RTB Digital, Inc.
For the period ended Mar 31, 2025. Filed May 20, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 20, 2025
RTB$6.08+2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001185185-24-001121
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-20.
0001185185-25-000525
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 57 previous paragraphs and 59 current paragraphs.
19 unchanged; 11 reworded; 29 added; 23 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
Going Concern
Current report
Substantial doubt exists as to our ability to continue as a going concern based on the fact that we do not have adequate working capital to finance our day-to-day operations. As described in the Notes to the Financial Statements included in our 2024 Form 10-K and in this Report, respectively, for the years ended December 31, 2024, and 2023, and the three month periods ended March 31, 2025 and 2024, there is a substantial doubt about our ability to continue as a going concern. 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. For the three months ended March 31, 2025, we had a net loss of $2.8 million, and as of March 31, 2025, we had an accumulated deficit of $182.2 million.
Current report
In February 2024, the Company stopped processing credit card payments on its QuickCard platform because our processing partner’s bank informed them that they no longer wished to process payments for cannabis merchants. QuickCard was our first-generation product and was designed to address the needs of previously all-cash businesses. Although not limited to the cannabis industry, prior to discontinuing QuickCard, cannabis merchants made up a substantial majority of the platform’s processing volume. The decline in revenues resulting from the discontinuation of QuickCard has adversely impacted the Company’s liquidity in its North America segment. Also, until recently, the Company had relied on the repatriation of profits from its European subsidiaries to cover some of its critical operating expenses in North America, which it will no longer be able to do once the Purchaser closes on the pre-funded sale of its wholly-owned subsidiary, Transact Europe, which is expected to occur during the second quarter of 2025 (see Note 16,Subsequent Events). As a result, management has determined that its cash balance in the North America segment as of March 31, 2025, will not be sufficient to fund the segment’s operations and capital needs for the next 12 months from the date of this Report and, unless we are able to raise additional capital, will only be sufficient to fund operations through approximately June 30, 2025. These conditions raise substantial doubt about our ability to continue as a going concern. See “*Risk Factors - Our financial situation creates doubt whether we will continue as a going concern”.*The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Current report
Preferred Stock Repurchase and Note Repayment Agreement and Non-Payment of Second Installment for Note Repayment Agreement
Current report
On January 23, 2025, the Company entered into a Preferred Stock Repurchase and Note Repayment Agreement (the “Repurchase Agreement”) with a securityholder of the Company (the “Securityholder”), which provides for repayment of the outstanding balance of an 8% Senior Convertible Note issued to the Securityholder on November 8, 2021 (the “Note”), which Note was originally due on November 5, 2023, and which maturity date was extended through April 5, 2026, pursuant to subsequent extensions provided by the Securityholder. Additionally, pursuant to two Exchange Agreements between the Company and the Securityholder entered into on July 25, 2023, and November 27, 2023, respectively, a portion of the outstanding balance of the Note was exchanged for 55,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.01 per share (the “Series B Preferred Shares”).
Current report
Pursuant to terms of the Repurchase Agreement, in consideration for an aggregate payment of $17.0 million by the Company to the Securityholder (the “Repurchase Price”), (i) the entire outstanding principal balance of the Note, including all accrued and unpaid interest, shall be deemed to have been paid and (ii) all outstanding Series B Preferred Shares held by the Securityholder will be repurchased by the Company.
Current report
The Repurchase Agreement provided for the payment of the Repurchase Price in two installments, the first in the amount of $13.0 million (the “First Installment”), which was paid on January 27, 2025. The second installment, in the amount of $4.0 million (the “Second Installment”), was due and payable on or before April 30, 2025 (the “Second Installment Date”), and the maturity date of the Note was advanced to such date. Upon the payment of the First Installment, all Series B Preferred Shares held by the Securityholder were repurchased.
Current report
The Repurchase Agreement further provides that, during the period from the payment of the First Installment until the Second Installment Date, no interest accrued on the remaining balance of the Note and certain restrictive covenants under the Note were temporarily waived. The Second Installment of the Note in the amount of $4.0 million was due and payable on or before April 30, 2025, which payment was not made on the Second Installment Date and has not been made as of the date of this Report. The Repurchase Agreement provides that, if the Second Installment was not paid by the Second Installment Date, previously waived interest will begin to accrue retroactive to the First Installment Date on the remaining balance of the Note and all other terms of the Note will also be restored as they were prior to the date the First Installment was paid. Since the terms of the Note prior to the Repurchase Agreement have been reinstated, which includes a Note maturity date of April 5, 2026, the Note has been classified as a long-term liability in the condensed consolidated balance sheet as of March 31, 2025.
Current report
Stock Purchase Agreement, Financing, and Modification Agreement
Current report
On January 23, 2025, in connection with the Company’s securing financing (the “Financing”), the Company entered into a stock purchase agreement (the “January 2025 SPA”) with a purchaser (the “Purchaser”), which provides for the sale to the Purchaser of all of the issued and outstanding shares of capital stock (the “Ryvyl EU Shares”) of the Company’s indirect subsidiary domiciled in Bulgaria, Ryvyl (EU) EAD (“Ryvyl EU”), by Transact Europe Holdings EOOD, the Company’s wholly owned subsidiary, also domiciled in Bulgaria (“Transact Europe”) for an aggregate purchase price of $15.0 million (the “Financing Purchase Price”). Under the terms of the January 2025 SPA, the Company was required to use $13.0 million of the net proceeds raised in the Financing to pay the First Installment of the Repurchase Price.
Current report
On January 23, 2025, the Company, Transact Europe and the Purchaser also entered into a Termination Agreement (the “Termination Agreement”). Among other things, the Termination Agreement provided the Company with the right to terminate the January 2025 SPA and all of the transactions contemplated therein, by paying the Purchaser $16.5 million on or before 90 days after the date of execution of the January 2025 SPA (April 23, 2025). If the January 2025 SPA was terminated as a result of such payment by the Company, the Ryvyl EU Shares would not be sold to the Purchaser and would be returned to Transact Europe and the January 2025 SPA would be void and of no further effect, except for some provisions that survive termination. In the event that the January 2025 SPA was not so terminated, then the Purchaser would close on its purchase of the Ryvyl EU Shares; provided, however, if the Purchaser is unable to close for any reason other than the Company’s breach, including the inability to obtain any regulatory clearances required for such transfer, then the Company is liable for damages in the amount of $16.5 million. In the event that the Purchaser is unable to close on the transfer of the Ryvyl EU Shares, as a result of the Company’s breach, then the Company is liable for damages in an amount equal to the appraised value of the Ryvyl EU Shares.
Current report
On April 23, 2025, the Company, Transact Europe, and the Purchaser executed and entered into a modification agreement (the “Modification Agreement”) which provides that, notwithstanding the terms of the Termination Agreement or the January 2025 SPA, the Purchaser would not take any actions to close on the purchase of the Ryvyl EU Shares before May 6, 2025, so that the Company and the Purchaser could attempt to enter into an alternative transaction in lieu of the securities purchase transaction under the January 2025 SPA. The Company had the right, at any time, on or before May 6, 2025, to extend this period, so that the Purchaser would not exercise such right to purchase the Ryvyl EU Shares, until May 27, 2025, in consideration for the Company’s payment to the Purchaser of $0.75 million. All other terms of the January 2025 SPA and the Termination Agreement remained unchanged and in full force and effect.
Current report
On May 7, 2025, the Purchaser provided a letter of notice to the Company and Transact Europe, stating that due to the Company not exercising its right to terminate the SPA by payment to the Purchaser of $16.5 million within the time so prescribed by the Termination Agreement, and as the Company had not exercised its right to extend the period during which time the Purchaser agreed not to exercise its rights to close on the transaction per the Modification Agreement (the “Standstill Period”), the Company no longer had the right to terminate the SPA pursuant to the Termination Agreement, and the Standstill Period had expired. The Purchaser also notified the Company that notwithstanding the foregoing, they did not intend to take the final steps to close on the purchase of the Ryvyl EU Shares for a period of ten calendar days from and including the date of the letter, or until May 16, 2025. The parties continued to be in conversation during this period. All other terms of the SPA and the Termination Agreement remained unchanged and in full force and effect. On May 14, 2025, the Purchaser notified the Company that it would proceed to take steps to acquire the Ryvyl EU Shares, and the Company issued a press release stating that the parties had ceased discussions to restructure the terms of the pre-funded asset sale of its RYVYL EU subsidiary. The Company expects the buyer will now take the final steps to close the pre-funded asset sale.
Current report
Blockchain Technology and QuickCard – Updated Disclosures
Current report
Refer to Note 16,*Commitments and Contingencies,*for additional information concerning an ongoing investigation by the SEC regarding possible violations of the federal securities laws, which in its course has included a review of the Company’s blockchain technology and its first-generation product, known as QuickCard. In response to the SEC’s concerns and based on our review of the facts and circumstances, the Company has determined to provide the following updated disclosures concerning its blockchain technology and its QuickCard product. The SEC’s concerns primarily pertain to disclosures in two areas: our description of our use of blockchain technology in our business and the lack of specific disclosure that the main vertical market being processed through QuickCard was cannabis merchants.
Current report
Our QuickCard product was designed to address the needs of previously all-cash businesses. Although not limited to cannabis, before QuickCard was discontinued, cannabis merchants made up a substantial majority of QuickCard processing volume. The Company stopped processing credit card payments on the QuickCard platform during the first quarter of 2024 because our processing partner’s bank informed them that they no longer wished to process payments for cannabis merchants. The turnover in acquiring banks of processing partners as well as the turnover in compliance officers within banks or changes in bank policies from time to time are examples of what we have historically referred to in public filings as “banking industry turmoil.”
Current report
When the Company stopped processing credit card payments on the QuickCard platform, we transitioned the QuickCard product from terminal-based processing to app-based processing. Our app-based processing platform would have required consumers to download an application and fund their app wallets via ACH bank transfers allowing them to purchase a prepaid virtual card. We have since determined that the app-based product may not be a viable long-term solution for certain niche high-risk business verticals (including cannabis merchants) and made the decision to terminate the rollout of the app-based product in those specific business verticals. In lieu of the app-based product, the Company began to offer a license of its QuickCard platform during the third quarter of 2024. Currently, the Company is not actively licensing any products.
Current report
QuickCard is a cloud-based digital payment platform that employs a private blockchain ledger database. While QuickCard payments are processed and settled through traditional payment processing gateways and not on the blockchain, once a transaction is complete, a record of the transaction is recorded on the blockchain ledger, and this record is therefore immutable. Once recorded on the blockchain ledger, the record of the transaction cannot be deleted or altered.
Current report
Our 2020 S-1 and subsequent periodic filings described a payment processing transaction as beginning with the consumer purchasing tokens from us, accomplished when we load a virtual wallet with a token, which then transfers credits to the merchant’s wallet on a dollar-for-dollar basis, after which the merchant releases its goods or services to the consumer. To clarify and more precisely describe the process, when a consumer presents a credit or debit card to our customer (the merchant), the process begins with the merchant creating and funding a digital wallet with the consumer’s payment, at which point the funds are converted to a digital representation of their deposit on a dollar-for-dollar basis, which we refer to as digital units or asset-based tokens. These are not cryptocurrency tokens and this is distinct and separate from the tokenization that occurs when a transaction is recorded on the blockchain. Merchants can request a withdrawal of their digital funds from us based on their wallet balances independent from the Company receiving cash at a later time from the acquiring bank in the network.
Current report
Until this year, QuickCard was our only product that employed the use of blockchain. QuickCard utilizes an open-source blockchain as its transaction ledger system. Transaction data is captured from payment endpoints, the data is encrypted and validated on Amazon Web Services (AWS) servers, validated transactions are formatted for blockchain compatibility, transaction blocks are created and added to the blockchain, and confirmation receipts are generated and stored.
Current report
While the blockchain is open-source and not created by or proprietary to the Company, we believe its implementation represents a proprietary technological advancement through, among other things:
Current report
Our proprietary elements include:
Current report
Our 2020 S-1 and subsequent periodic filings referred to transactions being verified by trusted partners. Transactions can be verified by merchants, but our blockchain ledger is not viewable by third parties. To ensure data integrity, the Company previously engaged a third-party vendor to perform an Information Technology General Controls (ITGC) audit of the system to ensure that transactions were accurately recorded. The ITGC audit did not result in any findings.
Current report
(in thousands)
Current report
Other Expense
Current report
Other expense increased by $0.8 million, or 140.1%, to $1.4 million for the three months ended March 31, 2025, from $0.6 million for the three months ended March 31, 2024. The increase was primarily driven by an increase in interest expense of $1.2 million related to a secured note payable, which the Company obtained in January 2025.
Current report
Cash Flow Activities
Current report
Financing Activities – Net cash provided by financing activities during the three months ended March 31, 2025 was $2.0 million and was primarily driven by proceeds from a short-term note payable obtained by the Company in January 2025, partially offset by the partial repayment of the 8% Senior convertible note during the quarter. Net cash used in financing activities during the three months ended March 31, 2024 was negligible.
Current report
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.
Removed paragraphs (23)
Previous report
Overview–** Organization and Name Changes**
Previous report
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. 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.
Previous report
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). On April 12, 2018, pursuant to the Verbal Agreement, the Company acquired PrivCo’s blockchain gateway and payment system business, point of sale system business, delivery business and kiosk business, bank and merchant accounts, as well as all intellectual property related thereto (the “GreenBox Business”). As consideration for the GreenBox Business, on April 12, 2018, the Company assumed PrivCo’s liabilities that had been incurred in the normal course of the GreenBox Business.
Previous report
On May 3, 2018, the Company formally changed its name to “GreenBox POS, LLC,” then subsequently changed its name to “GreenBox POS” on December 13, 2018. On October 13, 2022, GreenBox POS changed its name to “RYVYL Inc.”
Previous report
On May 21, 2021, the Company acquired all of the outstanding stock of Northeast Merchant Systems, Inc. (“NEMS”) in a transaction treated as a business combination. NEMS is a merchant services company providing merchant credit card processing through its own Bank Identification Number with the acquiring bank, Merrick. 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.
Previous report
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. 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. 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. 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.
Previous report
On March 31, 2022, the Company acquired a portfolio of merchant accounts from 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.
Previous report
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. 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. 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.
Previous report
In February 2024, the Company transitioned its QuickCard product in North America away from terminal-based to app-based processing. 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.
Previous report
As previously disclosed, management’s plan to recover the loss of revenues resulting from this product transition included the acceleration of business development efforts to launch the new app-based product in existing and new business verticals. 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 business verticals. To address this change, the Company recently introduced a licensing product for its payments processing platform, which 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 early 2025. 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, the recovery of the loss of revenues resulting from this product transition is now not expected to occur until early 2025.
Previous report
(Dollars in thousands)
Previous report
Other Income (Expense)
Previous report
Other expense increased by $1.5 million, or 238.0%, to $2.1 million for the three months ended September 30, 2024, from $0.6 million for the three months ended September 30, 2023. The increase was primarily driven by a net increase of $1.7 million related to debt discount accretion (+$3.9 million), changes in fair value of derivative liability (-$6.9 million), and derecognition expense on conversion of convertible debt (+$1.3 million), all primarily recognized in connection with the Company’s restructuring of its convertible note during the second quarter of 2024. Additionally, interest expense increased $0.2 million and legal settlement expense decreased $0.3 million.
Previous report
(Dollars in thousands)
Previous report
Revenue
Previous report
Cost of Revenue
Previous report
Operating Expenses
Previous report
Operating expenses increased by $4.5 million, or 16.5%, to $31.9 million for the nine months ended September 30, 2024, from $27.4 million for the nine months ended September 30, 2023. The increase was primarily due to a $6.7 million non-cash charge related to the write-off of goodwill in North America and restructuring charges of $1.6 million related to the Company’s reorganization and restructuring of its business in North America, both recorded during the second quarter of 2024. These increases were partially offset by a decrease in professional fees of $2.3 million due to lower accounting, consulting, and legal fees incurred in 2023 in connection with the Company’s restatement of prior period consolidated financial statements, and a decrease in research and development expenses of $1.4 million, as the Company began capitalizing a portion of these costs in the second quarter of 2024.
Previous report
Other Income (Expense)
Previous report
Other expense decreased by $10.0 million, or 74.2%, to $3.5 million for the nine months ended September 30, 2024, from $13.5 million for the nine months ended September 30, 2023. The decrease was primarily driven by a net decrease of $2.5 million related to debt discount accretion expense (-$7.6 million), changes in fair value of derivative liability (+$6.6 million), and derecognition expense on conversion of convertible debt (-$1.5 million), all primarily recognized in connection with the Company’s restructuring of its convertible note during the second quarter of 2024. Additionally, interest expense decreased $2.8 million, legal settlement expense decreased $2.6 million and other income (expense) decreased $2.1 million.
Previous report
Due to the product transition described under theRecent Developments section above, we believe that our cash and cash equivalents as of September 30, 2024 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. 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, and short-term borrowings in the U.S.
Previous report
Cash Flow
Previous report
Financing Activities*** ***– Net cash used by financing activities in the nine-month period ended September 30, 2024 was $0.2 million. Net cash used in financing activities in the nine-month period ended September 30, 2023 was negligible.
Reworded paragraphs (11)
Previous wording
Our Management’s Discussion and Analysis and Results of Operations contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the SEC.
Current wording
Our Management’s Discussion and Analysis and Results of Operations contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; our ability to continue operating as a going concern; our ability to pay our outstanding debt arrangements; and other risks that might be detailed from time to time in our filings with the SEC.
Previous wording
Revenue decreased by $4.9 million, or 27.9%, to $12.6 million for the three months ended September 30, 2024, from $17.5 million for the three months ended September 30, 2023. In the North America segment, revenue decreased $9.7 million, or 77.3%, compared to the three months ended September 30, 2023. In the International segment, revenue increased $4.8 million, or 95.8%, compared to the three months ended September 30, 2023. The decrease in revenue was primarily driven by a decrease in processing volume in the North America segment, which decreased from $341.0 million in the quarter ended September 30, 2023, to $170.6 million in the quarter ended September 30, 2024, and is attributable to the previously disclosed impact associated with the Company’s QuickCard product transition that began in February 2024. The decrease in revenue in North America was partially offset by an increase in revenue in the International segment that was primarily attributable to continued growth in processing volume, which increased from $517.0 million in the quarter ended September 30, 2023, to $952.3 million in the quarter ended September 30, 2024. The increase in processing volume in the International segment was driven by continued strong growth across multiple verticals, primarily, our Independent Sales Organizations (“ISO”) and partnership network, our global payments processing businesses, and banking-as-a-service offering.
Current wording
Consolidated revenue decreased $1.6 million, or 9.8%, to $15.1 million for the three months ended March 31, 2025, from $16.8 million for the three months ended March 31, 2024. In the North America segment, revenue decreased $6.9 million, or 71.4%, compared to the three months ended March 31, 2024. In the International segment, revenue increased $5.3 million, or 74.1%, compared to the three months ended March 31, 2024. The decrease in consolidated revenue was primarily driven by a decrease in processing volume in the North America segment, which decreased from $239.0 million in the quarter ended March 31, 2024, to $177.5 million in the quarter ended March 31, 2025, and is attributable to the previously disclosed impact associated with the Company’s QuickCard product transition. The decrease in revenue in North America was partially offset by an increase in revenue in the International segment that was primarily attributable to continued growth in processing volume, which increased from $755.0 million in the quarter ended March 31, 2024, to $859.6 million in the quarter ended March 31, 2025. The increase in processing volume in the International segment was driven by continued strong growth across multiple verticals, primarily, our Independent Sales Organizations (“ISO”) and partnership network, our global payments processing businesses, and banking-as-a-service offering.
Previous wording
Cost of revenue decreased by $3.1 million, or 28.2%, to $7.7 million for the three months ended September 30, 2024, from $10.8 million for the three months ended September 30, 2023. In the North America segment, cost of revenue decreased $6.0 million, or 77.1%, compared to the three months ended September 30, 2023. In the International segment, cost of revenue increased $2.9 million, or 94.6%, compared to the three months ended September 30, 2023. Cost of revenue primarily consists of various processing fees paid to gateways, as well as commission payments to the ISOs responsible for establishing and maintaining merchant relationships. The decrease in cost of revenue was primarily driven by the decrease in processing volumes in North America, as noted above, partially offset by an increase in processing volumes in the International segment.
Current wording
Consolidated cost of revenue decreased $1.3 million, or 13.6%, to $8.4 million for the three months ended March 31, 2025, from $9.7 million for the three months ended March 31, 2024. In the North America segment, cost of revenue decreased $4.1 million, or 74.6%, compared to the three months ended March 31, 2024. In the International segment, cost of revenue increased $2.8 million, or 66.2%, compared to the three months ended March 31, 2024. Cost of revenue primarily consists of various processing fees paid to gateways, as well as commission payments to the ISOs responsible for establishing and maintaining merchant relationships. The decrease in consolidated cost of revenue was primarily driven by the decrease in processing volumes in North America, as noted above, partially offset by an increase in processing volumes in the International segment.
Previous wording
Operating expenses decreased by $1.7 million, or 18.9%, to $7.3 million for the three months ended September 30, 2024, from $9.1 million for the three months ended September 30, 2023. The decrease was primarily driven by a decrease in research and development expenses of $0.5 million, as the Company began capitalizing a portion of these costs during the second quarter of 2024, and decreases in general and administrative expenses of $1.6 million and in professional fees of $0.2 million, both due to lower accounting, consulting, and legal fees incurred in 2023 in connection with the Company’s restatement of prior period consolidated financial statements.
Current wording
Operating expenses decreased $1.4 million, or 15.4%, to $7.6 million for the three months ended March 31, 2025, from $8.9 million for the three months ended March 31, 2024. The decrease was primarily driven by a decrease in research and development expenses of $0.9 million, as the Company did not begin capitalizing a portion of these costs until the second quarter of 2024, a decrease in general and administrative expenses of $0.5 million, primarily due to lower bad debt expense, and a decrease in depreciation and amortization of $0.5 million, primarily due to no amortization of intangible assets in North America, as these assets were written-off during the fourth quarter of 2024. These decreases were partially offset by an increase in restructuring charges of $0.4 million related to the impairment of previously acquired Logicquest Technology, Inc. assets during the first quarter of 2025.
Previous wording
The Company’s consolidated working capital at September 30, 2024 was negative $4.2 million, which included cash and cash equivalents of $4.3 million and restricted cash of $87.2 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. Our material liquidity needs principally relate to working capital requirements and research and development expenditures.
Current wording
The Company’s consolidated working capital at March 31, 2025 was negative $24.1 million, which included cash of $3.0 million and restricted cash of $74.5 million. Historically, the Company has financed its operations with proceeds from cash from operations, the sales of equity securities, and proceeds from its $100 million convertible note issued in November 2021. Our material liquidity needs principally relate to working capital requirements, research and development expenditures, and the repayment of short-term debt.
Previous wording
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. As a result, management has determined that its cash and cash equivalents in the North America segment as of September 30, 2024, will not be sufficient to fund the segment’s operations and capital needs for the next 12 months from the issuance of this Report. 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:
Current wording
As further described in Note 2,*Summary of Significant Accounting Policies – Going Concern,*in the unaudited condensed consolidated financial statements included in this Report, since the first quarter of 2024, the Company’s liquidity in its North America segment has been adversely impacted by the decline in revenues related to the discontinuation of its QuickCard product. As also noted in Note 2 of such financial statements, until recently, the Company had relied on the repatriation of profits from its European subsidiaries to cover some of its critical operating expenses in North America, which it will no longer be able to do once the Purchaser closes on the pre-funded sale of its wholly-owned subsidiary, Transact Europe, which is expected to occur during the second quarter of 2025 (see Note 16,Subsequent Events). As a result, management has determined that its cash in the North America segment as of March 31, 2025, will not be sufficient to fund the segment’s operations and capital needs for the next 12 months from the date of this Report and, unless the Company is able to raise additional capital, will only be sufficient to fund operations through approximately June 30, 2025. 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, but is not limited to, the following:
Previous wording
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 provide funds to cover operations for the next 12 months from the date of the issuance of this Report. However, there can be no guarantee 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.
Current wording
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. 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.
Previous wording
The following table shows cash flows for the periods presented (dollars in thousands):
Current wording
The following table shows cash flows for the periods presented (in thousands):
Previous wording
Operating Activities*** – For the nine months ended September 30, 2024 and 2023, net cash provided by operating activities was $19.1 million and $27.6 million, ***respectively. The cash provided by operating activities was primarily due to the timing of settlement of assets and liabilities.
Current wording
Operating Activities – For the three months ended March 31, 2025 and 2024, net cash used and net cash provided by operating activities was $15.6 million and $15.5 million, respectively. The net cash used and provided by operating activities was primarily driven by the timing of settlement of assets and liabilities.
Previous wording
Investing Activities*** ***– Net cash used in investing activities for the nine months ended September 30, 2024 and 2023, was $1.2 million and $0.1 million, respectively. The net cash used in investing activities for the nine months ended September 30, 2024 primarily relates to capitalized software development costs.
Current wording
Investing Activities – Net cash used in investing activities for the three months ended March 31, 2025 was $1.3 million. The net cash used in investing activities for the three months ended March 31, 2025 primarily relates to internal-use capitalized software development costs. Net cash used in investing activities for the three months ended March 31, 2024 was negligible.
Previous wording
The Company generates the majority of its revenue from payment processing services provided to its merchant clients. 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.
Current wording
The Company generates the majority of its revenue from payment processing services provided to its merchant clients. 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.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Nine Months Ended September 30, 2024 (Unaudited) Compared to Nine Months September 30, 2023 (Unaudited):
Previous report — wording carried elsewhere
Revenue decreased by $2.3 million, or 5.4%, to $41.3 million for the nine months ended September 30, 2024, from $43.6 million for the nine months ended September 30, 2023. In the North America segment, revenue decreased by $16.9 million, or 52.1%, compared to the nine months ended September 30, 2023. In the International segment, revenue increased by $14.5 million, or 128.5%, compared to the nine months ended September 30, 2023. The decrease in revenue was driven by a decrease in processing volume in the North America segment, which decreased from $1.0 billion in the nine months ended September 30, 2023, to $562 million in the nine months ended September 30, 2023, and is attributable to the previously disclosed impact associated with the Company’s QuickCard product transition that began in February 2024. The decrease in revenue in North America was partially offset by an increase in revenue in the International segment that was driven by continued growth in processing volume, which increased from $1.1 billion in the nine months ended September 30, 2023 to $2.6 billion in the nine months ended September 30, 2024. The increase in processing volume in the International segment was driven by continued strong growth across multiple verticals, primarily, our ISO and partnership network, our global payments processing businesses, and banking-as-a-service offering.
Previous report — wording carried elsewhere
Cost of revenue decreased by $1.1 million, or 4.1%, to $26.6 million for the nine months ended September 30, 2024, from $25.7 million for the nine months ended September 30, 2023. In the North America segment, cost of revenue decreased by $9.7 million, or 51.5%, compared to the nine months ended September 30, 2023. In the International segment, cost of revenue increased by $8.6 million, or 125.6%, compared to the nine months ended September 30, 2023. Cost of revenue primarily consists of various processing fees paid to gateways, as well as commission payments to the ISOs responsible for establishing and maintaining merchant relationships. The decrease in cost of revenue was primarily driven by a decrease in processing volumes in North America, as noted above, which were partially offset by an increase in processing volumes in the International segment.
Previous report — wording carried elsewhere
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, if successfully implemented, is appropriate and sufficient to address the liquidity shortfall in the North America segment and provide sufficient funds to cover operations for the next 12 months from the date of issuance of this Report. 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.