UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2021

OR

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

For the transition period from                   to                  .

Payoneer Global Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-40547	86-1778671
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)
	150 W 30th St New York, New York, 10001
	(Address of principal executive offices, including zip code)
	(212) 600-9272
Registrant’s Telephone Number, Including Area Code
New Starship Parent Inc. 2929 Arch Street, Suite 1703 Philadelphia, PA 19104
(Former name or former address, if changed since last report)

Securities 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, par value $0.01 per share	PAYO	The Nasdaq Stock Market LLC
Warrants, each exercisable for one share of common stock, $0.01 par value, at an exercise price of $11.50 per share	PAYOW	The Nasdaq Stock Market LLC

Indicate 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 ☒

Indicate 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 (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate 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.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of June 30, 2021, the registrant had 338,351,977 shares of common stock outstanding.

INTRODUCTORY NOTE

On June 25, 2021 (the “Closing Date”), FTAC Olympus Acquisition Corp., a Delaware corporation (both prior to and after the Closing Date, “FTOC”) consummated the previously announced reorganization (the “Reorganization”) with Payoneer Inc., a Delaware corporation. Pursuant to the Reorganization Agreement (as defined below), prior to the Closing Date and prior to the Reorganization, FTOC changed its jurisdiction of incorporation by deregistering as a Cayman Islands exempted company and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication”). In connection with the closing of the Reorganization, the registrant changed its name from New Starship Parent, Inc. (“ParentCo”) to Payoneer Global Inc. (“New Payoneer”). Following the Reorganization, New Payoneer became a publicly traded company, with Payoneer Inc., a subsidiary of New Payoneer, continuing the existing business operations.

References to the Reorganization Agreement shall mean that certain Agreement and Plan of Reorganization (as amended on February 16, 2021, May 10, 2021 and June 22, 2021, the “Reorganization Agreement”), by and among FTOC, ParentCo, Starship Merger Sub I Inc., a Delaware corporation and wholly owned subsidiary of ParentCo, Starship Merger Sub II Inc., a Delaware corporation and wholly owned subsidiary of ParentCo, and Payoneer Inc..

The Reorganization was accounted for as a reverse recapitalization for which Payoneer Inc. has been determined to be the accounting acquirer (the “Reverse Recapitalization”). As the Reorganization was accounted for as a Reverse Recapitalization, no goodwill or other intangible assets will be recorded, in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Under this method of accounting, FTOC was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Payoneer Inc. issuing stock for the net assets of FTOC, accompanied by a recapitalization. The net assets of FTOC were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Reverse Recapitalization will be those of Payoneer Inc. Notwithstanding the foregoing, see “Item 2― New Payoneer’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ― Results of Operations” set forth below.

The Reorganization closed on June 25, 2021.

Unless otherwise noted herein, “we”, “us”, “our”, “Payoneer”, and the “Company” refer to Payoneer Inc. for the period prior to the Closing Date and to Payoneer Global Inc. for the period thereafter.

2

Payoneer Global Inc.

Form 10-Q

For the Quarter Ended June 30, 2021

Table of Contents

	Page
PART I. FINANCIAL INFORMATION	5
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets (Unaudited)	6
Condensed consolidated statements of loss (Unaudited)	7
Condensed consolidated statements of comprehensive loss (Unaudited)	8
Condensed consolidated statements of changes in redeemable preferred stock, redeemable convertible preferred stock and shareholders’ equity (deficit) (Unaudited)	9
Condensed consolidated statements of cash flows (Unaudited)	11
Notes to the condensed consolidated financial statements (Unaudited)	13
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.Controls and Procedures	41
PART II - OTHER INFORMATION	42
Item 1. Legal Proceedings	42
Item 1A.Risk Factors	42
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.Defaults upon Senior Securities	42
Item 4.Mine Safety Disclosures	42
Item 5.Other Information	42
Item 6.Exhibits	43

3

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including the information incorporated herein by reference, contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “anticipate,” “appear,” “approximate,” “believe,” “continue,” “could,” “estimate,” “expect,” “foresee,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “would” and other similar words and expressions (or the negative version of such words or expressions) may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on the current expectations of New Payoneer’s management and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” discussed and identified in public filings made with the U.S. Securities and Exchange Commission (the “SEC”) by New Payoneer, and the following:

● the expected benefits of the Reorganization;

● our financial performance following the Reorganization;

● the impact of the COVID-19 pandemic on our business and the actions we may take in response thereto;

● the effect of legal, tax and regulatory changes; and

● the outcome of any known and unknown litigation and regulatory proceedings.

Should one or more of these risks or uncertainties materialize or should any of the assumptions made by the management of New Payoneer prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

All subsequent written and oral forward-looking statements concerning the Reorganization or other matters addressed in this Quarterly Report on Form 10-Q and attributable to New Payoneer or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Quarterly Report on Form 10-Q. Except to the extent required by applicable law or regulation, New Payoneer undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Current Report on Form 10-Q or to reflect the occurrence of unanticipated events.

4

PART I. FINANCIAL INFORMATION

PAYONEER GLOBAL INC.

QUARTERLY REPORT FOR THE PERIOD ENDED JUNE 30, 2021

TABLE OF CONTENTS

	Page
Condensed consolidated financial statements (unaudited) in U.S. dollars:
Condensed consolidated balance sheets (Unaudited)	6
Condensed consolidated statements of loss (Unaudited)	7
Condensed consolidated statements of comprehensive loss (Unaudited)	8
Condensed consolidated statements of changes in redeemable preferred stock, redeemable convertible preferred stock and shareholders’ equity (deficit) (Unaudited)	9
Condensed consolidated statements of cash flows (Unaudited)	11
Notes to condensed consolidated financial statements (Unaudited)	13

5

PAYONEER GLOBAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA

	June 30,		December 31,
	2021		2020
Assets:
Current assets:
Cash and cash equivalents	$	498,706	$	102,988
Restricted cash		2,716		26,394
Customer funds		3,634,211		3,346,722
Accounts receivable, net		12,247		17,843
CA receivables, net		49,226		66,095
Other current assets		18,833		10,417
Total current assets		4,215,939		3,570,459
Non-current assets:
Property, equipment and software, net		11,318		12,694
Goodwill		22,031		22,541
Intangible assets, net		35,231		34,415
Restricted cash		5,017		5,199
Deferred taxes		3,340		3,684
Investment in associated company		6,846		6,858
Severance pay fund		2,047		1,624
ROU assets		15,747		—
Other assets		15,978		12,210
Total assets	$	4,333,494	$	3,669,684
Liabilities, redeemable preferred stock, redeemable convertible preferred stock and shareholders’ equity:
Current liabilities:
Trade payables	$	16,892	$	17,245
Outstanding operating balances		3,634,211		3,346,722
Current portion of long-term debt		—		13,500
Redeemable preferred stock liability		39,804		—
Other payables		81,428		63,455
Total current liabilities		3,772,335		3,440,922
Non-current liabilities:
Long-term debt		—		26,525
Warrant liability		59,625		—
Other long-term liabilities		19,751		12,403
Total liabilities		3,851,711		3,479,850
Commitments and contingencies (Note 11)
Redeemable convertible preferred stock, $0.01 par value, 209,529,798 shares authorized; 209,529,798 shares issued and outstanding; aggregate liquidation preference of $213,484 at December 31, 2020.		—		154,800
Redeemable preferred stock, $0.01 par value, 3,500 shares authorized; 3,500 shares issued and outstanding; aggregate liquidation preference of $36,520 at December 31, 2020.		—		10,735
Shareholders’ equity:
Preferred stock, $0.01 par value, 380,000,000 shares authorized; no shares were issued and outstanding at June 30, 2021.		—		—
Common stock, $0.01 par value, 3,800,000,000 and 320,115,953 shares authorized; 338,351,977 and 48,608,176 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively.		3,384		486
Additional paid-in capital		550,952		79,706
Accumulated other comprehensive income		3,436		4,174
Accumulated deficit		(75,989)		(60,067)
Total shareholders’ equity		481,783		24,299
Total liabilities redeemable convertible preferred stock, redeemable preferred stock and shareholders’ equity	$	4,333,494	$	3,669,684

The accompanying notes are an integral part of the condensed consolidated financial statements (Unaudited).

6

PAYONEER GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF LOSS (UNAUDITED)

U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA

	Three months ended				Six months ended
	June 30,				June 30,
	2021		2020		2021		2020
Revenues	$	110,927	$	78,389	$	211,533	$	160,348
Transaction costs		28,521		23,782		48,676		48,575
Other operating expenses		32,010		19,643		58,624		39,495
Research and development expenses		18,541		11,150		35,194		21,724
Sales and marketing expenses		27,702		17,108		50,841		34,937
General and administrative expenses		18,163		8,307		28,680		16,133
Depreciation and amortization		4,351		4,130		9,028		8,296
Total operating expenses		129,288		84,120		231,043		169,160
Operating loss		(18,361)		(5,731)		(19,510)		(8,812)
Financial income (expense):
Gain from change in fair value of Warrants		12,076		—		12,076		—
Other financial income (expense), net		(2,937)		1,381		(3,559)		(422)
Financial income (expense), net		9,139		1,381		8,517		(422)
Loss before taxes on income		(9,222)		(4,350)		(10,993)		(9,234)
Taxes on income		3,197		2,227		4,928		4,800
Share in losses (gain) of associated company		(5)		83		1		105
Net loss	$	(12,414)	$	(6,660)	$	(15,922)	$	(14,139)
Per share data
Net loss per share attributable To common stockholders — basic and diluted	$	(0.63)	$	(0.22)	$	(0.84)	$	(0.47)
Weighted average common shares outstanding — basic and diluted		66,744,348		44,474,388		58,702,320		43,023,819

The accompanying notes are an integral part of the condensed consolidated financial statements (Unaudited).

7

PAYONEER GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

U.S. DOLLARS IN THOUSANDS

	Three months ended				Six months ended
	June 30,				June 30,
	2021		2020		2021		2020
Net (loss)	$	(12,414)	$	(6,660)	$	(15,922)	$	(14,139)
Other comprehensive income (loss):
Foreign currency translation adjustments		451		607		(738)		549
Comprehensive (loss)	$	(11,963)	$	(6,053)	$	(16,660)	$	(13,590)

The accompanying notes are an integral part of the condensed consolidated financial statements (Unaudited).

8

PAYONEER GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE PREFERRED STOCK, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY (DEFICIT) (UNAUDITED)

U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA

												Accumulated
	Redeemable convertible			Redeemable						Additional		other
	preferred stock			preferred stock			Common Stock			paid-in		comprehensive		Accumulated
	Shares	Amount		Share	Amount		Shares	Amount		capital		income (loss)		deficit		Total
Balance at April 1 , 2020	209,529,798	$	154,800	—		—	43,638,780	$	436	$	48,368	$	85	$	(43,800)	$	5,089
Exercise of options	—		—	—		—	1,260,873		13		59		—		—		72
Stock-based compensation	—		—	—		—	—		—		3,062		—		—		3,062
Other comprehensive income, net of tax	—		—	—		—	—		—		—		607		—		607
Net income	—		—	—		—	—		—		—		—		(6,660)		(6,660)
Balance at June 30, 2020	209,529,798	$	154,800	—		—	44,899,653	$	449	$	51,489	$	692	$	(50,460)	$	2,170
Balance at April 1 , 2021	209,529,798	$	154,800	3,500	$	10,735	49,697,982	$	497	$	84,532	$	2,985	$	(63,575)	$	24,439
Reverse Recapitalization transaction	(209,529,798)		(154,800)	—		—	249,792,546		2,498		189,056		—		—		191,554
PIPE financing	—		—	—		—	30,000,000		300		279,885		—		—		280,185
Redemption of Redeemable Preferred Stock	—		—	(3,500)		(10,735)	—		—		(29,069)		—		—		(29,069)
Exercise of options	—		—	—		—	8,861,449		89		15,788		—		—		15,877
Stock-based compensation	—		—	—		—	—		—		10,760		—		—		10,760
Other comprehensive income, net of tax	—		—	—		—	—		—		—		451		—		451
Net loss	—		—	—		—	—		—		—		—		(12,414)		(12,414)
Balance at June 30, 2021	—		—	—		—	338,351,977	$	3,384	$	550,952	$	3,436	$	(75,989)	$	481,783

The accompanying notes are an integral part of the consolidated financial statements (Unaudited).

9

PAYONEER GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE PREFERRED STOCK, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY (DEFICIT) (UNAUDITED)

U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA

	Redeemable convertible			Redeemable								Accumulated
	preferred stock			preferred stock			Common Stock			Additional		other
										paid-in		comprehensive		Accumulated
	Shares	Amount		Share	Amount		Shares	Amount		capital		income (loss)		deficit		Total
Balance at January 1, 2020	209,529,798	$	154,800	—		—	37,569,542	$	376	$	30,439	$	143	$	(36,321)	$	(5,363)
Exercise of options	—		—	—		—	2,051,255		20		280		—		—		300
Stock-based compensation	—		—	—		—	—		—		5,280		—		—		5,280
Acquisition related issuance of common stock	—		—	—		—	5,278,856		53		15,490		—		—		15,543
Other comprehensive income, net of tax	—		—	—		—	—		—		—		549		—		549
Net income	—		—	—		—	—		—		—		—		(14,139)		(14,139)
Balance at June 30, 2020	209,529,798	$	154,800	—		—	44,899,653	$	449	$	51,489	$	692	$	(50,460)	$	2,170
Balance at January 1, 2021	209,529,798	$	154,800	3,500	$	10,735	48,608,176	$	486	$	79,706	$	4,174	$	(60,067)	$	24,299
Reverse Recapitalization transaction	(209,529,798)		(154,800)	—		—	249,792,546		2,498		189,056		—		—		191,554
PIPE financing	—		—	—		—	30,000,000		300		279,885		—		—		280,185
Redemption of Redeemable Preferred Stock	—		—	(3,500)		(10,735)	—		—		(29,069)		—		—		(29,069)
Exercise of options	—		—	—		—	9,951,255		100		16,246		—		—		16,346
Stock-based compensation	—		—	—		—	—		—		15,128		—		—		15,128
Other comprehensive income, net of tax	—		—	—		—	—		—		—		(738)				(738)
Net loss	—		—	—		—	—		—		—		—		(15,922)		(15,922)
Balance at June 30, 2021	—		—	—		—	338,351,977	$	3,384	$	550,952	$	3,436	$	(75,989)	$	481,783

The accompanying notes are an integral part of the consolidated financial statements (Unaudited).

10

PAYONEER GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

U.S. DOLLARS IN THOUSANDS

	Six months ended
	June 30,
	2021		2020
Cash Flows from Operating Activities
Net loss	$	(15,922)	$	(14,139)
Adjustment to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		9,028		8,296
Deferred taxes		344		1,458
Stock-based compensation expenses		15,128		5,280
Share in losses of associated company		1		104
Gain from change in fair value of Warrants		(12,076)		—
Transaction costs allocated to Warrants		5,087
Foreign currency re-measurement gains		861		(97)
Changes in operating assets and liabilities, net of effects of businesses combination:
Other current assets		(8,311)		2,638
Trade payables		(468)		(5,583)
Deferred revenue		1,862		(6)
Accounts receivables		5,560		3,167
CA extended to customers		(189,927)		(97,660)
CA collected from customers		206,796		122,257
Other payables		1,407		(12,547)
Other long-term liabilities		(3,582)		310
Operating lease right-of-use assets		4,676		—
Other assets		(3,768)		(2,193)
Net cash provided by operating activities		16,696		11,285
Cash Flows from Investing Activities
Purchase of property, equipment and software		(2,044)		(3,240)
Capitalization of internal use software		(6,646)		(4,666)
Change in severance pay fund		(423)		145
Change in customer funds in transit		9,396		(15,082)
Acquisition of Optile, net of cash acquired		—		(15,482)
Net cash provided by (used in) investing activities		283		(38,325)
Cash Flows from Financing Activities
Exercise of options		16,346		300
Outstanding operating balances		287,486		238,271
Proceeds from Reverse Recapitalization, net		108,643		—
Proceeds from PIPE financing, net		280,185		—
Repayment of outstanding debt		(40,025)		—
Net cash provided by financing activities		652,635		238,571
Effect of exchange rate changes on cash and cash equivalents		(871)		97
Net change in cash, cash equivalents, restricted cash and customer funds		668,743		211,628
Cash, cash equivalents, restricted cash and customer funds at beginning of the period		3,413,289		1,796,517
Cash, cash equivalents, restricted cash and customer funds at end of the period	$	4,082,032	$	2,008,145

The accompanying notes are an integral part of the condensed consolidated financial statements (Unaudited).

11

PAYONEER GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) – (CONTINUED)

U.S. DOLLARS IN THOUSANDS

The below table reconciles cash, cash equivalents, restricted cash and customer funds as reported in the consolidated balance sheets to the total of the same amounts shown in the consolidated statements of cash flows:

	As of June 30,
	2021		2020
Cash and cash equivalents	$	498,706	$	114,983
Restricted cash		7,733		13,496
Customer funds(1)		3,575,593		1,879,666
Total cash, cash equivalents, restricted cash and customer funds shown in the consolidated statements of cash flows	$	4,082,032	$	2,008,145

⁽¹⁾Excludes $58,618 of customer funds in transit

Supplemental schedule about Reverse Recapitalization

Cash held by FTOC and cash related to FTOC trust, net of redemptions	$	574,961
Less cash consideration paid to Legacy Payoneer Shareholders		398,201
Less cash paid associated with transaction costs allocated to Reverse Recapitalization		68,117
Reverse Recapitalization financing		108,643
Cash related to PIPE		300,000
Less cash paid associated with transaction costs allocated to PIPE		19,815
PIPE financing		280,185
Net contributions from Reverse Recapitalization and PIPE financing*	$	388,828

* During the period ended June 30, 2021, there was non-cash financing activity associated with the Reverse Recapitalization. This includes $154,800 related to the conversion of redeemable convertible preferred stock into Common Stock.

Supplemental schedule about Optile acquisition

Net fair value of assets acquired and liabilities assumed at the date of acquisition was as follows:

Working capital deficit, net (excluding cash and cash equivalents in the amount of $196)	$	(29)
Property, plant and equipment		162
Goodwill		20,449
Identifiable intangible assets		17,805
Non-cash consideration		(22,905)
Total cash paid, net of cash acquired	$	15,482

The accompanying notes are an integral part of the consolidated financial statements (Unaudited).

12

PAYONEER GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

U.S. DOLLARS IN THOUSANDS

NOTE 1 – GENERAL OVERVIEW

Payoneer Global Inc. (together with its subsidiaries, “Payoneer” or the “Company”), incorporated in Delaware, empowers global commerce by connecting businesses, professionals, countries and currencies with its innovative cross-border payments platform. Payoneer enables businesses and professionals around the globe to reach new audiences while reducing the complexity involved in enabling overseas and cross-border trade, by facilitating seamless, cross-border payments. Payoneer offers its customers the flexibility to pay and get paid globally as easily as they do locally. The Company offers a suite of services that includes cross-border payments, physical and virtual Mastercard cards, working capital, risk management and other services. The fully-hosted service includes various payment options with minimal integration required, full back-office functions and customer support offered.

Payoneer is registered as a Money Service Business with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) and licensed as a Money Transmitter under the laws of all U.S. states where such license is necessary as well as in the District of Columbia and Puerto Rico. During 2012, the Company, through Payoneer (EU) Ltd., was granted an e-money license by the Gibraltar Financing Services Commission which enabled Payoneer (EU) Limited to issue prepaid cards and Payoneer accounts. Payoneer (EU) Limited issued prepaid cards and accounts balances and provided collection and global bank transfers services. In December 2020, the customers of Payoneer (EU) Limited were migrated to Payoneer Europe Ltd, discussed further below, and on April 30, 2021, Payoneer (EU) Limited ceased to provide services and surrendered its license as an electronic money institution. During 2015, the Company, through Payoneer Hong Kong Limited, was granted a Money Service Operator License in Hong Kong which enables the Company to offer payment solutions from Hong Kong. During 2016, the Company, through Payoneer Japan K.K, was registered as a Funds Transfer Service Provider in Japan. During 2018, the Company, through Payoneer Australia PTY Limited, was registered as a Financial Services Provider in Australia. During 2019, the Company, through Payoneer Europe Limited, was granted authorization to operate as an Electronic Money Institution from the Central Bank of Ireland and was authorized pursuant to EU passporting rules to provide payment services under its license in all countries in the European Economic Area. Payoneer Europe Limited also holds a license with Mastercard to issue cards and as of December 31, 2020, was the issuer of the majority of cards issued to Payoneer customers. In January 2021, Payoneer entered into an agreement with an existing card issuing partner in the United States that enables Payoneer to also provide its customers with access to commercial Mastercard cards issued through the card issuing partner to make online purchases of commercial goods and services. This new commercial card provides advantages such as higher acceptance rates.

The Company supports customers that come from more than 190 countries and territories and operates in a rapidly evolving regulatory environment characterized by a heightened regulatory focus on all aspects of the payments industry. Government regulations impact key aspects of the Company’s business. The Company is subject to regulations that affect the payments industry in the markets in which the Company operates.

On June 25, 2021 (the "Closing Date"), FTAC Olympus Acquisition Corporation (“FTOC”), consummated the previously announced merger pursuant to the Agreement and Plan of Reorganization (the “Reorganization Agreement”), dated February 3, 2021, as amended, by and among FTOC, Payoneer Inc. (“Legacy Payoneer”), New Starship Parent Inc., a Delaware corporation (“New Starship”), Starship Merger Sub I Inc., a Delaware corporation and a direct, wholly owned subsidiary of New Starship (“First Merger Sub”), Starship Merger Sub II Inc., a Delaware corporation and a direct, wholly owned subsidiary of New Starship (“Second Merger Sub” and, together with First Merger Sub, the “Merger Subs”, and together with the Legacy Payoneer, FTOC, New Starship and the Merger Subs, the “Parties”). Pursuant to the terms of the Reorganization Agreement, a transaction between FTOC and Legacy Payoneer was effected through the merger of First Merger Sub with and into FTOC and the through a merger of Second Merger Sub with and into Legacy Payoneer (the "Reverse Recapitalization").

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PAYONEER GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

U.S. DOLLARS IN THOUSANDS

NOTE 1 – GENERAL OVERVIEW (continued)

On the Closing Date, and in connection with the closing of the Reverse Recapitalization, New Starship became the combined company and changed its name to Payoneer Global Inc. (the "Company"). Legacy Payoneer was deemed the accounting acquirer in the Reverse Recapitalization based on an analysis of the criteria outlined in Accounting Standards Codification ("ASC") 805. This determination was primarily based on Legacy Payoneer's stockholders prior to the Reverse Recapitalization having a majority of the voting interests in the combined company, Legacy Payoneer's operations comprising the ongoing operations of the combined company, Legacy Payoneer's board of directors comprising a majority of the board of directors of the combined company, Legacy Payoneer's senior management comprising the senior management of the combined company and the assets and revenue of Legacy Payoneer were greater than those of FTOC. As FTOC does not meet the definition of a “business” for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Legacy Payoneer issuing stock for the net assets of FTOC, accompanied by a recapitalization. The net assets of FTOC are stated at historical cost, with no goodwill or other intangible assets recorded.

While FTOC was the legal acquirer in the Reverse Recapitalization because Legacy Payoneer was deemed the accounting acquirer, the historical financial statements of Legacy Payoneer became the historical financial statements of the combined company upon the consummation of the Reverse Recapitalization. As a result, the financial statements included in this report reflect (i) the historical operating results of Legacy Payoneer prior to the Reverse Recapitalization; (ii) the combined results of the Company and Legacy Payoneer following the closing of the Reverse Recapitalization; (iii) the assets and liabilities of Legacy Payoneer at their historical cost; and (iv) the Company’s equity structure for all periods presented.

In accordance with guidance applicable to these circumstances, the equity structure has been retroactively adjusted in all comparative periods up to the Closing Date, to reflect the number of shares of the Company's common stock, $0.01 par value per share issued to Legacy Payoneer's stockholders in connection with the Reverse Recapitalization transaction. As such, the shares and corresponding capital amounts and earnings per share related to Legacy Payoneer redeemable convertible preferred stock and common stock prior to the Reverse Recapitalization have been retroactively restated as shares reflecting the exchange ratio established pursuant to the Reorganization Agreement. In conjunction with the Reverse Recapitalization, the Company’s Common Stock underwent a 1-for-1.88 conversion. Note that the consolidated financial statements give retroactive effect as though the conversion of the Company’s Common Stock occurred for all periods presented, without any change in the par value per share.

Shelter-in-place orders, social distancing measures and travel restrictions following the extraordinary spread of COVID-19 fundamentally shifted commerce and the way buyers and sellers transact, accelerating digitalization and e-commerce trends.

Starting in January 2020, COVID impacted Payoneer teams, customers, and supply chains in Greater China. Starting in March 2020, due to broader travel restrictions, global travel and tourism slowed, negatively impacting our travel customer base. Furthermore, the Federal Reserve cut interest rates to zero in mid-March, negatively impacting our interest income revenues, associated with underlying customer accounts. Despite the global travel slowdown and interest rate cuts, and wavering consumer confidence, the pandemic driven shift in buying patterns from brick and mortar to e-commerce, led to an acceleration of digital commerce that created tailwinds which further strengthened the Company’s role in the global economy.

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PAYONEER GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

U.S. DOLLARS IN THOUSANDS

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

a.    Principles of consolidation and basis of presentation:

The accompanying consolidated financial statements include the accounts of Payoneer Global Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Investments in an entity where we have the ability to exercise significant influence, but not control, over the investee are accounted for using the equity method of accounting. For such investments, our share of the investee’s results of operations is shown within Share in losses of associated company on our condensed consolidated statements of income and our investment balance as an investment in associated company on our condensed consolidated balance sheets.

The consolidated interim financial information herein is unaudited; however, such information reflects all adjustments (consisting of normal, recurring adjustments and expect for the Reverse Recapitalization as described in Note 3), which are, in the opinion of management, necessary for a fair statement of results for the interim period. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year. The year-end condensed balance sheet data was derived from audited financial statements for the year ended December 31, 2020 but does not include all disclosures required by accounting principles generally accepted in the United States of America. These unaudited financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto of Legacy Payoneer and its subsidiaries.

b.    Accounting principles:

The consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America (hereafter - U.S. GAAP).

c.    Use of estimates in the preparation of financial statements:

The preparation of financial statements in conformity with U.S. 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 dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include, but are not limited to, share-based compensation, revenue recognition, valuation allowance on deferred taxes, contingencies, transaction loss provision and allowance for doubtful accounts on capital advances.

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PAYONEER GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

U.S. DOLLARS IN THOUSANDS

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)

d.    Capital Advance (CA) receivable, net:

The Company enters into transactions with pre-qualified sellers in which the Company purchases a designated amount of future receivables for an upfront cash purchase price.

During the six months ended June 30, 2021 and 2020, the Company has purchased and collected the following principal amounts associated with CAs: