Washington, D.C. 20549 FORM 10-Q (MARK ONE) UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☒QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 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) Nevada 22-3962936 (State or other jurisdiction of incorporat ...

Ryvyl, Inc. (NASDAQ:RVYL) Q4 2023 Results Conference Call March 26, 2024 4:30 PM ET Company Participants Ben Errez - Chairman George Oliva - Chief Financial Officer Min Wei - Chief Operating Officer Fredi Nisan - CEO Conference Call Participants Michael Donovan - H.C. Wainwright Howard Halpern - Taglich Brothers Operator Good afternoon, everyone, and welcome to RYVYL Inc.'s Fourth Quarter and Full Year 2023 Conference Call. At this time, all participants are in listen-only mode. A question-and-answer sessio ...

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, 2023 Commission File Number: 001-34294 (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 executive office) (Zip Code) Registrant's telephone number, including area code: (619) 631 ...

Financial Data and Key Metrics Changes - RYVYL reported record financial results for Q3 2023, with revenues increasing nearly 64% year-over-year to $17.5 million, reflecting an 18% sequential increase from $14.9 million in Q2 2023 [8][23] - The processing volume for Q3 totaled $861 million, representing a 28% increase from Q2 2023 [9] - The company recorded a net loss of $3.1 million or $0.60 per share, compared to a net loss of $15.9 million or $3.37 per share in the same quarter a year ago [28] Business Line Data and Key Metrics Changes - North America revenue increased 47% from $8.5 million in Q3 2022 to $12.5 million in Q3 2023, while EU revenue was $5 million, up more than 100% from $2.2 million in the same period last year [23] - The cost of revenues increased by 149% to $10.8 million, primarily due to increased processing fees and commission payments [23][24] - The company launched the coyni mobile point of sale (mPOS) app, transforming devices into payment terminals for secure transactions [16] Market Data and Key Metrics Changes - RYVYL EU revenue saw tremendous year-over-year growth, increasing 100% and currently representing 28.5% of total revenue [10] - The processing volume for the FX and international payments portfolio increased over 21% from Q2 2023 to $517 million, and a 52% increase from Q3 2022 [33] - The company expects to achieve processing volume in Q4 of $900 million to $1 billion, estimating total fiscal year processing volume to exceed $3 billion [38] Company Strategy and Development Direction - The company is focused on expanding its Banking-as-a-Service offering and leveraging its partnership with Visa to enhance service capabilities [11][14] - RYVYL is committed to the spin-off of coyni as part of its value creation strategy, with expectations to complete the process soon [15][45] - The company aims to ramp up to $100 million per month in transaction volume through its Banking-as-a-Service platform [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities in Europe and the potential for the coyni platform to generate revenue in the EU market [10][50] - The company anticipates continued momentum in revenue growth, projecting Q4 revenue of $19 million to $21 million, bringing total year revenue to $62 million to $64 million [38] - Management acknowledged challenges related to higher-than-planned expenses but expects adjusted EBITDA to improve in Q4 [39] Other Important Information - The company implemented a 1-for-10 reverse stock split to maintain NASDAQ compliance [18] - RYVYL has taken steps to reduce debt, resulting in a $21 million total debt reduction through convertible preferred stock exchanges [17] Q&A Session Summary Question: Does the company continue to expect to see higher growth in Europe? - Management expects continued revenue growth in Europe, noting the current lower revenue-to-volume ratio is due to the early phase of service rollout [42][44] Question: What is the progress of the coyni spin-off? - The company is committed to completing the spin-off process as quickly as possible, pending FINRA approval [45] Question: What would the recent NASDAQ standard deficiencies issue create as a potential blocker for the coyni spin-off? - The NASDAQ deficiencies are unrelated to the coyni spin-off, which is governed by FINRA rules [46] Question: What is the status of RYVYL completing its transition to the network firm? - The technical migration to the new network has been completed, with service implementation ongoing [47] Question: Can you comment on where the coyni is generating revenue year-to-date? - The company has some immaterial revenues from the coyni ecosystem, with expectations to ramp up revenue in both the U.S. and EU markets [48][50] Question: Does the company intend to hire senior leadership roles to fill vacancies in sales and marketing? - The company plans to fill vacancies to support growth momentum in existing and new verticals [51] Question: How does the company feel about its current staffing level to support growth? - Management believes they maintain adequate resources to support current business and anticipated growth [53] Question: What is the status of illegal proceedings regarding Sky Financial? - The company is unable to discuss ongoing legal proceedings publicly but will disclose progress as appropriate [55]

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, 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) Nevada 22-3962936 (State or other jurisdiction of incorp ...

Ryvyl, Inc. (NASDAQ:RVYL) Q2 2023 Results Conference Call August 14, 2023 4:30 PM ET Company Participants Ben Errez - Chairman of the Board Gene Jones - Interim Chief Financial Officer Min Wei - Chief Operating Officer Fredi Nisan - Interim Chief Financial Officer Conference Call Participants Michael Donovan - H.C. Wainwright Operator Welcome to the RYVYL second quarter earnings conference call. [Operator Instructions] The earnings press release accompanying this conference call is issued at the close of th ...

Part I - Consolidated Financial Information [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for RYVYL Inc. as of June 30, 2023, and for the three and six-month periods then ended, compared with prior periods It includes the balance sheets, statements of operations, changes in stockholders' equity, statements of cash flows, and detailed notes explaining the financial data and accounting policies [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2023, the company's total assets increased to $115.4 million from $97.7 million at year-end 2022, primarily driven by a significant rise in restricted cash Total liabilities also grew substantially to $136.8 million from $99.6 million, mainly due to increases in accounts payable and payment processing liabilities Consequently, the total stockholders' deficit widened to $(21.4) million from $(1.9) million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $13,166 | $13,961 | | Restricted cash | $50,760 | $26,873 | | Total current assets | $73,862 | $59,215 | | Total Assets | $115,425 | $97,657 | | **Liabilities & Equity** | | | | Total current liabilities | $66,035 | $36,735 | | Long-term debt, net | $66,940 | $61,735 | | Total liabilities | $136,808 | $99,579 | | Total stockholders' deficit | $(21,383) | $(1,922) | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) For the second quarter of 2023, revenue more than doubled to $14.8 million compared to $7.0 million in Q2 2022 Despite a higher gross profit of $6.1 million, the company reported a net loss of $(12.0) million, a significant shift from a net income of $12.1 million in the prior-year period, which was primarily driven by a large gain on the fair value of derivative liability For the six-month period, revenue also grew strongly to $26.1 million, but the net loss widened to $(20.0) million from $(17.3) million Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2023 | Q2 2022 (restated) | H1 2023 | H1 2022 (restated) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $14,849 | $6,966 | $26,140 | $11,176 | | Gross Profit | $6,124 | $2,736 | $11,237 | $4,166 | | Loss from Operations | $(5,641) | $(8,866) | $(9,320) | $(15,943) | | Net Income (Loss) | $(12,005) | $12,092 | $(19,982) | $(17,335) | | Basic and Diluted EPS | $(0.23) | $0.28 | $(0.39) | $(0.56) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2023, the company generated $23.1 million in cash from operating activities, a significant improvement from $3.1 million in the same period of 2022 Investing activities used a negligible amount of cash in 2023, compared to a $45.6 million outflow in 2022, which was primarily for acquisitions Financing activities also had minimal cash usage in 2023, versus a $9.2 million use in 2022 for debt repayments and stock repurchases Overall, cash, cash equivalents, and restricted cash increased by $23.1 million in the first half of 2023 Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2023 | 2022 (restated) | | :--- | :--- | :--- | | Net cash provided by operating activities | $23,129 | $3,095 | | Net cash used in investing activities | $(17) | $(45,559) | | Net cash used in financing activities | $(7) | $(9,232) | | **Net increase (decrease) in cash** | **$23,105** | **$(33,019)** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures on the company's business, accounting policies, acquisitions, debt, legal contingencies, and segment performance Key highlights include the planned spin-off of its Coyni assets, details on the $100 million senior convertible note and its subsequent partial exchange for preferred stock, a summary of ongoing litigation including a class action lawsuit, and a breakdown of financial performance by its North America and International segments - The company is a financial technology firm focused on developing and monetizing blockchain-based payment solutions and applications[16](index=16&type=chunk) - In April 2023, the company acquired a **99.1% stake** in Logicquest Technology, Inc., a shell company, with the intent to merge its Coyni, Inc. subsidiary into it and subsequently spin-off Coyni as a separate public company The company expects to raise approximately **$40 million** in an offering for the new entity, Coyni PubCo[62](index=62&type=chunk) - The company is involved in several legal proceedings, including a purported class action lawsuit alleging violations of securities laws by making false or misleading statements, and two shareholder derivative complaints alleging failures in internal controls[108](index=108&type=chunk) - Subsequent to the quarter end, in July 2023, the company authorized a new class of Series A Preferred Convertible Stock and exchanged approximately **$6.0 million** of its senior convertible note's principal and accrued interest for **6,000 shares** of this new preferred stock[113](index=113&type=chunk)[115](index=115&type=chunk) Segment Performance for Six Months Ended June 30 (in thousands) | Segment | Revenue 2023 | Revenue 2022 | Loss from Operations 2023 | Loss from Operations 2022 | | :--- | :--- | :--- | :--- | :--- | | North America | $19,842 | $10,144 | $(9,699) | $(15,409) | | International | $6,298 | $1,031 | $379 | $(534) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance for the three and six months ended June 30, 2023, compared to 2022 Revenue growth was strong, driven by acquisitions and increased processing volume in both North America and International segments However, the company incurred a net loss, influenced by operating expenses, interest costs, and changes in derivative liability valuation The discussion also includes a reconciliation of net loss to the non-GAAP measure of Adjusted EBITDA, which showed improvement, and an overview of the company's liquidity, highlighting sufficient cash to fund operations for at least the next year [Results of Operations](index=27&type=section&id=Results%20of%20Operations) For Q2 2023, revenue increased 113% to $14.8 million, driven by an 86% increase in North America and a 270% increase in International revenue For H1 2023, revenue grew 134% to $26.1 million Gross profit margins improved in both periods Operating expenses remained relatively flat year-over-year, with increases in G&A and professional fees offset by decreases in stock compensation and depreciation The net loss in Q2 2023 was primarily due to other expenses, including a negative change in the fair value of derivative liability, compared to a large gain in Q2 2022 Q2 2023 vs Q2 2022 Performance (in thousands) | Metric | Q2 2023 | Q2 2022 (restated) | Change % | | :--- | :--- | :--- | :--- | | Revenue | $14,849 | $6,966 | 113.2% | | Gross Profit | $6,124 | $2,736 | 123.8% | | Total Operating Expenses | $11,765 | $11,602 | 1.4% | | Net (Loss) / Income | $(12,005) | $12,092 | -199.3% | - The increase in revenue for Q2 and H1 2023 was primarily attributable to significant growth in processing volume from acquired businesses, including RYVYL EU and American Samoa[132](index=132&type=chunk)[140](index=140&type=chunk) - Higher general and administrative expenses in 2023 were mainly due to non-recurring legal settlements, related legal fees, a provision for credit losses on legacy accounts, and accounting fees for the restatement of prior period financial statements[136](index=136&type=chunk)[143](index=143&type=chunk) [Adjusted EBITDA (Non-GAAP)](index=29&type=section&id=Adjusted%20EBITDA) The company uses Adjusted EBITDA, a non-GAAP measure, to evaluate core operating performance For Q2 2023, the Adjusted EBITDA loss improved to $(0.9) million from a loss of $(3.1) million in Q2 2022 For the first six months of 2023, the Adjusted EBITDA loss was $(3.9) million, a significant improvement from a loss of $(12.6) million in the prior-year period The calculation adjusts net loss for interest, taxes, depreciation, amortization, stock compensation, and other non-recurring or special items Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(12,005) | $12,092 | $(19,982) | $(17,335) | | Adjustments | $11,111 | $(15,226) | $16,110 | $4,721 | | **Adjusted EBITDA** | **$(894)** | **$(3,134)** | **$(3,872)** | **$(12,614)** | [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary liquidity source has been capital raises, as cash flow from operations has not historically covered cash requirements Despite a net operating loss, management believes the current cash balance is sufficient to fund operations for at least one year A key event impacting capital structure was the July 2023 agreement to exchange $22.7 million of its senior convertible note for newly authorized Series A Preferred Stock, with an initial exchange of approximately $6.0 million completed on July 31, 2023 - Management believes that the current cash balance is sufficient to fund operations for **at least one year** from the filing date of this report[158](index=158&type=chunk) - In July 2023, the company entered into an agreement to exchange an aggregate of **$22.7 million** of outstanding principal and interest under its senior convertible note for **15,000 shares** of new Series A Preferred Convertible Stock[159](index=159&type=chunk)[160](index=160&type=chunk) Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2023 | 2022 (restated) | | :--- | :--- | :--- | | Cash provided by operating activities | $23,129 | $3,095 | | Cash used in investing activities | $(17) | $(45,559) | | Cash used in financing activities | $(7) | $(9,232) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is classified as a smaller reporting company and is therefore not required to provide the information for this item - As a smaller reporting company, RYVYL Inc. is not required to provide quantitative and qualitative disclosures about market risk[175](index=175&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were not effective as of June 30, 2023 This conclusion is based on the existence of one or more material weaknesses in internal control over financial reporting, including issues related to accounting for complex transactions and inadequate segregation of duties The company has outlined remediation plans, which include hiring additional senior accounting staff, engaging third-party experts, and implementing new procedures and internal controls - Management concluded that the company's disclosure controls and procedures were not effective as of the end of the period covered by this report[176](index=176&type=chunk) - A material weakness was identified related to the segregation of duties within certain accounting processes, which is attributed to the company's size and smaller department teams[179](index=179&type=chunk) - Remediation efforts are underway, including hiring a new Interim CFO and Corporate Controller, redistributing job responsibilities, and implementing more rigorous review processes The company expects to complete remediation in 2023[181](index=181&type=chunk)[183](index=183&type=chunk) Part II - Other Information [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 13 in the Notes to Unaudited Condensed Consolidated Financial Statements for information regarding the company's legal proceedings - Information regarding legal proceedings is incorporated by reference from Note 13 of the financial statements[186](index=186&type=chunk) [Other Items (Items 2, 3, 4, 5)](index=35&type=section&id=Other%20Items) For the period, the company reported no unregistered sales of equity securities, no defaults upon senior securities, and no other material information required to be disclosed The section on mine safety disclosures was not applicable - Item 2: No unregistered sales of equity securities and use of proceeds were reported[187](index=187&type=chunk) - Item 3: No defaults upon senior securities were reported[188](index=188&type=chunk) - Item 4: Mine Safety Disclosures are not applicable[189](index=189&type=chunk) - Item 5: No other information was reported[190](index=190&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, agreements related to the recent debt-for-equity exchange, and certifications by the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act - The exhibits include the Exchange Agreement and Leak-Out Agreement related to the Series A Preferred Stock transaction, as well as officer certifications required under Sections 302 and 906 of the Sarbanes-Oxley Act[191](index=191&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, 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)