ryvyl20240331

ryvyl20240331_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

For the transition period from to

Commission file number: 001-34294

RYVYL INC.

(Exact name of small business issuer as specified in its charter)

Nevada	22-3962936
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

3131 Camino Del Rio North, Suite 1400
San Diego, CA	92108
(Address of principal executive offices)	(Zip Code)

(619) 631-8261

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	RVYL	The Nasdaq Stock Market LLC (Nasdaq Capital Market)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 13, 2024, the Registrant had 6,469,342 shares of common stock, $0.001 par value per share, outstanding.

TABLE OF CONTENTS

PART I Consolidated Financial Information		Page
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023	3
	Condensed Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended March 31, 2024 and 2023 (unaudited)	4
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2024 and 2023 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (unaudited)	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33

PART II Other Information
Item 1.	Legal Proceedings	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	36
Signatures		37

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RYVYL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share and per share data)

	March 31, 2024			December 31, 2023
	*(Unaudited)*
ASSETS
Current Assets:
Cash and cash equivalents	$	10,523		$	12,180
Restricted cash		78,293			61,138
Accounts receivable, net of allowance for credit losses of $40 and $23, respectively		1,066			859
Cash due from gateways, net of allowance of $2,636 and $2,636, respectively		1,426			12,834
Prepaid and other current assets		2,954			2,854
Total current assets		94,262			89,865
Non-current Assets:
Property and equipment, net		290			306
Goodwill		26,308			26,753
Intangible assets, net		4,439			5,059
Operating lease right-of-use assets, net		4,036			4,279
Other assets		2,536			2,403
Total non-current assets		37,609			38,800
Total assets	$	131,871		$	128,665

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	1,321		$	1,819
Accrued liabilities		4,653			5,755
Payment processing liabilities, net		83,916			76,772
Current portion of operating lease liabilities		717			692
Other current liabilities		456			504
Total current liabilities		91,063			85,542
Long term debt, net of debt discount		16,816			15,912
Operating lease liabilities, less current portion		3,522			3,720
Total liabilities		111,401			105,174
Commitments and contingencies

Stockholders' Equity:
Preferred stock, Series B, par value $0.01, 5,000,000 shares authorized; 55,000 shares issued and outstanding at March 31, 2024 and December 31, 2023		1			1
Common stock, par value $0.001, 100,000,000 shares authorized, shares issued and outstanding of 6,001,487 and 5,996,948, respectively		6			6
Additional paid-in capital		175,777			175,664
Accumulated other comprehensive (loss) income		(44	)		401
Accumulated deficit		(155,270	)		(152,581	)
Total stockholders' equity		20,470			23,491
Total liabilities and stockholders’ equity	$	131,871		$	128,665

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

RYVYL INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Dollars in thousands, except share and per share data)

(Unaudited)

	Three Months Ended March 31,
	2024			2023

Revenue	$	16,774		$	11,291
Cost of revenue		9,743			6,178
Gross profit		7,031			5,113

Operating expenses:
Advertising and marketing		17			75
Research and development		1,393			1,936
General and administrative		2,042			1,452
Payroll and payroll taxes		3,569			2,714
Professional fees		1,035			1,803
Stock compensation expense		224			193
Depreciation and amortization		657			620
Total operating expenses		8,937			8,793
Loss from operations		(1,906	)		(3,680	)
Other income (expense):
Interest expense		(28	)		(1,729	)
Accretion of debt discount		(908	)		(2,622	)
Changes in fair value of derivative liability		-			168
Other income or expense, net		343			(111	)
Total other expense, net		(593	)		(4,294	)
Loss before provision for income taxes		(2,499	)		(7,974	)
Income tax provision		190			5
Net loss	$	(2,689	)	$	(7,979	)
Comprehensive income statement:
Net loss	$	(2,689	)	$	(7,979	)
Foreign currency translation adjustment		(445	)		(58	)
Total comprehensive loss	$	(3,134	)	$	(8,037	)
Net loss per share:
Basic and diluted	$	(0.45	)	$	(1.53	)
Weighted average number of common shares outstanding:
Basic and diluted		5,988,424			5,221,060

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

RYVYL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollars in thousands, except share data)

(Unaudited)

	Common Stock						Preferred Stock				Additional			Other Accumulated						Total
	Shares			Amount			Series B Shares		Amount		Paid In Capital			Comprehensive Income (Loss)			Accumulated Deficit			Stockholders' Equity

Balance at December 31, 2023		5,996,948		$	6			55,000	$	1	$	175,664		$	401		$	(152,581	)	$	23,491

Issuance of common stock under equity incentive plans		6,333			-			-		-		119			-			-			119

Issuance of restricted common stock under equity incentive plans		14,443			1			-		-		93			-			-			94

Issuance of common stock upon exercise of stock options		6,218			-			-		-		-			-			-			-

Shares forfeited		(22,455	)		(1	)		-		-		(99	)		-			-			(100	)

Net loss and comprehensive loss		-			-			-		-		-			(445	)		(2,689	)		(3,134	)

Balance at March 31, 2024		6,001,487		$	6			55,000	$	1	$	175,777		$	(44	)	$	(155,270	)	$	20,470

	Common Stock											Treasury Stock						Additional			Other Accumulated						Total
	Shares			Amount		To be Issued			Amount			To be returned			Amount			Paid In Capital			Comprehensive Income (Loss)			Accumulated Deficit			Stockholders' Equity/(Deficit)

Balance at December 31, 2022		4,972,736		$	5		175,392		$	0			(13,689	)	$	(7	)	$	97,494		$	357		$	(99,772	)	$	(1,923	)

Common stock issued to employees as stock compensation		(891	)		-		-			-			-			-			31			-			-			31

Common stock issued for interest on convertible debt		175,392			-		(175,392	)		(0	)		-			-			-			-			-			-

Share repurchase		(13,672	)		-		-			-			13,689			7			(7	)		-			-			-

Carryover effects of financial statement restatements in prior periods		-			-		-			-			-			-			-			-			294			294

Net loss and comprehensive loss		-			-		-			-			-			-			-			(58	)		(7,979	)		(8,037	)

Balance at March 31, 2023		5,133,565		$	5		0		$	0			(0	)	$	-		$	97,518		$	299		$	(107,457	)	$	(9,635	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

RYVYL INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

	Three Months Ended March 31
	2024			2023
Cash flows from operating activities:
Net loss	$	(2,689	)	$	(7,979	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense		657			620
Noncash lease expense		70			913
Stock compensation expense		224			193
Accretion of debt discount		908			2,622
Changes in fair value of derivative liability		-			(168	)
Changes in assets and liabilities:
Accounts receivable, net		(207	)		296
Prepaid and other current assets		159			5,741
Cash due from gateways, net		11,408			119
Other assets		(391	)		(2,017	)
Accounts payable		(499	)		8,144
Accrued and other current liabilities		(1,259	)		(915	)
Accrued interest		-			709
Payment processing liabilities, net		7,144

SEC Form 10-Q filed by Ryvyl Inc.