Basis of Presentation

The accompanying unaudited interim condensed financial statements (“Interim Financial Statements”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and SEC interim requirements and are shown in condensed form and should be read in conjunction with the Company’s audited annual financial statements and related notes. Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to applicable interim reporting requirements. These Interim Financial Statements reflect all adjustments, consisting only of normal recurring items that management considers necessary for a fair presentation of the results for the interim periods.

Revenue Recognition

In accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), revenues are recognized when control of the promised goods or services are transferred to the customer in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.

The Company generates revenue from digital advertising, sponsorship and other service arrangements, partner and publisher arrangements, syndication arrangements, and digital subscriptions. The Company evaluates each significant revenue stream and contractual arrangement to determine whether it is acting as principal or agent. When the Company controls the promised good or service before transfer to the customer, revenue is recognized on a gross basis. When the Company’s role is to arrange for another party to provide the good or service, revenue is recognized on a net basis.

Because the Company enters into multiple types of revenue arrangements, its principal versus agent conclusion is evaluated separately for each significant revenue stream and contractual arrangement. In making this determination, the Company considers the indicators of control under ASC 606, including primary responsibility for fulfillment, inventory risk, and discretion in establishing price. Accordingly, some arrangements are recognized on a gross basis and others on a net basis, depending on whether the Company controls the promised good or service before transfer to the customer. Significant costs of revenue are presented as a separate line item on the statements of operations.

Contract Balances

The timing of the Company’s performance under its various contracts often differs from the timing of the customer’s payment, which results in the recognition of a contract asset receivable or a contract liability (unearned revenue).

The following table provides information about contract balances:

Unearned revenue, also referred to as contract liabilities, are contracts signed in advance of performance and are recognized as revenue over time. The Company records contract liabilities as unearned revenue on the unaudited condensed interim balance sheets. Direct advertising revenue and service revenue of $81was recognized during the three months ended March 31, 2026. No direct advertising revenue and service revenue was recognized during the three months ended March 31, 2025.

USDC

USDC is a stablecoin redeemable on a one-to-one basis for U.S. dollars and is accounted for as a financial instrument in the Company’s balance sheets. Circle Internet Financial, LLC (“Circle”) and its affiliate, Circle Internet Financial Europe SAS is the issuer of USDC, a crypto-asset stablecoin with a conversion rate of 1:1 pegged to the U.S. Dollar. The Company records USDC at cost, which approximates fair value, and subsequently measures it at fair value each reporting period.

Changes in the fair value of USDC, if any, are recognized in other income (expense), net in the unaudited condensed interim statements of operations. From time to time, the Company utilizes USDC to pay vendors and accepts USDC as payment from customers or investors in lieu of cash and cash equivalents.

There are volatility risks related to stablecoins, which are designed to have a relatively stable price relative to an underlying physical asset, most commonly a fiat currency, such as U.S. dollars, or an exchange-traded commodity. The stability of a stablecoin results from the underlying assets backing the stablecoin that are held by the stablecoin issuer in reserve accounts, among other factors, such as the ability of a holder to redeem the stablecoin from its issuer at par. The issuers of certain stablecoins currently retain broad discretion to determine the composition and amounts of assets held in the issuers’ accounts backing those stablecoins, and to substitute assets other than the fiat currency that is initially deposited. The composition of backing assets varies considerably across popular stablecoins, with some stablecoins backed entirely by off-chain assets including cash or short-term, highly liquid assets, and others backed by assets significantly less liquid than cash or cash equivalents. In the case of USDC, Circle reported that, as of December 31, 2025, underlying reserves were held in cash, short-duration U.S. Treasuries, and overnight U.S. Treasury repurchase agreements within segregated accounts for the benefit of USDC holders.

Accounts Receivable and Allowance for Credit Losses

The Company receives payments from direct advertising customers based upon contractual payment terms. Accounts receivable is recorded when the right to consideration becomes unconditional and are generally collected within the contractual payment terms. The Company generally receives payments from advertising and non-advertising service customers at the time of contract sign-up and in advance of providing services.

The Company performs an ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses, and future expectations. The Company records an allowance for credit losses at the amount that it believes will approximate anticipated losses. Accounts receivable are written-off when deemed uncollectible and collection of the receivable is no longer being actively pursued.

In determining the amount of the allowance, the Company considers its historical level of credit losses. The Company also makes judgments about the creditworthiness of significant customers based on ongoing credit evaluations, and the Company assesses current economic trends that might impact the level of credit losses in the future. Historically, the Company has had no significant write-offs of accounts receivable.

However, since the Company cannot reliably predict future changes in the financial stability of its customers, it cannot guarantee that its allowances will continue to be adequate. If actual credit losses are significantly greater than the estimated allowance, the Company would increase its general and administrative expenses and increase its reported net losses. No allowance was recorded as of March 31, 2026, and December 31, 2025. Accounts receivable as of March 31, 2026, and December 31, 2025, were $184 and $147, respectively. 

Platform Development 

The Company capitalizes platform development costs for internal use when planning and design efforts are successfully completed, and development is ready to commence. The Company places capitalized platform development assets into service and commences amortization when the applicable project or asset is substantially complete and ready for its intended use. Once placed into service, the Company capitalizes the qualifying costs of specified upgrades or enhancements to capitalized platform development assets when the upgrade or enhancement will result in new or additional functionality. Costs associated with platform maintenance and training are expensed as incurred.

The Company capitalizes external labor costs, including payroll-based and stock-based compensation, benefits and payroll tax, direct testing costs, integral to release, tools or small scripts integral to building the release that are incurred for certain capitalized platform development projects related to the Platform.

Platform development costs are amortized on a straight-line basis over three years, which is the estimated useful life of the related asset and is recorded as an expense on the statements of operations. The amortization period may be accelerated if the useful life of the related asset is shortened.

As of March 31, 2026, and December 31, 2025, the Company had capitalized platform development costs of $299 and $623, respectively, as recorded within acquired and other intangible assets, net in the Company’s unaudited condensed interim balance sheets.

Fair Value of Financial Instruments

The authoritative guidance with respect to fair value established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels and requires that assets and liabilities carried at fair value be classified and disclosed in one of three categories, as presented below. Disclosure as to transfers in and out of Levels 1 and 2, and activity in Level 3 fair value measurements, is also required.

Level 1. Observable inputs such as quoted prices in active markets for an identical asset or liability that the Company has the ability to access as of the measurement date. Financial assets and liabilities utilizing Level 1 inputs include active-exchange traded securities and exchange-based derivatives.

Level 2. Inputs, other than quoted prices included within Level 1, which are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputs include fixed income securities.

Level 3. Unobservable inputs in which there is little or no market data for the asset or liability which requires the reporting entity to develop its own assumptions. Financial assets and liabilities utilizing Level 3 inputs include infrequently traded non-exchange-based derivatives and commingled investment funds and are measured using present value pricing models.

The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis of the assets and liabilities at each reporting period end.

The carrying amount of the Company’s financial instruments comprised of cash, accounts receivable, accounts payable, USDC, and accrued expenses approximate fair value because of the short-term maturity of these instruments. USDC is contractually redeemable for fiat currency on demand. As any changes in the fair value are reported in earnings as they occur, the derecognition of USDC does not necessarily give rise to a gain or loss. The Company also holds BTC, a digital asset that is measured at fair value at each reporting period based on quoted prices in active markets, with changes in fair value recognized in earnings. Additionally, the instruments associated with the March 2026 Convertible Note and March 2026 Warrant are classified as level 2 on the fair value hierarchy as the valuation inputs include the price of similar, but not identical, instruments.

March 2026 Convertible Note and Warrants

On March 6, 2026, the Company completed a private financing and raised $2,000. As part of this financing, the Company issued a non-interest-bearing convertible note and warrant, referred to as the “March 2026 Convertible Note” and the “March 2026 Warrant,” respectively. The March 2026 Convertible Note converts into shares of Ryvyl upon the close of the merger. The number of shares received upon the conversion of the March 2026 Convertible Note at the close of the merger is calculated as approximately one percent of the fully diluted number of shares outstanding as of the merger date. Refer to Note 10, Subsequent Events, for more information on the merger. The March 2026 Convertible Note has a maturity date of June 1, 2026. At maturity, if the merger had not yet occurred, the March 2026 Convertible Note would have converted into class B shares of the Company at an exercise price of $2.55 per share. There are no cash payments due on the March 2026 Convertible Note. The March 2026 Warrant is exercisable into shares of Ryvyl for a one-year period beginning on the close date of the merger. The exercise price and number of underlying shares will be determined upon the closing of the merger and will be based on the number of shares received by the investor upon conversion of the March 2026 Convertible Note.

Upon conversion of the March 2026 Convertible Note and exercise of the March 2026 Warrant, the investor will receive restricted shares which it cannot sell or pledge for a period of time. These restrictions lapse and the shares become freely transferrable in equivalent tranches of twenty-five percent after 12 months, 15 months, 18 months, and 21 months following the close of the merger. As part of this issuance, the Company promised to provide the investor with additional shares if the Company’s market capitalization falls below certain thresholds as of the date the shares become freely transferrable. The issuance of additional shares, referred to as a “Price Protection Feature” is capped at $15 million.

The Company elected to account for the March 2026 Convertible Note under the fair value option whereby the Company will recognize the March 2026 Convertible Note at fair value with changes in fair value recognized in earnings except for changes in fair value due to the instrument specific credit risk, which is recognized in other comprehensive income.

The March 2026 Warrant is accounted for at fair value with changes in fair value recognized in earnings as it meets the definition of a derivative. As of March 31, 2026, the March 2026 Warrant does not qualify for a scope exception to derivative accounting since the March 2026 Warrant will be exercisable into an unknown number of shares. In subsequent reporting periods, the Company will continue to analyze the March 2026 Warrant to determine if it continues to meet the definition of a derivative and if it continues to not qualify for a scope exception to derivative accounting.

The Price Protection Feature is also accounted for at fair value with changes in fair value recognized in earnings as it represents an obligation to issue additional shares when the value of the Company’s shares decreases.

The fair value of the March 2026 Convertible Note, March 2026 Warrant, and Price Protection Feature at issuance was $1,403, $129 and $468, respectively. As the fair value of these instruments was deemed to have remained consistent from issuance to the end of the March 31, 2026, the Company did not recognize any changes in fair value in the unaudited condensed statement of operations or other comprehensive income for any changes in instrument specific credit risk for the March 2026 Convertible Note.