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What changed in RYVYL Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of RYVYL Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+329 added−209 removedSource: 10-K (2025-03-28) vs 10-K (2024-03-26)

Top changes in RYVYL Inc.'s 2024 10-K

329 paragraphs added · 209 removed · 86 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeManagement’s intended plan over the next twelve months to address the temporary liquidity shortfall in the North America segment includes, but is not limited to, the following: ● acceleration of the Company’s business development efforts to drive volumes in diversified business verticals; ● the implementation of cost control measures to more effectively manage spending in the North America segment and right sizing the organization, where appropriate; ● repatriation of offshore profits from the Company’s European subsidiaries, whose continued accelerated growth and generation of positive cash flow have already provided, and will continue to provide, an immediate and viable short-term source of capital during this product transition; and ● a capital raise, which the Company intends to negotiate and consummate in the immediate term.
Biggest changeManagement’s intended plan over the next twelve months to address the liquidity shortfall in the North America segment includes, but is not limited to, the following: ● continued execution of its accelerated business development efforts to drive volumes in diversified business verticals with the Company’s other products, including the recently launched licensing of the Company’s payments processing platform in certain niche high-risk business verticals; ● continued implementation of cost control measures to more effectively manage spending in the North America segment and right-sizing the organization, where appropriate; ● the sale of noncore assets; ● continued repatriation of offshore profits from the Company’s European subsidiaries, whose continued accelerated growth and generation of positive cash flow have already provided, and will continue to provide, an immediate and viable short-term source of capital during this product transition (to date, the Company has repatriated approximately $17.6 million from Europe); and ● raising capital through a variety of means, including private and public equity offerings and debt financings.
The inclusion of our web address in this Report does not include or incorporate by reference the information on our website into this Report. 13 Table of Contents
The inclusion of our web address in this Report does not include or incorporate by reference the information on our website into this Report. 17 Table of Contents
However, there can be no guarantee that we will be successful in implementing our plan or in acquiring additional funding, that our projections of our future capital needs will prove accurate, or that any additional funding will be sufficient to continue our operations in the North America segment.
However, there can be no assurance that we will be successful in implementing our plan, that our projections of our future capital needs will prove accurate, or that any additional funding will be sufficient to continue our operations in the North America segment.
As a result, management has determined that its cash and cash equivalents in the North America segment as of December 31, 2023, will not be sufficient to fund the segment’s operations and capital needs for the next 12 months from the issuance of this Report.
As a result, management has determined that its cash in the North America segment as of December 31, 2024, will not be sufficient to fund the segment’s operations and capital needs for the next 12 months from the date of this Report.
On January 4, 2020, PubCo and PrivCo entered into an Asset Purchase Agreement to memorialize a verbal agreement (the “Verbal Agreement”) entered into on April 12, 2018, by and among PubCo (the buyer) and PrivCo (the seller).
Company History The Company was formerly known as ASAP Expo, Inc. and was incorporated in the State of Nevada on April 10, 2007. On January 4, 2020, PubCo and PrivCo entered into an Asset Purchase Agreement to memorialize a verbal agreement (the “Verbal Agreement”) entered into on April 12, 2018, by and among PubCo (the buyer) and PrivCo (the seller).
The principal purposes of our short-term incentive and long-term equity incentive plan are to attract, retain and reward personnel to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives. 8 Table of Contents Recent Developments In February 2024, the Company transitioned its QuickCard product in North America away from terminal-based to app-based processing.
The principal purposes of our short-term incentive and long-term equity incentive plan are to attract, retain and reward personnel to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.
The temporary decline in revenue described above has adversely impacted the Company’s liquidity in its North America segment in the short term.
The decline in revenues resulting from this product transition has adversely impacted the Company’s liquidity in its North America segment in the short term.
None of our employees are subject to collective bargaining agreements. We consider our relationship with our employees to be satisfactory. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants.
We also engage temporary employees and consultants as needed to support our operations. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees.
Management has assessed that its intended plan is appropriate and sufficient to address the liquidity shortfall in its North America segment.
Management has assessed that its intended plan described above, if successfully implemented, is appropriate and sufficient to address the liquidity shortfall in its North America segment and to provide funds to cover operations for the next 12 months from the date of the issuance of this Report.
Customers We currently process transactions for approximately 2,300 business customers in North America, Europe and Asia, and in over 25 industries, including, but not limited to, FX, retail, and e-commerce sectors. We do not rely on any one customer for more than 5% of our processing volume or revenue. Employees and Human Capital We currently have approximately 99 full-time employees.
We do not rely on any one customer for more than 5% of our processing volume or revenue. Employees and Human Capital We currently have approximately 95 full-time employees. None of our employees are subject to collective bargaining agreements. We consider our relationship with our employees to be satisfactory.
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Item 1. Business RYVYL Inc. is a financial technology company that develops, markets, and sells innovative blockchain-based payment solutions, which we believe offer significant improvements for 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.
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Item 1. Business Our Company RYVYL Inc. (“RYVYL”) is a financial technology company that develops software platforms and tools that are focused on providing global payment acceptance and disbursement capabilities. RYVYL’s strategy is rooted in our mission to transform the global payments landscape through technology-driven, customer-centric, and compliance-focused financial solutions.
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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 ASAP Expo, Inc. and was incorporated in the State of Nevada on April 10, 2007.
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Our first-generation product, QuickCard, was originally developed to facilitate payment processing for predominantly cash-based businesses in certain niche high-risk business verticals.
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On October 13, 2022, GreenBox POS changed its name to “RYVYL Inc.” On May 21, 2021, the Company acquired all of the outstanding stock of Northeast Merchant Systems, Inc. (“Northeast”) in a transaction treated as a business combination. Northeast is a merchant services company providing merchant credit card processing through its own Bank Identification Number with the acquiring bank, Merrick.
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It was a comprehensive physical and virtual payment card processing management system that offered a cloud-based network interface, merchant management, and point-of-sale (POS) connectivity to facilitate noncash payment methods such as credit cards, debit cards and prepaid gift cards, and to subsequently disburse those funds electronically to merchants upon request.
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This involves inside operations for new merchants that include sales assistance and applications processing, underwriting, and onboarding and inside operations for existing merchants include risk monitoring and customer service. Outside operations include equipment service or replacement; sales calls and applications; site inspections and identity verification; security verification; and on-site customer service and technical support.
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In early 2024, in response to evolving changes in the compliance environment and banking regulations, the Company began transitioning QuickCard to a fully virtual, app-based product.
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On July 13, 2021 (the “Closing Date”), GreenBox POS entered into and closed on a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Charge Savvy LLC, an Illinois limited liability company (“Charge Savvy”), and Charge Savvy’s three members (collectively, the “Sellers”). One of the Sellers, Ken Haller, was an employee of the Company on the Closing Date.
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In mid-2024, the Company further transitioned its QuickCard product from a direct offering to a licensing model, whereby partners with more suitable compliance capabilities could license the platform from the Company and offer its payments processing capabilities in the same business verticals the Company previously served directly.
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As a result of the Purchase Agreement, the Company purchased all of Charge Savvy’s issued and outstanding membership interests from the Sellers and Charge Savvy became a wholly owned subsidiary of the Company.
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As the global fintech industry continues to evolve, it has become evident that there is a need for a fully integrated platform that can seamlessly support multiple types of offerings on a global scale. We believe our second-generation platform, NEMS Core, provides a compelling solution to fill that product void.
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The purchase price under the Purchase Agreement for the all-stock transaction consisted of 1,000,000 shares of the Company’s Common Stock being issued and delivered to Sellers in proportion to the Sellers’ share of their membership interests in Charge Savvy. The share price at issuance was $12.14.
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As a dual-sided platform, NEMS Core is designed to support both acquiring and disbursement services within a unified infrastructure. This end-to-end platform enables businesses to seamlessly accept payments from customers while efficiently distributing funds to vendors, employees, and partners worldwide.
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Charge Savvy is a fintech company specializing in developing software and providing payment processing and point-of-sale (“POS”) services to the merchant services industry. Charge Savvy also owned an approximately 64,000 square foot office building located in Chicago, Illinois, where it is headquartered.
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Unlike traditional single-function payment systems that often face limitations in adapting to dynamic market demands, RYVYL’s dual-sided platform offers a flexible, agile, and robust architecture. It streamlines the entire transaction lifecycle, from payment initiation to settlement, providing businesses with a competitive advantage in an increasingly interconnected and digital financial environment.
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On March 31, 2022, the Company acquired a portfolio of merchant accounts from Sky Financial & Intelligence LLC, a Wyoming limited liability company (“Sky Financial”) for $18,110,000. The Company paid $16,000,000 of cash in March 2022 and issued 500,000 shares of restricted common stock for the transaction on May 12, 2022.
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RYVYL’s comprehensive product suite is designed to create value across the entire financial ecosystem. By combining advanced technology, global reach, and deep regulatory expertise, we empower businesses to manage payments, optimize cash flow, and scale operations efficiently in an increasingly digital world.
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On April 1, 2022, the Company completed the acquisition of Transact Europe Holdings OOD (“Transact Europe Holdings”). Transact Europe Holdings is the holding company of Transact Europe EAD (“TEU”). TEU formally changed its name to RYVYL EU on December 16, 2022. RYVYL EU is a European Union (“EU”) regulated electronic money institution headquartered in Sofia, Bulgaria.
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We believe that our commitment to continuous innovation helps us to remain at the forefront of the global fintech landscape, delivering secure, reliable, and transformative financial solutions that drive growth and create lasting value for our clients and stakeholders. The Company operates through distinct business segments designed to meet the diverse and evolving needs of global markets.
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RYVYL EU is a Principal Level member of Visa, a worldwide member of MasterCard, and a principal member of China UnionPay. In addition, RYVYL EU is part of the direct Single Euro Payments Area (“SEPA”) program, a payment system enabling cashless payments across continental Europe.
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Our business is strategically structured around two primary geographic regions - Europe and North America - each offering complementary product and service portfolios that encompass payment processing, treasury management, acquiring, issuing, and Electronic Money Institution (“EMI”) services. Our business segments are interconnected through shared technology platforms, unified compliance frameworks, and collaborative global partnerships.
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RYVYL EU provides complete payment solutions by offering acquiring, issuing of prepaid cards and agent banking, serving hundreds of clients. With a global footprint, proprietary payment gateway, and technology platforms, RYVYL EU offers a comprehensive portfolio of services and decades of industry experience. The Company paid approximately $28.8 million (€26.0 million) in total consideration for the purchase.
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This integration enables us to capitalize on synergies across regions, optimize resource allocation, and drive innovation that resonates across all markets in which we operate. Global Expansion RYVYL’s growth is fueled by our commitment to expanding our presence in both established and emerging markets, with a primary focus on Europe and North America.
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Our Business Payment processing in the blockchain world only requires recording a ledger; there is no movement of money.
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In Europe, we capitalize on the strength of Ryvyl EU’s EMI license in Bulgaria, complemented by our operational hub in Portugal. This enables us to offer comprehensive EMI services, including global IBAN issuance, foreign exchange (FX) solutions, and payment processing capabilities.
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Secure tokens are used where users need an immediate transaction, in a safe, private, and secure environment, and where traditional banks may not work effectively, like cross-border transactions or in under-banked verticals. 6 Table of Contents We generate revenue from payment processing services, licensing fees and equipment sales. ● Our main source of revenue is payment processing.
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Our direct connections to major card networks and the Central Bank of Europe reinforces our ability to scale across the European Union (EU), providing seamless financial services tailored to the unique demands of businesses operating in the region.
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We generate revenue through various activities such as merchant services, banking services, card issuing, foreign exchange (“FX”), and Automated Clearing House (“ACH”) programs. We charge a percentage of each transaction's value and/or a fixed amount specified per each transaction or service. This revenue is recognized as soon as the respective transaction or service is performed.
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In North America, our focus is on expanding treasury management services, Bank Identification Number (BIN) sponsorship for credit card processing, and comprehensive payment solutions such as Automated Clearing House (ACH) and wire transfers.
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When a merchant makes a sale, we receive payment card information, engage banks to transfer the proceeds to the merchant's account via digital gateways and record the transaction on our blockchain ledger.
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Our strategy also emphasizes enhancing cross-border payment infrastructure, enabling businesses to transact efficiently across more than 200 markets and 140 currencies, thus solidifying RYVYL’s role as a critical connector in the global financial ecosystem. By leveraging third-party sponsorship arrangements alongside our technology, we are positioned to capture growth opportunities in key sectors, including e-commerce, fintech, and B2B payments.
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We collect fees for all these activities. ● 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.
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Product Innovation and Diversification Innovation is the cornerstone of RYVYL’s growth strategy. We continuously evolve our product portfolio to anticipate and meet the dynamic needs of businesses worldwide. Central to this is the enhancement of our dual-sided payment platform, which facilitates both acquiring and disbursement services.
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We have three main products that are utilized by our customers: a) QuickCard Payment System is a comprehensive physical and virtual payment card processing management system, including software that facilitates off-ramp e-wallet management and fraud prevention. b) The Coyni Platform features a digital token supported by our blockchain technology.
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This platform is designed to support emerging use cases in acquiring, disbursements, and embedded finance, thereby delivering seamless, end-to-end financial solutions. Our treasury management services are evolving to include advanced features such as real-time liquidity tracking, dynamic fund allocation, and sophisticated FX risk management tools, providing businesses with greater control and flexibility over their financial operations.
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The Coyni Platform offers custodial assurance by utilizing unique blockchain technology in a closed-loop ecosystem, allowing for transparency, security, and flexibility. c) ChargeSavvy is our complete end-to-end POS solution, comprising both software and hardware for the restaurant and hospitality industry. Our proprietary blockchain-based technology serves as the settlement engine for all transactions within our ecosystem.
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We are expanding our card issuing capabilities - encompassing debit, prepaid, and virtual cards - and strengthening our BIN sponsorship programs to support fintech companies, neobanks, and enterprises looking to launch customized card programs on a global scale.
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The blockchain ledger provides a robust and secure platform to log immense volumes of immutable transactional records in near 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.
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Furthermore, by integrating banking-as-a-service (BaaS) capabilities, RYVYL is positioned to power the financial infrastructure for platforms and marketplaces seeking embedded finance solutions. 6 Table of Contents Operational Efficiency and Scalability Operational excellence is fundamental to sustaining RYVYL’s growth and profitability. Our strategy is focused on enhancing efficiency through technology, automation, and optimized resource management.
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Unlike general blockchain-based systems, we use proprietary, private ledger technology to verify every transaction conducted within our ecosystem. The verification of transaction data comes from trusted partners, all of whom we have extensively vetted. We facilitate all financial elements of our closed-loop ecosystem and act as the administrator for all related accounts.
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By leveraging our advanced ledger technology, we believe that we can ensure real-time transaction processing, data integrity, and the scalability required to handle high transaction volumes with minimal latency. The implementation of automation across key functions - including compliance, reconciliation, and reporting - enables us to reduce operational costs, improve accuracy, and enhance service delivery.
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Using our blockchain ledger technology, we seek authorization and settlement for each transaction from Gateways to the issuing bank responsible for the credit/debit card and ACH used in the transaction. When the Gateway settles the transaction, our Gateway technology composes a chain of blockchain instructions to our ledger manager system.
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We are also optimizing our global operations by aligning activities across Europe and North America, creating synergies that improve resource utilization, reduce overhead, and accelerate the deployment of new products and services. Regulatory Excellence and Risk Management Compliance is more than a regulatory requirement for RYVYL; it is a strategic advantage.
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When consumers use credit or debit cards to pay for transactions with merchants who use our ecosystem, the transaction starts with the consumer purchasing tokens from the Company. Tokens in this context are used represent and track the value or number of credits the consumer has received in the blockchain.
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Our regulatory strategy is designed to ensure resilience amid the complexities of global financial regulations.
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These tokens are purchased or granted directly from the merchant's terminals or mobile app, and are immediately available for transactions. The issuance of tokens is accomplished when the Company loads 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.
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We maintain rigorous compliance with international standards, including anti-money laundering (AML) and counter-terrorist financing (CTF) regulations under the Financial Crimes Enforcement Network (FinCEN) in the United States and EU directives, alongside data protection frameworks such as the General Data Protection Regulation (GDPR) and security standards like PCI-DSS. Proactive risk management is integral to our operations.
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These transfers take place instantaneously and seamlessly, allowing the transaction experience to seem like any other ordinary credit or debit card transaction to the consumer and merchant.
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We invest in real-time risk monitoring, advanced fraud detection systems, and comprehensive cybersecurity protocols to mitigate financial, operational, and regulatory risks. Our strong relationships with regulatory bodies in both the U.S. and the EU allow us to anticipate changes in the regulatory landscape, ensuring that we adapt swiftly to maintain uninterrupted service delivery and operational integrity.
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While our blockchain ledger records transaction details instantaneously, the final settlement of each transaction can take days to weeks, depending upon contract terms between us and the Gateways we use, between us and our Independent Sales Organizations (“ISO”), and between us and/or our ISOs and merchants who use our services.
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Sustainable Growth and Value Creation RYVYL’s long-term success is anchored in sustainable growth strategies that deliver value to our customers, shareholders, and partners. We are committed to diversifying revenue streams beyond traditional transaction-based income through the expansion of value-added services such as FX trading, treasury advisory, and compliance-as-a-service for fintech partners. A customer-centric approach underpins our growth strategy.
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In the case where the Gateways have not yet remitted funds to us pertaining to transactions already processed, we record those amounts as cash due from gateways, net – a current asset.
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We focus on enhancing client relationships, improving user experiences, and fostering customer loyalty through tailored support models and innovative service offerings. Strategic mergers and acquisitions play a key role in our growth trajectory, allowing us to acquire complementary technologies, expand our customer base, and strengthen our regulatory footprint in critical markets.
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Concurrently, we record a portion of the cash due from gateways as revenue and the remaining balance, which is due to merchants and ISOs, as payment processing liabilities, net – a current liability. 7 Table of Contents Our primary revenue drivers in fiscal year 2023 were the continuing growth of our merchant acquiring business utilizing our QuickCard System and geographic expansion in the European market and in American Samoa.
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Our commitment to environmental, social, and governance (ESG) principles is embedded in also our operations. We prioritize ethical business practices, data privacy, financial inclusion, and environmental responsibility, aligning our corporate values with the expectations of our stakeholders and the broader global community.
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We believe the RYVYL Platform is the most advanced technology released in the space to date. The latest installment of our technology, features the following new properties: 1. Payment token and e-wallet platform; 2. Banking as a service platform; 3. Mobile POS software for retail; 4. Dynamic business Application Programming Interfaces or APIs; 5. RYVYL Blockchain as a service.
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On October 13, 2022, GreenBox POS changed its name to “RYVYL Inc.” Our Products and Services RYVYL Product Portfolio RYVYL offers a comprehensive suite of financial products designed to meet the diverse and evolving needs of businesses and financial institutions worldwide.
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We believe our holistic end-to-end capabilities minimize user pain points in onboarding, transactions and offboarding. In 2022, we launched a new kind of media to the mix: Secure Token Technology, called Coyni. This token is neither minted nor mined, but rather it is the equivalent of a contract (an asset class called Smart Contract).
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Our products are powered by cutting-edge technology, enabling seamless, secure, and scalable payment processing, treasury management, and financial operations across multiple industries. With direct connections to major card brands, global banking networks, and leading payment gateways, RYVYL facilitates cross-border transactions and real-time fund disbursements in over 200 markets and 140 currencies globally.
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As such, Secure Token Technology has many advantages over tokens, and delivers on the features most sought after in the crypto payment space. 1. It enables near real time funds visibility and faster settlement than traditional banking options; 2. It is highly secure, since the asset and its value are not held together in a closed-loop ecosystem; 3.
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This robust ecosystem supports businesses in optimizing financial performance, enhancing operational efficiency, and driving growth in an increasingly digital economy. 7 Table of Contents We generate the majority of our revenue from the acceptance and processing of credit card and debit card payments on behalf of merchants that operate principally online.
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It is deletable – the token can be cancelled; 4. It is reversible (undo-able), allowing for chargebacks in the case of a bad transaction. This allows the token to be kept alive for another transaction by the same user; 5. It is attached to our transactional infrastructure.
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We typically charge our customers a small percentage, called a residual rate, of the gross value of each transaction processed, which we recognize as revenue as soon as the payment transaction occurs.
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This allows for the token to be usable for instant purchases, which we believe is an advantage for the merchants. These purchases, in turn, generate processing volume for us. We believe our platform will be a top choice for banks, e-commerce, and consumers.
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We also generate revenue from banking and online payments services for which we charge fees for various activities that include, but are not limited to, incoming and outgoing payment, bank account opening, account maintenance, foreign exchange services, etc. We recognize those fees as revenue when the services are provided to the customers.
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It is also the only type of blockchain payment processing platform that the Office of the Comptroller of the Currency has authorized for use by banks in a similar fashion to ACH, Wire, and Swift. Because of Secure Token Technology, it is also very good as a custodial vehicle.
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Strategic Priorities Our focus on continuous innovation, regulatory excellence, and customer-centric solutions ensures that RYVYL remains at the forefront of the fintech industry, delivering transformative financial services that empower businesses worldwide. Through our integrated business model, we are committed to creating lasting value for our clients, partners, and shareholders, supporting sustainable growth in an increasingly interconnected global economy.
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We believe our platform is the obvious tool of choice, without any meaningful competition, for both transactional and custodial roles of currency, and will appeal to various stakeholders: consumers, merchants, banks, and regulators.
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Key strategic initiatives include: ● Cross-Border Capabilities: We leverage our global infrastructure to support seamless cross-border transactions, enabling businesses to expand into new markets with ease.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe difficulties of combining the operations of the companies include, among others: ● the diversion of management’s attention to integration matters; ● difficulties in achieving anticipated cost savings, synergies, business opportunities, and growth prospects from the combination; ● potential challenges in obtaining requisite government regulatory approvals; ● difficulties in the integration of operations and systems; and ● conforming standards, controls, procedures, accounting and other policies, business cultures, and compensation structures between the two companies. 18 Table of Contents We cannot be certain that the products and offerings of companies we may acquire, or acquire an interest in, will achieve or maintain popularity with consumers in the future or that any such acquired companies or investments will allow us to market our products more effectively, develop our competencies or to grow our business.
Biggest changeThe difficulties of combining the operations of the companies include, among others: ● the diversion of management’s attention to integration matters; ● difficulties in achieving anticipated cost savings, synergies, business opportunities, and growth prospects from the combination; ● potential challenges in obtaining requisite government regulatory approvals; ● difficulties in the integration of operations and systems; and ● conforming standards, controls, procedures, accounting and other policies, business cultures, and compensation structures between the two companies.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, or through the issuance of shares under other types of contracts, or upon the exercise or conversion of outstanding options, warrants, convertible debt or other similar securities, the ownership interests of our stockholders will be diluted, and the terms of such financings may include liquidation or other preferences, anti-dilution rights, conversion and exercise price adjustments and other provisions that adversely affect the rights of our stockholders, including rights, preferences, and privileges that are senior to those of our holders of Common Stock in terms of the payment of dividends or in the event of a liquidation.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, or through the issuance of shares under other types of contracts, or upon the exercise or conversion of outstanding options, warrants, convertible debt or other similar securities, the ownership interests of our stockholders will be diluted, and the terms of such financings may include liquidation or other preferences, anti-dilution rights, conversion and exercise price adjustments and other provisions that adversely affect the rights of our stockholders, including rights, preferences, and privileges that are senior to those of our holders of Common Stock in terms of the payment of dividends or in the event of a liquidation.
Litigation may be necessary to defend against such claims, which could result in substantial costs and be a distraction to management and which may have a material adverse effect on us, even if we are successful in defending such claims. 20 Table of Contents We also rely in our business on trade secrets, know-how and other proprietary information.
Litigation may be necessary to defend against such claims, which could result in substantial costs and be a distraction to management and which may have a material adverse effect on us, even if we are successful in defending such claims. 26 Table of Contents We also rely in our business on trade secrets, know-how and other proprietary information.
In reviewing potential acquisitions or investments, we target assets or companies that we believe offer attractive products or offerings, the ability for us to leverage our offerings, competencies, or other synergies. The combination of two or more independent businesses is a complex, costly, and time-consuming process that will require significant management attention and resources.
In reviewing potential acquisitions or investments, we target assets or companies that we believe offer attractive products or offerings, the ability for us to leverage our offerings, competencies, or other synergies. 23 Table of Contents The combination of two or more independent businesses is a complex, costly, and time-consuming process that will require significant management attention and resources.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our Common Stock could decrease, which might cause our stock price and trading volume to decline.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our Common Stock could decrease, which might cause our stock price and trading volume to decline. 28 Table of Contents
We depend on the leadership and experience of our relatively small number of key executive management personnel, particularly our Chairman of the Board of Directors (the “Board”) and Executive Vice President, Ben Errez, and our Director and Chief Executive Officer, Fredi Nisan.
We depend on the leadership and experience of our relatively small number of key executive management personnel, particularly our Chairman of the Board of Directors (the “Board”) and Executive Vice President, Ben Errez, our Director and Chief Executive Officer, Fredi Nisan, and our Chief Financial Officer, George Oliva.
Furthermore, we cannot be certain that our efforts will be sufficient to remediate or prevent future material weaknesses or significant deficiencies from occurring. We have identified control deficiencies in the design and implementation of our internal control over financial reporting that constituted a material weakness.
Furthermore, we cannot be certain that our efforts will be sufficient to remediate or prevent future material weaknesses or significant deficiencies from occurring. 22 Table of Contents We previously identified control deficiencies in the design and implementation of our internal control over financial reporting that constituted a material weakness.
We may employ individuals who were previously employed by companies that are developing blockchain or cryptocurrency products and technology, including our competitors or potential competitors.
We may employ individuals who were previously employed by companies that are developing similar products and technology, including our competitors or potential competitors.
If we fail to remediate such material weaknesses or if we otherwise fail to establish and maintain effective control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected. 17 Table of Contents We may require additional financing to sustain or grow our operations.
If we fail to remediate such material weaknesses or if we otherwise fail to establish and maintain effective control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected. We will require additional financing to sustain or grow our operations.
As a strategic response to changes in the competitive environment, we may from time to time make certain decisions concerning expenditures, pricing, service, or marketing that could have a material and adverse effect on our business, results of operations, and financial condition. Due to the foregoing factors, our quarterly revenues and operating results are difficult to forecast.
As a strategic response to changes in the competitive environment, we may from time to time make certain decisions concerning expenditures, pricing, service, or marketing that could have a material and adverse effect on our business, results of operations, and financial condition.
Many of our payment facilitator competitors are significantly larger than we are and have considerably greater financial, technical, marketing, and other resources than we do. Some competitors may have a lower cost of funds and access to funding sources that are not available to us.
Notable companies in the payment facilitator industry include PayPal, Stripe, and Square. Many of our payment facilitator competitors are significantly larger than we are and have considerably greater financial, technical, marketing, and other resources than we do. Some competitors may have a lower cost of funds and access to funding sources that are not available to us.
Our executive officers, directors, and principal shareholders maintain the ability to control substantially all matters submitted to shareholders for approval. As of December 31, 2023, our executive officers, directors, and shareholders who owned more than 5% of our outstanding Common Stock, in the aggregate, beneficially owned 2,229,819 shares of Common Stock representing approximately 36% of our outstanding capital stock.
Our executive officers, directors, and principal shareholders maintain the ability to control substantially all matters submitted to shareholders for approval. As of March 24, 2025, our executive officers, directors, and shareholders who owned more than 5% of our outstanding Common Stock, in the aggregate, beneficially owned 2,307,471 shares of Common Stock representing approximately 27% of our outstanding capital stock.
The funds in our accounts are held in banks or other financial institutions. Our funds held in non-interest bearing and interest-bearing accounts would exceed any applicable Federal Deposit Insurance Corporation (“FDIC”) insurance limits.
Our funds held in non-interest bearing and interest-bearing accounts would exceed any applicable Federal Deposit Insurance Corporation (“FDIC”) insurance limits.
The losses incurred from a breach of data security and operational failures as well as the precautionary measures required to address this evolving risk may adversely impact our financial condition, results of operations and cash flows.
The losses incurred from a breach of data security and operational failures as well as the precautionary measures required to address this evolving risk may adversely impact our financial condition, results of operations and cash flows. Business interruptions or systems failures may impair the availability of our websites, applications, products or services, or otherwise harm our business.
The COVID-19 pandemic negatively impacted some of our clients as they saw reductions in revenues due to business closures which caused our processing volume to decline.
A prolonged economic downturn could adversely affect our business. Uncertain global economic conditions could adversely affect our business. The COVID-19 pandemic negatively impacted some of our clients as they saw reductions in revenues due to business closures which caused our processing volume to decline.
In addition, because we have limited to no operating history and limited experience in making these estimates, judgments, and assumptions, the risk of future charges to income may be greater than if we had more experience in these areas.
In addition, because we have limited to no operating history and limited experience in making these estimates, judgments, and assumptions, the risk of future charges to income may be greater than if we had more experience in these areas. Any such charges could significantly harm our business, financial condition, results of operations, and the price of our securities.
However, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Additionally, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Additionally, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Risks Related to Cybersecurity, Information Technology, and Intellectual Property We are increasingly dependent on information technology, and potential cyberattacks, security problems, or other disruption and expanding social media vehicles present new risks.
Due to the foregoing factors, our revenues and operating results are difficult to forecast. 24 Table of Contents Risks Related to Cybersecurity, Information Technology, and Intellectual Property We are increasingly dependent on information technology, and potential cyberattacks, security problems, or other disruption and expanding social media vehicles present new risks.
Privacy regulation is an evolving area and compliance with applicable privacy regulations may increase our operating costs or adversely impact our ability to service our clients and market our products and services.
In addition, our insurance may not be adequate to compensate us for all losses or failures that may occur. Privacy regulation is an evolving area and compliance with applicable privacy regulations may increase our operating costs or adversely impact our ability to service our clients and market our products and services.
Although we have now completed the restatement, we cannot guarantee that we will have no further inquiries from the SEC or The Nasdaq Stock Market LLC (“Nasdaq”) regarding our restated consolidated financial statements or matters relating thereto.
The restatement process was highly time and resource-intensive and involved substantial attention from management, as well as significant legal and accounting costs. Although we have completed the restatements, we cannot guarantee that we will have no further inquiries from the SEC or The Nasdaq Stock Market LLC (“Nasdaq”) regarding our restated consolidated financial statements or matters relating thereto.
We are subject to laws, regulations, and other measures that govern a wide range of topics, including those related to matters beyond our core products and services.
Expectations relating to environmental, social, and governance (ESG) considerations could expose us to potential liabilities, increased costs, and reputational harm. We are subject to laws, regulations, and other measures that govern a wide range of topics, including those related to matters beyond our core products and services.
Any significant breakdown, invasion, destruction, interruption, or leakage of information from our systems could harm our business. 19 Table of Contents Further, in the normal course of our business, we collect, store and transmit proprietary and confidential information regarding our customers, employees, and others, including personally identifiable information.
Further, in the normal course of our business, we collect, store and transmit proprietary and confidential information regarding our customers, employees, and others, including personally identifiable information.
Any failure, or perceived failure, by us to adhere to our public statements, comply fully with developing interpretations of ESG laws and regulations, or meet evolving and varied stakeholder expectations and standards could harm our business, reputation, financial condition, and operating results. 15 Table of Contents Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, have and could in the future, adversely affect our business, financial condition, results of operations, or prospects.
Any failure, or perceived failure, by us to adhere to our public statements, comply fully with developing interpretations of ESG laws and regulations, or meet evolving and varied stakeholder expectations and standards could harm our business, reputation, financial condition, and operating results.
Any such charges could significantly harm our business, financial condition, results of operations, and the price of our securities. 16 Table of Contents The restatement of our historical financial statements has consumed a significant amount of our time and resources and may continue to do so.
The restatement of our historical financial statements has consumed a significant amount of our time and resources and may continue to do so.
We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business, financial condition, and results of operations. It may be illegal now, or in the future, to participate in blockchains or utilize similar digital assets in one or more countries, the ruling of which would adversely affect us.
We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business, financial condition, and results of operations. Litigation may adversely affect our business, financial condition and results of operations.
In some cases, it will be difficult to anticipate or immediately detect such incidents and the damage they cause.
In some cases, it will be difficult to anticipate or immediately detect such incidents and the damage they cause. Any significant breakdown, invasion, destruction, interruption, or leakage of information from our systems could harm our business.
Moreover, the ultimate success and profitability of the new products may depend on our ability to resolve technical and technological challenges in a timely and cost-effective manner.
Moreover, the ultimate success and profitability of the new products may depend on our ability to resolve technical and technological challenges in a timely and cost-effective manner. Our investments in productive capacity and commitments to fund advertising and product promotions in connection with these new products could erode profits if those expectations are not met.
Raising additional capital may cause dilution to our existing stockholders and investors, restrict our operations or require us to relinquish rights to our products and/or product candidates on unfavorable terms to us. We may seek additional capital through a variety of means, including through private and public equity offerings and debt financings, collaborations, strategic alliances, and marketing or licensing arrangements.
Raising additional capital may cause dilution to our existing stockholders and investors, restrict our operations or require us to relinquish rights to our products and/or product candidates on unfavorable terms to us.
We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our Board, our Board committees or as executive officers.
The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our Board, our Board committees or as executive officers. 27 Table of Contents If we are not able to comply with the applicable continued listing requirements or standards of Nasdaq, our common stock could be delisted from Nasdaq.
A claim brought against us that is uninsured or underinsured could result in unanticipated costs, thereby adversely affecting our results of operations and resulting in a reduction in the trading price of our stock. Expectations relating to environmental, social, and governance (ESG) considerations could expose us to potential liabilities, increased costs, and reputational harm.
A claim brought against us that is uninsured or underinsured could result in unanticipated costs, thereby adversely affecting our results of operations and resulting in a reduction in the trading price of our stock. Please see the section titled Legal Proceedings elsewhere in this Report for more details on the Company’s currently ongoing litigation.
As described in Item 9A of Part II of this Report, management is in the process of remediating the deficiency described above and intends to take any additional actions as may be deemed appropriate to further strengthen the Company’s internal control over financial reporting.
Management completed its remediation of the identified control deficiencies as of September 30, 2024, and intends to continue to take additional actions as may be deemed appropriate to further strengthen the Company’s internal control over financial reporting. However, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
An investment in our securities involves a high degree of risk. Risks Related to Our Business and Industry The loss of key personnel or the inability of replacements to quickly and successfully perform in their new roles could adversely affect our business.
An investment in our securities involves a high degree of risk. Risks Related to Our Business and Industry Our financial situation creates doubt whether we will continue as a going concern.
Refer to the “Going Concern” subsection within Note 2, Summary of Significant Accounting Policies, for details of management’s intended plan and further assessment. Risks Related to Our Financial Position and Need for Capital Our financial statements may be materially affected if our estimates prove to be inaccurate as a result of our limited experience in making critical accounting estimates.
These and other complexities surrounding banking and payment processing laws may make it difficult for the licensees to acquire customers, thereby negatively impacting the Company’s ability to generate revenues from these arrangements. Our financial statements may be materially affected if our estimates prove to be inaccurate as a result of our limited experience in making critical accounting estimates.
Such circumstances could have a material adverse effect on our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect on our business, prospects or operations. Litigation may adversely affect our business, financial condition and results of operations.
Any of the foregoing risks could have a material adverse impact on our business, financial condition, and results of operations.
Removed
Our investments in productive capacity and commitments to fund advertising and product promotions in connection with these new products could erode profits if those expectations are not met. 14 Table of Contents A prolonged economic downturn could adversely affect our business. Uncertain global economic conditions could adversely affect our business.
Added
As described in the Notes to the Financial Statements for the years ended December 31, 2024, and 2023, the Company has a substantial doubt about the Company’s ability to continue as a going concern.
Removed
We could face substantial competition, which could reduce our market share and negatively impact our net revenue. Although we believe there is currently no other company in the payment facilitator industry using, as we are, blockchain infrastructure, notable companies in the payment facilitator industry include PayPal, Stripe, and Square.
Added
For the year ended December 31, 2024, we had a net loss of $26.8 million, and as of December 31, 2024, we had an accumulated deficit of $179.4 million.
Removed
Although currently cryptocurrencies and blockchain-based solutions generally are not regulated or are lightly regulated in most countries, one or more countries such as China and Russia may take regulatory actions in the future that could severely restrict the right to acquire, own, hold, sell or use these digital assets or to exchange for fiat currency.
Added
There can be no assurances that we will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or additional financing through private placements, public offerings and/or bank financing necessary to support our working capital requirements.
Removed
Such restrictions may adversely affect us. Such circumstances could have a material adverse effect on our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect on our business, prospects or operations.
Added
To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient, we will need to raise additional working capital. No assurance can be given that additional financing will be available, or if available, that we will be able to secure any such financing on acceptable terms.
Removed
The development and acceptance of competing blockchain platforms or technologies may cause consumers to use alternative distributed ledgers or other alternatives. The development and acceptance of competing blockchain platforms or technologies may cause consumers to use alternative distributed ledgers or an alternative to distributed ledgers altogether.
Added
These conditions raise substantial doubt about our ability to continue as a going concern. If adequate working capital is not available, we may be forced to discontinue operations, which would cause investors to lose their entire investment. We have entered into a Securities Purchase Agreement to sell a material subsidiary, which represents a substantial portion of our current business.
Removed
This may adversely affect us and our exposure to various blockchain technologies and prevent us from realizing the anticipated profits from our investments.
Added
Additionally, we may be required to pay significant liquidated damages if the prospective purchaser is unable to close the acquisition.
Removed
This transition coincided with a change in our banking partner that was prompted by recent changes in the compliance environment and banking regulations. The unforeseen abrupt nature of the transition and slow initial adoption of the app-based product has led to a significant decline in processing volume in North America.
Added
As described elsewhere in this Report, we entered into a Securities Purchase Agreement with a prospective purchaser, which provides for the sale to such prospective purchaser of all of the issued and outstanding shares of capital stock of our indirect subsidiary, Ryvyl EU (the “Ryvyl EU Shares”), which represents a materially significant portion of the Company’s current business and substantially all the business classified under the Company’s International reporting segment as described in the Notes to the Financial Statements for the year ended December 31, 2024 and 2023.
Removed
This in turn has adversely affected revenue in the North America segment and, as a result, management anticipates consolidated revenue for the first quarter of 2024 will be down sequentially by approximately 30 percent overall, which is primarily attributable to this product transition. See Note 17, Subsequent Events, for additional information.
Added
We also entered into a Termination Agreement with such prospective purchaser, providing us with the right to terminate the Securities Purchase Agreement and such prospective purchaser’s right to purchaser our Ryvyl EU business, if we pay such prospective purchaser $16.5 million on or before April 23, 2025 (or as may be extended an additional 30 days until May 23, 2025 in consideration for our payment of $500,000 to such prospective purchaser).
Removed
As a result of the developments described above, the Company’s liquidity in its North America segment has been adversely impacted in the short term. In direct response, management has devised a plan, which it has assessed as appropriate and sufficient to address the liquidity shortfall in the North America segment.
Added
In the event that we are unable to terminate the sale of our Ryvyl EU business, the prospective purchaser would be able to acquire our Ryvyl EU business, which represents a substantial percentage of our current business.
Removed
As further described in Note 3 to the consolidated financial statements, we have restated our consolidated financial statements for the therein. The restatement process was highly time and resource-intensive and involved substantial attention from management, as well as significant legal and accounting costs.
Added
The loss of such business would have a material adverse effect on our business and financial condition and would likely result in the termination of our business.
Removed
The material weakness that was identified, which relates to internal control over financial reporting, is as follows: ● Currently, management does not have a complete process in place to fully reconcile the transactions between its operating system (a Company-developed platform) and its general ledger system, at the individual transaction level.
Added
Additionally, if the prospective purchaser is unable to acquire the Ryvyl EU Shares for any reason other than our breach, including the inability to obtain any regulatory clearances required for such transfer from the applicable Bulgarian governmental authorities, then we are required to pay such prospective purchaser liquidated damages in the amount of $16.5 million.
Removed
This deficiency hampers the Company’s ability to timely and accurately identify differences that may require adjustment to its consolidated financial statements.
Added
In the event that the prospective purchaser is unable to acquire the Ryvyl EU Shares, as a result of our breach, then we are required to pay the prospective purchaser liquidated damages in an amount equal to the appraised value of the Ryvyl EU Shares.
Added
Our payment of either of such liquidated damages amounts to the prospective purchaser would have a material adverse impact on our business and financial condition and, in the event of our obligation to pay $16.5 million, would likely result in the termination of our business, and in the event of our obligation to pay the appraised value of the Ryvyl EU Shares, would definitely result in the termination of our business. 18 Table of Contents The loss of key personnel or the inability of replacements to quickly and successfully perform in their new roles could adversely affect our business.
Added
The payments technology industry is highly competitive and highly innovative, and some of our competitors have greater financial and operational resources than we do, which may give them an advantage with respect to the pricing of services offered to customers and the ability to develop new and disruptive technologies.
Added
We operate in the payments technology industry, which is highly competitive and highly innovative. In this industry, our primary competitors include other payment processors, credit card processing firms, third-party card processing software institutions, as well as financial institutions, ISOs, and payment facilitators.
Added
Some of our current and potential competitors may be larger than we are and have greater financial and operational resources or brand recognition than we have. Competitors may provide payment processing services to merchants at lower margins or at a loss in order to generate banking fees from such merchants.
Added
It is also possible that larger financial institutions could decide to perform some or all of the services that we currently provide or could provide in the future in-house. We are facing increasing competition from competitors, including new entrant technology companies, who offer certain innovations in payment methods. Some of these competitors utilize proprietary software and service solutions.
Added
Some of these competitors have significant financial resources and robust networks and are highly regarded by consumers. In addition, some competitors, such as private companies or startup companies, may be less risk averse than we are and, therefore, may be able to respond more quickly to market demands.
Added
These competitors may compete in ways that minimize or remove the role of traditional card networks, acquirers, issuers and processors in the digital payments process.
Added
If these competitors gain a greater share of total digital payments transactions, it could have an adverse effect on our business, financial condition, results of operations and cash flows. 19 Table of Contents We could face substantial competition, which could reduce our market share and negatively impact our net revenue.
Added
Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, have and could in the future, adversely affect our business, financial condition, results of operations, or prospects. The funds in our accounts are held in banks or other financial institutions.
Added
This transition was driven by a change in our banking partner that was prompted by recent changes in the compliance environment and banking regulations impacting certain niche high-risk business verticals, which were the predominant revenue driver for QuickCard. 20 Table of Contents Management planned to recover the loss of revenues resulting from this product transition through the acceleration of business development efforts to launch the new app-based product in existing and new business verticals.
Added
However, due to continuous changes in the regulatory environment and our previous banking relationships, during the second quarter of 2024, management determined that the app-based product may not be a viable long-term solution for certain niche high-risk business verticals and made the decision to terminate the rollout of the app-based product in those specific business verticals.
Added
To address this change, the Company recently introduced a licensing product for its payments processing platform, which it believes will enable it to serve the same customer base in such verticals through a business partner with more suitable banking compliance capabilities. Revenues from the new licensing product are not expected to materialize until late 2025.
Added
Due of this strategy shift as well as a reorganization of the Company’s business to better align with management’s revised strategy, which was executed during the second quarter of 2024, the recovery of the loss of revenues resulting from this product transition is now not expected to occur until late 2025.
Added
The decline in revenues resulting from this product transition has adversely impacted the Company’s liquidity in its North America segment in the short term.
Added
As a result, management has determined that its cash in the North America segment as of December 31, 2024, will not be sufficient to fund the segment’s operations and capital needs for the next 12 months from the date of this Report.
Added
Refer to the “Going Concern” paragraph within Note 2, Summary of Significant Accounting Policies, of this Report for management’s response plan and further assessment. Fluctuations in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.
Added
As much of the Company’s current operations are conducted in Europe, the Company receives a significant amount of currency in Euros from its operations, however, the Company’s reporting currency is U.S. dollars. Accordingly, fluctuations in the value of the Euro relative to the U.S. dollar could affect its results of operations due to translational remeasurements.
Added
As its international operations expand relative to its domestic operations, an increasing portion of its revenue and operating expenses will be denominated in non-US currencies. Accordingly, the Company’s revenue and operating expenses will become increasingly subject to fluctuations due to changes in foreign currency exchange rates.
Added
If the Company is not able to successfully hedge against the risks associated with currency fluctuations, the Company’s business, financial condition and results of operations could be materially adversely affected. Changes to U.S. tariff and import/export regulations may affect our portfolio companies, and may negatively impact our business, results of operations or financial condition.
Added
On February 1, 2025, President Donald Trump announced the imposition of a 25% additional tariff on imports from Canada and Mexico as well as an additional 10% tariff on imports from China as part of a broader strategy to leverage access to American markets in exchange for concessions from other countries.
Added
The continued pursuit of such a strategy could result in changes to American trade policy that would negatively impact our Company by subjecting it to the material negative effects associated with aforementioned tariffs and an increasingly uncertain investment environment.
Added
For example, significant potential changes to U.S. trade policies, treaties and tariffs, create uncertainty about the future relationship between the United States and other countries. These developments may have material adverse effects on global economic conditions and the stability of global financial markets, and may significantly reduce global trade.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor further discussion of the risks associated with cybersecurity incidents, see the cybersecurity risk factor included in the section entitled “Item 1A. Risk Factors” in this Report.
Biggest changeFor further discussion of the risks associated with cybersecurity incidents, see the cybersecurity risk factor included in the section entitled “Item 1A. Risk Factors” in this Report. Impact of Cybersecurity Threats Our results of operations and financial condition have not been materially affected by cybersecurity threats or incidents to date.
Our Head of IT, or a delegate, informs the COO of certain cybersecurity incidents that may potentially be determined to be material pursuant to escalation criteria set forth in our incident response plan and related processes. The COO is also primarily responsible for advising our CEO and Chief Financial Officer regarding cybersecurity disclosures in public filings.
Our Head of IT, or a delegate, informs the CEO of certain cybersecurity incidents that may potentially be determined to be material pursuant to escalation criteria set forth in our incident response plan and related processes. The CEO is also primarily responsible for advising our Chief Financial Officer regarding cybersecurity disclosures in public filings.
The audit committee is informed of material risks from cybersecurity threats pursuant to the escalation criteria as set forth in our disclosure controls and procedures. Further, at least once per quarter, our management team reports on cybersecurity matters, including material risks and threats, to the audit committee, and the audit committee provides updates to the Board at regular Board meetings.
The audit committee is informed of material risks from cybersecurity threats pursuant to the escalation criteria, as set forth in our disclosure controls and procedures. Further, at least once per year, our management team reports on cybersecurity matters, including material risks and threats, to the audit committee, and the audit committee provides updates to the Board at regular Board meetings.
Management Under the oversight of the audit committee of the Board, and as directed by our Chief Executive Officer (“CEO”) and Chief Operating Officer (“COO”), the Head of IT is primarily responsible for the assessment and management of material cybersecurity risks and the Company’s annual security audits to meet the payment industry expectations.
Management Under the oversight of the audit committee of the Board, and as directed by our Chief Executive Officer (“CEO”), the Head of IT is primarily responsible for the assessment and management of material cybersecurity risks and the Company’s annual security audits to meet the payment industry expectations.
Our management team is informed about the effectiveness of the prevention, detection, mitigation, and remediation of cybersecurity incidents pursuant to criteria set forth in our incident response plan and related processes. Our audit committee is responsible for overseeing the establishment and effectiveness of controls and other procedures, including controls and procedures related to the public disclosure of material cybersecurity matters.
Our management team is informed about the effectiveness of the prevention, detection, mitigation, and remediation of cybersecurity incidents pursuant to criteria set forth in our incident response plan and related processes. 29 Table of Contents Our audit committee is responsible for overseeing the establishment and effectiveness of controls and other procedures, including controls and procedures related to the public disclosure of material cybersecurity matters.
The COO also notifies the audit committee chair of any material cybersecurity incidents.
The CEO also notifies the audit committee chair of any material cybersecurity incidents.
Added
However, to assess, identify, and manage material risks from cybersecurity threats, including as a result of previous cybersecurity incidents, we have invested and expect to continue to invest significant resources to sustain and enhance our information security and controls or to investigate and mitigate security vulnerabilities.
Added
Although we believe that we maintain a robust program of information security and controls and that none of the cybersecurity incidents that we have encountered to date have materially affected us, we cannot be certain that the security measures and procedures we have in place to detect security incidents and protect sensitive data will be successful or sufficient to counter all current and emerging risks and threats.
Added
The impact of a material cybersecurity incident involving our systems and data, or those of our clients, partners or vendors, could have a material adverse effect on our business strategy, results of operations and financial condition.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 2. Properties We lease office space at four locations in the United States (California, Illinois, Massachusetts, and Florida) and one location in the EU (Sofia, Bulgaria). Our executive offices are located at 3131 Camino del Rio North, Suite 1400, San Diego, CA.
Biggest changeItem 2. Properties We lease office space at four locations in the United States (California, Illinois, Massachusetts, and Florida) and two locations in the EU (Sofia, Bulgaria and Lisbon, Portugal). Our executive offices are located at 3131 Camino del Rio North, Suite 1400, San Diego, CA.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+1 added−4 removed0 unchanged
Biggest changePeriod Total Number of Shares Purchased Average Price per Share Paid Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs January 1 to December 31, 2022 268,376 $ 39.40 268,376 $ 653,215 Total 268,376 268,376 653,215 23 Table of Contents Recent Issuance of Unregistered Securities We had no sales of unregistered securities in 2023 that have not been previously disclosed in a Current Report on Form 8-K or Quarterly Report on Form 10-Q other than following: We issued a total of 4,890 unregistered shares of common stock for the year ended December 31, 2023.The shares were issued to (former) directors of the Board as compensation.
Biggest changeRecent Issuance of Unregistered Securities We had no sales of unregistered securities in 2024 that have not been previously disclosed in a Current Report on Form 8-K or Quarterly Report on Form 10-Q other than following: We issued a total of 88,792 unregistered shares of common stock for the year ended December 31, 2024.The shares were issued to vendors and former employees as compensation.
Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Common Stock is traded on The Nasdaq Capital Market under the symbol “RVYL.” Holders As of March 25, 2024, there were 5,995,972 shares of Common Stock outstanding held by approximately 220 holders of record (not including an indeterminate number of beneficial holders of stock held in street name).
Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Common Stock is traded on The Nasdaq Capital Market under the symbol “RVYL.” Holders As of March 24, 2025, there were 8,351,086 shares of Common Stock outstanding held by approximately 219 holders of record (not including an indeterminate number of beneficial holders of stock held in street name).
The specific timing and amount of repurchases will vary based on available capital resources and other financial and operational performance, market conditions, securities law limitations, and other factors. The repurchases will be made using our cash resources.
The repurchases may be suspended or discontinued completely at any time. The specific timing and amount of repurchases will vary based on available capital resources and other financial and operational performance, market conditions, securities law limitations, and other factors. The repurchases will be made using our cash resources.
Issuer Repurchases of Common Stock On January 6, 2022, we announced that the Board approved an increase of $10 million in its share repurchase program (the “Share Repurchase Program”), providing for the repurchase of a portion of our outstanding Common Stock for up to $15 million. We did not repurchase any shares during the year ended December 31, 2023.
Issuer Repurchases of Common Stock On January 6, 2022, we announced that the Board approved an increase of $10 million in its share repurchase program (the “Share Repurchase Program”), providing for the repurchase of a portion of our outstanding Common Stock for up to $15 million.
Under the Share Repurchase Program, we are authorized to repurchase shares through open market purchases, privately-negotiated transactions, accelerated share repurchases or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. The repurchases may be suspended or discontinued completely at any time.
We did not repurchase any shares during the year ended December 31, 2024 or the year ended December 31, 2023.Under the Share Repurchase Program, we are authorized to repurchase shares through open market purchases, privately-negotiated transactions, accelerated share repurchases or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act.
Dividends There have been no cash dividends declared on our Common Stock, and we do not anticipate paying cash dividends in the foreseeable future. Dividends are declared at the sole discretion of our Board.
Dividends There have been no cash dividends declared on our Common Stock, and we do not anticipate paying cash dividends in the foreseeable future. Dividends are declared at the sole discretion of our Board. Securities Authorized for Issuance under Equity Compensation Plans The Company maintains one stock-based compensation plan, the 2023 Equity Incentive Plan (the “2023 EIP”).
Removed
Securities Authorized for Issuance under Equity Compensation Plans The Company maintains four stock-based compensation plans: the 2020 Incentive and Non-statutory Stock Option Plan (“2020 Plan”); the 2021 Incentive and Non-statutory Stock Option Plan (“2021 Plan”); the 2021 Restricted Stock Plan (“2021 RS Plan”); and the 2023 Equity Incentive Plan (“2023 Plan”).
Added
The 2023 EIP was adopted by our Board of Directors on September 11, 2023, and thereafter timely approved by our stockholders. The 2023 EIP was subsequently amended on October 15, 2024, and thereafter timely approved by our stockholders. As of March 24, 2025, there are 4,224,705 shares of common stock available for the grant of awards under the 2023 EIP.
Removed
The 2023 Plan serves as the successor to the 2020 Plan, the 2021 Plan, and the 2021 RS Plan. The 2023 Plan became effective as of November 2, 2023. Outstanding awards under the 2020 Plan, the 2021 Plan, and the 2021 RS Plan continue to be subject to the terms and conditions of those respective plans.
Removed
Since November 2, 2023, no additional awards have been nor will be granted in the future, under the 2020 Plan, the 2021 Plan, and the 2021 RS Plan. As of December 31, 2023, the total number of shares available for future issuance under the 2023 Plan is 79,953.
Removed
For the year ended December 31, 2022, we repurchased 268,376 shares at an aggregate cost of $9.7 million. These repurchases include two related party transactions in which we repurchased 200,000 shares of common stock held by PrivCo, as further described in Item 13 of this Report.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeManagement ’ s Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS The following results are for the years ended December 31, 2023 and 2022 (dollars in thousands, except per share data): Year Ended December 31, 2023 2022 Change % of % of Amount Revenue Amount Revenue Amount % Revenue $ 65,869 100.0 % $ 32,909 100.0 % $ 32,960 100.2 % Cost of revenue 40,157 61.0 % 16,786 51.0 % 23,372 139.2 % Gross profit 25,712 39.0 % 16,123 49.0 % 9,589 59.5 % Operating expenses: Advertising and marketing 80 0.1 % 1,337 4.1 % (1,257 ) -94.0 % Research and development 5,757 8.7 % 6,276 19.1 % (519 ) -8.3 % General and administrative 8,678 13.2 % 6,603 20.1 % 2,075 31.4 % Payroll and payroll taxes 12,017 18.2 % 10,547 32.1 % 1,470 13.9 % Professional fees 7,076 10.7 % 5,312 16.1 % 1,764 33.2 % Stock compensation expense 1,853 2.8 % 2,969 9.0 % (1,116 ) -37.6 % Depreciation and amortization 2,553 3.9 % 20,917 63.6 % (18,364 ) -87.8 % Total operating expenses 38,014 57.7 % 53,961 81.9 % (15,947 ) -29.6 % Loss from operations (12,302 ) -18.7 % (37,838 ) -57.4 % 25,536 -67.5 % Other income (expense): Interest expense (3,340 ) -5.1 % (8,169 ) -24.8 % 4,829 -59.1 % Accretion of debt discount (13,134 ) -19.9 % (13,980 ) -42.5 % 845 -6.0 % Derecognition expense on conversion of convertible debt (25,035 ) -38.0 % (5,709 ) -17.3 % (19,326 ) 338.5 % Changes in fair value of derivative liability 6,544 9.9 % 16,857 51.2 % (10,313 ) -61.2 % Legal settlement expense (4,142 ) -6.3 % - 0.0 % (4,142 ) n/a Gain on sale of property and equipment 1,069 1.6 % - 0.0 % 1,069 n/a Other expense (2,472 ) -3.8 % (405 ) -1.2 % (2,067 ) 510.0 % Total other income (expense) (40,511 ) -61.5 % (11,406 ) -17.3 % (29,104 ) 255.2 % Loss before provision for income taxes (52,812 ) -80.2 % (49,244 ) -74.8 % (3,568 ) 7.2 % Provision for income taxes 289 0.4 % (8 ) 0.0 % 296 n/a Net loss $ (53,101 ) -80.6 % $ (49,236 ) -74.7 % $ (3,866 ) 7.9 % 25 Table of Contents The Company has organized its operations into two reportable segments: North America and International.
Biggest changeManagement ’ s Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS The following results of operations are provided on a consolidated basis and by reportable segment for the years ended December 31, 2024, and 2023 (dollars in thousands): Year Ended December 31, 2024 2023 Change % of % of Amount Revenue Amount Revenue Amount % Revenue $ 55,998 100.0 % $ 65,869 100.0 % $ (9,871 ) (15.0 )% Cost of revenue 33,572 60.0 % 40,157 61.0 % (6,585 ) (16.4 )% Gross profit 22,426 40.0 % 25,712 39.0 % (3,286 ) (12.8 )% Operating expenses: Advertising and marketing 95 0.2 % 80 0.1 % 15 19.5 % Research and development 3,848 6.9 % 5,757 8.7 % (1,909 ) (33.2 )% General and administrative 6,933 12.4 % 8,678 13.2 % (1,745 ) (20.1 )% Payroll and payroll taxes 13,836 24.7 % 12,017 18.2 % 1,820 15.1 % Professional fees 4,372 7.8 % 7,076 10.7 % (2,703 ) (38.2 )% Stock compensation expense 624 1.1 % 1,853 2.8 % (1,228 ) (66.3 )% Depreciation and amortization 2,264 4.0 % 2,553 3.9 % (289 ) (11.3 )% Impairment of goodwill 6,675 11.9 % - N/A 6,675 N/A Impairment of intangible assets 3,028 5.4 % - N/A 3,028 N/A Restructuring charges 1,636 2.9 % - N/A 1,636 N/A Total operating expenses 43,311 77.3 % 38,014 57.7 % 5,298 13.9 % Loss from operations (20,885 ) (37.3 )% (12,302 ) (18.7 )% (8,584 ) 69.8 % Other income (expense): Interest expense (862 ) (1.5 )% (3,340 ) (5.1 )% 2,478 (74.2 )% Accretion of debt discount (2,258 ) (4.0 )% (13,134 ) (19.9 )% 10,876 (82.8 )% Changes in fair value of derivative liability 14 0.0 % 6,544 9.9 % (6,530 ) (99.8 )% Derecognition expense on conversion of convertible debt (600 ) (1.1 )% (25,035 ) (38.0 )% 24,435 (97.6 )% Legal settlement expense (2,064 ) (3.7 )% (4,142 ) (6.3 )% 2,078 (50.2 )% Gain on sale of property and equipment - N/A % 1,069 1.6 % (1,069 ) (100.0 )% Other income (expense) 970 1.7 % (2,472 ) (3.8 )% 3,442 (139.2 )% Total other expense, net (4,800 ) (8.6 )% (40,510 ) (61.5 )% 35,710 (88.2 )% Loss before provision for income taxes (25,685 ) (45.9 )% (52,812 ) (80.2 )% 27,126 (51.4 )% Provision for income taxes 1,140 2.0 % 289 0.4 % 851 294.7 % Net loss $ (26,825 ) (47.9 )% $ (53,101 ) (80.6 )% $ 26,275 (49.5 )% 32 Table of Contents Year Ended December 31, North America segment 2024 2023 $ Change % Change Revenue $ 18,159 $ 48,938 $ (30,779 ) (62.9 )% Cost of revenue 10,766 29,742 (18,976 ) (63.8 )% Segment gross profit $ 7,393 $ 19,196 $ (11,804 ) (61.5 )% Year Ended December 31, International segment 2024 2023 $ Change % Change Revenue $ 37,839 $ 16,931 $ 20,908 123.5 % Cost of revenue 22,806 10,415 12,391 119.0 % Segment gross profit $ 15,033 $ 6,516 $ 8,517 130.7 % Revenue We generate the majority of our revenue from the acceptance and processing of credit and debit card payments on behalf of merchants that operate principally online.
However, there can be no guarantee that we will be successful in implementing our plan or in acquiring additional funding, that our projections of our future capital needs will prove accurate, or that any additional funding will be sufficient to continue our operations in the North America segment.
However, there can be no assurance that we will be successful in implementing our plan, that our projections of our future capital needs will prove accurate, or that any additional funding will be sufficient to continue our operations in the North America segment.
As a result, management has determined that its cash and cash equivalents in the North America segment as of December 31, 2023, will not be sufficient to fund the segment’s operations and capital needs for the next 12 months from the issuance of this Report.
As a result, management has determined that its cash in the North America segment as of December 31, 2024, will not be sufficient to fund the segment’s operations and capital needs for the next 12 months from the date of this Report.
Investing Activities – For the year ended December 31, 2023, net cash provided by investing activities was $2.3 million, primarily due to the proceeds from the sale of a building owned by the Company’s subsidiary, Charge Savvy.
For the year ended December 31, 2023, net cash provided by investing activities was $2.3 million primarily due proceeds from the sale of a building owned by the Company’s subsidiary, Charge Savvy. Cash Flows from Financing Activities For the year ended December 31, 2024, net cash used in financing activities was immaterial.
Refer to the “Going Concern” subsection within Note 2, Summary of Significant Accounting Policies , for additional information.
Refer to the “Going Concern” paragraph within Note 2, Summary of Significant Accounting Policies , of this Report for additional information.
LIQUIDITY AND CAPITAL RESOURCES The Company’s consolidated working capital at December 31, 2023 was $4.3 million, which included cash and cash equivalents of $12.2 million and restricted cash of $61.1 million. Historically, the Company has financed its operations with proceeds from cash from operations, the sales of equity securities, and its $100 million convertible note.
LIQUIDITY AND CAPITAL RESOURCES The Company’s consolidated working capital at December 31, 2024 was negative $8.2 million, which included cash of $2.6 million and restricted cash of $89.4 million. Historically, the Company has financed its operations with proceeds from cash from operations, the sales of equity securities, and its $100 million convertible note.
The increase in revenue was primarily driven by significant growth in processing volume, which increased from $1.719 billion for the year ended December 31, 2022 to $3.14 billion for the year ended December 31, 2023.
The increase in revenue in the International segment was primarily driven by the continued growth in processing volume, which increased from $1.7 billion for the year ended December 31, 2023 to $3.7 billion for the year ended December 31, 2024.
Financing Activities – For the year ended December 31, 2023, net cash used in financing activities was $3.0 million, primarily due to a repayment of principal on our convertible note in connection with the restructuring of that note during the year.
For the year ended December 31, 2023, net cash used in financing activities was $3.0 million, due to a partial repayment of principal on our convertible note in connection with the restructuring of that note during the year. CRITICAL ACCOUNTING ESTIMATES We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the U.S. (“GAAP”).
Management’s intended plan over the next twelve months to address the temporary liquidity shortfall in the North America segment includes, but is not limited to, the following: ● acceleration of the Company’s business development efforts to drive volumes in diversified business verticals; ● the implementation of cost control measures to more effectively manage spending in the North America segment and right sizing the organization, where appropriate; ● repatriation of offshore profits from the Company’s European subsidiaries, whose continued accelerated growth and generation of positive cash flow have already provided, and will continue to provide, an immediate and viable short-term source of capital during this product transition; and ● a capital raise, which the Company intends to negotiate and consummate in the immediate term.
Management’s intended plan over the next twelve months to address the liquidity shortfall in the North America segment includes, but is not limited to, the following: ● continued execution of its accelerated business development efforts to drive volumes in diversified business verticals with the Company’s other products, including the recently launched licensing of the Company’s payments processing platform in certain niche high-risk business verticals; ● continued implementation of cost control measures to more effectively manage spending in the North America segment and right-sizing the organization, where appropriate; ● the sale of noncore assets; ● continued repatriation of offshore profits from the Company’s European subsidiaries, whose continued accelerated growth and generation of positive cash flow have already provided and we believe will continue to provide, an immediate and viable short-term source of capital during this product transition (to date, the Company has repatriated approximately $17.6 million from Europe); and ● raising capital through a variety of means, including private and public equity offerings and debt financings.
The temporary decline in revenue described above has adversely impacted the Company’s liquidity in its North America segment in the short term.
The decline in revenues resulting from this product transition has adversely impacted the Company’s liquidity in its North America segment in the short term.
The gateways have strict guidelines pertaining to the scheduling of the release of funds to merchants based on several criteria that include, but are not limited to, return and chargeback history, associated risk for the specific business vertical, average transaction amount, etc.
When a merchant makes a sale, the process of receiving the payment card information and engaging the banks for transferring the proceeds to the merchant’s account via digital gateways, are the activities for which the Company gets to collect fees. 36 Table of Contents The gateways have strict guidelines pertaining to the scheduling of the release of funds to merchants based on several criteria that include, but are not limited to, return and chargeback history, associated risk for the specific business vertical, average transaction amount, etc.
The increase in cost of revenue is primarily attributable to the increase in transaction volume, which resulted in higher processing fees paid to gateways and commission payments to ISOs, in both North America and International segments.
The decrease in cost of revenue in North America was consistent with the decline in revenue for the segment. The increase in cost of revenue in the International segment is primarily attributable to the increase in processing volume described in the Company’s revenue discussion above, which resulted in higher interchange and other processing fees, and commission payments to ISOs.
In the North America segment, cost of revenue increased by $15.5 million, or 108.8%, compared to the year ended December 31, 2022. In the International segment, cost of revenue increased by $7.9 million, or 309.2%, compared to the year ended December 31, 2022.
At the reportable segment level, revenue in North America decreased by $30.8 million, or 62.9%, compared to the year ended December 31, 2023, while revenue in the International segment increased by $20.9 million, or 123.5%, compared to the year ended December 31, 2023.
See Note 9, Long-Term Debt, Net , for additional information. ● Legal settlement expense for the year ended December 31, 2023, increased by $4.1 million, compared to December 31, 2022, due to non-recurring legal settlements during the year. ● Gain on sale of property and equipment for the year ended December 31, 2023, increased by $1.1 million, compared to December 31, 2022, due to the sale of a building owned by the Company’s subsidiary, Charge Savvy. ● Other expense for the year ended December 31, 2023, increased $2.1 million, compared to December 31, 2022, primarily due to the carryover effects of the Company’s restatement of prior period consolidated financial statements.
The net decrease was primarily driven by the multiple restructurings of the Company’s convertible note during 2023, with no comparable activity during 2024. ● Legal settlement expense for the year ended December 31, 2024, decreased by $2.1 million or 50.2%, compared to December 31, 2023, due to lower and less significant legal settlements activity during 2024. ● Gain on sale of property and equipment for the year ended December 31, 2024, decreased by $1.1 million or 100%, compared to December 31, 2023, due to the sale of a building owned by the Company’s subsidiary, Charge Savvy, during 2023 with no similar sales during 2024. ● Other income (expense), net increased $3.4 million, or 139.2%, to income of $0.9 million for the year ended December 31, 2024 from expense of $2.5 million in the prior year, primarily due to an increase in exchange gains and interest income, and a $2.1 million of expense recorded in 2023 related to the carryover effects of the Company’s restatement of prior period consolidated financial statements, with no similar item recorded in 2024.
To mitigate potential credit losses associated with these risks, these gateway policies determine reserve requirements and a payment in arrears strategy.
To mitigate potential credit losses associated with these risks, these gateway policies determine reserve requirements and a payment in arrears strategy. While reserve and payment in arrears restrictions are in effect for a merchant payout, the Company records the reserved amounts against cash due from the gateways until released.
Management has assessed that its intended plan is appropriate and sufficient to address the liquidity shortfall in its North America segment.
Management has assessed that its intended plan described above, if successfully implemented, is appropriate and sufficient to address the liquidity shortfall in its North America segment and to provide funds to cover operations for the next 12 months from the date of the issuance of this Report.
In the North America segment, revenue increased by $20.3 million, or 71.0%, compared to the year ended December 31, 2022. In the International segment, revenue increased by $12.6 million, or 294.1%, compared to the year ended December 31, 2022.
At the reportable segment level, cost of revenue in North America decreased by $19.0 million, or 63.8%, compared to the year ended December 31, 2023, while in the International segment, cost of revenue increased by $12.4 million, or 119.0%, compared to the year ended December 31, 2023.
Non-Operating Expenses Non-operating expenses increased by $29.1 million, or 255.2%, to $40.5 million for the year ended December 31, 2023 from $11.4 million in the prior year.
Operating Expenses Operating expenses for the year ended December 31, 2024, increased by $5.3 million, or 13.9%, compared to the year ended December 31, 2023.
While reserve and payment in arrears restrictions are in effect for a merchant payout, the Company records the reserved amounts against cash due from the gateways until released. 28 Table of Contents RECENT DEVELOPMENTS In February 2024, the Company transitioned its QuickCard product in North America away from terminal-based to app-based processing.
Cash due from gateways is only applicable to payment processing services provided in North America, as. Ryvyl EU has its own gateway and, therefore, similar receivables are not created. RECENT DEVELOPMENTS In February 2024, the Company transitioned its QuickCard product in North America away from terminal-based to app-based processing.
The Company’s 2023 growth was primarily achieved through its expanding ISO and agent network and direct sales efforts while controlling external marketing efforts. ● General and administrative expenses for the year ended December 31, 2023, increased by $2.1 million, or 31.4%, compared to December 31, 2022, primarily due to non-recurring credit losses related to non-continuing legacy accounts and an increase in expenses related to the full year impact of our European subsidiary acquired in mid-2022. ● Payroll and payroll taxes for the year ended December 31, 2023, increased $1.5 million, or 13.9%, compared to December 31, 2022, primarily due to increased headcount in our acquired European subsidiary to support its growth and expansion strategy. ● Professional fees for the year ended December 31, 2023, increased $1.8 million, or 33.2%, compared to December 31, 2022, primarily due to higher accounting, consulting, and legal fees associated with the Company’s restatement of prior period consolidated financial statements. 26 Table of Contents ● Stock compensation expense for the year ended December 31, 2023, decreased $1.1 million, or 37.6%, compared to December 31, 2022, primarily due to a lower stock price associated with grants issued in 2023. ● Depreciation and amortization for the year ended December 31, 2023, decreased $18.4 million, or 87.8%, compared to December 31, 2022, primarily due to the $18.1 million write-off of the contracted acquisition of the Sky Financial portfolio during 2022.
This decrease was primarily due to non-recurring credit losses recorded during the year ended December 31, 2023, related to non-continuing legacy accounts. 33 Table of Contents ● Payroll and payroll taxes for the year ended December 31, 2024, increased $1.8 million, or 15.1%, compared to December 31, 2023, primarily due to strategic personnel investments in North America during the second half of 2024 as part of management’s plan to return to revenue growth in that segment, and increased headcount and higher variable compensation in the International segment to support the segment’s continued growth and expansion strategy. ● Professional fees for the year ended December 31, 2024, decreased $2.7 million, or 38.2%, compared to December 31, 2023, primarily due to accounting, consulting, and legal fees incurred in connection with the Company’s restatement of prior period consolidated financial statements during 2023, which did not recur during 2024. ● Stock compensation expense for the year ended December 31, 2024, decreased $1.2 million, or 66.3%, compared to December 31, 2023, primarily due to a smaller number of stock grants issued in 2024 and a lower stock price associated with grants issued. ● Impairment of goodwill and impairment of intangible assets increased $6.7 million, or 100%, and $3.0 million, or 100%, respectively, compared to December 31, 2023, as the Company wrote-off 100% of those assets in North America during 2024.
Additionally, changes in fair value of derivative liability for the year ended December 31, 2023, decreased by $10.3 million, or 61.2%, compared to the year ended December 31, 2022.
Total revenue for the year ended December 31, 2024, decreased by $9.9 million, or 15%, compared to the year ended December 31, 2023.
The decrease in cash usage from operating activities was primarily due to adjustments for non-cash expenses primarily related to the restructuring of our convertible note ($31.6 million), depreciation expense ($2.6 million), and stock-based compensation ($1.9 million).
There inflows were partially offset by a net loss of $53.1 million non-cash expense adjustments of $35.3 million consisting primarily of depreciation and amortization, stock compensation expense, and non-cash expenses related to the restructuring of our convertible note.
Our ability to successfully address the short-term liquidity shortfall in the North America segment is contingent on management’s intended plan over the next twelve months to improve the segment’s liquidity and working capital requirements. Management has determined that its intended plan is appropriate and sufficient to address the liquidity shortfall.
Management has assessed that its intended plan described above, if successfully implemented, is appropriate and sufficient to address the liquidity shortfall in its North America segment and to provide funds to cover operations for the next 12 months from the date of the issuance of this Report.
The increase in processing volume is primarily attributable to the continued expansion of our ISO and partnership network and growth in our global payment processing businesses, banking-as-a-service offering, and American Samoa. Cost of Revenue Cost of revenue increased by $23.4 million, or 139.2%, to $40.2 million for the year ended December 31, 2023 from $16.8 million in the previous year.
The increase in processing volume is primarily attributable to the continued expansion of our ISO and partnership network and growth in our payments processing and banking-as-a-service offerings. Cost of Revenue Cost of revenue primarily consist of interchange and assessment fees, and various other fees paid to third-party payment processors and financial institutions.
The decrease is due to the Company’s restructuring of the convertible note during 2023, which included a waiver for interest on the convertible note through June 30, 2024. ● Derecognition expense on conversion of convertible debt for the year ended December 31, 2023, increased by $19.3 million, or 338.5%, compared to the year ended December 31, 2022.
This decrease was primarily driven by the following: ● Interest expense for the year ended December 31, 2024, decreased by $2.5 million, or 74.2%, compared to December 31, 2023, due the multiple restructurings of the convertible note during 2023, which reduced the principal balance and waived a portion of the accrued interest. ● On a net basis, Accretion of debt discount, Changes in fair value of derivative liability, and Derecognition expense on conversion of convertible note, for the year ended December 31, 2024, decreased by $28.8 million, or 91.0%, compared to December 31, 2023.
See Note 17, Subsequent Events , for additional information. 27 Table of Contents Cash Flow The following table shows cash flows for the periods presented (dollars in thousands): Years Ended December 31, 2023 2022 Net cash provided by (used in) operating activities $ 33,161 $ (9,344 ) Net cash provided by (used in) investing activities 2,287 (46,409 ) Net cash used in financing activities (3,008 ) (10,049 ) Net cash acquired from acquisitions - 16,719 Foreign currency translation adjustment 44 357 Net increase (decrease) in cash, cash equivalents, and restricted cash $ 32,484 $ (48,726 ) Operating Activities – For the year ended December 31, 2023, net cash provided by operating activities was $33.2 million, compared to net cash used in operating activities of $9.3 million for the year ended December 31, 2022.
However, there can be no assurance that we will be successful in implementing our plan, that our projections of our future capital needs will prove accurate, or that any additional funding will be sufficient to continue our operations in the North America segment. 35 Table of Contents Cash Flow Activities The following table shows cash flows for the periods presented (dollars in thousands): Years Ended December 31, 2024 2023 Net cash provided by (used in) operating activities $ 21,191 $ 33,161 Net cash provided by (used in) investing activities (1,808 ) 2,287 Net cash used in financing activities (241 ) (3,008 ) Effects of exchange rates on cash and restricted cash (430 ) 44 Net increase (decrease) in cash and restricted cash $ 18,712 $ 32,484 Cash Flows from Operating Activities For the year ended December 31, 2024, net cash provided by operating activities was $21.2 million, primarily due to net inflows related to changes in cash due from gateways of $12.7 million, accounts payable and other current liabilities of $3.2 million, and payment processing liabilities of $14.0 million.
Removed
These segments represent the components of the Company for which separate financial information is available that is utilized on a regular basis by the Chief Operating Decision Maker (“CODM”) to assess segment performance, set strategic goals, and allocate the Company's resources.
Added
We charge our customers a transaction fee that is generally calculated based on a percentage of the total transaction amount processed. We also generate revenue from banking and online payments services for which we charge fees for various activities that include, but are not limited to, incoming and outgoing payments, bank account opening, account maintenance, foreign exchange services, etc.
Removed
The following table provides a summary of our revenue by operating segment (dollars in thousands): Year Ended December 31, Revenue 2023 2022 $ Change % Change North America $ 48,938 $ 28,613 $ 20,325 71 % International 16,931 4,296 12,635 294 % Total revenue $ 65,869 $ 32,909 $ 32,960 100 % Revenue Revenue increased by $33.0 million, or 100%, to $65.9 million in the current year from $32.9 million in the previous year.
Added
The decrease in revenue in North America was driven by the loss of revenues associated with the product transition further described in Note 2, Summary of Significant Accounting Policies.
Removed
Cost of revenue consists of various processing fees paid to gateways and banks, as well as commission payments to the ISOs responsible for establishing and maintaining merchant relationships, and the cost associated with banking-as-a-service offering.
Added
It also includes commission payments to the ISOs responsible for establishing and maintaining merchant relationships. Total cost of revenue for the year ended December 31, 2024, decreased by $6.6 million, or 16.4%, compared to the year ended December 31, 2023.
Removed
Operating Expenses Operating expenses decreased by $15.9 million, or 29.6%, to $38.0 million for the year ended December 31, 2023 from $54.0 million in the prior year. The decrease was primarily driven by the following: ● Advertising and marketing expenses for the year ended December 31, 2023, decreased by $1.3 million, or 94.0%, compared to December 31, 2022.
Added
The increase was primarily driven by the following: ● Research and development expenses for the year ended December 31, 2024, decreased by $1.9 million or 33.2%, compared to December 31, 2023, as the Company began capitalizing a portion of internal-use software development costs during the second quarter of 2024. ● General and administrative expenses for the year ended December 31, 2024, decreased by $1.7 million, or 20.1%, compared to December 31, 2023.
Removed
During 2022, the Company incurred higher marketing costs in connection with its rebranding from Greenbox POS to RYVYL and the development of its new corporate website.
Added
See Note 2, Summary of Significant Accounting Policies, for additional details. ● Restructuring charges increased $1.6 million, or 100%, compared to December 31, 2023, due to the Company’s reorganization and restructuring of its business in North America during the second quarter of 2024.
Removed
This increase was primarily due to the following: ● Excluding accretion expense associated with the Company’s convertible note, interest expense for the year ended December 31, 2023, decreased by $4.8 million, or 59.1%, compared to the year ended December 31, 2022.
Added
The restructuring charges primarily included employee severance and termination benefits, and a write-off of assets related to the Coyni brand. Other Expense, Net Other expense, net for the year ended December 31, 2024, decreased by $35.7 million, or 88.2%, compared to the year ended December 31, 2023.
Removed
The increase in derecognition expense and the decrease in changes in fair value of the derivative liability were both due to the Company’s restructuring of its convertible note, which resulted in a significant reduction of the outstanding principal balance as of December 31, 2023.
Added
Our material liquidity needs principally relate to working capital requirements and research and development expenditures. Due to the decline in revenues resulting from the product transition further described in Note 2, Summary of Significant Accounting Policies, of this Report, the Company’s liquidity in its North America segment has been adversely impacted.
Removed
Our material liquidity needs principally relate to working capital requirements and research and development expenditures.
Added
As a result, management has determined that its cash in the North America segment as of December 31, 2024, will not be sufficient to fund the segment’s operations and capital needs for the next 12 months from the date of this Report. 34 Table of Contents The Company’s ability to successfully address this liquidity shortfall is contingent upon the successful execution of management’s intended plan over the next twelve months, which includes, without limitation: ● continued execution of its accelerated business development efforts to drive volumes in diversified business verticals with the Company’s other products, including the recently launched licensing of the Company’s payments processing platform in certain niche high-risk business verticals; ● continued implementation of cost control measures to more effectively manage spending in the North America segment and right-sizing the organization, where appropriate; ● the sale of noncore assets; ● continued repatriation of offshore profits from the Company’s European subsidiaries, whose continued accelerated growth and generation of positive cash flow have already provided and we believe will continue to provide, an immediate and viable short-term source of capital during this product transition (to date, the Company has repatriated approximately $17.6 million from Europe); and, ● raising capital through a variety of means, including private and public equity offerings and debt financings.
Removed
Due to the product transition described in Note 17, Subsequent Events, which has adversely impacted the Company’s liquidity in the short term, we believe that our cash and cash equivalents as of December 31, 2023 are not sufficient to fund the North America segment’s operations and capital needs for the next 12 months from the issuance of this Report.
Added
These inflows were partially offset by a net loss of $26.8 million and non-cash expense adjustments of $17.4 million consisting primarily of depreciation and amortization, debt discount accretion, impairment of goodwill and intangible assets, and restructuring charges.
Removed
Our ability to fund working capital and other expenditures in the North America segment will depend on our ability to generate cash from operating activities from our two operating segments, which is subject to our future operating success, further repatriation of offshore profits from our European subsidiaries, short-term borrowings in the U.S., and a capital raise, which the Company intends to consummate in the near term.
Added
For the year ended December 31, 2023, net cash provided by operating activities was $33.2 million, primarily due net inflows related to prepaids and other current assets of $6.6 million, accounts payable and other current liabilities of $2.3 million, and payment processing liabilities of $47.9 million.
Removed
The Company has signed an engagement letter with an investment bank and plans to raise capital as needed. However, there can be no guarantee that it will be available on a timely basis or on favorable terms and is subject to factors beyond our control, including general economic, political, and financial market conditions.
Added
Cash Flows from Investing Activities For the year ended December 31, 2024, net cash used by investing activities was $1.8 million, primarily due to outflows related to capitalized software development costs.
Removed
Cash flow from operating activities was also impacted by increases in payment processing liabilities, other current liabilities, cash due from gateways, net, and prepaid and other current assets.
Added
This transition was driven by a change in our banking partner that was prompted by recent changes in the compliance environment and banking regulations impacting certain niche high-risk business verticals, which were the predominant revenue driver for QuickCard.
Removed
Cash used in investing activities was $46.4 million for the year ended December 31, 2022, primarily due to $28.8 million paid to acquire Transact Europe Holdings, and, as more fully described elsewhere in this report, consideration paid in connection with an agreement to acquire the Sky Financial portfolio.
Added
Management planned to recover the loss of revenues resulting from this product transition through the acceleration of business development efforts to launch the new app-based product in existing and new business verticals.
Removed
Cash used in financing activities was $10.0 million for the year ended December 31, 2022, primarily due to repayments of our convertible note and repurchases of the Company’s treasury stock. CRITICAL ACCOUNTING ESTIMATES We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the U.S. (“GAAP”).
Added
However, due to continuous changes in the regulatory environment and our previous banking relationships, during the second quarter of 2024, management determined that the app-based product may not be a viable long-term solution for certain niche high-risk business verticals and made the decision to terminate the rollout of the app-based product in those specific business verticals.
Removed
When a 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.
Added
To address this change, during the third quarter of 2024, the Company introduced a licensing product for its payments processing platform, which it believes will enable it to serve the same customer base in such verticals through a business partner with more suitable banking compliance capabilities. Revenues from the new licensing product are not expected to materialize until late 2025.
Removed
This transition coincided with a change in our banking partner that was prompted by recent changes in the compliance environment and banking regulations. The unforeseen abrupt nature of the transition and slow initial adoption of the app-based product has led to a significant decline in processing volume in North America.
Added
Due of this strategy shift as well as a reorganization of the Company’s business to better align with management’s revised strategy, which was executed during the second quarter of 2024, the recovery of the loss of revenues resulting from this product transition is now not expected to occur until late 2025.
Removed
This in turn has adversely affected revenue in the North America segment and, as a result, management anticipates consolidated revenue for the first quarter of 2024 will be down sequentially by approximately 30 percent overall, which is primarily attributable to this product transition. See Note 17, Subsequent Events , for additional information.
Removed
However, there can be no guarantee that we will be successful in implementing our plan or in acquiring additional funding, that our projections of our future capital needs will prove accurate, or that any additional funding will be sufficient to continue our operations in the North America segment.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+1 added−1 removed0 unchanged
Biggest changeOur results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. During the years ended December 31, 2023 and 2022, we recorded other comprehensive income of $0.04 million and $0.4 million, respectively, in connection with the foreign currency translation adjustment.
Biggest changeFor the years ended December 31, 2024, and 2023, we recorded an other comprehensive loss of $1.7 million and $0.04 million, respectively, in connection with foreign currency translation adjustments. As the impact of foreign currency exchange rates has historically not been material to our consolidated financial statements, we have not engaged in any foreign currency hedging strategies.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risks in the ordinary course of our business, which primarily relate to fluctuations in foreign currency exchange rates. Foreign Currency Exchange Risk The functional currency of our foreign subsidiaries is the local currency in which those subsidiaries operate.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risks in the ordinary course of our business, which primarily relate to fluctuations in foreign currency exchange rates.
As the impact of foreign currency exchange rates has not been material to our consolidated financial statements, we have not engaged in any foreign currency hedging strategies. As our international operations grow, we will continue to reassess our approach to managing our risk relating to fluctuations in currency rates.
As our international operations grow, we will continue to reassess our approach to managing our risk relating to fluctuations in currency rates. 37 Table of Contents
Removed
The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our operations would not have had a material impact on our historical consolidated financial statements for the years ended December 31, 2023 and 2022.
Added
Foreign Currency Risk Our consolidated financial statements are presented in U.S. dollars and we have operations internationally that are denominated in the local currency in which those operations are located, primarily the Bulgarian Lev. Our results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates.

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