=136&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=3&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section was included in the table of contents but no substantive content was provided [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of June 30, 2022, the company's disclosure controls and procedures were effective[147](index=147&type=chunk) - No material changes to internal control over financial reporting occurred during the three and six months ended June 30, 2022[148](index=148&type=chunk) PART II Other Information [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings, including disputes with Corporate Performance Consulting and Pure Health, are detailed in Note 17 of the financial statements - Information regarding legal proceedings is detailed in Note 17 of the financial statements[151](index=151&type=chunk) [Risk Factors](index=3&type=section&id=Item%201A.%20Risk%20Factors) This section was included in the table of contents but no substantive content was provided [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Board approved increasing the share repurchase program to **$15 million**, with **$7.9 million** in repurchases as of March 31, 2022, and none in Q2 2022 - The Board approved an increase of the share repurchase program to **$15,000,000**[152](index=152&type=chunk) - From May 13, 2021, to March 31, 2022, the company repurchased **1,098,586** shares for **$7,936,785**[152](index=152&type=chunk) - There were no share repurchases in the three months ended June 30, 2022[153](index=153&type=chunk) [Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - None[154](index=154&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures were reported - None[155](index=155&type=chunk) [Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No other information was reported - None[156](index=156&type=chunk) [Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed, including CEO and CFO certifications and Inline XBRL data files - Exhibits include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101 series)[158](index=158&type=chunk) Signatures The report was signed on August 15, 2022, by the Chief Executive Officer and Chief Financial Officer - The report was signed on August 15, 2022, by Fredi Nisan, Chief Executive Officer, and Benjamin Chung, Chief Financial Officer[163](index=163&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from to Commission file number: 001-34294 GREENBOX POS (Exact name of small business issuer as specified in its charter) Nevada 22-3962936 (State or other jurisdiction of incorp ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2021 Commission File Number: 001-34294 GREENBOX POS (Exact name of registrant as specified in its charter) Nevada 22-3962936 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) 3131 Camino Del Rio North, Suite 1400 San Diego, CA 92108 (Address of principal exec ...

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR For the transition period from ______________ to ______________ Commission file number: 001-34294 GREENBOX POS (Exact name of small business issuer as specified in its charter) (State or other jurisd ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from ______________ to ______________ Commission file number: 001-34294 GREENBOX POS (Exact name of small business issuer as specified in its charter) (State or other jurisdictio ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from ______________ to ______________ Commission file number: 001-34294 GREENBOX POS (Exact name of small business issuer as specified in its charter) Nevada 22-3962936 (State o ...