Ryvyl Inc.

to the arrival second quarter earnings conference call. During today's presentation, all parties will be in a listen-only mode. Following management's remarks, the conference will be open to questions. The earnings press release accompanying this conference call is issued at the close of the market today. The quarterly report, which includes the company's results of operations for the three months ended June 30, 2023, was filed with the SEC today. On our call today are Rival Chairman Ben Erez, Interim Chief Financial Officer Freddie Nisson, excuse me, also Gene Jones, who is, excuse me, the Interim Chief Financial Officer. Freddie Nisson is the Chief Executive Officer and Chief Operating Officer Min Wei. I'd like to remind everyone that statements made on today's call and webcast, including those regarding future financial results and industry prospects, are forward-looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. Please refer to the company's regulatory filings for a list of associated risks. The replay of this call and webcast will be available for the next 90 days on the company's website under the events section. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. At this time, I'd like to turn the call over to Ben Arias, the company's chairman. Ben, the floor is yours.

Thank you for joining us today. Today's call is entirely produced using AI in a continued push for efficiency. and cost reduction for the company. I am proud to present our fiscal second quarter 2023 financial results, where we delivered record top-line revenue for the third consecutive quarter of $14.8 million, an increase of nearly 113% year-over-year. This reflects a 31% sequential increase from $11.3 million in the first quarter 2023. Revenue was also above our Q2 target range of $12.5 to $14 million, As I covered in past calls, our focus on improving processing efficiency, workforce, and technology are paying off as we continue to see our operating margins increase. We processed $678 million during the quarter, an increase of 20% from the first quarter of 2023 and above our target range of $580 to $610 million. COO Minwei will break down the various processing channels' performance later in the call, but needless to say we are very pleased with steady processing volume growth in our improved margin profile. Now, to move on to some of our key operating initiatives and the progress we've made recently. First is our planned spin-off of COINI. We initiated this process early in Q2 as part of a broad value creation strategy. and ultimately believe this is the optimal way to drive growth and unlock its tremendous potential. While we have made great strides with our payment processing business, we believe the best path forward to create value for our shareholders is through the spin-off of Koini as a public company and establishing it as the premier electronic token solution in the market. During the quarter, we acquired a public shell company to transfer Koini assets in order to facilitate the transaction, which our board of directors has approved. The name change process is underway, and we expect to be finalized soon. Furthermore, we selected Simon and Edward as auditor of COINI given their familiarity with rival technology, accounting processes, and personnel. Once complete, we can look toward the next phase of a public offering. We expect to be in the $40 million range along with NASDAQ uplist and ultimately a board-approved special dividend for rival shareholders. We'll provide more updates on this front as they come about, but expect to complete this by the end of the year. Turning now to our banking as a service platform, we continue to gain momentum on this initiative in 2023 with several new partners and growing demand for the service after signing six global financial institutions. This is projected to process more than $100 million per month in transaction when fully ramped up. Rivals Banking as a service solution offers API integrations and foreign exchange capabilities in more than 40 different currencies with local settlements. The service authorizes transactions 24 hours per day on business days and enables payouts by way of approved methods such as real-time payment or direct deposits. In addition, the service allows for the ability to readily trace transactions and reduce fraud, all while maintaining strict compliance requirements. During the second quarter, we announced a strategic partnership with Intercash, a Europe-based global payment solutions provider. Through the collaboration, business customers can now offer co-branded debit and prepaid cards to untapped consumer markets leveraging Rival's new banking-as-a-service platform as the infrastructure. White label cards can be issued as virtual. or physical, allowing businesses enhanced flexibility into cash, which currently has over 1 million cards issued, has already initiated the first phase of the process by moving more than 50,000 cards to the rival card program, and plans to continue with the migration in phases based on card issuance. Our subsidiary Rival EU made noticeable strides in Q2, receiving approval from the European Payments Council to launch single Euro payments area instant payments in Europe during the quarter. With this approval, Rival EU has enabled incoming and outgoing instant transfers via CPAR, an instant credit transfer scheme that encompasses over 2,000 payment service providers in the Eurozone, a targeted business client space for Rival EU. This service capability allows clients to instantly send, and receive payments from 36 CIPA countries, facilitating faster payment transfers and enhancing customer experience for our clients in the European markets. Vival EU also partnered with Visa to enable Visa Direct, a cutting-edge transfer solution, as part of our business transformation of updating payments infrastructure. Doing so provides a superior banking as a service offering and better serves our customers, retain their loyalty, and create new revenue streams. This collaboration in the Eastern European region will revolutionize the way funds are transferred between accounts, offering fast, convenient, and secure transactions. When the new Visa Direct capability is integrated into rivals, service offerings are customers. We'll have the opportunity to send money to authorized accounts in over 80 countries across multiple currencies through Visa's extensive network of local banking partners. By utilizing Visa Direct, our clients will experience the benefits of faster access to funds with money becoming available within minutes instead of days. By the end of the year, we expect to have a global payments platform integrated with CPAR and Visa Direct enabling local settlements in the key markets we serve. We believe banking as a service is the future of global banking, and we're excited to be an enabling service provider in a space that is rapidly emerging and reaching new customers every day. We also took meaningful steps to bolster our capital structure, announcing an exchange agreement with the holder of our $100 million convertible note financing. We completed the initial exchange, resulting in a $6 million debt reduction and an increase in shareholder equity and cash flow. The second exchange is also possible upon shareholder approval, which would further reduce our debt by $16.7 million for a total of $21 million debt reduction. This type of institutional-level commitment is a major win for all rival stakeholders and illustrates the conviction in our mission as a disruptive force in digital payments' landscape. Operationally, during the quarter, we welcome Gene Jones as interim chief financial officer of the company. For over 35 years, Gene has served within various executive roles, including CFO, COO, corporate treasurer, and controller for public, private equity, venture-funded, and startup companies. His strong leadership and expertise in financial, and operational improvements has had an immediate positive impact on our company. As we stand today, the second quarter exceeded our expectations with record top-line results, and we saw positive momentum for our business transformation of updating payments infrastructure. Doing so provides a superior banking as a service offering with partners at Visa, European Payments Council, and Intercash. We remain highly focused on executing towards this large opportunity ahead of us in the lucrative digital payments landscape. We are thrilled with the expansion and higher margin acquiring processing volume, both internationally and domestically. CoinEase's spin-off strategy is moving forward and has taken meaningful steps towards completion. We remain confident we are on the path to creating significant 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 Interim Chief Financial Officer, Gene Jones. Gene, the floor is yours.

Thank you, Ben. I'll be referring to adjusted EBITDA and other non-GAAP measures. For the calculation of adjusted EBITDA and other non-GAAP measures, please refer to our 10-Q filing, which will be available on the company website under SEC Filings. Our revenue increased by $7.9 million, or 113%, to $14.8 million for the quarter ended June 30, 2023, from $6.9 million for the year earlier quarter. The increase was principally attributable to an increase in processing volume in the second quarter of 2023, compared to the year earlier quarter, and an increase in revenues from our acquiring businesses, including Charge Savvy, Rival EU, and American Samoa. North America Q2 revenue increased 86% from $5.9 million in Q2 2022 to $11 million for the quarter ended June 30, 2023. EU Q2 revenue is $3.8 million, increasing by 270% from $1 million for the year earlier quarter. Cost of revenue increased by $4.5 million, or 106%, to $8.7 million for the quarter ended June 30, 2023, from $4.2 million for the year earlier quarter. Gross margins increased to 41% in the quarter ended June 30, 2023, compared to 39% in the year earlier quarter. Payment processing consists of various processing fees paid to gateways and commission payments to the independent sales organizations. or isos responsible for establishing and maintaining merchant relationships from which the processing transactions ensue cost of revenues increased chiefly due to increased volume resulting in higher processing fees paid to gateways commission payments to isos and cost of revenue of acquired businesses in the u s and e u Operating expenses increased by $0.2 million, or 1.4%, to $11.8 million for the quarter ended June 30, 2023, from $11.6 million for the year earlier quarter. The increase was due primarily to higher general, administrative, and professional fees for the quarter ended June 30, 2023, offset by decreases in advertising and marketing, stock-based compensation expense, and depreciation and amortization. The higher general and administrative expenses in the quarter ended June 30, 2023 are mainly attributable to non-recurring legal settlements and some ongoing matters and related legal fees, writing off some non-continuing legacy accounts and accounting fees related to the restatement of prior period financial statements. Other expense was $6.4 million for the quarter ended June 30, 2023, compared to other income of $20.1 million for the quarter ended June 30, 2022. The biggest portion of this change was in the highly volatile change in the fair value of derivative liability. That amount was a charge of half a million dollars for the quarter ended June 30, 2023, compared to a credit of $26.4 million in the year earlier quarter, a swing of nearly $27 million. interest expense, including expense related to the accretion of debt discount related to the $100 million convertible note, decreased by $3 million from the year earlier quarter due primarily to a lower level of amount of debt outstanding. Additionally, we incurred a charge of $0.2 million in the quarter ended June 30, 2023. Related to the conversion of debt and we recognized a loss of $0.8 million in the year earlier quarter in connection with the settlement of debt, You may recall that we had a restatement of previously issued financial statements, and so there are some carryover effects from that, including a $1.2 million charge in the second quarter. This was a challenging mission, but we believe we have substantially all the restatement effects behind us. However, if we exclude the effects of that highly volatile change in the fair value of our derivative liability and the non-recurring carryover effects of financial statement restatements, other non-operating expenses increased by about $300,000 in the second quarter compared to the year-earlier period. In summary, we recorded a net loss of $12 million in the second quarter. This compares to $12 million in net income in the year earlier period primarily due to $26.4 million income related to the change in the fair value of our derivative liability last year versus this year's change in fair value of derivative liability expense of $0.2 million. but there were also several non-recurring items in this year's quarter. Our second quarter 2023 adjusted EBITDA is a loss of $0.9 million compared to $3.1 million in the second quarter of last year. Non-recurring items totaled $5.5 million for the quarter and include legal settlements, legal matters, and related fees, charge-offs of some non-continuing legacy accounts, and accounting fees related to the restatement of prior period financial statements. We ended the quarter with cash, cash equivalents, and restricted cash of $63.9 million, with $13.2 million of that being unrestricted cash. I'll now turn the call over to Minway, our Chief Operating Officer, to provide a review of business operations and our outlook.