UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 WASHINGTON,
D.C. 20549

 FORM

 ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the Fiscal Year Ended December 31, 2024

 OR

 TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period
from __________ to __________

 Commission
File Number: 001-34294

 RYVYL
INC.

 (Exact
name of registrant as specified in its charter)

 Nevada

 22-3962936

 (State or other jurisdiction of
 incorporation or organization)

 (IRS Employer
 Identification No.)

 3131 Camino Del Rio North, Suite 1400
 San Diego, CA

 92108

 (Address of principal executive office)

 (Zip Code)

 Registrant's
telephone number, including area code: ( 619) 631-8261

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)

registered pursuant to Section 12(g) of the Act: None

by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
 Yes No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

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

 The
aggregate market value of the 4,580,816 million shares of voting common stock held by non-affiliates of the registrant as of June 30,
2024 was $ 8,474,510 million based on the closing price of $1.85 per share of the registrant's common stock as quoted on the Nasdaq
Capital Market on that date.

 As of March 24, 2025, the Registrant had 8,351,086 shares of common
stock, $0.001 par value per share, outstanding.

 TABLE
OF CONTENTS

 PAGE

 PART
 I

 Item
 1.

 Business

 Item
 1A.

 Risk Factors

 Item
 1B.

 Unresolved Staff Comments

 Item
 1C.

 Cybersecurity

 Item
 2.

 Properties

 Item
 3.

 Legal Proceedings

 Item
 4.

 Mine Safety Disclosures

 PART
 II

 Item
 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item
 6.

 [Reserved]

 Item
 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A.

 Quantitative and Qualitative Disclosures about Market Risk

 Item
 8.

 Financial Statements and Supplementary Data

 Item
 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

 Item
 9A.

 Controls and Procedures

 Item
 9B.

 Other Information

 Item
 9C

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 PART
 III

 Item
 10.

 Directors, Executive Officers and Corporate Governance

 Item
 11.

 Executive Compensation

 Item
 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item
 14.

 Principal Accounting Fees and Services

 PART
 IV

 Item
 15.

 Exhibits and Financial Statement Schedules

 Item
 16.

 Form 10-K Summary

 Signatures

 CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS

 This
Annual Report on Form 10-K (this "Report") and other materials we have filed or may file, as well as information included
in our oral or written statements, contains "forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934 (the "Exchange
Act"). These statements are often identified by the use of words such as "anticipate," "believe," "continue,"
"could," "estimate," "expect," "intend," "may," "plan," "project,"
"will," "would" or the negative or plural of these words or similar expressions or variations. Such forward-looking
statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results and the timing
of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could
cause or contribute to such differences include, but are not limited to, those identified herein and in our other SEC filings. You should
not rely upon forward-looking statements as predictions of future events.

 You
should not place undue reliance on forward-looking statements. The cautionary statements set forth in this Report identify important
matters or factors which you should consider in evaluating our forward-looking statements. These matters or factors include, among other
things:

 Our
 ability to effectively execute our business plan;

 Our
 ability to manage our expansion, growth and operating expenses both domestically and internationally;

 Our
 ability to comply with new regulations and compliance requirements that affect our business;

 Our
 ability to evaluate and measure our business, prospects and performance metrics;

 Our
 ability to compete and succeed in an evolving industry;

 Our
 ability to respond and adapt to rapid changes in technology;

 Our
 ability to manage our expansion, growth and operating expenses both domestically and internationally;

 Risks
 in connection with completed or potential acquisitions, post-acquisition integrations, dispositions and other strategic growth opportunities
 and initiatives;

 Our
 need for, and ability to raise, additional capital;

 Our
 ability to maintain operations in the event our financial condition is negatively impacted as the result of litigation or actions
 of any governmental agencies against us or against any of our officers or directors; and

 Risks
 related to our dependence on our proprietary technology, which we may not be able to protect.

 The
foregoing list of important factors does not include all such factors, nor necessarily present them in order of importance. In addition,
you should consult other disclosures made by the Company (such as in our other filings with the Securities and Exchange Commission (the
"SEC") or in our press releases) for other factors that may cause actual results to differ materially from those projected
by the Company. For additional information regarding risk factors that could affect the Company's results, see "Risk Factors"
beginning on page 13 of this Report, and as may be included from time-to-time in our reports filed with the SEC.

 The
Company intends the forward-looking statements to speak only as of the time of such statements and does not undertake or plan to update
or revise such forward-looking statements as more information becomes available or to reflect changes in expectations, assumptions or
results. The Company can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence
of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Report, could materially
and adversely affect our results of operations, financial condition, liquidity, and our future performance.

 In
this Report, unless the context otherwise requires, all references to "the Company," "we," "our",
"us" and "PubCo" refer to RYVYL Inc (formerly known as GreenBox POS Inc.), a Nevada corporation.

 Unless
the context otherwise requires, all references to "PrivCo" or the "Private Company" refer to GreenBox POS LLC,
a Washington limited liability company.

 On
September 6, 2023, the Company effected a reverse stock split of the Company's shares of common stock, par value $0.001 ("Common
Stock") outstanding at a ratio of one-for-ten (the "Reverse Stock Split"). All share and per share information in this
Report have been retroactively adjusted for all periods presented, unless otherwise indicated, to give effect to the Reverse Stock Split,
including the financial statements and notes thereto.

 PART
I

 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. Our first-generation product, QuickCard, was originally developed to facilitate payment processing for predominantly
cash-based businesses in certain niche high-risk business verticals. 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. 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. 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.

 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. 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. 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.

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. 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. 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. 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

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. 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. 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.

 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. 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.

 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. 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.
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. 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.

 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. 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. 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. Our regulatory strategy is designed to ensure resilience
amid the complexities of global financial regulations. 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. 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.

 Sustainable
Growth and Value Creation

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. 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. 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.

 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). 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.

 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."

 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. 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. This robust ecosystem supports businesses in optimizing financial performance, enhancing operational efficiency,
and driving growth in an increasingly digital economy.

 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. 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. 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.

 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.

 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. Our dual-sided platform facilitates efficient fund flows between Europe and North America, enhancing
 liquidity and financial agility for our clients.

 Technology
 Integration: Our advanced technology infrastructure serves as the backbone of both segments, allowing us to deploy innovative
 solutions rapidly across regions. Shared technology resources reduce development costs, accelerate time-to-market for new products,
 and ensure consistent service quality worldwide.

 Operational
 Efficiency: By standardizing processes and leveraging economies of scale, we optimize operational efficiency across all business
 functions. This approach reduces costs, improves resource allocation, and enhances service delivery for clients in both regions.

 Strategic
 Market Expansion: Our growth strategy is focused on expanding into new verticals and geographic regions. We achieve this through
 a combination of organic growth, strategic partnerships, and targeted acquisitions that complement our existing product offerings
 and strengthen our competitive position globally.

 Unified
 Compliance Framework: Regulatory compliance is managed through a centralized framework that ensures adherence to both regional
 and international standards. This unified approach enables us to maintain strong governance, mitigate risks, and support sustainable
 growth across all markets.

 Dual-Sided
Payment Platform

 At
the heart of RYVYL's ecosystem is our innovative dual-sided payment platform, 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. 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. By consolidating multiple payment functionalities within
a single platform, we empower businesses to manage transactions more effectively, optimize cash flow, and respond rapidly to new opportunities.
The platform integrates effortlessly with global payment networks, offering real-time processing capabilities that enhance financial
agility and operational resilience.

 The
acquiring function facilitates the acceptance of payments through diverse channels, including card networks, ACH transfers, wire transfers,
and other digital payment methods, supporting both domestic and international transactions. On the disbursement side, the platform enables
fast, secure payouts with real-time settlement capabilities, ensuring liquidity and financial flexibility for businesses of all sizes.
By simplifying the payment lifecycle, RYVYL's platform reduces transaction friction, minimizes errors, and optimizes cash flow
management.

 Treasury
Management Services

treasury management services are designed to help businesses optimize their financial operations, manage liquidity, and improve cash
flow efficiency. This comprehensive solution provides powerful tools for real-time monitoring, fund allocation, and automated reconciliation,
empowering businesses to make data-driven decisions that enhance financial performance.

 Key
features include cash flow optimization, which automates receivables and payables management, improving operational efficiency. Liquidity
management tools enable businesses to track and manage cash reserves across multiple accounts, ensuring optimal fund utilization. Additionally,
the platform offers real-time financial insights through advanced analytics and reporting capabilities, providing businesses with the
visibility needed to navigate complex financial landscapes confidently.

 BIN
Sponsorship for Credit Card Processing

 Through
our BIN Sponsorship program, RYVYL enables businesses to process credit card transactions using dedicated BINs, providing direct access
to global card networks without the need for a traditional banking license. This program supports businesses in launching custom payment
solutions, expanding their payment acceptance capabilities, and optimizing transaction processing efficiency.

 Our
BIN sponsorship services are designed with a strong focus on security, ensuring full compliance with industry standards such as PCI-DSS
for secure data handling. We offer global network access, facilitating seamless integration with major card schemes like Visa and Mastercard.
Additionally, we provide tailored solutions for high-volume merchants and specialized industries, delivering customized processing strategies
that align with specific business requirements.

 Payment
Solutions (ACH & Wire Transfers)

 We
offer a comprehensive range of payment solutions that support both domestic and international transactions. Our solutions are designed
to meet the needs of businesses that require fast, secure, and reliable payment processing capabilities.

 ACH
 Transfers: A cost-effective electronic funds transfer solution for recurring payments, payroll disbursements, and vendor settlements
 within the U.S. ACH payments offer efficiency, speed, and low transaction costs, making them ideal for businesses with high transaction
 volumes.

 Wire
 Transfers: Secure, high-speed fund transfer services for domestic and cross-border transactions. Our wire transfer solutions
 enable businesses to move large sums quickly and securely, with real-time processing capabilities that support urgent payment needs.

 These
solutions are integrated into RYVYL's platform to ensure seamless processing, robust security, and regulatory compliance across
all payment channels.

 Global
IBAN Issuance

 As
a licensed EMI in Bulgaria, RYVYL EU provides global IBAN issuance services that support seamless cross-border transactions. Our IBAN
solutions are designed to facilitate international fund transfers, streamline global payment workflows, and enhance financial transparency
for businesses operating in multiple jurisdictions.

 We
offer multi-currency support, enabling businesses to manage transactions in various currencies without the need for multiple bank accounts.
Our global IBANs support international wire transfers, SEPA payments within the EU, and other cross-border financial activities. All
services are delivered with strict adherence to EU regulatory requirements, ensuring secure and compliant financial operations.

 Card Issuing Services

card issuing services empower businesses to create branded payment solutions tailored to their specific needs. Our flexible platform
supports the issuance of various card types, including:

 Debit
 Cards: Designed for business expenses, corporate spending, and employee disbursements, providing businesses with secure, real-time
 payment capabilities.

 Prepaid
 Cards: Ideal for corporate payouts, rewards programs, and travel-related expenses, offering control over spending limits and
 enhanced security features.

 Virtual
 Cards: Secure, digital payment solutions optimized for online transactions, subscription services, and B2B payments. Virtual
 cards offer advanced fraud protection and real-time transaction tracking.'

 Our
card issuing solutions integrate with major global payment networks, offering real-time issuance capabilities, transaction monitoring,
and comprehensive fraud prevention tools.

 FX
Services

FX services are designed to support businesses with international operations, providing competitive currency conversion rates and real-time
FX trading capabilities. Our FX solutions help businesses manage currency exposure, optimize international transactions, and mitigate
foreign exchange risks.

 Key
features include multi-currency accounts, enabling businesses to hold and manage funds in different currencies without maintaining multiple
bank accounts. We offer real-time FX rates with transparent pricing structures, ensuring cost-effective currency conversions. Additionally,
our risk management tools help businesses hedge against currency fluctuations, providing stability in volatile markets.

 EMI
Services

 In
Europe, through Ryvyl EU's EMI license, we offer a wide range of regulated financial services designed to support businesses engaged
in international commerce. Our EMI services are fully compliant with EU financial regulations and supported by direct connections to
the Central Bank of Europe and major financial institutions.

 Our
EMI offering includes payment processing solutions that support domestic and cross-border transactions, global IBAN issuance for efficient
fund transfers, and comprehensive FX services for businesses managing multi-currency operations. These services are designed to enhance
financial agility, reduce transaction costs, and ensure regulatory compliance across all markets.

 Key
Features Across All Products

 Advanced
 Ledger Technology: Ensures real-time transaction processing, data integrity, and secure financial record-keeping across all business
 activities.

 Security
 & Compliance: Adheres to global regulatory standards, including PCI-DSS, GDPR, and AML/CTF frameworks, ensuring data protection
 and transaction security at every level.

 Scalable
 Infrastructure: Built to support businesses of all sizes, from startups to multinational corporations, with flexible integration
 options and scalable performance capabilities.

 Global
 Connectivity: Direct integrations with major card brands, banking networks, and payment gateways, enabling seamless financial
 operations across borders and industries.

 Industry
Diversification

strategic approach to industry diversification is a core component of our growth and risk management framework. By targeting a broad
spectrum of industries- - from traditional sectors like retail and financial services to high-growth areas such as e-commerce, technology,
and digital marketplaces- - we effectively minimize our reliance on any single market segment. This diversified focus not only reduces
our exposure to sector-specific risks but also positions RYVYL to capitalize on emerging opportunities across the global economy.

 Our
diversification strategy is designed to enhance resilience, optimize revenue streams, and drive sustainable growth. By engaging with
a wide range of industries, we mitigate the potential impacts of economic fluctuations, regulatory shifts, and changes in consumer behavior
that may disproportionately affect individual sectors. This proactive approach ensures that our business remains agile, adaptable, and
well-insulated from market volatility.

 Minimizing
Market Dependency

 At
the heart of RYVYL's industry diversification strategy is a deliberate effort to avoid over-reliance on any single sector. We recognize
that industries can be subject to cyclical downturns, disruptive innovations, and regulatory changes that can significantly impact financial
performance. By distributing our operations across multiple industries, we reduce the risk of revenue concentration and create a more
balanced, stable business model.

 This
strategy enables us to maintain strong financial performance even when specific markets face challenges. For example, while economic
slowdowns may affect sectors like hospitality or travel, growth in areas such as e-commerce, healthcare, or fintech can offset these
impacts, ensuring continuity in revenue generation and operational stability.

 Expanding
Market Reach and Customer Base

diversified industry focus also expands our market reach and customer base. By serving clients across various sectors - including retail,
e-commerce, financial services, logistics, healthcare, and more - we gain exposure to a wide range of consumer needs, business models,
and operational requirements. This broad engagement allows us to tailor our products and services to meet diverse demands, enhancing
our value proposition and competitiveness in the global marketplace.

 Our
ability to adapt to different industry environments not only strengthens client relationships but also opens doors to new business opportunities.
Whether supporting large enterprises, small businesses, or digital startups, RYVYL's flexible solutions are designed to deliver
value across a wide array of industries, fostering long-term customer loyalty and market relevance.

 Multiple
Revenue Streams for Sustainable Growth

 Industry
diversification plays a critical role in generating multiple revenue streams for RYVYL. By tapping into various sectors, we create a
dynamic business model that supports consistent growth and profitability. This multifaceted approach enables us to leverage different
revenue drivers, from transaction fees in payment processing to subscription-based income from financial management solutions.

 Our
diversified portfolio also facilitates cross-selling and upselling opportunities, as businesses operating in different industries often
require complementary financial products and services. This integrated strategy not only enhances revenue potential but also strengthens
our competitive positioning in the fintech landscape.

 Global
Market Presence

strategic focus on Europe and North America positions the company to effectively tap into two of the largest and most
technologically advanced markets in the world. By concentrating its efforts in these regions, RYVYL is not only able to access a
vast customer base but also to engage with cutting-edge technologies and innovations that are shaping the future of various
industries. This geographical diversification mitigates the risks associated with potential market-specific economic downturns,
which can significantly impact businesses that are overly reliant on a single region. Additionally, by operating in both Europe and
North America, RYVYL can take full advantage of the high transaction volumes that are prevalent in these markets. The robust
economic activity and consumer spending in these regions enhance the company's revenue potential, allowing it to capitalize on
a wide array of business opportunities. This strategic positioning enables RYVYL to not only withstand fluctuations in individual
markets but also to thrive by leveraging the strengths and opportunities presented by each region. Ultimately, this approach fosters
a more resilient business model that is well-equipped to navigate the complexities of the global marketplace while maximizing growth
and profitability.

 Competition

 In
each of our business segments, we compete with a large variety of companies - financial institutions, financial technology companies,
traditional payment providers, new market entrants, and others - both large and small. The markets for the services we provide are highly
fragmented and competitive. Many of these providers compete with us across our segments, vertical markets and geographies. Some of these
competitors possess greater financial, sales and marketing resources than we do. We expect each of our segments to become more competitive
over time, as advances in technology enable new entrants, barriers to entry fall and existing providers expand their services, both operationally
and geographically. Some of the key industry players with whom we may compete, directly or indirectly within the business verticals we
serve, include the following:

 Adyen
 - Dutch payment company that functions as an acquiring bank, allowing businesses to accept e-commerce, mobile, and point-of-sale
 payments. Estimated revenues for 2023 were ~$2 billion.

 Worldline
 SA - French financial services company covering the full payments value chain, including issuing processing, payments acceptance,
 commercial acquiring, and acquiring processing. In 2023, the company generated proforma revenue of 4.61 billion.

 Nexi
 Group - Italian multinational financial technology company specializing in payment systems, merchant services, and digital banking
 services. Estimated revenues for 2023 were ~ 3.2 billion.

 Stripe
 - A global technology company that builds economic infrastructure for the internet. Businesses of all sizes use Stripe's
 software and APIs to accept payments, send payouts, and manage their businesses online. Stripe offers payment processing services
 and has a significant presence in Europe. Estimated revenues for 2023 were ~$1.8 billion.

 Worldpay
 - A global payment processing company that provides services to merchants and financial institutions. It offers payment gateway
 solutions, risk management, and payment processing services, supporting various payment methods and currencies. Estimated revenues
 for 2023 were ~$4.9 billion.

 Checkout.com
 – A global payment solutions provider that offers a full-stack payment platform, including payment processing, acquiring,
 and gateway services. It supports businesses in accepting payments in multiple currencies and provides advanced fraud detection tools.
 Estimated revenues for 2023 were ~$22 million.

 2Checkout
 - Now part of Verifone, 2Checkout is a global payment platform that provides comprehensive e-commerce solutions, including payment
 processing, global tax and financial services, and subscription billing. It supports various payment methods and currencies, catering
 to businesses aiming to expand internationally. Estimated revenues for 2023 were ~$22 million.

 Government
Regulation

 RYVYL
operates within a dynamic and highly regulated global financial environment, where compliance is fundamental to our operations. As a
leading fintech company with a strong presence in both Europe and North America, we are subject to an extensive range of laws and regulations
that govern critical areas such as AML, CTF, consumer protection, cybersecurity, data privacy, and financial services supervision. The
regulatory landscape is continuously evolving, driven by legislative updates, regulatory reforms, and shifts in global compliance expectations.
These changes influence how we structure, deliver, and expand our services worldwide.

 Our
proactive approach to regulatory compliance ensures that we not only meet current legal requirements but are also well-prepared to adapt
to emerging regulatory developments. We closely monitor changes in laws and regulations across all jurisdictions where we operate, enabling
us to design secure, compliant, and customer-centric solutions that support our global growth strategy. Recognizing that regulatory shifts,
enforcement actions, or heightened scrutiny can impact our business operations and financial performance, we prioritize robust governance
frameworks to safeguard our business continuity.

 Payments
Regulation

payment services are governed by comprehensive regulatory frameworks in both the United States and the European Union, reflecting the
complexity of the global payments ecosystem.

 In
the United States, we offer a broad range of payment solutions, including credit card processing through BIN sponsorship, ACH transactions,
wire transfers, and treasury management services. These services are delivered in collaboration with regulated financial institutions
under third-party sponsorship arrangements. This model subjects us to indirect oversight by key regulatory bodies, notably FinCEN, which
plays a pivotal role in ensuring compliance with AML and CTF regulations, as well as broader financial crime prevention mandates.

 In
the European Union, RYVYL EU operates under an EMI license issued in Bulgaria, with additional operations in Portugal. This license authorizes
us to issue global IBANs, provide FX services, and deliver acquiring and card issuing solutions. Our activities are regulated under the
Payment Services Directive (PSD2) and supervised by the Bulgarian National Bank alongside other relevant EU financial authorities. The
regulatory frameworks in both regions impose stringent requirements related to capital adequacy, anti-fraud measures, data security,
and transaction monitoring, ensuring the resilience and integrity of our payment infrastructure.

 Financial
Services Supervision

operations are subject to both direct and indirect regulatory supervision, reflecting the breadth of our services and the diverse jurisdictions
in which we operate.

 In
Europe, we are directly regulated as an EMI, with obligations encompassing capital requirements, safeguarding client funds, corporate
governance, and risk management. This direct oversight ensures that we maintain high standards of financial stability, operational transparency,
and customer protection.

 In
North America, while RYVYL does not operate as a licensed money transmitter, our activities are conducted through third-party sponsorship
relationships. These partnerships require strict adherence to the compliance standards of our sponsoring financial institutions, subjecting
us to indirect regulatory oversight. This dual-layered supervision framework, combining direct regulatory engagement and indirect compliance
obligations, reinforces our commitment to maintaining the highest standards of regulatory integrity across all markets.

 AML
and CTF Regulations

 RYVYL
is dedicated to combating financial crime through comprehensive AML and CTF programs designed to align with global regulatory expectations.
Our compliance framework adheres to key international standards, including the U.S. Bank Secrecy Act (BSA), which is overseen by FinCEN,
the EU's Anti-Money Laundering Directives (AMLD), and guidelines issued by the Financial Action Task Force (FATF).

 Our
AML/CTF framework is built on robust policies and procedures that include customer due diligence (CDD) and know-your-customer (KYC) protocols,
advanced transaction monitoring systems to detect and prevent suspicious activities, and rigorous sanctions screening aligned with the
U.S. Office of Foreign Assets Control (OFAC) requirements and EU regulations. Ongoing training and development for our employees ensure
that compliance remains embedded in our corporate culture, enabling us to proactively manage financial crime risks across all areas of
our business.

 Data
Protection and Privacy

 As
a global fintech provider, RYVYL handles sensitive personal and financial data, making data protection and privacy critical components
of our regulatory compliance strategy. We operate under stringent data privacy laws in both the EU and the United States.

 In
the EU, we comply with GDPR, which sets rigorous standards for data collection, processing, and transfer. GDPR mandates strict requirements
around data security, breach notification, and the lawful basis for data processing, ensuring that we uphold the privacy rights of individuals
across the EU.

 In
the United States, RYVYL adheres to federal and state-level privacy regulations, including the California Consumer Privacy Act (CCPA)
and other emerging data protection laws. Our global data governance framework encompasses encryption protocols, cross-border data transfer
mechanisms, and incident response plans designed to safeguard data integrity and mitigate potential security risks.

 Cybersecurity
Compliance

 Our
cybersecurity measures include regular penetration testing, vulnerability assessments, and advanced threat detection systems to identify
and address potential risks proactively. Incident response protocols are in place to ensure swift and effective management of security
breaches, minimizing potential impacts on our operations and customers. In addition, we comply with the Payment Card Industry Data Security
Standard (PCI-DSS), which governs the secure handling of cardholder data in payment processing environments.

 Consumer
Protection and Financial Conduct Regulations

 RYVYL
is committed to safeguarding consumer interests through strict adherence to financial conduct and consumer protection regulations. We
ensure transparency in our fee structures, maintain fair lending practices where applicable, and provide clear dispute resolution mechanisms
to address customer concerns effectively.

 In
the United States, our operations are subject to oversight by the Consumer Financial Protection Bureau (CFPB), which regulates consumer
financial products and services. In the EU, we comply with directives under the EU Consumer Rights Directive and PSD2, which mandate
strong customer authentication (SCA) protocols and secure online payment standards. Our consumer protection strategy is designed to foster
trust, promote transparency, and enhance the overall customer experience across all markets.

 Sanctions
and Anti-Corruption Compliance

 RYVYL
maintains a robust sanctions and anti-corruption compliance framework, ensuring full adherence to global regulatory standards. We comply
with sanctions programs administered by the U.S. Office of Foreign Assets Control (OFAC), the EU's restrictive measures, the U.S.
Foreign Corrupt Practices Act (FCPA), and the U.K. Bribery Act.

 Our
compliance measures include comprehensive sanctions screening for all transactions and customer onboarding processes, rigorous anti-bribery
policies, and regular employee training on ethical business practices. Additionally, we implement third-party risk management protocols
to prevent corruption and ensure that our business relationships align with our ethical standards and regulatory obligations.

 Emerging
Regulatory Developments

 RYVYL
continuously monitors regulatory developments that may impact our operations, including:

 Emerging
 Payment Technologies: We stay ahead of regulatory changes related to digital wallets, tokenization, and evolving payment models,
 ensuring that our services remain compliant with new industry standards.

 Environmental,
 Social, and Governance (ESG) Reporting: We align with global sustainability regulations, such as the EU Corporate Sustainability
 Reporting Directive (CSRD), reflecting our commitment to responsible business practices.

 Interchange
 Fee Regulations: We comply with the EU's Multilateral Interchange Fee Regulation (MIFR) and U.S. regulations affecting
 credit and debit card processing fees, ensuring transparency and fairness in our pricing structures.

 Technology
Infrastructure

 At
the core of RYVYL's fintech ecosystem is our innovative dual-side platform. RYVYL's technology infrastructure is purpose-built
to deliver seamless, secure, and scalable payment solutions that meet the highest standards of performance and reliability. Our platform
is underpinned by advanced ledger technology, which ensures real-time transaction processing, robust data integrity, and the secure management
of financial data across all business activities.

 Performance
and Reliability

 Our
architecture is designed to support high transaction volumes with exceptional speed and accuracy. This performance capability is critical
for businesses operating in fast-paced, high-growth environments where the ability to process payments efficiently can be a key driver
of success. By leveraging cutting-edge technology, we provide real-time transaction monitoring, dynamic reporting tools, and advanced
analytics, enabling businesses to make data-driven decisions with confidence.

 Security

 Security
is embedded in every layer of RYVYL's technology stack. We operate a comprehensive security framework that incorporates multiple
layers of protection, including encryption, tokenization, and fraud detection systems. This multi-faceted approach ensures the confidentiality,
integrity, and availability of data, safeguarding both our infrastructure and the sensitive information of our clients.

 Our
comprehensive cybersecurity program includes continuous system monitoring, rigorous vulnerability assessments, and proactive threat mitigation
strategies. We adhere to global security standards such as PCI-DSS for secure payment card transactions and ISO 27001 for information
security management. Regular penetration testing and security audits further strengthen our defenses, ensuring that our platform remains
resilient in the face of emerging cyber threats.

 Scalability
and Flexibility

technology infrastructure is designed with scalability at its core. Our modular architecture allows businesses to expand their operations
without facing the technological constraints often associated with legacy payment systems. Whether supporting a startup experiencing
rapid growth or a multinational corporation managing complex global transactions, our platform can scale effortlessly to meet evolving
business requirements.

 We
continuously optimize our infrastructure to enhance system reliability, reduce downtime, and improve processing speeds. This commitment
to continuous improvement ensures that our platform remains agile and adaptable, capable of integrating with external systems, third-party
applications, and evolving regulatory requirements.

 Driving
Business Transformation Through Technology

dual-sided platform and advanced technology infrastructure are not just about facilitating payments - they are about transforming the
way businesses manage their financial operations. By combining seamless payment processing with robust security measures, real-time data
insights, and scalable architecture, we help businesses unlock new growth opportunities, improve operational efficiency, and strengthen
their competitive position in the marketplace.

 Our
technology strategy is aligned with our broader corporate vision: to be the preferred global fintech partner for businesses seeking innovative,
secure, and future-ready financial solutions. Through continuous investment in technology, security, and infrastructure, RYVYL is well-positioned
to lead the next generation of financial services, delivering unparalleled value to our clients and stakeholders worldwide.

 Customers

 We
currently process transactions for approximately 1,500 business customers in North America, Europe and Asia, and in over 50 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 95 full-time employees. None of our employees are subject to collective bargaining agreements. We consider
our relationship with our employees to be satisfactory. 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. 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.

 Recent
Developments

 Product
Transition and Loss of Revenues in North America Segment

 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.

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. 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. 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. 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.

 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 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.
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:

 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.

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.

Stock Repurchase and Note Repayment Agreement

 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").

to terms of the Repurchase Agreement, in consideration for an aggregate payment of $17,000,000 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.

 The
Repurchase Agreement provides for the payment of the Repurchase Price in two installments, the first in the amount of $13 million
(the "First Installment"), which was paid on January 27, 2025. The second installment, in the amount of $4 million (the
"Second Installment"), is due and payable on or before April 30, 2025 (the "Second Installment Date"), and
the maturity date of the Note is advanced to such date. Upon the payment of the First Installment, all Series B Preferred Shares
held by the Securityholder were repurchased.

 The
Repurchase Agreement further provides that, during the period from the payment of the First Installment until the Second Installment
Date, no interest will accrue on the remaining balance of the Note and certain restrictive covenants under the Note will be temporarily
waived. If the Company fails to make the Second Installment on or before the Second Installment Date, then interest will continue to
accrue again on the outstanding 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.

 Stock
Purchase Agreement and Financing

 On
January 23, 2025, in connection with the Company's securing financing (the "Financing"), the Company entered into a
stock purchase agreement (the "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 $15,000,000 (the "Financing Purchase
Price"). Under the terms of the SPA, the Company was required to use $13 million of the net proceeds raised in the Financing to
pay the First Installment of the Repurchase Price.

 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 provides the Company with the right to terminate the 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 SPA (April 23, 2025), provided
that such date may be extended an additional 30 days (May 23, 2025) in consideration for the Company's payment of $500,000 to the
Purchaser. If the SPA is terminated as a result of such payment by the Company, the Ryvyl EU Shares will not be sold to the Purchaser
and will be returned to Transact Europe and the SPA will be void and of no further effect, except for some provisions that survive termination.
In the event that the SPA is not so terminated, then the Purchaser will 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.

 Corporate
Information

 Our
principal executive offices are located at 3131 Camino Del Rio North, Suite 1400, San Diego, CA 92108. Our telephone number is (619)
631-8261. The address of our website is www.ryvyl.com. The inclusion of our web address in this Report does not include or incorporate
by reference the information on our website into this Report.

 Item
1A. Risk Factors

 The
following describes material risks, uncertainties, and other factors that could have a material effect on us and our operations. The
risks described below may not be the only risks we face, as our business and operations may also be subject to risks that we do not yet
know of, or that we currently believe are immaterial. If any of the events or circumstances described below actually occur, our business,
financial condition, results of operations or cash flow could be materially and adversely affected and the trading price of our common
stock could decline. The following risk factors should be read in conjunction with the other information contained herein, including
the financial statements and the related notes. 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.

 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. 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. 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. 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. 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. Additionally, we may be required to pay significant liquidated damages if the prospective purchaser is unable to close the
acquisition.

 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. 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). 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. 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.

 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. 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. 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.

 The
loss of key personnel or the inability of replacements to quickly and successfully perform in their new roles could adversely affect
our business.

 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. The loss
of the services of any of our key executives or any of our executive management members could have a material adverse effect on our business
and prospects, as we may not be able to find suitable individuals to replace such personnel on a timely basis or without incurring increased
costs, or at all. Furthermore, if we lose or terminate the services of one or more of our key employees or if one or more of our current
or former executives or key employees joins a competitor or otherwise competes with us, it could impair our business and our ability to
successfully implement our business plan. Additionally, if we are unable to hire qualified replacements for our executive and other key
positions in a timely fashion, our ability to execute our business plan would be harmed. Even if we can quickly hire qualified replacements,
we would expect to experience operational disruptions and inefficiencies during any transition. We believe that our future success will
depend on our continued ability to attract and retain highly skilled and qualified personnel. There is a high level of competition for
experienced, successful personnel in our industry. Our inability to meet our executive staffing requirements in the future could impair
our growth and harm our business.

 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. As a result, if these shareholders were to choose to act together, they would be able
to control substantially all matters submitted to our shareholders for approval, as well as our management and affairs. For example, these
persons, if they choose to act together, would control the election of directors and approval of any merger, consolidation or sale of
all or substantially all of our assets. This concentration of voting power could delay or prevent an acquisition of us on terms that other
shareholders may desire.

 Low
demand for new products and the inability to develop and introduce new products at favorable margins could adversely impact our performance
and prospects for future growth.

 Our
competitive advantage is due in part to our ability to develop and introduce new products in a timely manner at favorable margins. The
uncertainties associated with developing and introducing new products, such as market demand and costs of development and production,
may impede the successful development and introduction of new products on a consistent basis. Introduction of new technology may result
in higher costs to us than that of the technology replaced. That increase in costs, which may continue indefinitely or until increased
demand and greater availability in the sources of the new technology drive down its cost, could adversely affect our results of operations.
Market acceptance of the new products introduced in recent years and scheduled for introduction in future years may not meet sales expectations
due to various factors, such as the failure to accurately predict market demand, end-user preferences, evolving industry standards, or
the emergence of new or disruptive technologies. 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.

 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. Negative global and national economic
trends, such as decreased consumer and business spending, high unemployment levels and declining consumer and business confidence, pose
challenges to our business and could result in declining revenues, profitability and cash flow. Although we continue to devote significant
resources to support our brands, unfavorable economic conditions may negatively affect demand for our products.

 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.

 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. 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. 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. 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. 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.
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.

 We
could face substantial competition, which could reduce our market share and negatively impact our net revenue.

 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. 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.

 From
time to time in the normal course of our business operations, we may become subject to litigation involving intellectual property, data
privacy and security, consumer protection, commercial disputes and other matters that may negatively affect our operating results if
changes to our business operation are required. We may also be subject to a variety of claims including product warranty, product liability,
and consumer protection claims related to product defects, among other litigation. We may also be subject to claims involving health
and safety, other environmental impacts, or service disruptions or failures. The cost to defend such litigation may be significant and
may require a diversion of our resources. There also may be adverse publicity associated with litigation that could negatively affect
customer perception of our business, regardless of whether the allegations are valid or whether we are ultimately found liable. As a
result, litigation may adversely affect our business, financial condition and results of operations. In addition, insurance may not cover
existing or future claims, be sufficient to fully compensate us for one or more of such claims or continue to be available on terms acceptable
to us. 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.

 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. For instance, new laws, regulations, policies, and international accords relating to ESG matters, including
sustainability, climate change, human capital, and diversity, are being developed and formalized in Europe, the U.S., and elsewhere,
which may entail specific, target-driven frameworks and/or disclosure requirements. 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.

 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. Our funds held in non-interest bearing and interest-bearing
accounts would exceed any applicable Federal Deposit Insurance Corporation ("FDIC") insurance limits. Should events, including
limited liquidity, defaults, non-performance or other adverse developments occur with respect to the banks or other financial institutions
that hold our funds, or that affect financial institutions or the financial services industry generally, or concerns or rumors about
any events of these kinds or other similar risks, our liquidity may be adversely affected. For example, on March 10, 2023, the FDIC announced
that Silicon Valley Bank had been closed by the California Department of Financial Protection and Innovation. Although we did not have
any funds in Silicon Valley Bank or other institutions that have been closed, we cannot guarantee that the banks or other financial institutions
that hold our funds will not experience similar issues.

 Our
business is dependent on our strategic banking relationships to process our electronic transactions. If we are unable to secure or retain
a banking partner due to market conditions in the financial services industry, our financial condition will be materially affected.

 In
addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing
terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit
and liquidity sources, thereby making it more difficult for us to acquire financing on terms favorable to us could have material adverse
impacts on our liquidity, our business, financial condition or results of operations, and our prospects. Our business is dependent on
our strategic banking relationships to process our electronic transaction. Our business and our relationships with banking partners has
been, and may in the future, be adversely impacted by these developments in ways that we cannot predict at this time. There may be additional
risks that we have not yet identified, and we cannot guarantee that we will be able to avoid negative consequences directly or indirectly
from any failure of one or more banks or other financial institutions.

 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.

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. 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. 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. 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.

 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 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.
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.

 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. 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. 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.

 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. 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. 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. Any of these factors could dampen economic activity and thereby limit customers'
payment processing volumes, resulting in a material adverse effect on their business, financial condition and results of operations, which
in turn would negatively impact us. We cannot predict whether, or to what extent, any tariff or other trade protections may affect us
or our Company.

 We
are currently operating in a period of severe capital markets disruptions and economic uncertainty which could impair our Company's
financial position and operating results and affect the industries in which we conduct our business and, in turn, harm our operating
results.

 The
U.S. and global markets have, from time to time, experienced periods of disruption due to events such as terrorist attacks; acts of war;
natural disasters, such as earthquakes, tsunamis, fires, floods or hurricanes; and outbreaks of epidemic, pandemic or contagious diseases.
Such events have created, and continue to create, economic and political uncertainties and have contributed to recent global economic
instability. In particular, the U.S. capital markets have recently experienced, and continue to experience, extreme volatility and disruption
as a result of inflation, changing interest rates, the Russia-Ukraine war, conflicts in the Middle East and the possibility of an economic
recession. These events are having an adverse impact on the ability of lenders to originate loans, increase funding costs, limit access
to the capital markets or result in an inability for us to raise capital, which could have a material adverse effect on our business,
financial condition and results of operations. Volatility and dislocation in the capital markets can also create a challenging environment
in which to raise or access debt capital. If sustained for a prolonged period of time, the current market conditions could result in
difficulties refinancing, obtaining additional indebtedness, or raising capital necessary to sustain our business, including the cancellation
of the sale of Ryvyl EU. The equity or debt capital that will be available to us in the future, if at all, may be at increased costs
and on less favorable terms and conditions than what we currently experience.

 Risks
Related to Our Financial Position and Need for Capital

 Our
revenue projections related to our new licensing arrangements with payment services providers may not materialize due to customer acquisition
and banking compliance issues that are outside of our control.

 As
part of the Company's plan to diversify its business, it recently launched a new licensing product for its payment processing platform.
The Company will generate revenues from these arrangements from use-based license fees that it will charge to the payment services providers.
The Company's ability to generate revenues from these licensing arrangements is contingent on the success of the licensees in utilizing
and servicing their customers on their platforms, as the licensees will have exclusive control over, among other things, implementation
and operations of the point of banking system, procurement of ACH processing solutions, and customer acquisitions.

 The
licensees will also have control in determining clients and industries utilizing the licensed technology, which requires an understanding
of various banking laws and regulations that may impact the licensee's servicing of customer accounts. For example, federal money
laundering statutes and Bank Secrecy Act regulations discourage financial institutions from working with operators of certain industries,
particularly those with heightened cash reporting obligations and restrictions. As a result, banks may refuse to process certain payments
and/or require onerous reporting obligations by payment processors to avoid compliance risk. 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.

 Financial
statements prepared in accordance with generally accepted accounting principles ("GAAP") require the use of estimates, judgments,
and assumptions that affect the reported amounts. Actual results may differ materially from these estimates under different assumptions
or conditions. These estimates, judgments, and assumptions are inherently uncertain, and, if they prove to be wrong, then we face the
risk that charges to income will be required. 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.

 The
restatement of our historical financial statements has consumed a significant amount of our time and resources and may continue to do
so.

 We
have previously restated our consolidated financial statements for the quarters ended March 31, 2021, June 30, 2021, September 30, 2021,
March 31, 2022, June 30, 2022, and September 30, 2022, and for the annual period ended December 31, 2021, and previously presented the
effects of the restatement adjustments in the Company's 2022 Annual Report. 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.

 Any
future inquiries from the SEC or Nasdaq as a result of the restatement of our historical financial statements will, regardless of the
outcome, likely consume a significant amount of our resources in addition to those resources already consumed in connection with the
restatement itself.

 Further,
many companies that have been required to restate their historical financial statements have experienced a decline in stock price and
stockholder lawsuits related thereto.

 Our
financial statements may be materially affected as a result of material weaknesses in internal accounting controls.

 We
are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and Nasdaq rules and regulations. The Sarbanes-Oxley
Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate
disclosure controls and procedures, is designed to prevent fraud. We must perform system and process evaluation and testing of our internal
controls over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting
in this Report, as required by Section 404 of the Sarbanes-Oxley Act ("Section 404"). This requires significant management
efforts and requires us to incur substantial professional fees and internal costs to expand our accounting and finance functions. Any
failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to
meet our reporting obligations. In addition, any testing by us, as and when required, conducted in connection with Section 404, or any
subsequent testing by our independent registered public accounting firm, as and when required, may reveal deficiencies in our internal
controls over financial reporting that are deemed to be significant deficiencies or material weaknesses, including the material weakness
described below, or that may require prospective or retroactive changes to our financial statements, or may identify other areas for
further attention or improvement. Furthermore, we cannot be certain that our efforts will be sufficient to remediate or prevent future
material weaknesses or significant deficiencies from occurring.

 We
previously identified control deficiencies in the design and implementation of our internal control over financial reporting that constituted
a material weakness. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting
such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected
on a timely basis. Any failure to implement and maintain effective internal control over financial reporting could adversely affect the
results of the period including management evaluations and annual independent registered public accounting firm attestation reports regarding
the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports
that are filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also
cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the
trading price of our stock.

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. 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. In the future, we may identify additional
material weaknesses that may cause us to fail to meet our reporting obligations or result in material misstatements of our financial
statements. 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. 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
will need to 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. 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.
In addition, debt financing, if available, could include covenants limiting or restricting our ability to take certain actions, such
as incurring additional debt, making capital expenditures, entering into licensing arrangements, or declaring dividends and may require
us to grant security interests in our assets. If we raise additional funds through collaborations, strategic alliances, or marketing,
distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue
streams, product or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional
funds through equity or debt financing when needed, we may need to curtail or cease our operations.

 Our
growth will be dependent on our ability to access additional equity and debt capital. We may seek additional capital through a variety
of means, including through private and public equity offerings and debt financings, collaborations, and strategic alliances. 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. In addition, debt financing, if available, could include covenants limiting
or restricting our ability to take certain actions, such as incurring additional debt, making capital expenditures or declaring dividends
and may require us to grant security interests in our assets. If we raise additional funds through collaborations, strategic alliances,
or marketing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams,
products, and services. If we are unable to raise additional funds through equity or debt financing when needed, we may need to curtail
or cease our operations.

 We
may not realize the anticipated benefits of acquisitions or investments in joint ventures, or those benefits may be delayed or reduced
in their realization.

 Acquisitions
and investments are likely to be a component of our growth and the development of our business in the future. Acquisitions can broaden
and diversify our product concepts. 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. The integration process may disrupt the businesses and, if implemented ineffectively, would limit the expected
benefits of the acquisition. The failure to meet the challenges involved in integrating businesses and realizing the anticipated benefits
could cause an interruption of, or a loss of momentum in, our activities and could adversely affect our results of operations. The overall
integration of the businesses may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of customer
and other business relationships, and diversion of management's attention. The 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.

 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. In some cases, we expect that the integration of the companies that we may acquire
into our operations will create production, marketing and other operating, revenue or cost synergies which will produce greater revenue
growth and profitability and, where applicable, cost savings, operating efficiencies and other advantages. However, we cannot be certain
that these synergies, efficiencies and cost savings will be realized. Even if achieved, these benefits may be delayed or reduced in their
realization. In other cases, we may acquire or invest in companies that we believe have strong and creative management, in which case
we may plan to operate them more autonomously rather than fully integrating them into our operations. We cannot be certain that the key
talented individuals at these companies will continue to work for us after the acquisition or that they will develop popular and profitable
products or services in the future. We cannot guarantee that any acquisition or investment we may make will be successful or beneficial,
and acquisitions can consume significant amounts of management attention and other resources, which may negatively impact other aspects
of our business.

 Our
operating results may fluctuate significantly as a result of a variety of factors, many of which are outside of our control, which could
cause fluctuations in the price of our securities.

 We
are subject to the following factors that may negatively affect our operating results:

 our
 ability to upgrade and develop our systems and infrastructure to accommodate growth;

 our
 ability to attract and retain key personnel in a timely and cost-effective manner;

 technical
 difficulties;

 the
 amount and timing of operating costs and capital expenditures relating to the expansion of our business, operations, and infrastructure;

 our
 ability to identify and enter into relationships with appropriate and qualified third-party providers for necessary development and
 manufacturing services;

 regulation
 by federal, state, or local governments;

 banking
 industry turmoil and headwinds in the digital asset space; and

 general
 economic conditions, as well as economic conditions specific to the entertainment, theme park, party items, arts and crafts, and
 packaging industries.

 As
a result of our lack of any operating history and the nature of the markets in which we compete, it is difficult for us to forecast our
revenues or earnings with a high degree of certainty. 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 revenues and operating results are
difficult to forecast.

 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.

 We
rely on information technology networks and systems, including the internet, to process, transmit, and store electronic information,
and to manage or support a variety of business processes, including financial transactions and records, billing, and operating data.
We may purchase some of our information technology from vendors, on whom our systems will depend, and we rely on commercially available
systems, software, tools, and monitoring to provide security for processing, transmission, and storage of confidential operator and other
customer information. We depend upon the secure transmission of this information over public networks. Our networks and storage applications
could be subject to unauthorized access by hackers or others through cyberattacks, which are rapidly evolving and becoming increasingly
sophisticated, or by other means, or may be breached due to operator error, malfeasance or other system disruptions. 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.

 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. An operational failure or breach of security from
increasingly sophisticated cyber threats could lead to loss, misuse or unauthorized disclosure of this information about our
employees or customers, which may result in regulatory or other legal proceedings, and have a material adverse effect on our
business. We also may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of
cyber-attacks. Any such attacks or precautionary measures taken to prevent anticipated attacks may result in increasing costs,
including costs for additional technologies, training and third-party consultants. 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.

 Our
systems and operations and those of our service providers and partners have experienced from time to time, and may experience in the
future, business interruptions or degradation of service because of distributed denial-of-service and other cyberattacks, insider threats,
hardware and software defects or malfunctions, human error, earthquakes, hurricanes, floods, fires, and other natural disasters, public
health crises (including pandemics), power losses, disruptions in telecommunications services, fraud, military or political conflicts,
terrorist attacks, computer viruses or other malware, or other events. The frequency and intensity of weather events related to climate
change are increasing, which could increase the likelihood and severity of such disasters as well as related damage and business interruption.
A catastrophic event that could lead to a disruption or failure of our systems or operations could result in significant losses and require
substantial recovery time and significant expenditures to resume or maintain operations. Further, some of our systems are not fully redundant
and any failure of these systems, including due to a catastrophic event, may lead to operational outages or delays. While we try to mitigate
risks from outages or delays, any planning and testing may not be effective or sufficient for all possible outcomes or events. As a provider
of payments solutions, we are also subject to heightened scrutiny by regulators that may require specific business continuity, resiliency
and disaster recovery plans, and rigorous testing of such plans, which may be costly and time-consuming to implement, and may divert
our resources from other business priorities. Any of the foregoing risks could have a material adverse impact on our business, financial
condition, and results of operations.

 We
have experienced, and expect to continue to experience, system failures, cyberattacks, unplanned outages, and other events or conditions
from time to time that have and may interrupt the availability, or reduce or adversely affect the speed or functionality, of our products
and services. While we continue to undertake system upgrades efforts designed to improve the availability, reliability, resiliency, and
speed of our payments platform, these efforts are costly and time-consuming, involve significant technical complexity and risk, may divert
our resources from new features and products, and may ultimately not be effective. A prolonged interruption of, or reduction in, the
availability, speed, or functionality of our products and services could materially harm our business and financial condition. Frequent
or persistent interruptions in our services could permanently harm our relationship with our customers and partners and our reputation.
If any system failure or similar event results in damage to our customers or their business partners, they could seek significant compensation
or contractual penalties from us for their losses. These claims, even if unsuccessful, would likely be time-consuming and costly for
us to address.

 In
addition, any failure to successfully implement new information systems and technologies or improvements or upgrades to existing information
systems and technologies in a timely manner could lead to regulatory scrutiny, significant fines and penalties, and mandatory and costly
changes to our business, adversely impact our business, internal controls, results of operations, and financial condition, and ultimately
could cause us to lose existing licenses that we need to operate or prevent or delay us from obtaining additional licenses that may be
required for our business.

 Software
and hardware defects, failures, undetected errors and development delays could affect our ability to deliver our services, damage customer
relations, expose us to liability and have an adverse effect on our business, financial condition and results of operations.

 Our
services are based on software and computing systems that may encounter development delays, and the underlying software may contain undetected
errors, viruses, defects or vulnerabilities. The hardware infrastructure on which our systems run may have a faulty component or fail.
Defects in our software services, underlying hardware or errors or delays in our processing of digital transactions could result in additional
development costs, diversion of technical and other resources from our other development efforts and could result in loss of credibility
with current or potential customers, harm to our reputation and exposure to liability claims. In instances in which we rely on third-party
software, our services are occasionally affected by defects, viruses, vulnerabilities, security incidents or other failures that take
place at the vendor level. Depending on the circumstances, a vendor failure could cause delays, disruption or data loss or damage, and
therefore cause harm to our credibility, reputation or financial condition. 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.

 Because
we store, process and use data, some of which contains personal information, we are subject to complex and evolving federal, state,
and foreign laws and regulations regarding privacy, data protection, and other matters. While we believe we are currently in
compliance with applicable laws and regulations, many of these laws and regulations are subject to change and uncertain
interpretation, and could result in investigations, claims, changes to our business practices, increased cost of operations, and
declines in user growth, retention, or engagement, any of which could seriously harm our business.

 Data
privacy and security concerns relating to our technology and our practices could cause us to incur significant liability and deter current
and potential users from using our products and services. Software bugs or defects, security breaches, and attacks on our systems could
result in the improper disclosure and use of user data and interference with our users ' ability to use our products
and services, harming our business operations.

 Concerns
about our practices with regard to the collection, use, disclosure, or security of personal information or other data-privacy-related
matters, even if unfounded, could harm our financial condition, and operating results. Our policies and practices may change over time
as expectations regarding privacy and data change. Our products and services involve the storage and transmission of proprietary information,
and bugs, theft, misuse, defects, vulnerabilities in our products and services, and security breaches expose us to a risk of loss of
this information, improper use and disclosure of such information, litigation, and other potential liability. Systems and control failures,
security breaches and/or inadvertent disclosure of user data could result in government and legal exposure, seriously harm our business,
and impair our ability to attract and retain customers.

 We
may experience cyber-attacks and other attempts to gain unauthorized access to our systems. We may experience future security issues,
whether due to employee error or malfeasance or system errors or vulnerabilities in our or other parties' systems, which could
result in significant legal and financial exposure. We may be unable to anticipate or detect attacks or vulnerabilities or implement
adequate preventative measures. Attacks and security issues could also compromise trade secrets and other sensitive information, harming
our business. As a result, we may suffer significant legal or financial exposure, which could harm our business, financial condition,
and operating results.

 Third-party
claims of infringement against us could adversely affect our ability to market our products and require us to redesign our products or
seek licenses from third parties.

 We
are susceptible to intellectual property lawsuits that could cause us to incur substantial costs, pay substantial damages, or prohibit
us from distributing our products. Whether a product infringes a patent involves complex legal and factual issues, the determination
of which is often uncertain. In addition, because patent applications can take many years to issue, there may be applications now pending
of which we are unaware, which later may result in issued patents that our products may infringe. If any of our products infringe a valid
patent, we could be prevented from distributing that product unless and until we can obtain a license or redesign it to avoid infringement.
A license may not be available or may require us to pay substantial royalties. We also may not be successful in any attempt to redesign
the product to avoid any infringement. Infringement and other intellectual property claims, with or without merit, can be expensive and
time-consuming to litigate, and we may not have the financial and human resources to defend ourselves against any infringement suits
that may be brought against us.

 We
may employ individuals who were previously employed by companies that are developing similar products and technology, including our competitors
or potential competitors. To the extent our employees are involved in research areas which are similar to those areas in which they were
involved at their former employers, we may be subject to claims that such employees and/or we have inadvertently or otherwise used or
disclosed the alleged trade secrets or other proprietary information of the former employers. 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.

 We
also rely in our business on trade secrets, know-how and other proprietary information. We seek to protect this information, in part,
through the use of confidentiality agreements with employees, consultants, advisors and others. Nonetheless, we cannot assure you that
those agreements will provide adequate protection for our trade secrets, know-how or other proprietary information and prevent their
unauthorized use or disclosure. To the extent that consultants, key employees or other third parties apply technological information
independently developed by them or by others to our proposed products, disputes may arise as to the proprietary rights to such information
which may not be resolved in our favor. Most of our consultants are employed by or have consulting agreements with third parties and
any inventions discovered by such individuals generally will not become our property. There is a risk that other parties may breach confidentiality
agreements or that our trade secrets become known or independently discovered by competitors, which could adversely affect us.

 We
are highly dependent on information systems and systems failures or interruption could significantly disrupt our business, which may,
in turn, negatively affect our financial results and the market price of our common stock.

 We
depend on communications and information systems for payment-processing as well as certain third-party service providers. As our reliance
on these systems has increased, so have the risks posed to these communications and information systems. Any failure or interruption
in these systems, including due to (i) electrical or telecommunication outages, (ii) natural disasters such as earthquakes, tornadoes
and hurricanes, (iii) disease pandemics, (iv) events arising from local or larger state political or social matters, including terrorist
activities, and (v) cyberattacks could cause disruptions in our activities.

 If
we cannot keep pace with rapid technological developments to provide new and innovative products and services, the use of our products
and services and, consequently, our revenues, could decline.

 Rapid,
significant, and disruptive technological changes impact the industries in which we operate, including payment technologies, internet
browser technologies, artificial intelligence and machine learning, and developments in technologies supporting our regulatory and compliance
obligations. We expect that new technologies applicable to the industries in which we operate will continue to emerge and may be superior
to, or render obsolete, the technologies we currently use in our products and services. We cannot predict the effects of technological
changes on our business, which technological developments or innovations will become widely adopted, and how those technologies may be
regulated. Developing and incorporating new technologies into new and existing products and services may require significant investment,
take considerable time, and may not ultimately be successful. We may rely on third parties for the development of and access to new or
evolving technologies. These third parties may restrict or prevent our access to, or utilization of, those technologies, as well as their
platforms or products. Our ability to develop, provide or incorporate new technologies and adapt our existing products and services or
develop future and new products and services using new technologies may be limited or restricted by industry-wide standards, platform
providers, payments networks, changes to laws and regulations, changing customer expectations, third-party intellectual property rights,
and other factors. If we are unable to develop and incorporate new technologies and adapt to technological changes and evolving industry
standards in a timely or cost-effective manner, our business, results of operations, or reputation could be harmed.

 Risks
Related to Owning Our Common Stock

 We
are subject to increased costs as a result of operating as a public company, and our management is required to devote substantial time
to new compliance initiatives.

 As
a public company, we incur significant legal, accounting, and other expenses that we did not incur as a private company, including costs
associated with public company reporting requirements. The Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and Nasdaq
to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment
and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Further, in July 2010,
the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, was enacted. There are significant corporate governance
and executive compensation related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules and regulations in
these areas, such as "say on pay" and proxy access. Stockholder activism, the current political environment and the current
high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which
may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.
Our management and other personnel will devote a substantial amount of time to these compliance programs and monitoring of public company
reporting obligations and as a result of the new corporate governance and executive compensation related rules, regulations and guidelines
prompted by the Dodd-Frank Act and further regulations and disclosure obligations expected in the future, we will likely need to devote
additional time and costs to comply with such compliance programs and rules. These rules and regulations will cause us to incur significant
legal and financial compliance costs and will make some activities more time-consuming and costly.

 The
rules and regulations applicable to public companies have substantially increased our legal and financial compliance costs and make some
activities more time-consuming and costly. If these requirements divert the attention of our management and personnel from other business
concerns, they could have a material adverse effect on our business, financial condition, and results of operations. The increased costs
will decrease our net income and may require us to reduce costs in other areas of our business or increase the prices of our products
or services. For example, these rules and regulations made it more difficult and more expensive for us to obtain director and officer
liability insurance and we may be required to incur substantial costs in the future to maintain the same or similar coverage. 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.

 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.

 Our
common stock is currently listed on Nasdaq. In order to maintain that listing, we must satisfy minimum financial and other continued
listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders'
equity, minimum share price, and certain corporate governance requirements. There can be no assurances that we will be able to comply
with the applicable listing standards of Nasdaq.

 In
the event that our common stock is delisted from Nasdaq and is not eligible for quotation on another market or exchange, trading of our
common stock could be conducted in the over-the-counter market established for unlisted securities, such as the OTC Markets. In such
event, it could become more difficult to dispose of, or obtain accurate price quotations for, our common stock, and there would likely
also be a reduction in our coverage by securities analysts and the news media, which could cause the price of our common stock to decline
further. Also, it may be difficult for us to raise additional capital if we are not listed on a major exchange.

 In
the event that our common stock is delisted from Nasdaq, U.S. broker-dealers may be discouraged from effecting transactions in shares
of our common stock because it may be considered a penny stock and thus be subject to the penny stock rules.

 The
SEC has adopted a number of rules to regulate a "penny stock" that restricts transactions involving stock which is deemed
to be a penny stock. Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 5g-7, and 15g-9 under the Exchange
Act. These rules may have the effect of reducing the liquidity of penny stocks. "Penny stocks" generally are equity securities
with a price of less than $5.00 per share (other than securities registered on certain national securities exchanges or traded on Nasdaq
if current price and volume information with respect to transactions in such securities is provided by the exchange or system). Our shares
of common stock may, in the future constitute, a "penny stock" within the meaning of the rules. The additional sales practice
and disclosure requirements imposed upon U.S. broker-dealers may discourage such broker-dealers from effecting transactions in shares
of our common stock, which could severely limit the market liquidity of such shares of common stock and impede their sale in the secondary
market.

 A
U.S. broker-dealer selling a penny stock to anyone other than an established customer or "accredited investor" (generally,
an individual with a net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse)
must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction
prior to sale, unless the broker-dealer or the transaction is otherwise exempt. In addition, the "penny stock" regulations
require the U.S. broker-dealer to deliver, prior to any transaction involving a "penny stock", a disclosure schedule prepared
in accordance with SEC standards relating to the "penny stock" market, unless the broker-dealer or the transaction is otherwise
exempt. A U.S. broker-dealer is also required to disclose commissions payable to the U.S. broker-dealer and the registered representative
and current quotations for the securities. Finally, a U.S. broker-dealer is required to submit monthly statements disclosing recent price
information with respect to any "penny stock" held in a customer's account and information with respect to the limited
market in "penny stocks".

 You
should be aware that, according to the SEC, the market for "penny stocks" has suffered in recent years from patterns of fraud
and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to
the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press
releases; (iii) "boiler room" practices involving high-pressure sales tactics and unrealistic price projections by inexperienced
sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping
of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, resulting in investor losses.
Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a
position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the
confines of practical limitations to prevent the described patterns from being established with respect to our securities.

 If
securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, our stock
price and our trading volume could decline.

 The
trading market for our Common Stock depends, in part, on the research and reports that securities or industry analysts publish about
us or our business. While we currently have certain analyst coverage, if one or more of the analysts who cover us downgrade our Common
Stock or publish inaccurate or unfavorable research about our business, our stock price could decline. In addition, if our operating
results fail to meet the forecast of analysts, our stock price could 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.

 Item
1B. Unresolved Staff Comments

 Not
applicable.

 Item
1C. Cybersecurity

 We
have processes for assessing, identifying, and managing material risks from cybersecurity threats. These processes are integrated into
our overall risk management systems, as overseen by our Board, primarily through its audit committee. These processes also include overseeing
and identifying risks from cybersecurity threats associated with the use of third-party service providers. We conduct risk assessments
of certain third-party providers before engagement and have established monitoring procedures in an effort to assess and mitigate potential
data security exposures originating from third parties. We from time to time engages third-party consultants, legal advisors, and audit
firms in evaluating and testing our risk management systems and assessing and remediating certain potential cybersecurity incidents as
appropriate.

 Governance

 Board
of Directors

 The
audit committee of our Board oversees, among other things, the adequacy and effectiveness of our internal controls, including internal
controls designed to assess, identify, and manage material risks from cybersecurity threats. 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. Our management team also provides updates annually or
more frequently as appropriate to the Board.

 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 holds a regular cybersecurity and business continuity reviews to evaluate
data security exposures, control effectiveness and necessary remediation actions. The Head of IT is also supported by a third-party IT
consulting services provider who helps oversee our IT systems and provides cross-functional support for cybersecurity risk management
and facilitates the response to any cybersecurity incidents.

 Our
Head of IT oversees our cybersecurity incident response plan and related processes that are designed to assess and manage material risks
from cybersecurity threats. Our Head of IT also coordinates with our legal counsel and third parties, such as consultants and legal advisors,
to assess and manage material risks from cybersecurity threats. 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 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 CEO also notifies the audit committee chair of any material cybersecurity incidents.

 As
of the date of this Report, we are not aware of any cybersecurity incidents that have materially affected or are reasonably likely to
materially affect the Company, including its business strategy, results of operations, or financial condition and that are required to
be reported in this Report. For 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. 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.
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. 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

 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
3. Legal Proceedings

 We
are currently a party to, and may in the future be involved in, various litigation matters and legal claims. Refer to Note 14, Commitments
and Contingencies, of this Report for further information.

 Item
4. Mine Safety Disclosures

 Not
applicable.

 PART
II

 Item
5. 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).

 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.

Authorized for Issuance under Equity Compensation Plans

 The Company maintains one stock-based compensation plan, the 2023 Equity
Incentive Plan (the "2023 EIP"). 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.

 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, 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. 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.

 Recent
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.

 Item
6. [Reserved]

 Item
7. Management ' 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):

 2024

 2023

 Change

 % of

 % of

 %

 $
 55,998

 100.0
 %

 $
 65,869

 100.0
 %

 $
 (9,871
)

 (15.0
)%

 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

 0.2
 %

 0.1
 %

 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

 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

 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)

 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
 %

 0.4
 %

 294.7
 %

 Net loss

 $
 (26,825
)

 (47.9
)%

 $
 (53,101
)

 (80.6
)%

 $
 26,275

 (49.5
)%

 North America segment

 2024

 2023

 $ Change

 % Change

 $
 18,159

 $
 48,938

 $
 (30,779
)

 (62.9
)%

 10,766

 29,742

 (18,976
)

 (63.8
)%

 Segment gross profit

 $
 7,393

 $
 19,196

 $
 (11,804
)

 (61.5
)%

 International segment

 2024

 2023

 $ Change

 % Change

 $
 37,839

 $
 16,931

 $
 20,908

 123.5
 %

 22,806

 10,415

 12,391

 119.0
 %

 Segment gross profit

 $
 15,033

 $
 6,516

 $
 8,517

 130.7
 %

 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. 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.

 Total
revenue for the year ended December 31, 2024, decreased by $9.9 million, or 15%, compared to the year ended December 31, 2023. 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. 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. 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. 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. 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.
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. 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.

 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. 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.
 This decrease was primarily due to non-recurring credit losses recorded during the year ended December 31, 2023, related to non-continuing
 legacy accounts.

 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. 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. 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.
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. 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.

 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. 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. 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.

 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:

 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;

 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.

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.

 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
)

 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. 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.

 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. 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.

 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. 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. 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").
GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during
the reporting period. We base our estimates on historical experience, anticipated future trends, and other assumptions we believe to
be reasonable under the circumstances. Because these estimates require significant judgment, our actual results may differ materially
from our estimates.

 Cash
Due from Gateways

 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.

 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. 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.

 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. 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.

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. 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. 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. 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.

 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 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.
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:

 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;

 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.

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. Refer to the "Going Concern" paragraph within Note 2, Summary of Significant Accounting Policies, of this
Report for additional information.

 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 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. For 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. As our international operations grow, we will continue to reassess our approach to
managing our risk relating to fluctuations in currency rates.

 Item
8. Financial Statements and Supplementary Data

 The
consolidated financial statements required by this item begin on page F-1 of this Report and are incorporated herein by reference.

 Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

 None.

 Item
9A. Controls and Procedures

 Evaluation
of Disclosure Controls and Procedures

 Regulations
under the Exchange Act require public companies to maintain "disclosure controls and procedures," as defined in Rules 13a-15(e)
and 15d-15(e) of the Exchange Act. Disclosure controls and procedures include, without limitation, controls and other procedures that
are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated
and timely communicated to management, including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer
(our principal financial officer), to allow timely decisions regarding required disclosure. Our management, with the participation of
our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls
and procedures as of the end of the period covered by this Report. Based on their evaluation as of December 31, 2024, our Chief Executive
Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance
level as of such date.

 Remediation
of Material Weakness

 During
2024, with the oversight of the Audit Committee of the Board of Directors, the Company executed its remediation plan to address the material
weakness identified in Item 9A of its 2023 Annual Report related to not having 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. The Company
took the following actions during the execution of its remediation plan:

 Implemented
 an enhanced reconciliation preparation and review process

 Implemented
 changes to its operating system to improve reporting

has determined, through its current year testing, that these controls have been designed and implemented effectively and that these controls
operated effectively for a sufficient period of time to conclude that the previously disclosed material weakness related to the reconciliation
of transactions between the Company's operating system and its general ledger system as of December 31, 2023, has been remediated
as of the date of the filing of this Report.

 Changes
in Internal Control Over Financial Reporting

 Except
as discussed above, there were no changes in our internal control over financial reporting that occurred during the year ended December
31, 2024, which has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 Item
9B. Other Information

 None.

 Item
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection

 None.

 PART
III

 Item
10. Directors, Executive Officers and Corporate Governance

 The
following table sets forth the name, age, and position of each of the Company's executive officers and directors.

 Name

 Age

 Position(s)

 Executive
 Officers

 Ben
 Errez

 Chairman
 of the Board and Executive Vice President

 Fredi
 Nisan

 and Chief Executive Officer (Principal Executive Officer)

 Zechariah
 Kirscher

 Vice
 President Legal

 George
 Oliva

 Chief
 Financial Officer

 Non-Employee
 Directors

 Genevieve
 Baer

 Ezra
 Laniado

 David
 Montoya

 Business
Experience of Executive Officers

 Ben
Errez has acted as Chairman of our Board, Executive Vice President, Principal Financial Officer since July 2017. He has brought
this expertise to the Company to lead the Company into the forefront of the blockchain-based financial software, services and hardware
market. Since 2017, Errez has been a principal of the GreenBox Business. From August 2004 until August 2015, Errez formed the start-up
IHC Capital, where he held the position of Principal Consultant from founding to the present date, through which he advises clients in
the South Pacific region with market capitalizations ranging from $50M to $150M on matters such as commerce, security, reliability and
privacy. From January 1991 to August 2004, he served as Software Development Lead for the Microsoft International Product Group. He led
the International Microsoft Office Components team (Word, Excel, PowerPoint) in design, engineering, development and successful deployment.
He also served as Executive Representative of Microsoft Office and was a founding member of the Microsoft Trustworthy Computing Forum,
both within the company, and internationally. Errez co-authored the first Microsoft Trustworthy Computing Paper on Reliability. At Microsoft,
Mr. Errez was responsible for the development of the first Microsoft software translation Software Development Kit in Hebrew, Arabic,
Thai and Simplified Chinese, as well as the development of the first bidirectional extensions to Rich Text Format file format, all bidirectional
extensions in text converters for Microsoft Office, and contributed to the development of the international extensions to the Unicode
standard to include bidirectional requirements under the World Wide Web Consortium. He received his Bachelor Degree in Mathematics and
Computer Science from the Hebrew University.

 Fredi Nisan has served as a Director
and our Chief Executive Office since July 2017 and has been a principal of the Company since August 2017. In May 2016, Nisan founded Firmness,
LLC. Through Firmness, Nisan created "QuickCitizen," a software program that simplifies the onboarding process for new clients
of law firms specializing in immigration issues. The QuickCitizen software significantly reduced law firm's onboarding processing
time from more than three hours to approximately fifteen minutes. In January 2010, Nisan launched Brava POS, where he served as President
until 2015. Brava POS provided POS systems for specialty retail companies. Nisan developed software to provide clients with solutions
for issues ranging from inventory management to payroll to processing high volume transactions in the form of a cloud-based POS system.
This system had the capability to manage multiple stores with centralized inventory and process sales without an internet connection,
and offered a secure login for each employee, as well as including advanced inventory management and reporting, plus powerful functionality
for its end users.

 Zechariah
Kirscher has served on the Company's internal legal team since May 2022, when he joined as Senior Counsel, and was later
appointed VP of Legal Affairs in April 2023. Prior to joining the Company, Mr. Kirscher spent nearly a decade working in law firms in
Southern California, most recently at Cooley LLP ("Cooley") from April 2021 to May 2022 and, before that, DLA Piper (US)
("DLA") from September 2015 to April 2021. While at Cooley and DLA, Mr. Kirscher represented banks, lenders, private funds,
and companies in primarily the venture lending space. Today, Mr. Kirscher leverages his experience with early-stage companies to contribute
to the growth and success of RYVYL as it seeks to transform the payments industry. Mr. Kirscher holds a Bachelor of Arts degree from
the University of Wisconsin-Madison and a Juris Doctor degree from Chicago-Kent College of Law.

 George
Oliva joined the RYVYL team in October 2023 as Chief Financial Officer and has over 30 years as a senior finance professional,
with a background in corporate finance, treasury, financial planning and analysis, international tax, and strategic planning. Prior to
joining RYVYL, he was Chief Financial Officer and Corporate Secretary for Wisa Technologies since 2019. Prior to Wisa, he provided financial
consulting services to public and private companies nationwide. He was also a partner with Hardesty LLC, a national executive services
firm. Mr. Oliva has held several interim positions with a variety of clients that included a scientific instruments business acquired
by a private equity firm, a medical device manufacturer preparing for an IPO, an audio company merger and a yield improvement software
company implementing a world-wide ERP system. Mr. Oliva was CFO of Penguin Computing from 2009 through 2013, where he played a leading
role in guiding them through a period of rapid growth, twice making the Silicon Valley Business Journal's list of fastest growing
private companies. Prior to Penguin, he was CFO of StreamLogic, a public company doing business as Hammer Storage Solutions, where he
navigated its going-private transaction. Prior to serving in such roles, Mr. Oliva was responsible for financial planning and analysis
and operational support as the operations controller for Conner Peripherals and at Read-Rite Corporation, both exceeding a billion of
revenue in the data storage industry. Mr. Oliva began his career in auditing with Arthur Andersen & Co., a leading public accounting
firm. Mr. Oliva is a certified public accountant, currently inactive status. He earned a B.S. degree in Business Administration from
U.C. Berkeley with a dual emphasis in Accounting and Finance.

 Business
Experience of Non-Employee Directors

 Genevieve
Baer has served as a Director since February 2021 and has been chief executive officer of JKH Consulting since 2009. JKH Consulting
is a real estate finance consulting firm that has advised on transactions with a collective value of over $10 billion. Prior to her work
with JKH Consulting, Ms. Baer worked at Magnet Industrial Bank for 6 years at the end of which tenure she was a Senior Vice President.
Ms. Baer also worked at US Bancorp Piper Jaffray for nine years as a Vice President working on equity and debt real estate financings.
Ms. Baer earned a B.S. in chemistry from the University of Utah.

 Ezra
Laniado has served as a Director since February 2021 and has, since 2018, been Executive Director of the San Diego chapter of
Friends of Israel Defence Forces and, since 2017, been Regional Director of the San Diego chapter of the Israeli-American Council, two
American charitable organizations providing support and funds for Israel and the Israeli community in America. In such capacity, Mr.
Laniado has raised over $5 million in donations and managed over 30 volunteers. From 2014 to 2017, Mr. Laniado was Co-Founder and Business
Director of Shonglulu Group, a fashion brand. As Business Director, Mr. Laniado raised capital, coordinated the company's marketing
strategy, and implemented its business plan. Prior to 2014, Mr. Laniado was an attorney in Israel for four years. Mr. Laniado received
a B.A. and an L.L.B. from the Interdisciplinary Center Herzliya.

 David
Montoya has served as a Director since May 2023 and has been the legal and operations managing partner of Seaview Mezzanine Fund,
LP since 2005, where he negotiates and reviews investments and private placements. Seaview is a private equity fund making debt and equity
investments into lower and middle market companies. Mr. Montoya has been the Chief Executive Officer of Saugatuck Brands, Inc. since
2017. Saugatuck is a holding company with investments in a regulated industry in California. From 2001 to 2005, Mr. Montoya was an Of
Counsel attorney at Breslow & Walker LLP, a law firm, where he advised private equity funds, public companies and private companies
with respect to general corporate, M&A, real estate and tax matters. Prior to 2001, Mr. Montoya's experience included working
at the law firm Skadden Arps, Slate, Meagher & Flom and the accounting firm Ernst & Young. Mr. Montoya earned a BS in Finance
from St John's University, an MBA from Columbia University Graduate School of Business and a JD from New York University School
of Law. Mr. Montoya is an active member of the New York State Bar Association and a New York State CPA (retired).

 Family
Relationships

 The
Company employs two of our CEO's brothers, Dan and Liron Nusinovich, who are paid approximately $260,000 and $131,000 per year,
respectively. There are no family relationships between any of our other directors or executive officers and any other employees or directors
or executive officers.

 Corporate
Governance Overview

 Composition
of our Board of Directors

 Our
Board of Directors currently consists of five directors. Our Amended and Restated Articles of Incorporation and Amended and Restated
Bylaws provide that our Board of Directors can consist of not less than one director nor more than 11 directors. Our Amended and Restated
Bylaws also provide that a majority of the total number of directors then in office will constitute a quorum for a meeting of the Board
of Directors. At each Annual Meeting of Stockholders, directors will be elected for a one year term, until his or her successor is elected
at our Annual Meeting or his or her death, resignation or removal, whichever is earliest to occur. When considering whether directors
have the experience, qualifications, attributes or skills, taken as a whole, to enable our Board of Directors to satisfy its oversight
responsibilities effectively in light of our business and structure, the Board of Directors focuses primarily on each person's
background and experience as reflected in the information discussed in each of the directors' individual biographies set forth
above. We believe that our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business.

Independence

 As
our common stock is listed on the Nasdaq Capital Market, our determination of the independence of directors is made using the definition
of "independent director" contained in Nasdaq Listing Rule 5605(a)(2). Our Board of Directors has affirmatively determined
that each of Ms. Baer, Mr. Montoya and Mr. Laniado are "independent directors," as that term is defined in the Nasdaq rules.
Under the Nasdaq rules, our Board must be composed of a majority of "independent directors."

 Additionally,
subject to certain limited exceptions, our Board's audit, compensation, and nominating and corporate governance committees also
must be composed of all independent directors.

 Audit
committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. Under the rules of Nasdaq,
a director will only qualify as an "independent director" if, in the opinion of that company's Board of Directors,
that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities
of a director.

 To
be considered to be independent for purposes of Rule 10A-3 of the Exchange Act, a member of an audit committee of a listed company may
not, other than in his capacity as a member of our audit committee, our Board of Directors, or any other committee of our Board of Directors:
(1) accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries;
or (2) be an affiliated person of the listed company or any of its subsidiaries.

 Board
Leadership Structure and Board ' s Role in Risk Oversight

 Ben
Errez is our Chairman of the Board. The Chairman has authority, among other things, to preside over and set the agenda for Board of Directors
meetings. Accordingly, the Chairman has substantial ability to shape the work of our Board of Directors. We believe that the presence
of three independent members of our Board of Directors ensures appropriate oversight by the Board of Directors of our business and affairs.
However, no single leadership model is right for all companies and at all times. The Board of Directors recognizes that depending on
the circumstances, other leadership models, such as the appointment of a lead independent director, might be appropriate. Accordingly,
the Board of Directors may periodically review its leadership structure. In addition, the Board of Directors holds executive sessions
in which only independent directors are present.

 Our
Board of Directors is generally responsible for the oversight of corporate risk in its review and deliberations relating to our activities.
Our principal source of risk falls into two categories, financial and product commercialization.

 Our
audit committee oversees the management of financial risks; our Board of Directors regularly reviews information regarding our cash position,
liquidity and operations, as well as the risks associated with each. The Board of Directors regularly reviews plans, results and potential
risks related to our business, growth, and strategies. Our compensation committee oversees risk management as it relates to our compensation
plans, policies and practices for all employees including executives and directors, particularly whether our compensation programs may
create incentives for our employees to take excessive or inappropriate risks which could have a material adverse effect on our company.

 Board
Committees

 The
Board has established the following three standing committees: audit committee; compensation committee; and nominating and governance
committee or nominating committee. Each of our independent directors, Mr. Montoya, Ms. Baer and Mr. Laniado, serves on each committee,
with Mr. Montoya also serving as chairman of each committee. Our Board has adopted written charters for each of these committees. Copies
of the charters are available on our website. Our Board may establish other committees as it deems necessary or appropriate from time
to time.

 Audit
Committee

 The
audit committee is responsible for, among other matters:

 Appointing,
 compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm;

 discussing
 with our independent registered public accounting firm the independence of its members from its management;

 with our independent registered public accounting firm the scope and results of their audit;

 approving
 all audit and permissible non-audit services to be performed by our independent registered public accounting firm;

 overseeing
 the financial reporting process and discussing with management and our independent registered public accounting firm the interim
 and annual financial statements that we file with the SEC;

 and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory
 requirements;

 coordinating
 the oversight by our Board of our code of business conduct and our disclosure controls and procedures;

 establishing
 procedures for the confidential and/or anonymous submission of concerns regarding accounting, internal controls or auditing matters;

 overseeing
 and making applicable determinations under the Company's Executive Compensation Clawback Policy;

 and approving related-person transactions; and

 appointing,
 compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm.

 The
Board has reviewed the independence of our directors based on the listing standards of Nasdaq. Based on this review, the Board has determined
that Mr. Montoya, Ms. Baer and Mr. Laniado all meet the definition of "independent director" for purposes of serving on an
audit committee under Rule 10A-3 and Nasdaq rules. The Board has determined that Mr. Montoya qualifies as an "audit committee financial
expert," as such term is defined in Item 407(d)(5) of Regulation S-K.

 Compensation
Committee

 The
compensation committee is responsible for, among other matters:

 key employee compensation goals, policies, plans and programs;

 overseeing
 and making applicable determinations under the Company's Executive Compensation Clawback Policy;

 and approving the compensation of our directors and executive officers;

 and approving employment agreements and other similar arrangements between us and our executive officers; and

 Nominating
Committee

 The
purpose of the nominating committee is to assist the Board in identifying qualified individuals to become Board members, in determining
the composition of the Board, evaluating director compensation, and in monitoring the process to assess Board effectiveness.

Attendance at Annual Meetings of Stockholders

 We
do not have a formal policy regarding the attendance of directors at our annual meetings of stockholders, but we encourage all directors
to make every effort to attend all annual meetings of stockholders and believe that attendance at annual meetings is just as important
as attendance at Board of Directors and committee meetings.

 Code
of Business Conduct and Ethics

 Our
Board of Directors adopted a Code of Business Conduct and Ethics that applies to our directors, officers, and employees. A copy of this
code is available on our website at investors.ryvyl.com/governance/charter-documents. We intend to disclose on our
website any amendments to the Code of Business Conduct and Ethics and any waivers of the Code of Business Conduct and Ethics that apply
to our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar
functions.

 Delinquent
Section 16(a) Reports

 Section
16(a) of the Exchange Act requires the Company's directors, executive officers and holders of more than 10% of the Company's
Common Stock to file reports relating to their ownership and changes in ownership of our Common Stock with the SEC. Based on a review
of Forms 3, 4 and 5 and any amendments thereto filed with the SEC and stockholder reports from our transfer agent and written representations
that no other reports were required, during the fiscal year ended December 31, 2024, our officers, directors and 10% or more stockholders
complied with all Section 16(a) filing requirements applicable to them, except that (i) Mr. Errez filed four late Form 4s covering a
total of four transactions; (ii) Mr. Nisan filed three late Form 4s covering a total of three transactions; (iii) Ms. Baer filed one
late Form 4 covering one transaction; (iv) Mr. Laniado filed two late Form 4s covering a total of two transactions; and (vi) Mr. Montoya
filed three late Form 4s covering a total of three transactions. The Company has requested all Section 16(a) officers provide power of
attorney to the in-house legal team to ensure timely approvals and filing of Section 16(a) reports and has implemented an equity management
software as of the first quarter of 2025 to assist with timely recording and reporting.

 Insider
Trading Policy

 On
February 15, 2024, we adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our
securities by directors, officers, and employees, which are reasonably designed to promote compliance with insider trading laws, rules
and regulations, and applicable Nasdaq listing standards (the "Insider Trading Policy").

 The
foregoing description of the Insider Trading Policy does not purport to be complete and is qualified in its entirety by the terms and
conditions of the Insider Trading Policy, which can be found in Exhibit 19.1 incorporated herein by reference.

 Item
11. Executive Compensation

 Summary
Compensation Table

 The
following table summarizes information for the fiscal years ended December 31, 2024, and 2023, concerning the compensation awarded to,
earned by, or paid to, our Chief Executive Officer (Principal Executive Officer) and our two most highly compensated executive officers,
who continued to serve as executive officers, on December 31, 2024, other than the Principal Executive Officer, and up to two additional
executive offers for whom disclosure would have been provided, but for the fact such executive officer no longer served as an executive
officer, on December 31, 2024 (collectively, "Named Executive Officers"). Our Named Executive Officers in 2024 were Mr. Nisan,
Mr. Errez, and Mr. Oliva. Our Named Executive Officers in 2023 were Mr. Nisan, Mr. Errez, and Mr. Wei.

 Name and Principal Position

 Year

 Salary
 ($)

 Bonus
 ($)

 Stock
 Awards
 ($)(1)

 Options
 Awards
 ($)(1)

 All Other
 Compensation
 ($)(2)

 Total
 ($)

 Ben Errez

 2024

 399,010

 -

 29,959

 -

 114,633

 543,602

 Chairman/EVP

 2023

 380,000

 218,585

 148,127

 88,920

 835,632

 Fredi Nisan

 2024

 399,000

 -

 29,959

 -

 113,070

 542,029

 CEO/Director

 2023

 380,000

 217,225

 148,927

 21,390

 767,542

 Min Wei

 2024

 190,183

 -

 -

 -

 188,057

 378,240

 COO (3)

 2023

 320,000

 160,000

 158,400

 157,949

 33,469

 829,818

 George Oliva

 2024

 320,000

 -

 -

 -

 46,751

 366,751

 CFO (4)

 2023

 66,666

 -

 49,997

 -

 3,019

 119,682

 (1)

 Represents
 the aggregate grant date fair value of restricted stock and stock option awards calculated in accordance with Financial Accounting
 Standards Board ("FASB") Accounting Standards Codification ("ASC") 718, Compensation – Stock Compensation
 ("ASC 718"). These amounts do not necessarily correspond to the actual value that may be recognized by the holder.
 Refer to Note 1, Summary of Significant Accounting Policies, of this Report for a description of the assumptions used in determining
 the grant date fair values of these awards.

 (2)

 All
 other compensation includes Company paid healthcare insurance premiums, compensation for board memberships, and 401(k) match. For
 Messrs. Errez and Nisan, as members of the Board, each of their compensation includes $90,000 in cash. For Mr. Wei, compensation
 includes severance compensation.

 (3)

 Mr.
 Wei joined the Company in February 2022 and resigned in June 2024.

 (4)

 Mr.
 Oliva joined the Company in October 2023.

 Narrative
to Summary Compensation Table

 Employment
and Consulting Contracts, Termination of Employment, and Change-in-Control Arrangements

 The
Company has not entered into employment agreements or other compensation agreements with its executive officers. All employee contracts
are "at will." There are no potential payments payable to the named executive officers upon a termination of employment in
connection with a change in control.

 Equity
Incentive Plan

 The
Company maintains one stock option plan, the 2023 Equity Incentive Plan (the "2023 EIP"). 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.

 Share
Reserve

 The 2023 EIP reserved an aggregate of 5,098,262 shares
of common stock available for equity incentive awards. As of March 24, 2025, the 2023 EIP has 4,224,705 shares of common stock available
for new incentive awards.

 If
any options granted expire or terminate without being exercised, both the 2023 EIP option plans provides that the shares covered thereby
are added back to the plan's share reserve and become available for stock equity incentive option awards to other participants.

 Administration

 Our
Board of Directors have appointed Ben Errez as administrator of the 2023 EIP. The administrator has the full power to grant options,
to determine the persons eligible to receive such equity grants, and to determine the amount, type and terms and conditions of each such
grants.

 Eligibility

 Employees,
directors, or consultants of the Company or any of our affiliates, as selected from time to time by the plan administrator in its discretion,
are eligible to participate in the equity incentive plan.

 Types
of Awards

 The
equity incentive plans permits the granting of options intended to qualify as incentive stock options under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code") and options that do not so qualify. Options granted under the equity incentive
stock option plans will be nonstatutory options if they fail to qualify as incentive stock options or exceed the annual limit on incentive
stock options. Incentive stock options may only be granted to employees of the Company and its subsidiaries. Nonstatutory options may
be granted to any persons eligible to receive awards under the stock option plans.

 The
plan administrator shall determine the purchase price (the "option price") for an optionee to exercise the option. For incentive
stock options, the option price may not be less than 100% of the fair market value of one share of common stock on the date of grant
or, in the case of an incentive stock option granted to a 10% or greater stockholder, 110% of such share's fair market value. The
term of each option will be fixed by the plan administrator and may not exceed ten (10) years from the date of grant (or five years for
an incentive stock option granted to a 10% or greater stockholder). The plan administrator will determine at what time or times each
option may be exercised, including the ability to accelerate the vesting of such options.

 Upon
exercise of an option, the option price must be paid in full (i) in cash or by check; (ii) with approval of the plan administrator, by
delivery of shares of Company common stock that are beneficially owned by the optionee free of restrictions or were purchased in the
open market, provided that if the shares were acquired from the Company, they have been held by the optionee for more than six months;
or (iii) with such other form of legal consideration permitted by federal and state law as may be acceptable to the Board.

 Equitable
Adjustments

 The
2023 EIP plans provides that the number of shares of common stock covered by each outstanding option, and the price per share thereof
set forth in each such option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of common
stock resulting from a subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in
the number of such shares affected without receipt of consideration by the Company.

 Transferability
of Options

 Both
stock option plans provides that no option may be transferable by the optionee, except by will or by the laws of descent and distribution.

 Term
of the Option Plans

 The
2023 EIP will expire on November 3, 2033. Although no options may be granted under the plans after such dates, the expiration will not
affect the validity of outstanding options.

 Amendment
and Termination

 The
Board of Directors may, insofar as permitted by law, from time to time, with respect to any shares of common stock at the time not subject
to options, suspend or terminate the 2023 EIP or otherwise revise or amend the equity incentive plan. The Board of Directors must obtain
stockholder approval for any revisions that would (i) increase the number of shares subject to the plan, (ii) decrease the price at which
options may be granted, (iii) materially increase the benefits to optionees, or (iv) change the class of persons eligible to receive
equity grants under the plan. No amendment or termination of the equity incentive plan may alter or impair the rights and obligations
under any grants outstanding without the written consent of the grantee thereunder.

 Outstanding
Equity Awards at Fiscal Year-End

 The
following table shows, for each of our Named Executive Officers, all equity awards that were outstanding as of December 31, 2024.

 Option Awards(1)

 Stock Awards

 Name

 Number of
 Underlying
 Unexercised
 Options,
 Exercisable
 (#)

 Number of
 Underlying
 Unexercised
 Options,
 Not
 Exercisable
 (#)

 Option
 Exercise
 Price
 ($)

 Option
 Expiration
 Date

 Number of
 or Units
 of Stock
 That Have
 Not Vested
 (#)

 Market
 Value of
 Shares or
 Units of
 Stock That
 Have Not
 Vested
 ($)

 Fredi Nisan

 8,333

 -

 $
 60.60

 06/01/2026

 26,667

 $
 52,800

 -

 133.10

 06/02/2026

 -

 36.60

 10/13/2027

 53,333

 26,667

 2.18

 11/15/2028

 Ben Errez

 8,333

 -

 60.60

 06/01/2026

 26,667

 52,800

 -

 133.10

 06/02/2026

 -

 36.60

 10/13/2027

 53,333

 26,667

 2.18

 11/15/2028

 Neither
Min Wei nor George Oliva has any equity awards outstanding as of December 31, 2024.

 Non-Employee
Director Compensation

 The
following table sets forth compensation earned by each non-employee Director who served during the year ended December 31, 2024.

 Name

 Fees
 Earned or
 Paid in
 Cash
 ($)(1)

 Stock
 Awards
 ($)(2)

 Total
 ($)

 Genevieve Baer

 $
 45,000

 $
 18,768

 $
 63,768

 Ezra Laniado

 45,000

 18,773

 63,773

 David Montoya

 102,000

 37,554

 139,554

 (1)

 Represents
 the cash portion of annual director fees for service on the RYVYL Board.

 (2)

 Represents
 the fair value of the share awards for the year ended December 31, 2024. These amounts reflect the actual value upon vesting realized
 by the Board member.

 Each
non-employee director has entered into Board of Director Agreements (the "BOD Agreements"). Pursuant to the BOD Agreements,
each non-employee director receives cash compensation in the amount of $2,500 per month. Pursuant to the BOD Agreements, each non-employee
director will receive equity compensation in the form of shares of Common Stock in an amount equal to $2,500 per month. Each chairman
of the independent committees receives cash compensation in the amount of $5,000 per month and equity compensation in the form of shares
of Common Stock in an amount equal to $5,000 per month. Additionally, from time to time, each of the independent directors may receive
awards pursuant to the Company's Equity Incentive Plan or opt to receive cash in lieu of stock awards.

 Each
non-employee director has agreed to execute an indemnification agreement in favor of the Board member substantially in the form of the
agreement attached to each BOD Agreement as Exhibit A (the "Indemnification Agreement"). In addition, so long as the Company's
indemnification obligations exist under the Indemnification Agreement, the Company shall provide the Board member with directors'
and officers' liability insurance coverage in the amounts specified in the Indemnification Agreement.

 The
Company will also provide and maintain a 10b5-1 trading plan (the "Plan") for its Directors and employees. If such Plan is
not in effect at the time each month that Mr. Montoya is granted equity (each monthly grant, an "Equity Grant"), then the
Company will compensate Mr. Montoya, within three (3) business days of an such Equity Grant, with an additional cash payment in an amount
equal to $3,500 (each, a "Grant Tax Payment") until such date that the Plan is made available to Montoya. Additionally, on
the date that any such Equity Grant vests (each, a "Vesting Date"), if the Grant Tax Payment is not at least fifty percent
(50%) of the fair market value of on any Vesting Date (each, a "FMV Grant Value") then the Company, within three (3) business
days of any Vesting Date, shall pay Mr. Montoya the difference between (i) the FMV Grant Value and (ii) the Grant Tax Payment.

 Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

 The following table sets forth certain information with respect to
the beneficially owned holdings of: (1) each person known to us to be the beneficial owner of more than 5% of our Common Stock; (2) each
of our directors, nominees for director and named executive officers; and (3) all directors and executive officers as a group. Applicable
percentage ownership is based on the 8,351,086 shares of Common Stock outstanding as of March 24, 2025.

 A
person is considered to beneficially own any shares: (i) over which such person, directly or indirectly, exercises sole or shared voting
or investment power, or (ii) of which such person has the right to acquire beneficial ownership at any time within 60 days through an
exercise of stock options or warrants. To the best of our knowledge, each of the persons named in the table below as beneficially owning
the shares set forth therein has sole voting power and sole investment power with respect to such shares, unless otherwise indicated.

 Unless
otherwise specified, the address of each of the persons set forth below is in care of the Company, at 3131 Camino Del Rio North, Suite
1400, San Diego, California.

 Name and Address of Owner

 Shares of

Stock

Owned

Beneficially

 Percent of

Class

 5% Holders

 GreenBox POS LLC (1)

 1,848,922

 22.14

 %

 Officers and Directors

 Ben Errez (2)

 2,006,932

 (3)

 23.85

 %

 Fredi Nisan (4)

 2,004,436

 (3)

 23.82

 %

 George Oliva

 8,552

 *

 Zechariah Kirscher (5)

 53,949

 (5)

 *

 Genevieve Baer

 14,618

 (6)

 *

 Ezra Laniado

 17,334

 (6)

 *

 David Montoya

 50,571

 *

 Total of Officers and Directors (7 Persons)

 2,307,471

 27.05

 %

 *
 Less
than 1%

 (1)

 GreenBox
 POS LLC ("PrivCo") holds 1,848,922 shares of the Company's issued and outstanding stock. PrivCo is managed by its
 two managing members, Ben Errez and Fredi Nisan, both of whom serve as our sole officers and directors. Messrs. Errez and Nisan each
 own 50% of PrivCo.

 (2)

 Mr.
 Errez owns 50% of PrivCo and therefore owns 924,461 shares held by PrivCo. As one of two managing members of PrivCo, Mr. Errez has
 influence over PrivCo's entire holding of 1,848,922 shares.

 (3)

 Includes
 62,786 fully vested options.

 (4)

 Mr.
 Nisan owns 50% of PrivCo and therefore owns 924,461 shares held by PrivCo. As one of two managing members of PrivCo, Mr. Nisan has
 influence over PrivCo's entire holding of 1,848,922 shares

 (5)

 Includes
 53,334 fully vested options.

 (6)

 Includes
 409 fully vested options.

 Item
13. Certain Relationships and Related Transactions and Director Independence

 The
following includes a summary of transactions since January 1, 2023 to which we have been a party in which (i) the amount involved exceeded
or will exceed $120,000 or one percent (1%) of our average total assets at year-end for the last two completed fiscal years, and (ii)
any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of
the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other
compensation, termination, change in control and other arrangements, which are described under "Executive Compensation."
We also describe below certain other transactions with our directors, executive officers, and stockholders.

 PrivCo

 The Company repurchased, in two separate repurchase
transactions, each consisting of 100,000 shares of common stock, an aggregate of 200,000 shares owned by PrivCo (an entity controlled
by Messrs. Errez and Nisan). In October 2022, the Board unanimously ratified these two repurchase transactions between the Company and
PrivCo. The Company repurchased 100,000 shares for a price per share of $55.90 (for total proceeds to PrivCo of $5,590,000) (the "First
Repurchase") and 100,000 shares for a price per share of $8.20 (for total proceeds to PrivCo of $820,000) (the "Second Repurchase").
The First Repurchase was based on the closing price of the common stock on November 24, 2021 and took place over a number of months starting
in February 2022 and ending in October 2022. The Second Repurchase was based on the closing price of the common stock on July 29, 2022
and took place in October 2022. The purpose of each of these transactions was to allow the Company to issue shares to new shareholders
without increasing the Company's shares outstanding. As of December 31, 2024, and 2023, there were 11,733 and 100,525 shares available,
respectively, of the 200,000 shares of common stock under the aforementioned transactions.

 Kenneth
Haller

 The
following are certain transactions between the Company and the Haller Companies. Mr. Haller was an employee of the Company through March
31, 2022.

 Sky
Financial & Intelligence, LLC – Haller owns 100% of Sky Financial & Intelligence LLC ("Sky"), a Wyoming limited
liability company, and serves as its sole Managing Member. Sky is a strategic merchant services company that focuses on high risk merchants
and international credit card processing solutions. In 2018, Sky was using GreenBox's QuickCard payment system as its main payment
processing infrastructure, through Sky's relationship with Mtrac. It was through this successful relationship that we came to know
Haller and the Haller Network. Realizing that the Haller Network and Haller's unique skillset was highly complementary to our business
objectives, we commenced discussions to retain Haller through his consulting firm, Sky, for a senior role, directly responsible for growing
GreenBox's operations. Subsequently, in November 2018, Haller was appointed as our Senior Vice President of Payment Systems, for
a monthly consulting fee of $10,000, paid to Sky ("Haller Consulting Fee").

 On
March 31, 2022, the Company entered into and closed an asset purchase agreement with Sky Financial to purchase a portfolio of certain
merchant accounts. The Company paid $16,000,000 in cash at closing and issued 500,000 shares of restricted common stock on May 12, 2022.
As of March 31, 2022, Mr. Haller is no longer an employee of the Company. As of December 31, 2024 the Company has not received the delivery
of the acquired merchant list and the associated ISO management portal access. The Company wrote-off the entire purchase price during
the year ended December 31, 2022. The Company is actively pursuing its entitlements under the purchase agreement. See Note 15, Commitments
and Contingencies, for additional information.

 Ms.
Hogan

 Ms.
Hogan joined the Board on April 4, 2022 and resigned on April 12, 2023. Ms. Hogan was a Partner and Co-Chair of the Corporate and Securities
Practice Group at Lucosky Bookman LLP from March 2021 until November 2022. Lucosky Brookman provided legal services to the Company through
July 2023. For the period from January 1, 2022, through April 15, 2023, the Company paid $514,151 in legal fees to Lucosky Brookman.

 Mr.
Nisan

 The
Company hired Dan Nusinovich on or about February 19, 2018 as our Development and Testing Manager and he was promoted to Vice President
of Development on or about January 12, 2022. Dan is the brother of Fredi Nisan, our CEO and Director. Mr. Nusinovich is paid approximately
$260,000 per year.

 The
Company hired Liron Nusinovich on or about July 16, 2018 as a Risk Analyst and he was promoted to Junior Product Owner on or about February
16, 2022. Mr. Nusinovich is the brother of Fredi Nisan, our CEO and Director. Mr. Nusinovich is paid approximately $131,000 per year.

 Indemnification
Under Articles of Incorporation and Bylaws; Indemnification Agreements

 Our
Bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by the Nevada Revised Statutes ("NRS"),
subject to certain exceptions contained in our Bylaws. In addition, our Bylaws provide that our directors will not be liable for monetary
damages for breach of fiduciary duty.

 Policy
Regarding Related Party Transactions

 Our
Board of Directors adopted a written policy contained in our Code of Business Conduct and Ethics regarding transactions with related
persons. As a general rule, conducting corporate business with a relative or significant other, or with a business in which a relative
or significant other is associated in any significant role, should be avoided. Relatives include spouse, sister, brother, daughter, son,
mother, father, grandparents, aunts, uncles, nieces, nephews, cousins, step relationships, and in-laws. Significant others include persons
living in a spousal (including same sex) or familial fashion with an employee. If such a related party transaction is unavoidable, the
nature of the related party transaction must be fully disclosed to our Chief Financial Officer ("CFO"). If determined to
be material to the Company by the CFO, our Audit Committee must review and approve in writing in advance such related party transactions.
The most significant related party transactions, particularly those involving our directors or executive officers, must be reviewed,
and approved in writing in advance by the Board. We must report all such material related party transactions under applicable accounting
rules, federal securities laws, SEC rules and regulations, and securities market rules. Any dealings with a related party must be conducted
in such a way that no preferential treatment is given to such business.

 Item
14. Principal Accounting Fees and Services

 The following table presents fees paid for professional
and other services rendered to the Company by Simon & Edward, LLP and KYJ, LLP in the years ended December 31, 2024, and 2023:

 2024

 2023

 Audit Fees (1)

 $
 228,700

 $
 415,885

 Tax Fees (2)

 47,281

 47,536

 Total Fees

 $
 275,981

 $
 463,421

 (1)
 Consist
of professional services rendered in connection with the audit and quarterly reviews of our consolidated financial statements, including
audited financial statements presented in this Report for the years ended December 31, 2024, and 2023, as well as related services normally
provided in connection with statutory and regulatory filings or engagements.

 (2)
 Consist
of fees for professional services for tax compliance, tax advice and tax planning. These services include consultation on tax matters
and assistance regarding federal, state, and international tax compliance.

 Pre-Approval
Policies and Procedures

 In
accordance with Section 10A(i) of the Exchange Act, before we engage our independent registered public accounting firm to render audit
or non-audit services, the engagement is approved by our audit committee. Our audit committee approved all of the fees referred to in
the rows titled "Audit Fees," and "All Other Fees" in the table above.

 PART
IV

 Item
15. Exhibits and Financial Statement Schedules

 The
following documents are filed as part of this Report:

 a)
 Financial
Statements:

 Our
financial statements and the Report of Independent Registered Public Accounting Firm are included herein on page F-1.

 b)
 Financial
Statement Schedules:

 The
financial statement schedules are omitted as they are either not applicable or the information required is presented in the financial
statements and notes thereto on page F-1.

 c)
 Exhibits:

 Incorporated
 by

 Filed
 or

 Reference

 Furnished

 Number

 Description

 Form

 Filing
 Date

 Herewith

 3.1

 Amended and Restated Articles of Incorporation, filed October 10, 2022

 3.1

 10/15/2022

 Certificate of Change, filed September 6, 2023

 3.1

 09/06/2023

 3.3

 Certificate of Amendment to Amended and Restated Articles of Incorporation, filed November 3, 2023

 3.1

 11/03/2023

 3.4

 Amended and Restated Bylaws, adopted effective October 6, 2022

 3.2

 10/13/2022

 4.1

 Form of Base Indenture between GreenBoxPOS and Wilmington Savings Fund Society, FSB

 4.1

 11/03/2021

 4.2

 Form of First Supplemental Indenture

 4.2

 11/03/2021

 4.3

 Form of 8% Senior Convertible Note Due 2023

 4.3

 11/03/2021

 4.4

 Description of Securities

 4.4

 04/17/2023

 4.5

 Certificate of Designations of Rights and Preferences of Series A Convertible Preferred Stock of RYVYL Inc.

 10.3

 07/26/2023

 4.6

 Certificate of Designations of Rights and Preferences of Series B Convertible Preferred Stock of RYVYL Inc.

 10.1

 12/04/2023

 10.1+

 Form of Board of Directors Agreement entered into on February 16, 2021, by and between the Company and each of Ms. Baer and Messrs. Caragol and Laniado

 10.1

 02/19/2021

 10.2+

 2020 Incentive and Nonstatutory Stock Option Plan

 S-8

 4.1

 09/03/2020

 10.3+

 2021 Incentive and Nonstatutory Stock Option Plan

 S-8

 4.1

 07/13/2021

 10.4+

 Amendment Agreement No. 1 to Share Purchase Agreement by and between GreenBox POS, and certain individuals named therein, made as of March 24, 2021.

 10.1

 03/31/2022

 10.5

 Asset Purchase Agreement, signed March 31, 2022, between GreenBox POS and Sky Financial and Intelligence, LLC

 10.1

 04/06/2022

 10.6

 Restructuring Agreement, dated August 16, 2022 between GreenBox POS and the Investor

 10.1

 08/16/2022

 10.7

 April 2021 Sublease Agreement with regard to 3131 Camino del Rio North, Suite 1400, San Diego, CA 92108

 10.3

 11/15/2021

 10.8

 Securities Purchase Agreement, dated November 2, 2021, between GreenBoxPOS and the Investors

 10.1

 11/03/2021

 10.9

 Agreement and Waiver, dated January 28, 2022, between GreenBoxPOS and the Investor

 10.1

 01/31/2022

 10.10

 Form of First Exchange Agreement, dated July 25, 2023, between RYVYL Inc. and the Investor

 10.1

 07/26/2023

 10.11

 Form of Leak-Out Agreement

 10.2

 07/26/2023

 Incorporated
 by

 Filed
 or

 Reference

 Furnished

 Number

 Description

 Form

 Filing
 Date

 Herewith

 10.12

 Amendment No. 1 to First Exchange Agreement, dated August 18, 2023, between RYVYL Inc. and the Investor

 10.12

 08/18/2023

 10.13

 Amendment No. 2 to First Exchange Agreement, dated August 25, 2023, between RYVYL Inc. and the Investor

 10.13

 08/28/2023

 10.14

 Form of Second Exchange Agreement, dated November 27, 2023, between RYVYL Inc. and the Investor

 10.1

 11/28/2023

 10.15

 Long-Term Incentive Plan

 10.1

 11/21/2023

 10.16

 Form of Forbearance Agreement

 10.1

 05/20/2024

 10.17

 Preferred Stock Repurchase and Note Repayment Agreement, dated as of January 23, 2025

 10.1

 01/24/2025

 10.18

 Stock Purchase Agreement, dated as of January 23, 2025

 10.2

 01/24/2025

 10.19

 Escrow Agreement, dated as of January 23, 2025

 10.3

 01/24/2025

 10.20

 Termination Agreement, dated as of January 23, 2025

 10.4

 01/24/2025

 14.1

 Code of Business Conduct and Ethics

 14.1

 02/19/2021

 19.1

 Insider Trading Compliance Manual, adopted February 15, 2024

 19.1

 03/26/2024

 21.1

 List of Subsidiaries

 X

 23.1

 Consent of
 Independent Registered Public Accounting Firm

 X

 31.1

 Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a), As adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 X

 31.2

 Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-14(a), As adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 X

 32.1*

 Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, As adopted Pursuant to Section 906 of the Sarbanes-Oxley Act 2002

 X

 32.2*

 Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, As adopted Pursuant to Section 906 of the Sarbanes-Oxley Act 2002

 X

 97.1

 Executive Compensation Clawback Policy, adopted November 28, 2023

 97.1

 03/26/2024

 101.INS

 X

 101.SCH

 X

 101.CAL

 X

 101.DEF

 X

 101.LAB

 X

 101.PRE

 X

 Cover

 +
contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.

 *
 In
accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

 Item
16. Form 10-K Summary

 None.

 SIGNATURES

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.

 RYVYL,
 Inc.

 Date:
 March 28, 2025

 By:

 /s/
 Fredi Nisan

 Fredi
 Nisan

 Chief
 Executive Officer

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:

 Date:
 March 28, 2025

 By:

 /s/
 Fredi Nisan

 Fredi
 Nisan

 Chief
 Executive Officer and Director

 (Principal
 Executive Officer)

 Date:
 March 28, 2025

 By:

 /s/
 George Oliva

 George
 Oliva

 Chief
Financial Officer

(Principal Financial Officer and

Principal Accounting Officer)

 Signature

 Title

 Date

 /s/ Ben
 Errez

 Executive
 Vice President and Chairman of the Board of Directors

 March
 28, 2025

 Ben
 Errez

 /s/ Genevieve
 Baer

 March
 28, 2025

 Genevieve
 Baer

 /s/ Ezra
 Laniado

 March
 28, 2025

 Ezra
 Laniado

 /s/ David
 Montoya

 March
 28, 2025

 David
 Montoya

 RYVYL
INC.

to Financial Statements

 Page

 Report of Independent Registered Public Accounting Firm (PCAOB ID 2485)

 Audited Consolidated Balance Sheets as of December 31, 2024 and 2023

 Audited Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023

 Audited Statement of Consolidated Changes in Stockholders' Equity/(Deficit) for the Years Ended December 31, 2024 and 2023

 Audited Statements of Cash Flows for the Years Ended December 31, 2024 and 2023

 Notes to Financial Statements

 F- 1

 Report
of Independent Registered Public Accounting Firm

 Shareholders and Board of Directors

 RYVYL, Inc.

 San Diego, CA

 Opinion on the Consolidated
Financial Statements

 We have audited the accompanying consolidated
balance sheets of Ryvyl, Inc. (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations
and comprehensive income, stockholders' equity(deficit), and cash flows for each of the years then ended, and the related notes
(collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements
present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its
operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States
of America.

 Substantial Doubt
About the Company's Ability to Continue as a Going Concern

 The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As described
in Note 2 to the consolidated financial statements, the Company transitioned its QuickCard product in North America away from terminal-based
to app-based processing on February 2024, which was then terminated on the second quarter of 2024 and the Company then decided to introduce
a licensing product for its payments processing platform. This business reorganization
has resulted in a significant decline in processing volume and revenue, the recovery of the loss of revenues resulting from this product
transition is not expected to occur until late 2025. The loss of revenue has jeopardized its ability to continue as a going concern. Management's
evaluation of the events and conditions and management's plans regarding these matters are also described in Note 2. The consolidated
financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified
with respect to this matter.

 Basis for Opinion

 These consolidated financial
statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess
the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide
a reasonable basis for our opinion.

 Critical Audit Matter

 The critical audit matters communicated below
are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated
to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and
(2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 F- 2

 Impairment

 As described in Notes 2, 5 and 6 to the consolidated
financial statements, the Company's consolidated Goodwill balances were $18.9 and $26.8 million at December 31, 2024 and 2023, respectively.

 The Company utilized the qualitative assessment
when performing annual impairment of goodwill and/or long-lived assets, based on which the management concluded there were $9.7 and $0
impairment as of December 31, 2024 and 2023, respectively.

 We identified impairment as a critical audit matter
because the assessment is solely relied on a qualitative assessment result which involves the management's subjective interpretation
of the potential events and circumstances. Auditing these elements involved a high degree of auditor judgment and an increased extent
of effort when performing audit procedures to evaluate the reasonableness of management's interpretation in relation to the potential
events and circumstances.

 The primary procedures we performed to address
this critical audit matter included:

 Conducted
a comprehensive walkthrough of the financial reporting cycles, specifically focusing on the procedures related to management's annual
evaluation of impairment of goodwill and/or long-lived assets or circumstances indicate.

 Assessed
the validity of management's qualitative analysis and evaluation of pertinent events and circumstances, scrutinizing the financial data
utilized in the assessment.

 Independently
recalculated the fair value of each reporting unit using the discounted cash flow method, aligning with management's long-term strategic
plan and adjusting for the Company's current performance.

 Further
assessed impairment by comparing the net book value of assets to the Company's market capitalization.

 Modification and Conversion of Senior Convertible
Note (the "Note")

 As outlined in Note 8 to the consolidated financial
statements, the Company's consolidated balance of a Note amounted to $16.7 and $15.3 million as of December 31, 2024 and 2023 following
modifications made to the Note throughout the years, respectively.

 The intricate accounting rules governing senior
convertible note modification and conversion necessitate a detailed assessment of future cash flows, particularly considering the variable
conversion price and the fair market value of the conversion both before and after modification. Incorrectly applying payment scenarios
could result in a significant impact on accounting outcomes.

 We identified the Note modification as a critical
audit matter because the Company has amended the Note twice in a year. Auditing these elements involved complex auditor judgment due to
the nature and extent of audit effort required to address these matters.

 The primary procedures we performed to address
this critical audit matter included:

 Conducted a comprehensive walkthrough of the
financial reporting cycles, which encompassed the handling of significant equity and financing transactions.

 Evaluated the expertise of the specialist engaged
by the Company to assess the impact of the Note modification. This assessment involved scrutinizing the reasonableness of assumptions
made, considering the Company's historical stock prices, operational performance, third-party market data, and ensuring consistency with
evidence obtained elsewhere in the audit.

 Assessed the accounting treatment of the Note
modification in accordance with ASC 470 and ASC 815 while also recalculating the cash flow used for 10% testing.

 Assessed the accuracy of accounting entries based
on the outcomes of the assessment, including the validation of principal repayment and principal conversion entries made upon modification

 Verified the recognition of the Note by scrutinizing
the input of the amortization schedule and recalculating said schedule to ensure accuracy.

 /s/ Simon & Edward, LLP

 We have served as the Company's auditor since
2022.

 Rowland Heights, CA

 March 28,
2025

 F- 3

 RYVYL
INC.

 CONSOLIDATED
BALANCE SHEETS

 ( In thousands, except par value and share data)

 December 31,

 2024

 2023

 ASSETS

 Current Assets:

 Cash

 $
 2,599

 $
 12,180

 Restricted cash

 89,432

 61,138

 Accounts receivable, net of allowance for credit losses of $ 206 and $ 23, respectively

 1,076

 Cash due from gateways, net of allowance of $ 89 and $ 2,636, respectively

 12,834

 Prepaid and other current assets

 2,189

 2,854

 Total current assets

 95,384

 89,865

 Non-current Assets:

 Property and equipment, net

 18,856

 26,753

 Intangible assets, net

 1,802

 5,059

 Operating lease right-of-use assets, net

 3,425

 4,279

 Other assets

 2,644

 2,403

 Total non-current assets

 26,892

 38,800

 Total assets

 $
 122,276

 $
 128,665

 LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)

 Current Liabilities:

 Accounts payable

 $
 3,515

 $
 1,819

 Accrued liabilities

 8,146

 5,755

 Payment processing liabilities, net

 90,802

 76,772

 Current portion of operating lease liabilities

 Other current liabilities

 Total current liabilities

 103,542

 85,542

 Long term debt, net of debt discount of $ 1,556 and $ 3,906, respectively

 17,363

 15,912

 Operating lease liabilities, less current portion

 2,863

 3,720

 Total liabilities

 123,768

 105,174

 Stockholders' Equity/(Deficit):

 Preferred stock, Series B, par value $ 0.01, 5,000,000 shares authorized; 53,499 and 55,000 shares issued and outstanding at December 31, 2024 and 2023, respectively

 Common stock, par value $ 0.001, 100,000,000 shares authorized; 8,032,318 and 5,996,948 shares issued and outstanding at December 31, 2024 and 2023, respectively

 Additional paid-in capital

 179,157

 175,664

 Accumulated other comprehensive income

 ( 1,251
)

 Accumulated deficit

 ( 179,407
)

 ( 152,581
)

 Total stockholders' (deficit)/equity

 ( 1,492
)

 23,491

 Total liabilities and stockholder's (deficit)/equity

 $
 122,276

 $
 128,665

 The
accompanying notes are an integral part of these audited financial statements.

 F- 4

 RYVYL
INC.

 CONSOLIDATED
STATEMENTS OF OPERATIONS

 ( In thousands, except share and per share data)

 2024

 2023

 $
 55,998

 $
 65,869

 33,572

 40,157

 Gross profit

 22,426

 25,712

 Operating expenses:

 Advertising and marketing

 Research and development

 3,848

 5,757

 General and administrative

 6,933

 8,678

 Payroll and payroll taxes

 13,836

 12,017

 Professional fees

 4,372

 7,076

 Stock compensation expense

 1,853

 Depreciation and amortization

 2,264

 2,553

 Impairment of goodwill

 6,675

 -

 Impairment of intangible assets

 3,028

 -

 Restructuring charges

 1,636

 -

 Total operating expenses

 43,311

 38,014

 Loss from operations

 ( 20,885
)

 ( 12,302
)

 Other income (expense):

 Interest expense

 ( 862
)

 ( 3,340
)

 Accretion of debt discount

 ( 2,258
)

 ( 13,134
)

 Changes in fair value of derivative liability

 6,544

 Derecognition expense on conversion of convertible debt

 ( 600
)

 ( 25,035
)

 Legal settlement expense

 ( 2,064
)

 ( 4,142
)

 Gain on sale of property and equipment

 -

 1,069

 Other income (expense), net

 ( 2,472
)

 Total other expense, net

 ( 4,800
)

 ( 40,510
)

 Loss before provision for income taxes

 ( 25,685
)

 ( 52,812
)

 Income tax provision

 1,140

 Net loss

 $
 ( 26,825
)

 $
 ( 53,101
)

 Comprehensive income statement:

 Net loss

 $
 ( 26,825
)

 $
 ( 53,101
)

 Foreign currency translation (loss) gain

 ( 1,652
)

 Total comprehensive loss

 $
 ( 28,477
)

 $
 ( 53,057
)

 Net loss per share:

 Basic and diluted

 $
 ( 4.01
)

 $
 ( 10.11
)

 Weighted average number of common shares outstanding:

 Basic and diluted

 6,694,165

 5,251,852

 The
accompanying notes are an integral part of these audited financial statements.

 F- 5

 RYVYL
INC.

 CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS ' EQUITY/(DEFICIT)

 ( In thousands, except share data)

 Stock

 Stock

 Additional

 Other

 Comprehensive

 Total

 Series B

 Paid
 In

 Capital

 Income

 (Loss)

 Deficit

 Stockholders'

 Equity

 Balance at December 31, 2023

 5,996,948

 $

 $

 $

 175,664

 $

 $

 ( 152,581

)

 $

 23,491

 Issuance of common stock under equity incentive plans

 17,804

 -

 -

 -

 -

 -

 Issuance of restricted common stock under equity incentive
 plans

 70,936

 -

 -

 -

 -

 -

 Issuance of restricted common stock for compensation

 88,792

 -

 -

 -

 -

 -

 Issuance of common stock upon exercise of stock options

 6,218

 -

 -

 -

 -

 -

 Common stock issued for conversion of convertible debt

 823,294

 -

 -

 1,416

 -

 -

 1,417

 Common stock issued for conversion of Preferred B stock

 1,109,036

 ( 1,501

)

 -

 ( 1

)

 -

 -

 -

 Shares cancelled in connection with the net settlement
 of vested restricted stock awards

 ( 80,710

)

 -

 -

 -

 ( 209

)

 -

 -

 ( 209

)

 Capital contributions

 -

 -

 -

 -

 1,399

 -

 -

 1,399

 Net loss and comprehensive loss

 -

 -

 -

 -

 -

 ( 1,652

)

 ( 26,825

)

 ( 28,477

)

 Balance at December 31, 2024

 8,032,318

 $

 52,999

 $

 $

 179,157

 $

 ( 1,251

)

 $

 ( 179,407

)

 $

 ( 1,492

)

 Stock

 Treasury
 Stock

 Stock

 Additional

 Other

 Comprehensive

 Total

 Stockholders'

 To
 be
 Issued

 To
 be
 returned

 At Cost

 Series B

 Paid
 In
 Capital

 Income

 (Loss)

 Deficit

 Equity

 (Deficit)

 Balance
 at December 31, 2022

 4,972,736

 $

 175,392

 $

 -

 ( 13,689

)

 $

 ( 7

)

 -

 $

 -

 -

 -

 $

 97,494

 $

 $

 ( 99,772

)

 $

 ( 1,923

)

 stock issued to employees for compensation

 303,015

 -

 -

 -

 -

 -

 -

 -

 -

 -

 1,555

 -

 -

 1,555

 stock issued for conversion of convertible debt

 527,172

 -

 -

 -

 -

 -

 -

 -

 -

 2,514

 -

 -

 2,515

 stock issued for interest on convertible debt

 176,130

 -

 ( 175,392

)

 -

 -

 -

 -

 -

 -

 -

 -

 -

 Restricted
 common stock issued for compensation

 23,820

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 forfeited

 ( 26,683

)

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 167

)

 -

 -

 ( 167

)

 Issuance
 for rounding of fractional shares due to reverse stock split

 34,430

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 Issuance
 of Series B convertible preferred stock for conversion of convertible debt

 -

 -

 -

 -

 -

 -

 -

 -

 74,141

 -

 -

 74,142

 Carryover
 effects of financial statement restatements in prior periods

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 Shared
 returned or cancelled

 ( 13,672

)

 -

 -

 -

 13,689

 -

 -

 -

 -

 ( 7

)

 -

 -

 -

 Net
 loss and comprehensive loss

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 53,101

)

 ( 53,057

)

 Balance
 at December 31, 2023

 5,996,948

 $

 -

 $

 -

 -

 $

 -

 -

 $

 -

 $

 $

 175,664

 $

 $

 ( 152,581

)

 $

 23,491

 The
accompanying notes are an integral part of these audited financial statements.

 F- 6

 RYVYL
INC.

 CONSOLIDATED
STATEMENTS OF CASH FLOWS

 ( In thousands)

 2024

 2023

 Cash flows from operating activities:

 Net loss

 $

 ( 26,825

)

 $

 ( 53,101

)

 Adjustments to reconcile net loss to net cash used in operating activities:

 Depreciation and amortization expense

 2,264

 2,553

 Noncash lease expense

 Stock compensation expense

 1,853

 Restricted common stock issued for compensation

 -

 Accretion of debt discount

 2,258

 13,134

 Derecognition expense on conversion of convertible debt

 25,035

 Changes in fair value of derivative liability

 ( 14

)

 ( 6,544

)

 Gain on sale of property and equipment

 -

 ( 1,069

)

 Impairment of goodwill

 6,675

 -

 Impairment of intangible assets

 3,028

 -

 Restructuring charges

 1,636

 -

 Changes in assets and liabilities:

 Accounts receivable, net

 ( 155

)

 Prepaid and other current assets

 6,568

 Cash due from gateways, net

 12,684

 ( 5,407

)

 Other assets

 ( 160

)

 ( 1,183

)

 Accounts payable

 1,695

 Accrued and other current liabilities

 1,497

 2,080

 Accrued interest

 Payment processing liabilities, net

 14,029

 47,860

 Net cash provided by operating activities

 21,191

 33,161

 Cash flows from investing activities:

 Purchases of property and equipment

 ( 47

)

 ( 108

)

 Logicquest Technology acquisition

 -

 ( 225

)

 Proceeds from sale of property and equipment

 -

 2,620

 Capitalized software development costs

 ( 1,647

)

 -

 Purchase of intangibles

 ( 114

)

 -

 Net cash (used in) provided by investing activities

 ( 1,808

)

 2,287

 Cash flows from financing activities:

 Treasury stock purchases

 -

 Repayments of convertible debt

 -

 ( 3,000

)

 Repayments on long-term debt

 ( 12

)

 ( 15

)

 Tax withholdings related to net settlement of equity awards

 ( 229

)

 -

 Net cash used in financing activities

 ( 241

)

 ( 3,008

)

 Effect of exchange rates in cash and restricted cash

 ( 430

)

 Net increase (decrease) in cash and restricted cash

 18,712

 32,484

 Cash and restricted cash – beginning of period

 73,318

 40,834

 Cash and restricted cash – end of period

 $

 92,030

 $

 73,318

 Supplemental disclosures of cash flow information

 Cash paid during the period for:

 Interest

 $

 $

 2,709

 Income taxes

 $

 $

 Non-cash financing and investing activities:

 Convertible debt conversion to preferred stock

 $

 $

 64,600

 Convertible debt conversion to common stock

 $

 -

 $

 1,650

 Interest accrual from convertible debt converted to preferred stock

 $

 -

 $

 1,703

 Interest accrual from convertible debt converted to common stock

 $

 -

 $

 The
accompanying notes are an integral part of these audited financial statements.

 F- 7

 RYYVL
INC.

 NOTES

 1. Description of the Business and Basis of Presentation

 Organization

 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. Our first-generation product, QuickCard, was originally developed to facilitate payment processing
for predominantly cash-based businesses in certain niche high-risk business verticals. 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. 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. 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.

 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. 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. 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.

 The Company operates through distinct business
segments designed to meet the diverse and evolving needs of global markets. 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. 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.

 Name
Change

 On
May 3, 2018, PubCo 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. ("RYVYL"). Unless the context otherwise requires, all
references to "the Company," "we," "our", "us" and "PubCo" refer to RYVYL
Inc. Additionally, unless the context otherwise requires, all references to "PrivCo" or the "Private Company"
refer to GreenBox POS LLC, a limited liability company, formed in the state of Washington.

 Basis
of Presentation and Consolidation

 The
accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America ("GAAP"). All intercompany transactions and balances have been eliminated in the accompanying consolidated
financial statements.

 2. Summary of Significant Accounting Policies

 Going
Concern

 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.

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. 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. 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. 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.

 F- 8

 RYYVL
INC.

 NOTES

 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 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.
These conditions raise substantial doubt about our ability to continue as a going concern.

 The
Company's ability to continue as a going concern is contingent upon the successful execution of management's intended plan
over the next twelve months to improve the liquidity of its North America segment, 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 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.

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. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going
concern.

 Use
of Estimates

 The
preparation of the Company's consolidated financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the
Company's financial condition or operating results will be materially affected. The Company bases its estimates on current and
past experience, to the extent that historical experience is predictive of future performance, and other assumptions that the Company
believes are reasonable under the circumstances. The Company evaluates these estimates on an ongoing basis.

 Reclassification

 Certain
prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect
on the reported financial position, results of operations or cash flows.

 F- 9

 RYYVL
INC.

 NOTES

 Reverse
Stock Split

 On
September 6, 2023, the Company filed a certificate of amendment to its amended and restated certificate of incorporation with the Secretary
of State of the State of Nevada to effect a 1-for-10 reverse stock split (the "Reverse Stock Split") of the Company's
shares of common stock, par value $ 0.001 per share (the "common stock"). Such amendment and ratio were previously approved
by the board of directors. Under Nevada Revised Statutes Section 78.207, stockholder approval of the Reverse Stock Split was not required
because (i) both the number of authorized shares of the common stock and the number of issued and outstanding shares of the common stock
were proportionally reduced as a result of the Reverse Stock Split; (ii) the Reverse Stock Split did not adversely affect any other class
of stock of the Company; and (iii) the Company did not pay money or issue scrip to stockholders who would otherwise be entitled to receive
a fractional share as a result of the Reverse Stock Split. As a result of the Reverse Stock Split, which was effective September 6, 2023,
every ten shares of the Company's pre-reverse split outstanding common stock were combined and reclassified into one share of common
stock. Proportionate voting rights and other rights of common stockholders were not affected by the Reverse Stock Split. Any fractional
shares of common stock resulting from the Reverse Stock Split were rounded up to the nearest whole share. All stock options outstanding
and common stock reserved for issuance under the Company's equity incentive plans outstanding immediately prior to the Reverse
Stock Split were adjusted by dividing the number of affected shares of common stock by ten and, as applicable, multiplying the exercise
price by ten. All share numbers, share prices, exercise prices and per share amounts have been adjusted, on a retroactive basis to reflect
this 1-for-10 Reverse Stock Split.

 Cash
and Restricted Cash

 Cash
consist of cash on hand and cash on deposit with banks. Restricted cash substantially consists of cash received from gateways for merchant
transactions processed, which has yet to be distributed to merchants, ISOs and their agents at the end of the period.

 Cash
Due from Gateways, Net

 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 primary activities for which the Company gets to collect fees. Cash due from gateways represent
amounts due to the Company for transactions processed but not yet distributed by the gateways.

 F- 10

 RYYVL
INC.

 NOTES

 The
gateways have strict policies 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. To mitigate potential credit losses associated with these risks, the gateways use these policies to 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 the restriction is released.

 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.

 Payment
Processing Liabilities

 Payment
processing liabilities principally represent funds collected from acquiring transactions that are due to merchants and ISOs, net of amounts
earned by the Company on those transactions. It also includes net amounts owed to merchants and ISOs in connection with acquiring transactions
processed but which have yet to be received from our third-party gateways. These liabilities are secured by funds held in restricted
cash accounts and are presented as Restricted cash in the consolidated balance sheets.

Recognition

is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration
the Company expects to be entitled to in exchange for those goods or services.

 The
Company generates the majority of its revenue from payment processing services. Payment processing services revenue is typically based
on a percentage of the value of each transaction processed and/or upon fixed amounts specified for each transaction or service. The Company
satisfies its performance obligations and, therefore, recognizes the processing fees as revenue at a point in time, upon the authorization
of a merchant sale transaction. The Company also generates revenue from banking services, which primarily include incoming and outgoing
ACH and wire transfer transactions. For these transactions, we typically charge specified fees on a per transaction basis, which may
vary from customer to customer. The Company satisfies its performance obligation related to these transactions at a point in time, upon
the authorization of the transaction in the Company's payments platform.

 Research
and Development Costs

 Research
and development costs primarily consist of salaries and benefits for research and development personnel and outsourced contracted services,
as well as associated supplies and materials. These costs are expensed as incurred.

 Internal-use
Software Development Costs

 Internal-use
software development costs consist of the costs related to outsourced consultants who are directly associated with and who devote time
to creating and enhancing internally developed software for the Company's platforms. Internal-use software development activities
generally consist of three stages: (i) the preliminary project stage, (ii) the application development stage, and (iii) the postimplementation-operation
stage. In accordance with ASC 350-40, Internal Use Software, costs incurred in the preliminary and postimplementation-operation
stages of software development are expensed as incurred. Costs incurred in the application development stage, including significant enhancements
and upgrades, are capitalized. Capitalized internal-use software development costs are included within intangible assets, net on the
consolidated balance sheets, and are amortized on a straight-line basis over an estimated useful life of three years upon the software
or additional features being ready for their intended use.

 F- 11

 RYYVL
INC.

 NOTES

 Accounts
Receivable, Net

 Accounts
receivable primarily consist of amounts recorded in connection with the sale of payment processing terminals and related accessories.
Accounts receivable are recorded at invoiced amounts, net of an allowance for credit losses, and do not bear interest. In accordance
with Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments – Credit Losses (ASC 326): Measurement
of Credit Losses on Financial Instruments ( " ASU 2016-13 "), the Company measures its allowance for credit
losses using an expected credit loss model that reflects the Company's current estimate of expected credit losses inherent in the
enterprise and the accounts receivable balance. In determining the expected credit losses, the Company considers its historical loss
experience, the aging of its accounts receivable balance, current economic and business conditions, and anticipated future economic events
that may impact collectability. The Company reviews its allowance for credit losses periodically and, as needed, amounts are written-off
when determined to be uncollectible. As of December 31, 2024, and 2023, the allowance for credit losses was immaterial.

 Prepaid
Expenses and Other Current Assets

 Prepaid
expenses and other current assets primarily consist of inventory and deposits made by our European subsidiaries with credit card companies.

 Property
and Equipment, Net

 Property
and equipment primarily consist of computer equipment and furniture and fixtures. Property and equipment are stated at historical cost
less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets,
which range from three to eight years. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or
otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected
in income for the period.

 Fair
Value Measurements

 The
Company applies fair value accounting for assets and liabilities that are recognized or disclosed at fair value in the consolidated financial
statements on a recurring basis. Fair value is defined as the price received to sell an asset or paid to transfer a liability in the
principal market for the asset or liability in an orderly transaction between market participants on the measurement date.

 ASC
Topic 820, Fair Value Measurements, establishes a three-level hierarchy priority for disclosure of assets and liabilities recorded
at fair value. The ordering of priority reflects the degree to which objective prices in external active markets are available to measure
fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology
used for measurement are observable or unobservable. The Company utilizes valuation techniques that maximize the use of observable inputs
and minimize the use of unobservable inputs to the extent possible. The three levels in the hierarchy are as follows:

 Level
 1 – Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities accessible
 to the reporting entity at the measurement date.

 Level
 2 – Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets or liabilities, quoted
 prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially
 the full term of the assets or liabilities.

 Level
 3 – Unobservable inputs that cannot be directly corroborated by observable market data and that typically reflect management's
 estimate of assumptions that market participants would use in pricing the asset or liability.

 F- 12

 RYYVL
INC.

 NOTES

 The
Company measures its convertible note and related derivative liability at fair value. The Company classifies these liabilities as Level
3 of the fair value hierarchy, as fair values are estimated using models that use both observable (e.g., changes in market interest rates)
and unobservable (e.g., changes in unobservable long-dated volatilities) inputs.

and Intangible Assets

is recorded when the consideration paid for the acquisition of a business exceeds the fair value of the identifiable net tangible and
intangible assets acquired. ASC 350-20, Intangibles — Goodwill and Other — Goodwill, requires companies
to assess goodwill for impairment annually or more frequently if indicators of impairment exist. Testing goodwill for impairment is performed
at the reporting unit level, using a two-step test, and requires companies to compare the fair value of a reporting unit with its carrying
amount, including goodwill. Goodwill is considered impaired if the carrying value of a reporting unit exceeds its fair value. ASC 350-20
also provides for an optional qualitative assessment for testing goodwill for impairment that enables companies to skip the two-step
test if it is determined that it is more likely than not (i.e., a likelihood of greater than 50%) that the fair value of a reporting
unit is greater than its carrying amount.

 The
Company's policy is to perform its annual impairment test of goodwill as of December 31 of each fiscal year or more frequently
if indicators of impairment are identified. Based on the most recent impairment assessment, performed as of June 30, 2024, the Company
previously recorded an impairment charge of $ 6.7 million or one hundred percent (100%) of the goodwill balance related to its North America
operating unit. As of December 31, 2024, no impairment indicators were identified that would warrant an updated impairment assessment
on the remaining balance of goodwill and, as such, no additional adjustment was required.

 Intangible
assets consist of acquired customer relationships and business intellectual properties. In accordance with ASC 350-30, Intangibles — Goodwill
and Other — General Intangibles Other than Goodwill, the Company's intangible assets are amortized over their estimated
useful lives, ranging from two to five years, using the straight-line method. Intangible assets amortized under ASC 350-30 must be reviewed
for impairment when indicators of impairment are present, in accordance with ASC 360-10. As of December 31, 2024, management determined
that an impairment assessment over intangible assets held in the North America operating unit was required. Based on that assessment,
management determined that the carrying value of the Company's intangible assets in North America was not recoverable and recorded
an impairment of $ 3.0 million or one hundred percent of the carrying balance as of December 31, 2024.

 Leases

 The
Company leases office space under non-cancellable operating leases with various expiration dates. The Company determines whether an arrangement
is a lease for accounting purposes at contract inception. Operating leases are recorded as right-of-use ("ROU") assets, which
are included within noncurrent assets, and lease liabilities, which are included within current and noncurrent liabilities on our consolidated
balance sheets.

 Operating
lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the future
lease payments over the lease term. ROU assets are based on the lease liability and are increased by prepaid lease payments and decreased
by lease incentives received, where applicable. The interest rate used to determine the present value of the future lease payments is
the Company's incremental borrowing rate because the interest rate implicit in the Company's leases is not readily determinable.
The Company's incremental borrowing rate is estimated to approximate the interest rate that the Company would pay to borrow on
a collateralized basis with similar terms and payments as the lease, and in economic environments where the leased asset is located.
Certain leases require the Company to pay taxes, maintenance, and other operating expenses associated with the leased asset. Such amounts
are not included in the measurement of the ROU assets and lease liabilities. These lease costs are recognized as lease expenses when
incurred.

 F- 13

 RYYVL
INC.

 NOTES

 The
Company evaluates ROU assets related to leases for indicators of impairment whenever events or changes in circumstances indicate that
the carrying amount of a ROU asset may not be recoverable. When a decision has been made to exit a lease prior to the contractual term
or to sublease that space, the Company evaluates the asset for impairment and recognizes the associated impact to the ROU asset and related
expense, if applicable. The evaluation is performed at the asset group level initially and when appropriate, at the lowest level of identifiable
cash flows, which is at the individual lease level. Undiscounted cash flows expected to be generated by the related ROU assets are estimated
over the ROU assets' useful lives. If the evaluation indicates that the carrying amount of the ROU assets may not be recoverable,
any potential impairment is measured based upon the fair value of the related ROU asset or asset group as determined by appropriate valuation
techniques.

 Foreign
Currency

 Assets
and liabilities of our foreign subsidiaries are translated into the reporting currency using the exchange rates in effect on the
consolidated balance sheet dates. Equity accounts are translated at historical rates, except for the change in retained earnings
during the period, which is the result of the income statement translation process. Revenue and expense accounts are translated
using the weighted average exchange rate during the period. The cumulative translation adjustments associated with the net assets of
foreign subsidiaries are recorded in accumulated other comprehensive income in the accompanying consolidated statements of
stockholders' equity.

 Stock
Based Compensation

 Stock-based
compensation expense relates to restricted stock awards ("RSAs") and stock options granted to employees and non-employee
directors under the Company's equity incentive plans, which are measured based on the grant-date fair value. The fair value of
RSAs is determined by the closing price of the Company's common stock on the grant date. The fair value of stock options is estimated
on the date of grant using the Black-Scholes-Merton option valuation model. Generally, stock-based compensation expense is recorded on
a straight-line basis over the requisite service period. The Company accounts for forfeitures as they occur.

 Income
Taxes

 Income
taxes are accounted for under the asset and liability method. Deferred income taxes are recognized for temporary differences between
the tax basis of assets and liabilities and their reported amounts in the financial statements, net of operating loss carry forwards
and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is not more likely than not that some portion of or all the deferred tax assets will not be realized.
Judgment is required in determining and evaluating income tax provisions and valuation allowances for deferred income tax assets. We
recognize an income tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained
on examination by taxing authorities, based on the technical merits of the position.

 Current
income taxes are provided for in accordance with the laws of the relevant taxing authorities. As of December 31, 2024, and 2023, the Company
has a full valuation allowance on its deferred tax assets.

 Net
Loss Per Share

 The
Company's basic net loss per share is computed by dividing the net loss available to common shareholders by the weighted average
number of common shares outstanding during the period without consideration of potentially dilutive securities. Diluted net loss per
share is computed by dividing the net loss available to common shareholders by the weighted-average number of shares of common stock
outstanding, adjusted for the dilutive effect of all potential shares of common stock. For the years ended December 31, 2024, and 2023,
the Company's diluted net loss per share is the same as the basic net loss per share, since there are no common stock equivalents
outstanding that would have a dilutive effect.

 Segment
Reporting

 The
Company reports its segments to reflect the manner in which its CODM reviews and assesses performance. The Company's CODM is its
CEO. The primary financial measures used by the CODM to evaluate the performance of its segments and allocate resources to them are revenue
and gross profit.

 The
Company has two reportable segments: North America and International. The CODM uses segment revenue and gross profit for each segment
during the annual budgeting and forecasting process. Further, the CODM uses segment revenue and gross profit as the metrics to assess
the business trajectory of each segment on a quarterly basis, and to make investment decisions and allocate operating resources to each
segment. The CODM does not evaluate performance or allocate resources based on segment asset data. Assets are reviewed on a consolidated
basis. As such, segment asset data is not provided.

 Recently
Adopted Accounting Pronouncements

 In
August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives
and Hedging – Contracts in Entity ' s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and
Contracts in an Entity ' s Own Equity ( " ASU 2020-06 "). ASU 2020-06 aims to simplify the accounting
for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock.
ASU 2020-06 also simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity's
own equity and amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible
instruments. Early adoption is permitted for fiscal years beginning after December 15, 2020. For SEC filers, excluding smaller reporting
companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal
years. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods
therein. The adoption of the new guidance, effective January 1, 2024, did not have an impact on the financial condition, results of operations,
cash flows and disclosures of the Company.

 F- 14

 RYYVL
INC.

 NOTES

 In
November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures ("ASU 2023-07"). The
amendments expand segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the CODM,
the amount and description of other segment items, permits companies to disclose more than one measure of segment profit or loss, and
requires all annual segment disclosures to be included in the interim periods. The amendments do not change how an entity identifies
its operating segments, aggregates those operating segments, or applies quantitative thresholds to determine its reportable segments.
The Company adopted this guidance effective for the annual reporting period beginning January 1, 2024, and has applied the guidance retrospectively.
The adoption of this guidance did not have a material impact on the Company's consolidated financial statements and related disclosures.
Refer to Note 15, Segment Reporting, for further details.

 Recently
Issued Accounting Pronouncements

 In
December 2023, the FASB issued ASU 2023-08, Intangibles – Goodwill and Other – Crypto Assets (Subtopic 350-60):
 Accounting for and Disclosure of Crypto Assets. This amended guidance requires fair value measurement of certain crypto assets
each reporting period with the changes in fair value reflected in net income. The amendments also require disclosures of the name, fair
value, units held, and cost bases for each significant crypto asset held and annual reconciliations of crypto asset holdings. The new
guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2024, with early
adoption permitted. We are required to apply these amendments as a cumulative-effect adjustment to retained earnings as of the beginning
of the fiscal year in which the guidance is adopted. The adoption of this guidance is not expected to have an impact on our consolidated
financial statements, as we currently do not hold any crypto assets.

 In
December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amended guidance
enhances income tax disclosures primarily related to the effective tax rate reconciliation and income taxes paid information. This guidance
requires disclosure of specific categories in the effective tax rate reconciliation and further information on reconciling items meeting
a quantitative threshold. In addition, the amended guidance requires disaggregating income taxes paid (net of refunds received) by federal,
state, and foreign taxes. It also requires disaggregating individual jurisdictions in which income taxes paid (net of refunds received)
is equal to or greater than 5 percent of total income taxes paid (net of refunds received). The amended guidance is effective for fiscal
years beginning after December 15, 2024. The guidance can be applied either prospectively or retrospectively. The Company is currently
in the process of evaluating the impact this amended guidance may have on the footnotes to our consolidated financial statements.

 In November 2024, the FASB issued ASU No. 2024-03, Disaggregation
of Income Statement Expenses ("ASU 2024 03"), and in January 2025, the FASB issued ASU No. 2025-01, Clarifying the Effective
Date ("ASU 2025-01"). The amendments are intended to enhance disclosures regarding an entity's costs and expenses
by requiring additional disaggregated information disclosures about certain income statement expense line items. The amendments, as clarified
by ASU 2025-01, are effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after
December 15, 2027. Early adoption is permitted. The Company is evaluating the effect of adopting the new disclosure requirements.

 3. Acquisitions

 Logicquest
Technology, Inc.

 In
April 2023, the Company executed a purchase agreement for 99.4 million shares of restricted common stock of Logicquest Technology, Inc.,
a Nevada corporation ("Logicquest") representing ownership of 99.1 % of Logicquest, 48 shares of Series C Convertible Non-Redeemable
Preferred Stock of Logicquest, and 10 shares of Series D Convertible Non-Redeemable Preferred Stock of Logicquest, in exchange for an
aggregate purchase price of $ 225,000. Logicquest was a shell company (as defined in Rule 12b-2 of the Exchange Act) quoted on the Over-the-Counter
Pink Open Market under the symbol "LOGQ" and is required to file reports and other information with the SEC pursuant to the
Exchange Act. In June 2023, the Company merged the assets of Coyni, Inc., a wholly-owned subsidiary of the Company, and Logicquest, with
Logicquest as the surviving entity. Subsequently, Logicquest changed its name to Coyni, Inc. ("Coyni PubCo"). In the fourth
quarter of 2023, the Company amended the share purchase agreement to reflect 98 million shares of restricted common stock of Logicquest,
 48 shares of Series C Convertible Non-Redeemable Preferred Stock of Logicquest, and 10 shares of Series D Convertible Non-Redeemable
Preferred Stock of Logicquest, in exchange for an aggregate purchase price of $ 225,000. In accordance with ASC 805, Business Combinations,
 this transaction was accounted for as an asset acquisition and the acquired assets are included in the consolidated financial statements
of the Company as of December 31, 2024.

 As
previously disclosed, the Company originally intended to transfer the Coyni Platform assets, which are owned by the Company, into Coyni
PubCo, and subsequently spin-off Coyni PubCo into a new publicly traded entity. However, we subsequently determined that it was in the
best interest of the Company and its shareholders to retain the Coyni Platform at the Company to expand payment processing and banking-as-a-service
solutions. As such, management no longer plans to pursue a spin-off of Coyni PubCo.

 Merchant
Payment Solutions LLC

 In
November 2021, the Company executed a term sheet to acquire certain Automated Clearing House ("ACH") business of Merchant
Payment Solutions LLC ("MPS"). Upon execution of the term sheet, the Company made a refundable earnest money deposit in the
amount of $725,000 toward the total purchase price. After conducting due diligence, the Company elected to terminate the term sheet on
April 21, 2023. In June 2023, the Company and MPS agreed to finalize a Portfolio Purchase Agreement ("Purchase Agreement").
Pursuant to the Purchase Agreement, the Company acquired the ACH portfolio of MPS for $ 725,000. In accordance with ASC 805, Business
Combinations, this transaction was accounted for as an asset acquisition.

 F- 15

 RYYVL
INC.

 NOTES

 4. Property and Equipment, Net

 The
following table details property and equipment, less accumulated depreciation (dollars in thousands):

 December 31,

 2024

 2023

 Computers and equipment

 $

 $

 Furniture and fixtures

 Improvements

 Total property and equipment

 Less: accumulated depreciation

 ( 444

)

 ( 293

)

 Net property and equipment

 $

 $

 Depreciation
expense was $ 0.2 million and $ 0.2 million for the years ended December 31, 2024, and 2023, respectively. During the year ended December
31, 2023, the Company's subsidiary, Charge Savvy, sold a building it owned and recognized a gain on sale of $ 1.1 million.

 5. Goodwill

 The
following table summarizes goodwill activity and balances by reportable segment (dollars in thousands):

 North America

 Consolidated

 Goodwill - December 31, 2023

 $
 6,675

 $
 20,078

 $
 26,753

 Goodwill Acquired

 -

 -

 -

 Goodwill Impairment

 ( 6,675
)

 -

 ( 6,675
)

 Adjustments (1)

 -

 ( 1,222
)

 ( 1,222
)

 Goodwill – December 31, 2024

 $
 -

 $
 18,856

 $
 18,856

 (1)
 The
adjustments to goodwill pertain to foreign currency translation adjustments, which totaled negative $ 1.2 million for the twelve months
ended December 31, 2024.

 6. Intangible Assets, Net

 The
following table details intangible assets (dollars in thousands):

 December 31, 2024

 December 31, 2023

 Intangible Assets

 Amortization
 Period

 Cost

 Amortization

 Net

 Cost

 Amortization

 Net

 Customer relationships

 2 - 5 years

 $
 7,812

 $
 ( 7,762
)

 $

 $
 7,812

 $
 ( 4,100
)

 $
 3,712

 Business technology/IP

 5 years

 2,765

 ( 2,657
)

 2,675

 ( 1,328
)

 1,347

 Capitalized internal-use software

 3 years

 1,648

 ( 4
)

 1,644

 -

 -

 -

 Total intangible assets

 $
 12,225

 $
 ( 10,423
)

 $
 1,802

 $
 10,487

 $
 ( 5,428
)

 $
 5,059

 Amortization
expense was $ 2.1 million and $ 2.4 million for the years ended December 31, 2024, and 2023, respectively. Additionally, during the year
ended December 31, 2024, the Company recorded an impairment charge of $ 3.0 million or 100% of its intangible assets in North America.

 The
estimated future amortization expense related to intangible assets as of December 31, 2024, is as follows (dollars in thousands):

 Year

 2025

 $

 2026

 2027

 2028

 2029

 -

 Total

 $
 1,802

 F- 16

 RYYVL
INC.

 NOTES

 7. Accrued Liabilities

 The
following table details the balance in accrued liabilities (dollars in thousands):

 December 31,

 2024

 2023

 Accrued gateway fees

 $
 -

 $
 2,356

 Payroll related accruals

 2,613

 1,235

 Accrued legal and professional fees

 1,342

 Accrued legal settlements

 2,467

 -

 Accrued taxes

 Accrued convertible note interest

 -

 Other

 1,704

 Total accrued liabilities

 $
 8,146

 $
 5,755

 F- 17

 RYYVL
INC.

 NOTES

 8. Long-Term Debt, Net

 The
following table summarizes the Company's debts as of December 31, 2024, and 2023 (dollars in thousands):

 December 31,

 2024

 2023

 $ 100,000,000 8 % senior convertible note, due April 5, 2026

 $
 18,300

 $
 19,200

 Less: Unamortized debt discount

 ( 1,555
)

 ( 3,906
)

 Net carrying value

 16,745

 15,294

 $ 149,900 Economic Injury Disaster Loan (EIDL), interest rate of 3.75 %, due June 1, 2050

 $ 500,000 EIDL, interest rate of 3.75 %, due May 8, 2050

 Total debt

 17,375

 15,927

 Less: current portion

 ( 12
)

 ( 15
)

 Long-term debt, net

 $
 17,363

 $
 15,912

 Senior
Convertible Note

 On
November 8, 2021, the Company sold and issued, in a registered direct offering, an 8% Senior convertible note, originally due November
3, 2023, and subsequently extended to April 5, 2025, in the aggregate original principal amount of $ 100 million (the "Note").
The Note had an original issue discount of sixteen percent ( 16 %) resulting in gross proceeds of $ 84 million. The Note was sold pursuant
to the terms of a Securities Purchase Agreement, dated November 2, 2021 (the "SPA"), between the Company and the investor
in the Note (the "Investor").

 The
Note was issued on November 8, 2021, pursuant to an indenture dated November 2, 2021 between us and Wilmington Savings Fund Society,
FSB, as trustee (the "Base Indenture"), as supplemented by a first supplemental indenture thereto, dated November 2, 2021,
relating to the Note (the "First Supplemental Indenture" and the Base Indenture as supplemented by the First Supplemental
Indenture, the "First Indenture"). The terms of the Note include those provided in the First Indenture and those made part
of the First Indenture by reference to the Trust Indenture Act.

 First
Exchange Agreement

 On
July 25, 2023, the Company entered into an Exchange Agreement (the "First Exchange Agreement") under which the Company and
the Investor agreed to exchange (the "Series A Exchanges"), in two separate exchanges, an aggregate of $ 22.7 million of the
outstanding principal and interest under the Note for 15,000 shares of a newly authorized series of preferred stock of the Company designated
as Series A Preferred Convertible Stock (the "Series A Preferred Stock"), the terms of which are set forth in a Certificate
of Designations of Rights and Preferences of Series A Convertible Preferred Stock of RYVYL Inc. (the "Series A Certificate of Designations"),
which the Company filed with the Nevada Secretary of State prior to the initial issuance of the Series A Preferred Stock. The Series
A Preferred Stock is further described in Note 9, Convertible Preferred Stock. As part of the First Exchange Agreement, the Company
also agreed to allow for the conversion of up to an additional $9.0 million of principal (together with any accrued and unpaid interest
thereon) of the Note at a conversion price equal to 97.5% of the lower of (x) the then in effect conversion price and (y) the lowest
volume weighted average price of the Company's common stock during the five trading days immediately prior to such conversion;
and the Investor agreed to waive any interest that would otherwise accrue on the Note during the period commencing on April 1, 2023 through,
and including, December 31, 2023.

 F- 18

 RYYVL
INC.

 NOTES

 On
July 31, 2023, pursuant to the terms of the First Exchange Agreement, the Company closed the initial exchange (the "Initial Series
A Exchange") and issued 6,000 shares of Series A Preferred Stock in exchange for $ 4.3 million of the outstanding principal balance
of the Note and $ 1.7 million of accrued interest. Additionally, upon satisfaction of all applicable closing conditions, including, without
limitation, the Company having obtained any stockholder approval required for the consummation of the transactions and the issuance of
the common stock issuable upon the conversion of all of the shares of Series A Preferred Stock (unless waived by the applicable other
party), in the final exchange (the "Final Series A Exchange"), the parties agreed to exchange the remaining $16.7 million
of the outstanding principal balance subject to the Series A Exchanges for 9,000 shares of Series A Preferred Stock on a date mutually
agreed to by the Company and the Investor. The Company determined that the parties' obligation to exchange the remaining $ 16.7
million of the outstanding principal balance subject to the Series A Exchanges for 9,000 shares of Series A Preferred Stock in the Final
Series A Exchange represents an embedded conversion feature that does not require bifurcation and separate valuation because it would
not meet the definition of a derivative, if freestanding, under ASC 815, Derivatives and Hedging ( " ASC 815 "),
as net settlement could not be achieved.

 The
Company analyzed the changes made to the Note under the First Exchange Agreement under ASC 470-50 to determine if extinguishment accounting
was applicable. Under ASC 470-50-40-10, a modification or an exchange that adds or eliminates a substantive conversion option as of the
conversion date is always considered substantial and requires extinguishment accounting. Since the First Exchange Agreement added a substantive
conversion option, the Company determined that extinguishment accounting was applicable. In accordance with the extinguishment accounting
guidance, the Company recorded a loss on extinguishment of $ 1.3 million which represents the difference between (a) the fair value of
the modified Note and the 6,000 shares of Series A Preferred Stock issued in the Initial Series A Exchange and (b) the carrying amount
of the Note and the fair value of the bifurcated embedded derivative immediately prior to giving effect to the First Exchange Agreement.

 Second
Exchange Agreement

 Under
the terms of the First Exchange Agreement, a final closing was to be held upon which the Investor was to exchange an additional $ 16.7
million of principal of the Note into 9,000 shares of Series A Preferred Stock (the "Unissued Series A Preferred Stock")
which shares of Unissued Series A Preferred Stock were convertible into shares of common stock, in accordance with the terms of the Series
A Certificate of Designations.

 On
November 27, 2023, the Company entered into an Exchange Agreement (the "Second Exchange Agreement") with the Investor under
which the Company and the Investor agreed to exchange (the "Series B Exchange"), (i) all of the existing shares of Series
A Preferred Stock issued to the Investor in the Initial Series A Exchange, (ii) the right to exchange the shares of Unissued Series A
Preferred Stock for an additional $ 16.7 million of principal of the Note, and (iii) $ 60.3 million of the outstanding principal under
the Note for 55,000 shares of a newly authorized series of preferred stock of the Company designated as Series B Preferred Convertible
Stock (the "Series B Preferred Stock," and collectively with the Series A Preferred Stock, the "Preferred Stock"),"),
the terms of which are set forth in a Certificate of Designations of Rights and Preferences of Series B Convertible Preferred Stock of
RYVYL Inc. (the "Series B Certificate of Designations"), which the Company filed with the Nevada Secretary of State prior
to the initial issuance of any shares of Series B Preferred Stock. The Series B Preferred Stock is further described in Note 9, Convertible
Preferred Stock. As additional consideration for the Series B Exchange, the Company has also agreed to make a cash payment to the
Investor in the amount of $ 3.0 million. As part of the Second Exchange Agreement, the Investor also agreed to forbear from requiring
the repayment of the Note (to the extent such repayment obligation arises solely as a result of the occurrence of the maturity date and
not with respect to any event of default or redemption rights in the Note or pursuant to the Indenture (as such term is defined in the
Second Exchange Agreement)) during the period commencing on November 5, 2024 through, and including, April 5, 2025; and to extend the
waiver of payment of interest under the Note through July 1, 2024.

 The
Company analyzed the changes made to the Note under the Second Exchange Agreement under ASC 470-50 to determine if extinguishment accounting
was applicable. Under ASC 470-50-40-10, a modification or an exchange that adds or eliminates a substantive conversion option as of the
conversion date is always considered substantial and requires extinguishment accounting. Since the Second Exchange Agreement eliminated
a substantive conversion option (the parties' obligation to exchange the remaining $16.7 million of outstanding principal balance
subject to the Series A Exchange for 9,000 shares of Series A Preferred Stock in the Final Series A Exchange), the Company determined
that extinguishment accounting was applicable. In accordance with the extinguishment accounting guidance, the Company recorded a loss
on extinguishment of $ 22.5 million which represents the difference between (a) the fair value of the modified Note, the fair value of
the 55,000 shares of Series B Preferred Stock issued in the Series B Exchange, and the $ 3.0 million cash payment made to the Investor,
and (b) the carrying amount of the Note, the fair value of the bifurcated embedded derivative immediately prior to giving effect to the
Second Exchange Agreement, and the fair value of the existing shares of Series A Preferred Stock issued to the Investor in the Initial
Series A Exchange forfeited to the Company by the Investor.

 F- 19

 RYYVL
INC.

 NOTES

 On
November 29, 2023, the Company closed the Series B Exchange, pursuant to which the Company issued to the Investor 55,000 shares of Series
B Convertible Preferred Stock and paid the Investor a cash payment in the amount of $ 3.0 million, in exchange for 6,000 shares of Series
A Convertible Preferred Stock previously issued to the Investor, the right to exchange the shares of Unissued Series A Preferred Stock
for an additional $ 16.7 million of principal of the Note, and the reduction of principal of the Note in the aggregate amount of $ 60.3
million.

 Forbearance
Agreement

 On
May 17, 2024, the Company entered into a Forbearance Agreement (the "Forbearance Agreement") with the Investor pursuant to
which the Investor, in consideration for the Company's cash payment in the amount of $ 80,000 as an advance payment of a portion
of the next interest payment, in the estimated amount of $ 380,000, due and payable under the Note on October 1, 2024, agreed to further
forbear from requiring the repayment of the Note (to the extent such repayment obligation arises solely as a result of the occurrence
of the maturity date and not with respect to any event of default or redemption rights in the Note or pursuant to the Indenture) during
the period commencing on April 5, 2025 through, and including, April 5, 2026. The Company analyzed the changes made to the Note under
the Forbearance Agreement under ASC 470-60 to determine if the transaction qualified as a troubled debt restructuring. For a debt restructuring
to be considered troubled, the debtor must be experiencing financial difficulties and the creditor must have granted a concession. The
Company considered the indicators of financial difficulties provided in ASC 470-60 and determined that one or more indicators were present
at the time the Forbearance Agreement was entered into, such as the existence of substantial doubt about the Company's ability
to continue as a going concern. Furthermore, the Company determined that the effective borrowing rate on the Note decreased as a result
of the changes made to the Note under the Forbearance Agreement and, as such, the Investor granted a concession on the debt. As a result,
the changes made to the Note under the Forbearance Agreement were accounted for as a troubled debt restructuring. However, no restructuring
gain or corresponding adjustment to the carrying amount of the Note was recorded because the net carrying amount of the Note at the time
the Forbearance Agreement was entered into was less than the total undiscounted future principal and interest payments of the restructured
Note. The $ 80,000 cash payment made to the Investor in connection with the Forbearance Agreement was treated as a lender fee and expensed
as incurred under the troubled debt restructuring model.

 During
the year ended December 31, 2022, the Investor converted $ 8.55 million of the outstanding Note principal balance into 598,695 shares
of the Company's common stock at a weighted average conversion price of $ 1.43. In addition, the Company paid the Investor $ 6.9
million in January 2022 in exchange for cancellation of $ 6.0 million of the outstanding principal balance. During the year ended December
31, 2023, the Investor converted $ 1.65 million of the outstanding Note principal balance into 527,910 shares of the Company's common
stock at a weighted average conversion price of $ 1.18. During the year ended December 31, 2024, the Investor converted $ 0.9 million of
the outstanding Note principal balance into 823,294 shares of the Company's common stock at a weighted average conversion price
of $ 1.10.

 Ranking

 The
Note is the senior unsecured obligation of the Company and not the financial obligation of our subsidiaries. Until such date as the principal
amount of the Note is $5 million or less, all payments due under the Note will be senior to all other indebtedness of the Company and/or
any of its subsidiaries.

 Maturity
Date

 Under
its original terms, unless earlier converted, or redeemed, the Note was to mature on November 3, 2023, the second anniversary of the
issuance date, which we refer to herein as the "Maturity Date," subject to the right of the Investor to extend the date:

 (i)
 if
an event of default under the Note has occurred and is continuing (or any event shall have occurred and be continuing that with the passage
of time and the failure to cure would result in an event of default under the Note) and

 (ii)
 for
a period of 20 business days after the consummation of a fundamental transaction if certain events occur.

 F- 20

 RYYVL
INC.

 NOTES

 We
are required to pay, on the Maturity Date, all outstanding principal, accrued and unpaid interest and accrued and unpaid late charges
on such principal and interest, if any.

 As
part of the Restructuring Agreement entered into with the Investor on August 16, 2022 (the "Restructuring Agreement"), the
Company obtained a forbearance of the Maturity Date from November 5, 2023 to November 5, 2024. As part of the Second Exchange Agreement
entered into with the Investor on November 27, 2023, the Company obtained a further forbearance of the Maturity Date from November 5,
2024 to April 5, 2025. As part of the Forbearance Agreement entered into with the Investor on May 17, 2024, the Company obtained a further
forbearance of the Maturity Date from April 5, 2025 to April 5, 2026.

 Interest

 The
Note bears interest at the rate of 8 % per annum which (a) shall commence accruing on the date of issuance, (b) shall be computed on the
basis of a 360-day year and twelve 30-day months and (c) shall be payable in cash quarterly in arrears on the first trading day of each
calendar quarter or otherwise in accordance with the terms of the Note. If the holder elects to convert or redeem all or any portion
of the Note prior to the Maturity Date, all accrued and unpaid interest on the amount being converted or redeemed will also be payable.
If we elect to redeem all or any portion of the Note prior to the Maturity Date, all accrued and unpaid interest on the amount being
redeemed will also be payable. The interest rate of the Note will automatically increase to 15% per annum upon the occurrence and continuance
of an event of default (See " Events of Default " below).

 Subject
to the satisfaction of certain equity conditions, the terms of the Restructuring Agreement require the holder to voluntarily convert
certain interest payments when due under the Note at 95% of the lower of (i) the then in effect conversion price and (ii) the lowest
volume weighted average price of our common stock during the five trading days immediately prior to such conversion.

 As
part of the First Exchange Agreement, the Investor agreed to waive any interest that would otherwise accrue on the Note during the period
commencing on April 1, 2023 through, and including, December 31, 2023. As part of the Second Exchange Agreement, the Investor agreed
to extend the waiver of payment of interest under the Note through July 1, 2024.

 Late
Charges

 The
Company is required to pay a late charge of 15 % on any amount of principal or other amounts that are not paid when due.

 Conversion

 Fixed
Conversions at Option of Holder

 The
holder of the Note may convert all, or any part, of the outstanding principal and interest of the Note, at any time at such holder's
option, into shares of our common stock at an initial fixed conversion price, which is subject to:

 proportional
adjustment upon the occurrence of any stock split, stock dividend, stock combination and/or similar transactions; and

 full-ratchet
adjustment in connection with a subsequent offering at a per share price less than the fixed conversion price then in effect.

to the original terms of the Note, since during the fiscal quarter ending March 31, 2022, the Company (i) failed to process at least
$750 million in transaction volume or (ii) had revenue that was less than $12 million, the Note's fixed conversion price then in
effect exceeded the greater of (x) the Note's $1.67 floor and (y) 140% of the market price as of April 1, 2022 (the "Adjustment
Measuring Price"), on April 1, 2022, the fixed conversion price automatically adjusted to the Adjustment Measuring Price.

 As
part of the Restructuring Agreement, the Company agreed to allow for the conversion of up to $4.5 million of principal (together with
any accrued and unpaid interest thereon) of the Note at a conversion price equal to the lesser of (i) $2.40 and (ii) 97.5% of the lower
of (x) the then in effect conversion price and (y) the lowest volume weighted average price of our common stock during the five trading
days immediately prior to such conversion.

 As
part of the First Exchange Agreement, the Company agreed to allow for the conversion of up to an additional $9.0 million of principal
(together with any accrued and unpaid interest thereon) of the Note at a conversion price equal to 97.5% of the lower of (x) the then
in effect conversion price and (y) the lowest volume weighted average price of our common stock during the five trading days immediately
prior to such conversion.

 1-Year
Alternate Optional Conversion

 At
any time following the first anniversary of the issuance date of the Note, but only if the closing bid price of our common stock on the
immediately prior trading day is less than $6.50, the holder of the Note shall have the option to convert, at such holder's option,
pro rata, up to $ 30 million of the principal amount of the Note (in $250,000 increments) at the "alternate optional conversion
price," which is equal to the lower of (i) the then in effect conversion price and (ii) the greater of (x).the Note's $ 1.67
floor price or (y) 98 % of the market price on the conversion date.

 F- 21

 RYYVL
INC.

 NOTES

 Alternate
Event of Default Optional Conversion

 If
an event of default has occurred under the Note, the holder may alternatively elect to convert the Note (subject to an additional 15 %
redemption premium) at the "alternate event of default conversion price" equal to the lesser of:

 the
fixed conversion price then in effect; and

 the
greater of:

 the
floor price; and

 80%
of the lowest volume weighted average price of our common stock during the five trading days immediately prior to such conversion.

 Beneficial
Ownership Limitation

 The
Note may not be converted, and shares of common stock may not be issued under the Note if, after giving effect to the conversion or issuance,
the applicable holder of the Note (together with its affiliates, if any) would beneficially own in excess of 4.99% of the Company's
outstanding shares of common stock, which is referred to herein as the "Note Blocker". The Note Blocker may be raised or
lowered to any other percentage not in excess of 9.99% at the option of the applicable holder of the Note, except that any raise will
only be effective upon 61 days' prior notice to us.

 Change
of Control Redemption Right

 In
connection with a change of control of the Company, the holder may require us to redeem in cash, all or any portion, of the Note at a
15% redemption premium to the greater of the face value, the equity value of our Common Stock underlying the Note, and the equity value
of the change of control consideration payable to the holder of our common stock underlying the Note.

 The
equity value of our common stock underlying the Note is calculated using the greatest closing sale price of our common stock during the
period immediately preceding the consummation or the public announcement of the change of control and ending the date the holder gives
notice of such redemption.

 The
equity value of the change of control consideration payable to the holder of our common stock underlying the Note is calculated using
the aggregate cash consideration and aggregate cash value of any non-cash consideration per share of our common stock to be paid to the
holders of our common stock upon the change of control.

 Events
of Default

 Under
the terms of the First Supplemental Indenture, the events of default contained in the Base Indenture shall not apply to the Note. Rather,
the Note contains standard and customary events of default including but not limited to: (i) the suspension from trading or the failure
to list the Company's common stock within certain time periods; (ii) failure to make payments when due under the Notes; and (iii)
bankruptcy or insolvency of the Company.

 If
an event of default occurs, the holder may require us to redeem all or any portion of the Note (including all accrued and unpaid interest
and late charges thereon), in cash, at a 15% redemption premium to the greater of the face value and the equity value of the Company's
common stock underlying the Note.

 The
equity value of the Company's common stock underlying the Note is calculated using the greatest closing sale price of the Company's
common stock on any trading day immediately preceding such event of default and the date the Company makes the entire payment required.

 Company
Optional Redemption Rights

 At
any time no event of default exists, the Company may redeem all, but not less than all, of the Note outstanding in cash all, or any portion,
of the Note at a 5% redemption premium to the greater of the face value and the equity value of the Company's common stock underlying
the Note.

 F- 22

 RYYVL
INC.

 NOTES

 The
equity value of the Company's common stock underlying the Note is calculated using the greatest closing sale price of the Company's
common stock on any trading day during the period commencing on the date immediately preceding such date the Company notifies the applicable
holder of such redemption election and the date the Company makes the entire payment required.

 The
following is a rollforward of the senior convertible note balance (dollars in thousands):

 Balance, December 31, 2020

 $
 -

 Convertible debentures issued

 100,000

 Derivative liability

 ( 21,580
)

 Original issue discount of 16 %

 ( 16,000
)

 Placement fees and issuance costs

 ( 7,200
)

 Amortization and write-off of debt discount

 3,435

 Balance, net of unamortized debt discount of $ 41,345 - December 31, 2021

 58,655

 Repayments and conversion

 ( 14,550
)

 Amortization and write-off of debt discount

 16,996

 Balance, net of unamortized debt discount of $ 24,349 - December 31, 2022

 61,101

 Repayments and conversion

 ( 66,250
)

 Amortization and write-off of debt discount

 20,443

 Balance, net of unamortized debt discount of $ 3,906 - December 31, 2023

 15,294

 Repayments and conversion

 Amortization and write-off of debt discount

 2,351

 Balance, net of unamortized debt discount of $ - December 31, 2024

 $
 16,745

 The
Company recorded debt discount accretion expense of $ 2.3 million and $ 13.1 million for the years ended December 31, 2024, and 2023, respectively.

 The
Company incurred interest expense of $ 0.7 million and $ 3.3 million for the years ended December 31, 2024, and 2023, respectively.

 Derivative
Liability

 The
senior convertible note contains embedded derivatives representing certain conversion features, redemption rights, and contingent payments
upon the occurrence of certain events of default. The Company determined that these embedded derivatives required bifurcation and separate
valuation.

 The
Company utilizes a binomial lattice model to value its bifurcated derivatives included in the note. ASC 815 does not permit an issuer
to account separately for individual derivative terms and features embedded in hybrid financial instruments that require bifurcation
and liability classification as derivative financial instruments. Rather, such terms and features must be combined and fair-valued as
a single compound embedded derivative. The Company selected a binomial lattice model to value the compound embedded derivative because
it believes this technique is reflective of all significant assumptions that market participants would likely consider in negotiating
the transfer of the note. Such assumptions include, among other inputs, stock price volatility, risk-free rates, credit risk assumptions,
early redemption and conversion assumptions, and the potential for future adjustment of the conversion price due to triggering events.
Additionally, there are other embedded features of the Note requiring bifurcation, other than the conversion features, which had no value
at December 31, 2024 and December 31, 2023, due to management's estimates of the likelihood of certain events, but that may have
value in the future should those estimates change.

 The
following is a rollforward of the derivative liability balance (dollars in thousands):

 Balance, December 31, 2021

 $

 18,735

 Change in fair value 2022

 ( 18,480

)

 Balance, December 31, 2022

 Increase in derivative liability upon extinguishment of debt

 6,312

 Change in fair value 2023

 ( 6,548

)

 Balance, December 31, 2023

 Change in fair value 2024

 ( 15

)

 Balance, December 31, 2024

 $

 F- 23

 RYYVL
INC.

 NOTES

 Small
Business Association CARES Act Loans

 On
June 9, 2020, the Company entered into a 30 -year loan agreement with the Small Business Association ("SBA") under the CARES
Act in the amount of $ 149,900. The loan bears interest at 3.75 % per annum and requires monthly principal and interest payments of $ 731
beginning June 9, 2021. Both the Chief Executive Officer and Chairman of the Company signed personal guarantees under this loan. As of
December 31, 2024, the loan is not in default.

 On
May 8, 2020, Charge Savvy, a wholly-owned subsidiary of the Company, entered into a 27 -year loan agreement with the SBA under its Economic
Injury Disaster Loan ("EIDL") assistance program in the amount of $ 150,000. The loan bears interest at 3.75% per annum and
required principal and interest payments of $ 731 beginning on May 8, 2021, which were subsequently deferred to November 8, 2022. On August
4, 2021, Charge Savvy was granted a loan increase in the amount of $ 350,000 on identical terms as the initial loan, for an aggregate
loan amount of $ 500,000. Monthly principal and interest payments on the aggregate loan are $ 2,477 and began on November 8, 2022. Pursuant
to the terms of Security Agreements executed in connection with this loan, the SBA was granted a security interest in all tangible and
intangible personal property of Charge Savvy. As of December 31, 2024, the loan is not in default.

 9.

 Convertible
 Preferred Stock

 On
July 31, 2023, the Company issued 6,000 shares of Series A Preferred Stock in exchange for $ 4.297 million of the outstanding principal
balance of the 8 % senior convertible note due April 5, 2025 and $ 1.703 million of accrued interest pursuant to the First Exchange Agreement
entered into with the investor in the senior convertible note on July 25, 2023. On November 29, 2023, the existing shares of Series A
Preferred Stock issued to the investor were forfeited to the Company by the investor and the Company issued 55,000 shares of Series B
Preferred Stock, along with a cash payment of $ 3.0 million, in exchange for $ 60.303 million of the outstanding principal balance of the
senior convertible note pursuant to the Second Exchange Agreement entered into with the investor on November 27, 2023. Refer to Note
8, Long-Term Debt, Net, for further information. The Series A Preferred Stock had a stated value of $ 1,000 per share and
a fair value of approximately $ 1,111 per share at issuance, as determined by a valuation performed by third-party experts. The Series
B Preferred Stock has a stated value of $ 1,000 per share and a fair value of approximately $ 1,339 per share at issuance, as determined
by a valuation performed by third-party experts.

 As
of December 31, 2024, and 2023, Preferred Stock consisted of the following (dollars in thousands):

 December 31, 2024

 Authorized

 Issued
 and
 Outstanding

 Carrying
 Value

 Liquidation
 Preference

 Stock
 Issuable
 Upon
 Conversion

 Series A

 15,000

 -

 $
 -

 $
 -

 $
 -

 Series B

 53,499

 71,622

 61,524

 17,202,251

 Total Preferred Stock

 70,000

 53,499

 $
 71,622

 $
 61,524

 $
 17,202,251

 December 31, 2023

 Authorized

 Issued
 and
 Outstanding

 Carrying
 Value

 Liquidation
 Preference

 Stock
 Issuable
 Upon
 Conversion

 Series A

 15,000

 -

 $
 -

 $
 -

 $
 -

 Series B

 73,631

 63,250

 17,684,888

 Total Preferred Stock

 70,000

 $
 73,631

 $
 63,250

 $
 17,684,888

 The
holders of the Preferred Stock have the following rights and preferences:

 Voting
 – The Preferred Stock has no voting power and the holders of Preferred Stock have no right to vote on any matter at any time,
either as a separate series or class or together with any other series or class of share of capital stock.

 F- 24

 RYYVL
INC.

 NOTES

 Dividends
 – The holders of Preferred Stock are entitled to receive dividends when and as declared by the Board of Directors, from time
to time, in its sole discretion. Such dividends are not cumulative. No such dividends have been declared to date.

 Liquidation
 – In the event of the voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of Series
B Preferred Stock shall be entitled to receive in cash out of the assets of the Company, prior and in preference to any distribution
of the proceeds of such liquidation event to the holders of Series A Preferred Stock or common stock, an amount per share of Series B
Preferred Stock equal to the greater of (A) 115% of the stated value of such share of Series B Preferred Stock plus all declared and
unpaid dividends on such share of Series B Preferred Stock and (B) the amount per share such holder would receive if it converted such
share of Series B Preferred Stock into common stock (at the Series B Alternate Conversion Price, as defined below, then in effect) immediately
prior to the date of such payment. If at any time, there is more than one holder of the Series B Preferred Stock, and the proceeds thus
distributed among the holders of the Series B Preferred Stock shall be insufficient to permit the payment to such holders of the full
aforesaid preferential amounts, then the entire proceeds legally available for distribution shall be distributed ratably among the holders
in proportion to the full preferential amount that each such holder is otherwise entitled to receive.

 Redemption
 – Upon a change of control of the Company (as defined in the Company's "Series B Certificate of Designations"),
the holders of Series B Preferred Stock may require the Company to exchange their shares of Series B Preferred Stock for consideration,
in the form of the securities or other assets to which holders of shares of common stock are entitled to receive with respect to or in
exchange for their shares of common stock in such change of control, equal to the greatest of (i) 115% of the stated value of such share
of Series B Preferred Stock plus all declared and unpaid dividends on such share of Series B Preferred Stock, (ii) 115% of the greatest
closing sale price of the number of shares of common stock into which such share of Series B Preferred Stock could be converted (at the
Series B Alternate Conversion Price, as defined below, then in effect) during the period beginning on the date immediately preceding
the earlier to occur of (a) the consummation of the applicable change of control and (b) the public announcement of such change of control
and ending on the date such holder delivers notice to the Company of its election, and (iii) the aggregate cash consideration and the
aggregate cash value of any non-cash consideration per share of common stock that would be paid to the holder upon consummation of such
change of control if it converted all of its shares of Series B Preferred Stock into common stock at the conversion price then in effect.

 Conversion
 – Each share of Series B Preferred Stock is convertible, at the option of the holder, at any time after the date of issuance
of such share, into shares of common stock either (i) at the fixed conversion price then in effect, which initially is $ 3.11 (subject
to standard antidilution adjustments and adjustments as a result of subsequent issuances of securities where the effective price of the
common stock is less than the then current fixed conversion price) or (ii) at the Series B Alternate Conversion Price, as defined below.
The Series B Certificate of Designations also provides that in the event of certain "Triggering Events," any holder may,
at any time, convert any or all of such holder's Series B Preferred Stock at a conversion rate equal to the product of (i) the
Series B Alternate Conversion Price and (ii) 115% of the stated value of the Series B Preferred Stock subject to such conversion. "Triggering
Events" include, among others, (i) a failure to timely deliver shares of common stock, upon a conversion, (ii) a suspension of
trading on the principal trading market or the failure to be traded or listed on the principal market for five days or more, (iii) the
failure to pay any dividend to the holders of Series B Preferred Stock when required, (iv) the failure to remove restrictive legends
when required, (v) the Company's default in payment of indebtedness in an aggregate amount of $2 million or more, (vi) proceedings
for a bankruptcy, insolvency, reorganization or liquidation, which are not dismissed with 30 days, (vii) commencement of a voluntary
bankruptcy proceeding, and (viii) final judgments against the Company for the payment of money in excess of $2 million. The "Series
B Alternate Conversion Price" means the lower of (i) the applicable conversion price then in effect and (ii) the greater of (x)
$0.62 and (y) 97.5% of the lowest volume weighted average price of the common stock during the five consecutive trading day period ending
and including the trading day immediately preceding the delivery of the applicable conversion notice.

 10. Income Taxes

 The
components of the provision for income taxes are as follows (dollars in thousands):

 2024

 2023

 Current:

 Federal

 $

 -

 $

 -

 State

 Current income tax expense (benefit)

 Deferred:

 Federal

 -

 -

 State

 -

 -

 ( 134
)

 Deferred income tax expense (benefit)

 ( 134
)

 Total income tax expense

 $
 1,140

 $

 F- 25

 RYYVL
INC.

 NOTES

 Taxes
on income vary from the statutory federal income tax rate applied to earnings before tax on income as follows (dollars in thousands):

 2024

 2023

 Statutory federal income tax rate of 21 % applied to earnings before income taxes and extraordinary items

 $
 ( 5,413
)

 $
 ( 11,091
)

 State taxes - net of federal benefit

 Meals and entertainment

 -

 Gifts

 Stock compensation (ISOs)

 Goodwill impairment

 -

 Changes in FV of derivative liability

 ( 3
)

 ( 1,374
)

 Derecognition expense on conversion of convertible debt

 5,257

 Foreign withholding tax

 -

 Valuation allowance

 6,076

 7,223

 Others

 Foreign rate difference

 ( 787
)

 ( 155
)

 Total

 $
 1,140

 $

 Deferred
income tax assets and liabilities arising from differences between accounting for financial statement purposes and tax purposes, less
valuation reserves at year-end, are as follows (dollars in thousands):

 2024

 2023

 State taxes - prior year

 $

 $

 Intangible assets

 5,692

 4,785

 Fixed assets

 Allowance for credit losses

 1,064

 Capitalization of research and development under Sec 174

 2,357

 2,012

 Inventory reserve

 Impairment loss on investment

 -

 -

 Stock compensation (RSA)

 Lease liability

 Section 163(j) limitation

 -

 Accrued expenses

 Other

 -

 Net operating loss carryover

 31,140

 26,689

 Total deferred tax assets

 42,639

 35,796

 Deferred tax liabilities:

 -

 ( 161
)

 Intangible assets

 -

 ( 13
)

 Right of use assets

 ( 844
)

 ( 987
)

 Other

 ( 87
)

 Total deferred tax liabilities

 ( 931
)

 ( 1,161
)

 Net deferred tax assets, non-current prior to valuation allowance

 41,708

 34,635

 Valuation allowance

 ( 41,795
)

 ( 34,579
)

 Total net deferred taxes

 $
 ( 87
)

 $

 F- 26

 RYYVL
INC.

 NOTES

 The
Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes (ASC 740). Under the liability
method, deferred taxes are determined based on differences between the financial statement and tax bases of assets and liabilities using
enacted tax rates.

 As
of December 31, 2024, the Company had Federal and State Net Operating Loss ("NOL") carryforwards of $ 119.5 million and $ 77.4
million, respectively. Under the new tax law, the Federal NOL arising in tax years ending after December 31, 2017 will be carried forward
indefinitely. The Company does not have pre-tax reform Federal NOL carryforwards as of December 31, 2024. NOL carryforwards arising from
tax years ending after December 31, 2017, are $119.5 million. The State NOL carryforwards will begin to expire in 2038.

 As
of December 31, 2024, and 2023, the Company maintained a full valuation allowance for NOL carryforward deferred tax assets. In assessing
the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred
tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income
during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax
liabilities, projected future taxable income and tax planning strategies in making this assessment. The amount of the deferred tax asset
considered realizable, however, could be reduced if estimates of future taxable income are reduced.

 The
Company files a consolidated Federal income tax return and files tax returns in various state and local jurisdictions. The statutes of
limitations for its consolidated Federal income tax returns are open for years 2021 and thereafter, and state and local income tax returns
are open for years 2020 and thereafter.

 Interest
and penalties related to uncertain tax positions are recognized as a component of income tax expense. For the tax years ended December
31, 2024, and 2023, the Company recognized no interest or penalties.

 11. Stock-Based Compensation

 Equity
Incentive Plans

 The
Company adopted the 2023 Equity Incentive Plan ("2023 Plan") on November 2, 2023, which provides employees, directors, and
consultants with opportunities to acquire the Company's shares, or to receive monetary payments based on the value of such shares.
Management has determined that it is in the best interests of the Company to replace the 2020 Incentive and Nonstatutory Stock Option
Plan, the 2021 Incentive and Nonstatutory Stock Option Plan, and the 2021 Restricted Stock Plan, with one plan, the 2023 Plan, pursuant
to which the Company will be able to grant stock option awards, stock appreciation rights, restricted stock awards, restricted stock
units, and other stock-based awards. The 2023 Plan provides for up to 1,098,262 shares of common stock. Grants made under the 2023 Plan
will generally vest and become exercisable at various times from the grant dates. These awards will have such vesting or other provisions
as may be established by the Board of Directors at the time of each award.

 Stock
Option Activity

 A
summary of stock option activity for the year ended December 31, 2024, is as follows (dollars in thousands):

 Weighted
 Average
 Exercise
 Price

 Outstanding at January 1, 2024

 766,142

 $
 3.76

 Granted

 -

 N/A

 Exercised

 ( 11,999
)

 1.98

 Cancelled/forfeited/expired

 ( 170,169
)

 3.60

 Outstanding at December 31, 2024

 583,974

 4.20

 Exercisable at December 31, 2024

 407,974

 $
 4.20

 F- 27

 RYYVL
INC.

 NOTES

 The
aggregate intrinsic value for stock options exercised during the year ended December 31, 2024, and 2023, was $ 0.03 million and $ 0.04 million,
respectively. There were no stock options granted during the year ended December 31, 2024. The total weighted-average grant date fair
value of options granted during the year ended December 31, 2023, was $ 2.02 per share.

 The
grant-date fair values of the Company's stock options awards were estimated using the following assumptions:

 2024

 2023

 Risk free interest rate

 N/A

 4.44
 %

 Expected term (years)

 N/A

 5.0

 Expected volatility

 N/A

 %

 Expected dividend yield

 N/A

 %

 Restricted
Stock Activity

 A
summary of RSA activity for the year December 31, 2024, is as follows (dollars in thousands):

 Number of

 Weighted

Average

Grant Date

Fair Value

 Unvested at January 1, 2024

 189,893

 $
 2.28

 Granted

 96,893

 2.26

 Vested

 ( 214,913
)

 2.41

 Forfeited

 -

 N/A

 Unvested at December 31, 2024

 71,873

 $
 1.81

 The
total fair value of restricted shares that vested was $ 0.5 million and $ 1.1 million in the years ended December 31, 2024, and 2023, respectively.

 12. Operating Leases

 The
Company leases office space under operating leases at four locations in the United States (California, Illinois, Massachusetts, and Florida)
and one location in the European Union (Sofia, Bulgaria). The Company had no finance lease obligations as of December 31, 2024.

 The
Company's operating lease expense totaled $ 1.4 million and $ 1.1 million for the years ended December 31, 2024, and 2023, respectively.
As of December 31, 2024, the weighted-average remaining lease term was 3.7 years and the weighted average discount rate was 11.2 %.

 F- 28

 RYYVL
INC.

 NOTES

 Future
minimum lease payments under our operating leases and reconciliation to the operating lease liability as of December 31, 2024, are as
follows (in thousands):

 Year Ending December 31,

 Total

 2025

 $
 1,167

 2026

 1,333

 2027

 1,046

 2028

 1,042

 Thereafter

 -

 Total lease payments

 4,588

 Less: imputed interest

 ( 886
)

 Present value of total lease payments

 3,702

 Less: current portion

 ( 839
)

 Long-term lease liabilities

 $
 2,863

 13. Related Party Transactions

 PrivCo

 The
Company repurchased, in two separate repurchase transactions each consisting of 100,000 shares of common stock, an aggregate of 200,000
shares owned by PrivCo (an entity controlled by Messrs. Errez and Nisan). In October 2022, the Board unanimously ratified these two repurchase
transactions between the Company and PrivCo. The Company repurchased 100,000 shares for a price per share of $ 55.90 (for total proceeds
to PrivCo of $ 5,590,000) (the "First Repurchase") and 100,000 shares for a price per share of $ 8.20 (for total proceeds to
PrivCo of $ 820,000) (the "Second Repurchase"). The First Repurchase was based on the closing price of the common stock on
November 24, 2021 and took place over a number of months starting in February 2022 and ending in October 2022. The Second Repurchase
was based on the closing price of the common stock on July 29, 2022 and took place in October 2022. The purpose of each of these transactions
was to allow the Company to issue shares to new shareholders without increasing the Company's shares outstanding. As of December
31, 2024, and 2023, there were 11,733 and 100,525 shares available, respectively, of the 200,000 shares of common stock under the aforementioned
transactions.

 Family
Relationships

 The
Company employs two of our CEO's brothers, Dan and Liron Nusinovich, who are paid approximately $ 260,000 and $ 131,000 per year,
respectively. There are no family relationships between any of other directors or executive officers and any other employees or directors
or executive officers.

 The
Company did not pay any commissions to the related parties mentioned above for the years ended December 31, 2024, and 2023.

 14. Commitments and Contingencies

 From
time-to-time, the Company is involved in legal proceedings. The Company records a liability for those legal proceedings when it determines
it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company also discloses when
it is reasonably possible that a material loss may be incurred, however, the amount cannot be reasonably estimated. From time to time,
the Company may enter into discussions regarding settlement of these matters, and may enter into settlement agreements, if it believes
settlement is in the best interest of the Company and its shareholders.

 F- 29

 RYYVL
INC.

 NOTES

 The
following is a summary of our current outstanding litigation. Note that references to GreenBox POS are for historical purposes. GreenBox
POS changed its name to RYVYL Inc. on October 13, 2022.

 On
 November 8, 2022, the Company filed a complaint against its former Chief Operating Officer Vanessa Luna, Luna Consultant Group, LLC
 and Does 1 through 50 in San Diego Superior Court (the "Company Filing"). The Company alleged that Ms. Luna abused her
 position for additional compensation, failed to follow proper protocols and breached her fiduciary duties and duty of loyalty by
 secretly maintaining alternative employment. The action sought damages, including interest and costs of suit incurred. On November
 10, 2022, Ms. Luna filed her own complaint against the Company and Fredi Nisan in San Diego Superior Court (the "Luna Filing").
 Ms. Luna alleged that Mr. Nisan used contract negotiations to coerce her, that the Company improperly coded transactions and misled
 investors, and that when her concerns were reported to management, she was wrongfully terminated, resulting in a number of claims.
 Ms. Luna also alleged sexual misconduct on the part of Mr. Nisan. Ms. Luna sought damages including compensatory damages, unpaid
 wages (past and future), loss of wages and benefits (past and future), and other damages to be proven at trial. The Company and Mr.
 Nisan deny all allegations of the Luna Filing. In April 2023, Ms. Luna sought and was granted permission to add Coyni, Inc. as a
 defendant with regard to her claims. In addition, in August 2024, the Company and Mr. Nisan were granted leave to file a Second Amended
 Complaint to add additional claims against Ms. Luna, including securities fraud. After vigorously defending against all claims asserted
 by Ms. Luna and vigorously prosecuting its own claims against Ms. Luna, on October 17, 2024, the parties entered into a confidential
 settlement agreement. On February 4, 2025, the parties filed with the San Diego Superior Court Requests for Dismissal, dismissing
 their respective cases with prejudice.

 On
 December 12, 2022, Jacqueline Dollar (aka Jacqueline Reynolds), former Chief Marketing Officer of the Company, filed a complaint
 against the Company, Fredi Nisan, and Does 1-20 in San Diego Superior Court. Ms. Dollar is alleging she was undercompensated compared
 to her male counterparts and retaliated against after raising concerns to management resulting in sex discrimination in violation
 of the California Fair Employment and Housing Act ("FEHA") and failure to prevent discrimination in violation of FEHA.
 Ms. Dollar is also claiming intentional infliction of emotional distress. Ms. Dollar is seeking an unspecified amount of damages
 related to, among other things, payment of past and future lost wages, stock issuances, bonuses and benefits, compensatory damages,
 and general, economic, non-economic, and special damages. As the Company cannot predict the outcome of the matter, the probability
 of an outcome cannot be determined. The Company intends to vigorously defend against all claims. The parties are currently in the
 discovery phase.

 Since
 December 2022, the Company has been cooperating with 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 former QuickCard business.
 The Company intends to continue to cooperate fully with the SEC in its investigation. The Company cannot predict the outcome of such
 investigation or whether it will have a material impact on the Company's financial condition, results of operations or cash
 flow.

 On
February 1, 2023, a putative class action lawsuit titled Cullen v. RYVYL Inc. fka GreenBox POS, Inc., et al., Case No. 3:23-cv-00185-GPC-AGS,
was filed in the United States District Court for the Southern District of California against several defendants, including the Company
and certain of our current and former directors and officers (the "Cullen Defendants"). The complaint was filed on behalf
of persons who purchased or otherwise acquired the Company's publicly traded securities between January 29, 2021 and January 20,
2023. The complaint alleged that the Cullen Defendants violated Sections 11, 12(a)(2), and 15 of the Securities Act and Sections 10(b)
and 20(a) of the Exchange Act by making false and/or misleading statements regarding the Company's financial controls, performance
and prospects. On June 30, 2023, the plaintiff filed an amended complaint. On March 1, 2024, the Court issued an order granting in part
and denying in part defendants' motions to dismiss, which included dismissing all Securities Act claims and narrowing the potential
class period. The plaintiff filed a second amended complaint on April 30, 2024, which alleges claims against the Cullen Defendants under
Exchange Act Sections 10(b) and 20(a) only and a class period of May 13, 2021 through January 20, 2023. The Company filed its motion
to dismiss the second amended complaint on July 1, 2024. On October 21, 2024, the Court issued an order granting in part and denying
in part defendants' motions to dismiss. The scope of the remaining claims is consistent with the Court's last motion to dismiss
decision dated March 1, 2024. On November 12, 2024, Plaintiff filed a Third Amended Complaint, which asserts the same legal causes of
action and proposed class period as the previous complaint. On February 28, 2025, the Parties executed a Memorandum of Understanding
("MOU") that reflects their agreement in principle to settle the claims asserted in this class action. Lead Plaintiff has
begun the process of drafting the Stipulation and Agreement of Settlement and exhibits thereto, which, after negotiation and execution
by the Parties, will be filed with the Court in connection with Motion for Preliminary Approval of Class Action Settlement. The Parties
intend to move for preliminary approval of the proposed settlement as soon as practicable after the final settlement agreement is executed.
There is no assurance, however, that the settlement will be completed and/or that the Court will approve it. The Cullen Defendants continue
to deny any and all liability and allegations set forth in the pending Third Amended Complaint.

 F- 30

 RYYVL
INC.

 NOTES

 On
 June 22, 2023, a shareholder derivative complaint was filed in the United States District
 Court for the Southern District of California against certain of the Company's current
 and/or former officers and directors (the "Hertel Defendants"), Christy Hertel,
 derivatively on behalf of RYVYL Inc., f/k/a GreenBox POS v. Ben Errez et al., Case No. 3:23-CV-01165-GPC-SBC.
 On August 4, 2023, a second shareholder derivative complaint was filed in the United States
 District Court for the Southern District of California against the Hertel Defendants, Marcus
 Gazaway, derivatively on behalf of RYVYL Inc., f/k/a GreenBox POS v. Ben Errez et al., Case
 No. 3:23-CV-01425-LAB-BLM. Both derivative complaints generally allege that the Hertel Defendants
 failed to implement adequate internal controls that would prevent false and misleading financial
 information from being published by the Company and that controlling shareholders participated
 in overpayment misconduct resulting in violations of Sections 10(b), 14(a) and 20 of the
 Exchange Act and breached their fiduciary duties and, purportedly on behalf of the Company.
 On April 2, 2024, the Court granted the parties' joint motion for an order consolidating
 the Hertel and Gazaway cases under the caption In re RYVYL Inc. Derivative Litigation, Lead
 Case No. 3:23-CV-01165-GPC-SBC (S.D. Cal.). On May 6, 2024, the Court issued an order staying
 the action until after the final resolution of any motion to dismiss the securities class
 action detailed above. On May 1, 2024, a third nearly identical shareholder derivative complaint
 was filed in Clark County, Nevada by plaintiff Christina Brown, derivatively on behalf of
 RYVYL, Inc., v. Ben Errez et al., Case No. A-24-892382-C. The Company currently is working
 with Ms. Brown's counsel to coordinate a stay of the Nevada action on the same terms
 as the stay of the Hertel and Gazaway cases.

 The
 complaint seeks damages and contribution from the Hertel Defendants and a direction that the Company and the Hertel Defendants take
 actions to reform and improve corporate governance and internal procedures to comply with applicable laws. The Hertel Defendants
 deny all allegations of liability and intend to vigorously defend against all claims. However, given the preliminary stage of the
 lawsuits, the uncertainty of litigation, and the legal standards that must be met for success on the merits, the Company cannot predict
 the outcome of either case at this time.

 On
 October 1, 2023, the Company filed a demand for arbitration against Sky Financial with the American Arbitration Association in San
 Diego, California (the "Arbitration"). In the Arbitration, the Company seeks to recover for breach of contract and Sky
 Financial's failure to perform its obligations On October 2, 2023, the Company filed a complaint against Sky Financial in San
 Diego Superior Court asserting the same claims asserted in the Arbitration, solely to toll any applicable statutes of limitations
 pending the Arbitration and, if necessary, provide jurisdiction for the court to compel arbitration. The action seeks damages, including
 interest and costs of suit incurred. The parties agreed to proceed in the Arbitration and to implement the steps needed to extend
 the current stay of the San Diego Superior Court action pending the Arbitration. Subsequently, the parties agreed to stay the Arbitration
 and attend mediation. A mediation was scheduled but then vacated by stipulation of the parties. The parties have agreed to continue
 the stay of the Arbitration pending a mediation, which is to be re-scheduled.

 On
 July 6, 2022, the Company's subsidiary, RYVYL EU (formerly known as Transact Europe OOD), received a notary invitation from
 Satya Consulting PTE Limited ("Satya") filed in Bulgaria. In the filed claim, Satya alleges nonpayment of its fee in
 the amount of EUR 900,000, to which statutory default interest is to be added, for failure of payment under the Company's stock
 purchase agreement for Transact Europe Holdings OOD. RYVYL EU has retained Bulgarian counsel to assist in the defense of the asserted
 claim and denies all allegations. As RYVYL EU cannot predict the outcome of the matter, the probability of an outcome cannot be determined.
 RYVYL EU intends to vigorously defend against all claims. On October 18, 2024, RYVYL EU entered into a confidential settlement agreement
 with no material impact to the Company. The Court approved the settlement and the case was dismissed on November 23, 2024.

 On
 January 2, 2024, the Company filed a Statement of Claim against Chessa Sabourin in the Ontario Superior Court of Justice. Case No.
 CV-24-00712190-0000. The Company seeks to recover funds unlawfully held by Sabourin, or in the alternative, damages in the equivalent
 amount. Additionally, punitive and exemplary damages. In September 2023, the Company mistakenly sent funds to Ms. Sabourin and attempted
 to reverse or recall the transfers but was unable to do so. To date, Ms. Sabourin has failed and/or refused to return the funds mistakenly
 sent to her. On October 21, 2024, the Court issued a default judgment against Sabourin.

 On
 June 25, 2024, J. Drew Byelick, a former Chief Financial Officer of the Company, filed a complaint against the Company in the United
 States District Court for the Southern District of California, Case No. '24CV1096 JLS MSB. Mr. Byelick alleged breach of contract,
 fraudulent inducement of employment, along with intentional misrepresentation and concealment. The Company moved to dismiss the complaint
 for failure to state a claim and for other violations of the federal rules of civil procedure. The Court granted that motion on December
 20, 2024, but permitted Mr. Byelick to file an amended complaint. Mr. Byelick filed his first amended complaint on January 19, 2025,
 asserting the same core claims. The Company filed a motion to dismiss the first amended complaint on February 3, 2025, which has
 been set for hearing on April 11, 2025. The Company denies all allegations of liability and intends to vigorously defend against
 all claims. However, given the preliminary stage of the lawsuit, the uncertainty of litigation, and the legal standards that must
 be met for success on the merits, the Company cannot predict the outcome at this time or estimate a reasonably possible loss or range
 of loss that may result from this action.

 F- 31

 RYYVL
INC.

 NOTES

 15. Segment Reporting

 The
Company reports its segments to reflect the manner in which its CODM reviews and assesses performance. The Company's CODM is its
CEO. The primary financial measures used by the CODM to evaluate the performance of its segments and allocate resources to them are revenue
and gross profit.

 The
Company has two reportable segments: North America and International. The CODM uses segment revenue and gross profit for each segment
during the annual budgeting and forecasting process. Further, the CODM uses segment revenue and gross profit as the metrics to assess
the business trajectory of each segment on a quarterly basis, and to make investment decisions and allocate operating resources to each
segment. The CODM does not evaluate performance or allocate resources based on segment asset data. Assets are reviewed on a consolidated
basis. As such, segment asset data is not provided.

 The
following tables present revenue and gross profit information for each of our reportable segments (dollars in thousands):

 Year Ended December 31, 2024

 North America

 Total

 $
 18,159

 $
 37,839

 $
 55,998

 10,766

 22,806

 33,572

 Segment gross profit

 $
 7,393

 $
 15,033

 $
 22,426

 Depreciation and amortization

 $
 2,011

 $

 $
 2,264

 Year Ended December 31, 2023

 North America

 Total

 $
 48,938

 $
 16,931

 $
 65,869

 29,742

 10,415

 40,157

 Segment gross profit

 $
 19,196

 $
 6,516

 $
 25,712

 Depreciation and amortization

 $
 1,907

 $

 $
 2,553

 The
following table provides a reconciliation of total segment gross profit to the Company's loss before provision for income taxes
(in thousands):

 2024

 2023

 Total segment gross profit

 $
 22,426

 $
 25,712

 Less: Advertising and marketing

 Less: Research and development

 3,848

 5,757

 Less: General and administrative

 6,933

 8,678

 Less: Payroll and payroll taxes

 13,837

 12,017

 Less: Professional fees

 4,372

 7,076

 Less: Stock compensation expense

 1,853

 Less: Depreciation and amortization

 2,264

 2,553

 Less: Impairment of goodwill

 6,675

 -

 Less: Impairment of intangible assets

 3,028

 -

 Less: Restructuring charges

 1,636

 -

 Less: Other expense, net

 ( 4,800
)

 ( 40,510
)

 Loss before provision for income taxes

 $
 ( 25,686
)

 $
 ( 52,812
)

 F- 32

 RYYVL
INC.

 NOTES

 16. Subsequent Events

Stock Repurchase and Note Repayment Agreement

 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").

to terms of the Repurchase Agreement, in consideration for an aggregate payment of $ 17,000,000 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.

 The
Repurchase Agreement provides for the payment of the Repurchase Price in two installments, the first in the amount of $13 million (the
"First Installment"), which was paid on January 27, 2025. The second installment, in the amount of $4 million (the "Second
Installment"), is due and payable on or before April 30, 2025 (the "Second Installment Date"), and the maturity date
of the Note is advanced to such date. Upon the payment of the First Installment, all Series B Preferred Shares held by the Securityholder
were repurchased.

 The
Repurchase Agreement further provides that, during the period from the payment of the First Installment until the Second Installment
Date, no interest will accrue on the remaining balance of the Note and certain restrictive covenants under the Note will be temporarily
waived. If the Company fails to make the Second Installment on or before the Second Installment Date, then interest will continue to
accrue again on the outstanding 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.

 Stock
Purchase Agreement and Financing

 On
January 23, 2025, in connection with the Company's securing financing (the "Financing"), the Company entered into a
stock purchase agreement (the "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 $ 15,000,000 (the "Financing Purchase
Price"). Under the terms of the SPA, the Company was required to use $ 13 million of the net proceeds raised in the Financing to
pay the First Installment of the Repurchase Price.

 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 provides the Company with the right to terminate the 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 SPA (April 23, 2025), provided
that such date may be extended an additional 30 days (May 23, 2025) in consideration for the Company's payment of $500,000 to the
Purchaser. If the SPA is terminated as a result of such payment by the Company, the Ryvyl EU Shares will not be sold to the Purchaser
and will be returned to Transact Europe and the SPA will be void and of no further effect, except for some provisions that survive termination.
In the event that the SPA is not so terminated, then the Purchaser will 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.

 F- 33

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