Good afternoon, everyone, and welcome to RYVYL Inc.'s Third Quarter 2023 Conference Call. This conference is being recorded. A replay of the call will be available through January 13, 2024, by calling 1 (844) 512-2921 within the United States or 1 (412) 317-6671 when calling internationally, and entering access ID 10183517. An archived version of the webcast will also be available for 90 days on the IR section of the RYVYL website. Before we begin, I would like to remind you that today's call contains forward-looking statements from our management made within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, concerning future events. These forward-looking statements are based on the company's current beliefs, assumptions, and expectations regarding future events, which, in turn, are based on information currently available to the company. Such forward-looking statements include statements regarding the timing of the filing of periodic reports with the SEC and are characterized by future or conditional words such as may, will, expect, intend, anticipate, believe, estimate, and continue or similar words. You should read statements that contain these words carefully because they discuss future expectations and plans, which contain projections of future results of operations or financial condition or state other forward-looking information. By their nature, forward-looking statements address matters that are subject to risks and uncertainties. A variety of factors could cause actual events and results to differ materially from those expressed in or contemplated by these forward-looking statements, including the risk that the completion and filing of the aforementioned periodic reports will take longer than expected and that additional information may become known prior to the expected filing of the aforementioned periodic reports with the SEC. Other risk factors affecting the company are discussed in detail in the company's filings with the SEC. The company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except to the extent required by applicable laws. I will now hand the call over to Ben Errez, Chairman of RYVYL. Please go ahead.

Thank you, Sara. Good afternoon, everyone, and thank you for joining us today. During the third quarter of 2023, once again, RYVYL delivered record financial results for the fourth consecutive quarter. Q3 top line revenues increased nearly 64% year-over-year to $17.5 million. This also reflects an 18% sequential increase from $14.9 million in the second quarter of 2023. Revenue came in at the upper end of our Q3 target range of $16 million to $18 million. Our Q3 revenue was derived from transaction processing volume, which totaled $861 million and represents an increase of 28% from the second quarter of 2023. Strong growth in our international business, RYVYL EU, as well as growth in our North America business, resulting from the establishment of additional processing channels in the U.S. for retail and online businesses, paved the way for the record results. RYVYL's Chief Operating Officer, Min Wei, will provide a full breakdown of the various processing channel performance later. Overall, we are very pleased with the steady growth trajectory and our improved margin profile. Moving on to some key initiatives. First, for an update on RYVYL EU, on the heels of receiving approval to launch CEPA from the European Payments Council and being chosen as a Visa Direct partner, RYVYL EU revenue saw tremendous year-over-year growth for the quarters ending September 30, 2023, and 2022, respectively, increasing 100% and currently representing 28.5% of our total revenue. Again, with CEPA enabled, we expect RYVYL EU to target the more than 2,000 payment service providers across 36 countries in the Eurozone, with incoming and outgoing instant transfers. Being a Visa Direct partner will allow RYVYL EU to leverage its capabilities to provide a superior Banking-as-a-Service offering. And we are working tirelessly on this initiative, which we believe will enable us to better serve our customers, retain their loyalty and create new revenue streams. Once integration is complete, expected by mid-2024, we believe that the collaboration in the Eastern European region will revolutionize the way funds are transferred between accounts, offering fast, convenient, and secure transactions. It is expected that our customers will have the opportunity to send money to authorized accounts, e-wallets, and debit cards in over 80 countries across multiple currencies through Visa's extensive network of local banking partners, experiencing the benefit of faster access to funds with money becoming available, in many cases, within minutes instead of days. We remain quite optimistic about the opportunity in Europe, and we believe we are positioned to capitalize on this important market opportunity, which also presents an important segue to the market in Asia. Eventually, we continue to work with our large institutional partner on our Banking-as-a-Service platform, with the goal of ramping up to what we believe will be $100 million per month in transaction volume. Our Banking-as-a-Service solution offers API integration and foreign exchange capabilities in more than 40 different currencies with local settlement. The service authorizes transactions 24 hours per day on business days and enables payout by way of approved methods such as real-time payments and direct deposits. In addition, the service allows for the ability to readily trace transactions and reduce fraud, all while maintaining strict compliance requirements. We are excited about the long-term potential for this lucrative market, and we believe our technology is well-suited to tap into. Next, we would like to speak about our planned spin-off of coyni. We initiated the process in early Q2 as part of the broad value creation strategy and truly believe it is the optimal way to drive growth potential. We're currently in the process of completing a comprehensive review with FINRA to finalize the name change of our subsidiary to coyni. This has taken longer than anticipated, but we do expect it to be completed soon and believe that, with a thorough review, it will provide greater assurance to investors of the viability of the coyni business. During the third quarter, we launched the coyni mobile point of sale (mPOS) app, transforming iOS and Android devices into payment terminals for secure, efficient transactions. The coyni mPOS app provides merchants with a secure and convenient way to quickly add mPOS services. End users can swiftly register to begin accepting payments by integrating mPOS capabilities with the coyni platform so that businesses and merchants can benefit from a comprehensive and user-friendly payment system, coupled with the advanced foundation of the next data release of the coyni business platform. We also have taken meaningful steps to reduce the debt on our balance sheet. During the third quarter, we entered into an exchange agreement with our holder of a rival issued convertible note, initially in the principal amount of $100 million. To date, we have exchanged a portion of the outstanding principal and interest of such convertible note for 6,000 shares of our newly designated Series A convertible preferred stock, resulting in a $6 million debt reduction and an increase in cash flow. A second exchange was also contemplated and received shareholder approval under the applicable exchange agreement, which would further reduce our debt by $16.7 million for a total of $21 million of debt reduction in consideration for the issuance of an additional 9,000 shares of Series A convertible preferred stock. We believe this type of institutional-level commitment is a major win for all rival shareholders and illustrates the conviction in our mission as a disruptive force in the digital payment landscape. We also implemented a 1 for 10 reverse stock split to increase the market price per share to better assure the maintenance of NASDAQ compliance. Operationally, we welcome George Oliva as Chief Financial Officer of the company. George brings over 30 years of experience as a senior finance professional with a background in corporate finance, treasury, financial planning and analysis, international tax, and strategic planning. We welcome George's capabilities in scaling public technology companies. We believe that this achievement, as well as his expertise in the financial management of private and listed companies, will make a significant contribution to the strategic operation and development of our company moving forward. To sum things up, we continue to demonstrate strong growth in our core processing business and margin improvement while making steady progress on those initiatives that we expect to further drive sustainable growth and profitability. We strongly believe in our ability to execute our strategy and to generate long-term value for our shareholders. And now to discuss the details of our financial results, I'd like to turn the call over to our Chief Financial Officer, George Oliva. George, the floor is yours.

Thank you, Ben. I'll be referring to adjusted EBITDA and other non-GAAP measures. For calculation of adjusted EBITDA, please refer to the reconciliation of this non-GAAP metric in our earnings release issued before this call, which can be accessed on the company IR website in the press release or in quarterly earnings sections. Our revenue increased by $6.8 million or 64% to $17.5 million for the quarter ended September 30, 2023, up from $10.7 million for the same quarter a year earlier. The change in net revenue in the third quarter of 2023 compared to the year earlier quarter was primarily attributable to significant growth in processing volume from our acquired business, RYVYL EU, and from business in American Samoa. North America Q3 revenue increased 47% from $8.5 million in Q3 2022 to $12.5 million for the quarter ended September 30, 2023. EU Q3 revenue was $5 million, an increase of more than 100% from $2.2 million in the same period last year. Cost of revenues increased by $6.5 million or 149% to $10.8 million for the quarter ended September 30, 2023, up from $4.3 million for the year earlier quarter. Payment processing consists of various processing fees paid to gateways as well as commission payments to independent sales organizations (ISOs), which are responsible for establishing and maintaining merchant relationships from which the processing transactions ensue. Cost of revenues increased primarily due to increased volume resulting in higher processing fees paid to gateways, commission payments to ISOs, and the cost of revenue associated with the acquired business in the U.S. and EU. Operating expenses decreased by $0.4 million or 4% to $9 million for the quarter ended September 30, 2023, from $9.4 million for the year earlier quarter. The decrease was primarily due to a decrease in depreciation and amortization and stock compensation expense, offset by an increase in general and administrative expenses. The higher general and administrative expenses in the quarter of 2023 are primarily attributable to a nonrecurring provision for credit losses on noncontinuing legacy accounts. Other expenses totaled $0.6 million for the three months ended September 30, 2023, compared to $12.7 million for the three months ended September 30, 2022. Changes in the fair value of derivative liability amounted to a credit of $6.9 million for the three months ended September 30, 2023, and a charge of $4.1 million in the three months ended September 30, 2022. Interest expense for the accretion of debt discount, related to the $100 million convertible note issued in November of 2021, increased by $5.8 million. Additionally, we incurred a charge of $1.3 million in the quarter ended September 30, 2023, related to the conversion of the debt. We recognized a loss of $8.1 million in the quarter ended September 30, 2022, in connection with the settlement of debt. We recorded an expense of $1.9 million related to nonrecurring legal settlements in the quarter ended September 30, 2023. In summary, the company recorded a net loss in the third quarter of 2023 of $3.1 million or a loss of $0.60 per basic and diluted share, compared to a net loss of $15.9 million or $3.37 per basic and diluted share in the same quarter a year ago. In the third quarter of 2023, adjusted EBITDA was positive $50,000, compared to a loss of $500,000 in the third quarter last year. We ended the quarter with cash and cash equivalents and restricted cash of $68.4 million, of which $15.8 million is being unrestricted cash. I'll now turn the call over to Min Wei, our Chief Operating Officer, to provide a review of the business operations and our outlook.

Thank you, George. We'll walk through our processing volumes for the verticals we serve and discuss our third quarter results and outlook for the fourth quarter of 2023. Please note that all the figures are exclusive of the Sky Financial portfolio. Our Q3 processing volume across all channels exceeded $860 million versus our published indication of $720 million to $800 million for the quarter. This is about 27% better than our Q2 2023 volume of $678 million and an increase of about 24% from our Q3 2022 volume, not including the Sky Financial volume. Our Q3 North America acquiring business volume was $171 million, which is 17% higher than Q2's $146 million volume and is 108% higher than the same period one year earlier. Q3 ChargeSavvy was $42 million or about 21% lower than Q2 2023 processing volume. When compared to the $62 million volume in Q2 2022, it is a 33% decline. The year-over-year decline is due to reduced processing from select merchant bases. For our FX and international payments portfolio, including the acquired Transact Europe business and our new Banking-as-a-Service offering, we processed $517 million in Q3 compared to $425 million in business volume in Q2, an increase of over 21%. This is a 52% increase from Q3 2022's $340 million. For an update on American Samoa, we continue to serve about 60% of the target merchants' market on the island. In Q3, our processing volume was about $30 million, about the same as the prior quarter, and our monthly volume is sustaining at about $10 million. With respect to coyni, we continue to execute our service deployment plan. In the U.S., as communicated prior, due to the U.S. regulatory environment and digital asset banking dynamics, we adjusted our monetization path for coyni to focus on the EU market. In Q3 and subsequent period, thus far, we have successfully set up our coyni EU entity, completed capital registration, and are expecting to receive our license immunity. All of these are to enable us to onboard the first batch of business customers and start generating value soon. In the meantime, we are pleased to share that in the U.S., after taking a pause due to the above-mentioned environmental factors, we are now moving ahead with the coyni cone system for payment processing in the new business verticals. Our coyni merchant processing channel is now approved by our banking partner, and we expect to start the processing in the near term. Now I'd like to turn to our outlook for the fourth quarter and the total year. With respect to processing volume in Q4, we expect to attain a range of $900 million to $1 billion. If we achieve such processing volume, we estimate that our processing volume for our fiscal year ending December 31, 2023, will exceed $3 billion. Based on Q3 revenue of $17.5 million and continuing momentum, we believe our revenue outlook of $19 million to $21 million is achievable for Q4, which will bring our total year revenue to $62 million to $64 million, which is ahead of our forecasted revenue of $60 million for the year. With respect to adjusted pro forma EBITDA, please refer to the reconciliation of this non-GAAP metric in our earnings release issued before the call. Our Q3 figure is positive $50,000. This is lower than our targeted $1 million for the quarter, which is due to higher-than-planned expenses associated with cost-of-fees, technology development investment, external legal spending, and administrative expenses to regain compliance. Some of these referenced investments and expenses will continue in Q4, and we are estimating our Q4 adjusted EBITDA to be a positive $0.5 million to $1 million, and our total year 2023 adjusted EBITDA to come in at negative $2 million to $3 million. This concludes my remarks for the third quarter and the total year. I'd like to now turn the call over to Ben Errez, our Chairman, to begin our Q&A.

Thank you, Min. Thank you all for your interest and commitment to RYVYL. We are grateful for your ongoing support. With that, I'll begin our Q&A session. Now we have received a few questions by mailers, and I'll start with those, and then we'll take questions from the floor. So first, does the company continue to expect to see higher growth in Europe? And if so, how should we think about the margins for RYVYL EU versus North America? The EU revenues of $5 million on $500 million in processing seems much less than the North America revenue. Min will take that question.

This is a good question. So first of all, definitely, we expect to see continuing growth of revenue in Europe. When it comes to margin for EU versus North America, I think it's a good observation that EU revenue of $5 million versus the $500 million processing volume seems to be lower than the same ratio compared to the North America ratio. That's simply because, in the case of the European market, our revenues primarily come from acquiring business and banking and service offerings, as we mentioned earlier. The acquiring revenue for European markets is comparable in terms of ratio to volume when compared to North America acquiring business. However, we do have currently lower revenue-to-volume ratio for the Banking-as-a-Service offering, part of which is due to the fact that we are still in the early phase of rolling out the services in the EU market, and we are still testing the pricing point for the new service offering. We expect to adjust this kind of ratio as we continue to move along to ensure we achieve a good balance between reasonable pricing to revenue and profitability for the business.

Thank you, Min. Regarding the coyni spin-off, I covered this in my remarks and want to emphasize our commitment to the process, aiming to complete it as swiftly as FINRA permits. Now, on the recent NASDAQ standard deficiencies, these issues are not related to the coyni spin-off. The deficiencies are acknowledged and will be addressed within NASDAQ, with a hearing scheduled for January. It's important to note that coyni is currently an OTC spin-off and is not a NASDAQ entity, which means it falls under FINRA regulations.

I'll answer the question. First of all, we have technically completed our efforts to migrate the network to Explora, which is a technology previously owned by the attestation service provider. However, in terms of service implementation, as we continue the rollout of the coyni service offering, we will introduce their feature in due time.

Thank you, Min. The next question is with regards to coyni revenues. Can you comment on where the arrival is generating revenue year-to-date from coyni since it's well operational and what those are, if material?

Thank you for the question. So first of all, we do have some immaterial revenues from the service fees from the coyni ecosystem since it went live and became operational. As I covered during my earnings remarks, in the U.S., as also we communicated prior, given that the fallout of FTX and also the banking industry's risk appetite for digital asset banking, we took a pause for coyni in the U.S. market. But as I mentioned earlier, now that we have approval from our banking partner, we are now about to move out to make sure that we can process for our business customers in the U.S., in the approved verticals. So we expect to ramp up revenue in the U.S. And also, as I mentioned earlier, during the earnings remarks, we now have gained the setup, the entity, in the European market. We finished the registration of capital. We actually are getting our license this week. So we're also about to roll out the services and ensure that we earn revenue for coyni in the EU market as well.

And I will add to that, that a lot of the coyni activity depends on the spin-off. And once FINRA gives us the go-ahead, we'll publicly discuss what that business looks like and its potential.

That's the easiest question. The answer is yes. We intend to continue to grow momentum in existing verticals as well as new verticals we have for 2024, and we plan to fill the vacancies we have.

Thanks, Min. And a related question. How does the company feel about its current staffing level to support the growth of the organization? Are customer support and operations roles adequate to respond to customer inquiries as well as initiatives and efficiencies to support growth.

So we appreciate the comment there. For a business to be able to sustain success, together with our business partners and business customers, we always maintain a satisfactory merchant experience and customer experience at the forefront of our operations. So yes, we do maintain adequate resources to support the current business as well as anticipated business growth. We are always very, very conscious to strike a good balance between the right resource level to cost and to ensure that we also fulfill obligations for our shareholders.

Thanks, Min. The final question that was submitted in writing prior to the call pertains to legal proceedings with regards to the Sky Financial. There's not a lot that we can discuss publicly today about this process. It’s ongoing, and it’s being handled by our professional teams. We will disclose any progress on that front as appropriate and when the time comes. With that, operator, we’ll move to questions from the floor. Go ahead, please.

Our first question comes from Kevin Dede with H.C. Wainwright.

I've got a few questions. Cut me off whenever you think it's reasonable. I think, first of all, I just wanted to say, Ben, that I appreciated real people and not an AI bot. So thanks for doing that.

You're part of the reason that we did it this way. Unfortunately, we all have colds, so you suffer the other way. But hopefully, people will appreciate the effort.

Can you help me understand the app that you're developing with Coyni, and how we should compare it to Square?

Okay. So for that, I will invite a new speaker. That's Fredi Nisan, CEO. Go ahead, Fredi.

Kevin, thank you for the question. The coyni mobile app was designed to replace the traditional critical processing to e-wallet. We now ask coyni to receive payment in a closed loop, very similar, like you mentioned, to Square, but with Instant Pay and reducing risk, fraud, and allow the merchant to receive payments from a customer that went through KYC, meaning know your customer. So we can show the merchant as well who is on the other side, if it's a good customer or a bad customer, and allow us to monitor the network and everything that goes through that network. So the mPOS is a first step in entering the retail space with our new technology and then open up other good stuff with that technology.

Okay. The convertible note, I think it was hard to see how debt levels slid a little bit. Maybe George can point me in the right direction, or maybe that conversion was post September?

I'll let George take that. Go ahead, George.

The Series A is in two tranches. The first was in July, and the second required Board approval, which we recently received in the shareholder meeting. I don't think that one is fully reflected yet, but it will be shortly.

Okay. So we should see year-end financials?

Yes. Yes. So the current balance sheet only shows the July transaction. So the total was, I believe, $21 million, and we only show $6.7 million in these financials.

Okay. That helps. Maybe Fredi or Min can help me understand this, Ben. Why is it that the integration into Visa's back-end takes the better part of the year?

Fredi will take that.

That's a great question. Actually, the time that it takes to integrate is not on our side; it's actually on Visa's side. As you go through the compliance process and integration process, each country has its own compliance. So to open up all of those locations that we want to operate in, for example, Colombia or South America or Canada, it doesn't matter. Each one requires a separate compliance process from Visa to be able to operate in the space. What I can tell you is that the great news about that relationship, even though we're trying to finish all of that in a shorter period of time, is that we allow us to do as well the high-risk through Visa. And that means something that nobody else offers, like gaming and spend money instantly globally. And we are very excited about it, and we'll do our best to overcome the time by trying to accelerate the process, but that depends on Visa, not on us.

Okay. My understanding was one of the advantages that you bring to the integration is your understanding of the end customer and creditworthiness. And I'm wondering how you've been able to develop a database in countries that you haven't necessarily operated in before.

And that's part of the technology and KYC. So as we're onboarding customers and we're verifying who they are, we're getting a better understanding of the demographic and the people we service. On the other side of it, we require our partners, different companies utilizing our service, to create their own KYC and understand who the client is as well, so we can work together in servicing them. So it requires a little bit more work than a traditional business, but we have the technology and the partnership to do so.

As the integration process goes forward, will you be able to offer maybe more insight on the progress you're making?

Oh, absolutely. The moment this vertical will be available, we're going to share more details specifically on which countries we operate in with Visa, what is the volume in each country, that will be easier for us to educate the market with. But at the moment, because it's just in the integration stage, and we cannot share any more detail.

I'm going to switch quickly just to American Samoa. The idea of that closed-loop system at one point, maybe 2, 3 quarters ago, you saw an opportunity to take that technology, show it to other markets and hopefully pick up other customers. So I'm wondering how that process is progressing and maybe a little bit on why you think adoption has stalled out at 60%?

Great question again. There are really probably 2 or 3 parts to the question. First of all, we continue to work very closely with our partner on the island, the Territorial Bank of America Samoa, to provide great services to the merchants on the island. At the moment, we are going through further planning with them. There are a couple of major developments. One of them is we introduced the mPOS solution. I think this is actually a very ideal solution for the island, for the businesses and the users on the island because it does provide a very slick way for us to make the conversion from the conventional power solution to something that's very easy, with fewer restrictions, quite quickly. That's point number one. Point number two is, as we previously mentioned, American Samoa Island is a very contained environment to allow us to test coyni. And we've been working very closely with our partner on the island. As a matter of fact, we presented the proposal for their 2024 plan to be voted out. So that, obviously, will go through the required government approval, and we are very optimistic that we'll move ahead in the new year. That's really going to transform the payments experience on the island. Hopefully, those 2 parts together will help answer the question. And the conventional way of processing is plateauing a little bit because there are better ways to do it, and we have a plan to do it together with our partner there.

Okay. One little hole for me I didn't quite understand. $861 million total processing, $517 million in the U.S. and $171 million in Europe, but there just seems to be a gap between those 2 figures and the $861 million. What am I missing?

Yes. So Kevin, it's actually the reverse. It's $500-plus million out of European markets and $171 million for the North America acquiring business, $42 million for ChargeSavvy, and about $30 million for American Samoa. And then, yes, there are probably a couple of other pieces, but those are the major pieces in the equation as I went over in my session, okay?

Sara, go ahead.

Showing no further questions, I'd like to turn the conference back over to Ben Errez for any closing remarks.

Thank you all for submitting questions and your interest in RYVYL. So Sara, back to you, and you can close the session.

Thank you. This concludes today's conference call. You may now disconnect.