10-Q

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 March 31, 2023

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
N/A
(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 May 1, 2023, the registrant had 359,713,442 shares of common stock outstanding.

Payoneer Global Inc.

Form 10-Q

For the Quarter Ended March 31, 2023

Table of Contents

	Page
PART I. FINANCIAL INFORMATION	4
Item 1. Financial Statements (Unaudited)	4
Condensed consolidated balance sheets (Unaudited)	5
Condensed consolidated statements of comprehensive income (Unaudited)	6
Condensed consolidated statements of changes in shareholders’ equity (Unaudited)	7
Condensed consolidated statements of cash flows (Unaudited)	8
Notes to the condensed consolidated financial statements (Unaudited)	10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3. Quantitative and Qualitative Disclosures About Market Risk	26
Item 4. Controls and Procedures	27
PART II - OTHER INFORMATION	28
Item 1. Legal Proceedings	28
Item 1A. Risk Factors	28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3. Defaults upon Senior Securities	28
Item 4. Mine Safety Disclosures	28
Item 5. Other Information	28
Item 6. Exhibits	29
Signatures	30

2

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 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: (1) changes in applicable laws or regulations; (2) the possibility that Payoneer may be adversely affected by geopolitical and other economic, business and/or competitive factors; (3) Payoneer’s estimates of its financial performance; (4) the outcome of any known and/or unknown legal or regulatory proceedings; and (5) other 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 Payoneer.

Should one or more of these risks or uncertainties materialize or should any of the assumptions made by the management of 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 matters addressed in this Quarterly Report on Form 10-Q and attributable to 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, 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.

3

PART I. FINANCIAL INFORMATION

PAYONEER GLOBAL INC.

QUARTERLY REPORT FOR THE PERIOD ENDED MARCH 31, 2023

TABLE OF CONTENTS

	Page
Condensed consolidated financial statements (unaudited) in U.S. dollars:
Condensed consolidated balance sheets (Unaudited)	5
Condensed consolidated comprehensive statements of income (Unaudited)	6
Condensed consolidated statements of changes in shareholders’ equity (Unaudited)	7
Condensed consolidated statements of cash flows (Unaudited)	8
Notes to condensed consolidated financial statements (Unaudited)	10

4

PAYONEER GLOBAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

	March 31,		December 31,
	2023		2022
	(Unaudited)
Assets:
Current assets:
Cash and cash equivalents	$	544,542	$	543,299
Restricted cash		9,525		2,882
Customer funds		5,467,274		5,838,612
Accounts receivable (net of allowance of $246 at March 31, 2023 and December 31, 2022)		10,831		12,878
Capital advance receivables (net of allowance of $5,415 at March 31, 2023 and $5,311 at December 31, 2022)		42,073		37,155
Other current assets		44,521		36,278
Total current assets		6,118,766		6,471,104
Non-current assets:
Property, equipment and software, net		14,335		14,392
Goodwill		19,889		19,889
Intangible assets, net		50,065		45,444
Restricted cash		4,851		4,848
Deferred taxes		2,363		4,169
Investment in associated company		—		6,429
Severance pay fund		1,072		1,095
Operating lease right-of-use assets		15,223		15,260
Other assets		11,154		12,021
Total assets	$	6,237,718	$	6,594,651
Liabilities and shareholders’ equity:
Current liabilities:
Trade payables	$	31,767	$	41,566
Outstanding operating balances		5,467,274		5,838,612
Other payables		87,051		97,334
Total current liabilities		5,586,092		5,977,512
Non-current liabilities:
Long-term debt from related party (refer to Notes 8 and 17 for further information)		17,120		16,138
Warrant liability		26,166		25,914
Other long-term liabilities		31,494		29,831
Total liabilities		5,660,872		6,049,395
Commitments and contingencies (Note 11)
Shareholders’ equity:
Preferred stock, $0.01 par value, 380,000,000 shares authorized; no shares were issued and outstanding at March 31, 2023 and December 31, 2022.		—		—
Common stock, $0.01 par value, 3,800,000,000 and 3,800,000,000 shares authorized; 359,202,123 and 352,842,025 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively.		3,592		3,528
Additional paid-in capital		674,021		650,433
Accumulated other comprehensive loss		(176)		(176)
Accumulated deficit		(100,591)		(108,529)
Total shareholders’ equity		576,846		545,256
Total liabilities and shareholders’ equity	$	6,237,718	$	6,594,651

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

5

PAYONEER GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

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

	Three months ended
	March 31,
	2023		2022
Revenues	$	192,014	$	136,958
Transaction costs (Exclusive of depreciation and amortization shown separately below and inclusive of $421 and $320 interest expense and fees associated with related party transaction during the three months ended March 31, 2023 and 2022, respectively; refer to Notes 8 and 17 for further information)		27,081		25,575
Other operating expenses (Exclusive of depreciation and amortization shown separately below)		40,095		34,759
Research and development expenses		29,280		25,915
Sales and marketing expenses		47,826		34,469
General and administrative expenses		26,681		18,128
Depreciation and amortization		6,039		4,455
Total operating expenses		177,002		143,301
Operating income (loss)		15,012		(6,343)
Financial income (expense):
Gain (loss) from change in fair value of Warrants		(252)		31,196
Other financial income (expense), net		2,350		(2,695)
Financial income, net		2,098		28,501
Income before taxes on income and share in gains of associated company		17,110		22,158
Taxes on income		9,172		1,967
Share in gains of associated company		-		20
Net income	$	7,938	$	20,211
Other comprehensive income, net of tax
Foreign currency translation adjustments		-		390
Other comprehensive income, net of tax		-		390
Comprehensive income	$	7,938	$	20,601
Per Share Data
Net income per share attributable to common stockholders — Basic earnings per share	$	0.02	$	0.06
— Diluted earnings per share	$	0.02	$	0.06
Weighted average common shares outstanding — Basic		360,220,161		342,324,722
Weighted average common shares outstanding — Diluted		388,308,279		365,992,174

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

6

PAYONEER GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)

U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA

						Accumulated
				Additional		other
	Common Stock			paid-in		comprehensive		Accumulated
	Shares	Amount		capital		income (loss)		deficit		Total
Balance at December 31, 2022	352,842,025	$	3,528	$	650,433	$	(176)	$	(108,529)	$	545,256
Exercise of options, vested RSUs, and shares granted	6,360,098		64		6,188		—		—		6,252
Stock-based compensation	—		—		17,400		—		—		17,400
Net income	—		—		—		—		7,938		7,938
Balance at March 31, 2023	359,202,123	$	3,592	$	674,021	$	(176)	$	(100,591)	$	576,846
Balance at December 31, 2021	340,384,157	$	3,404	$	575,470	$	2,253	$	(94,054)	$	487,073
Adoption of ASC 326	—		—		—		—		(2,505)		(2,505)
Exercise of options and vested RSUs	2,212,210		22		3,659		—		—		3,681
Stock-based compensation	—		—		13,114		—		—		13,114
Other comprehensive income, net of tax	—		—		—		390		—		390
Net income	—		—		—		—		20,211		20,211
Balance at March 31, 2022	342,596,367	$	3,426	$	592,243	$	2,643	$	(76,348)	$	521,964

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

7

PAYONEER GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

U.S. DOLLARS IN THOUSANDS

	Three months ended
	March 31,
	2023		2022
Cash Flows from Operating Activities
Net income	$	7,938	$	20,211
Adjustment to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		6,039		4,455
Deferred taxes		1,806		1,523
Stock-based compensation expenses		16,927		13,114
Share in gains of associated company		—		(20)
Loss (gain) from change in fair value of Warrants		252		(31,196)
Foreign currency re-measurement loss (gain)		(416)		77
Changes in operating assets and liabilities:
Other current assets		(8,159)		(4,622)
Trade payables		(10,090)		176
Deferred revenue		323		(160)
Accounts receivable, net		2,047		(481)
Capital advance extended to customers		(71,184)		(67,706)
Capital advance collected from customers		66,266		76,356
Other payables		(10,414)		(10,794)
Other long-term liabilities		(635)		(1,050)
Operating lease right-of-use assets		2,335		2,381
Other assets		867		108
Net cash provided by operating activities		3,902		2,372
Cash Flows from Investing Activities
Purchase of property, equipment and software		(1,764)		(2,690)
Capitalization of internal use software		(7,588)		(3,812)
Severance pay fund distributions, net		23		46
Customer funds in transit, net		(53,628)		34,409
Net cash inflow from acquisition of remaining interest in joint venture (Refer to Note 2(c) for further information)		5,953		—
Net cash provided by (used in) investing activities		(57,004)		27,953
Cash Flows from Financing Activities
Proceeds from issuance of common stock in connection with stock-based compensation plan		5,865		3,681
Outstanding operating balances, net		(371,338)		229,299
Borrowings under related party facility (Refer to Notes 8 and 17 for further information)		9,842		7,163
Repayments under related party facility (Refer to Notes 8 and 17 for further information)		(8,859)		(6,532)
Net cash provided by (used in) financing activities		(364,490)		233,611
Effect of exchange rate changes on cash and cash equivalents		515		(78)
Net change in cash, cash equivalents, restricted cash and customer funds		(417,077)		263,858
Cash, cash equivalents, restricted cash and customer funds at beginning of period		6,386,720		4,838,433
Cash, cash equivalents, restricted cash and customer funds at end of period	$	5,969,643	$	5,102,291
Supplemental information of investing and financing activities not involving cash flows:
Property, equipment, and software acquired but not paid	$	400	$	147
Internal use software capitalized but not paid	$	2,609	$	1,265
Right of use assets obtained in exchange for new operating lease liabilities	$	2,298	$	7,303

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

8

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 condensed consolidated statements of cash flows:

	As of March 31,
	2023		2022
Cash and cash equivalents	$	544,542	$	465,734
Current restricted cash		9,525		3,088
Non-current restricted cash		4,851		5,367
Customer funds(1)		5,410,725		4,628,102
Total cash, cash equivalents, restricted cash and customer funds shown in the condensed consolidated statements of cash flows	$	5,969,643	$	5,102,291

⁽¹⁾Excludes $56,549 and $2,451 of customer funds in transit as of March 31, 2023 and 2022, respectively.

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

9

PAYONEER GLOBAL INC.

NOTE 1 – GENERAL OVERVIEW

Unless otherwise noted herein, “we”, “us”, “our”, “Payoneer”, and the “Company” refer to Payoneer Global Inc.

Payoneer, incorporated in Delaware, empowers global commerce by connecting businesses, professionals, countries and currencies with its diversified cross-border payments platform. Payoneer enables small and medium-sized businesses (“SMB(s)”) around the globe to reach new audiences by reducing the complexity of cross-border trade, and 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.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

a.    Principles of consolidation, basis of presentation and accounting principles:

The accompanying condensed consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America (hereafter – U.S. GAAP) and 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 comprehensive 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), 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 months ended March 31, 2023 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, 2022 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 Payoneer Global Inc. and its subsidiaries.

b.    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, allowance for capital advance receivables, income taxes, goodwill, revenue recognition, stock-based compensation, and loss contingencies.

c.    Investment in associated company:

In July 2019, the Company, through its wholly-owned subsidiary Payoneer Research and Development Ltd., entered into an agreement for the establishment of a joint venture company in the Peoples Republic of China (“PRC”). The objective of the joint venture was to apply for a local payment service provider license in accordance with PRC laws. The Company’s share in the Joint Venture was 46%, with the remaining ownership interest held by a local partner. Initial funds in the amount of $6,501 were contributed. The investment in the joint venture was presented as an investment in associated company in the Company’s consolidated balance sheets as the Company did not have control over the joint venture.

In January 2023, the Company, through Payoneer Research and Development Ltd., acquired all remaining interests from other partners in the joint venture. As part of the agreement, the acquiring company assumed responsibility for all expenses and income incurred or earned through the date of acquisition related to the joint venture.

10

PAYONEER GLOBAL INC.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued):

As substantially all of the fair value of the gross assets of the joint venture are concentrated in a group of similar assets (cash and cash equivalents and restricted deposits), the Company accounted for the transaction as an asset acquisition. As such, the Company’s basis in the acquired assets is valued at the amount of consideration transferred, as shown below.

Consideration paid
Cash1	$7,961
Foreign exchange loss on payment1	(100)
Investment in associated company	6,429
Total	$14,290
Assets acquired
Cash and cash equivalents	$6,957
Short-term restricted deposits	6,957
Prepaid assets	24
Tax receivable	59
Intangible assets	293
Total	$14,290
Net cash inflow related to acquisition
Cash and cash equivalents and restricted deposits acquired	$13,914
Cash paid	(7,961)
Net cash inflow	$5,953

________________________________________

(1) The underlying assets of the joint venture were previously valued in CNY. Due to a timing difference of payment date and acquisition agreement settlement date, $100 of foreign exchange loss was recognized at the time of payment through other financial income (expense), net on the condensed consolidated statements of comprehensive income.

The Company acquired $59 in tax receivables which we do not expect to utilize. As such, these receivables were written-off subsequent to acquisition through general and administrative expenses in the condensed consolidated statements of comprehensive income.

The Company also acquired $293 in intangible assets which were determined to have no use to the Company post-acquisition. As such, these assets were completely impaired through depreciation and amortization in the condensed consolidated statements of comprehensive income.

d.    Functional currency and translation:

Prior to January 1, 2023, the Company had a foreign subsidiary that used the local currency of the respective country as its functional currency. As of January 1, 2023, this subsidiary has changed its functional currency to be that of the Company, the U.S. dollar, due to a shift in the subsidiary’s primary revenue streams, which are now substantially all from services provided to the Company.

e.    Recently issued accounting pronouncements:

FASB Standards issued, but not adopted as of March 31, 2023

In 2020, the FASB issued amended guidance that provides transitional relief for the accounting impact of reference rate reform. For a limited duration, this guidance provides optional expedients and exceptions for applying GAAP to certain contract modifications, hedging relationships, and other transactions that will be impacted by a reference rate expected to be discontinued due to reference rate reform. The amended guidance is effective through December 31, 2024. The Company does not expect reference rate reform to have a material impact on the Company’s financial statements.

11

PAYONEER GLOBAL INC.

NOTE 3 – CAPITAL ADVANCE (“CA”) RECEIVABLES

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 three months ended March 31, 2023 and 2022, the Company has purchased and collected the following principal amounts associated with CAs:

	Three months ended
	March 31,
	2023		2022
Beginning CA receivables, gross	$	42,466	$	56,101
CA extended to customers		71,476		68,281
Change in revenue receivables		150		(4)
CA collected from customers		(65,973)		(76,352)
Charge-offs, net of recoveries		(631)		(1,101)
Ending CA receivables, gross	$	47,488	$	46,925
Allowance for CA losses		(5,415)		(4,405)
CA receivables, net	$	42,073	$	42,520

The outstanding gross balance at March 31, 2023 consists of the following current and overdue amounts:

			1‑30 days	30‑60	60‑90	Above 90
Total		Current	overdue	overdue	overdue	overdue
$	47,488	44,506	1,030	684	250	1,018

The outstanding gross balance at December 31, 2022 consists of the following current and overdue amounts:

			1‑30 days	30‑60	60‑90	Above 90
Total		Current	overdue	overdue	overdue	overdue
$	42,466	39,945	986	380	104	1,051

The following are current and overdue balances from above that are segregated into the timing of expected collections at March 31, 2023:

			Due in less	Due in 30‑60	Due in 60‑90	Due in more
Total		Overdue	than 30 days	days	days	than 90 days
$	47,488	2,982	8,409	8,591	15,390	12,116

The following are current and overdue balances from above that are segregated into the timing of expected collections at December 31, 2022:

			Due in less	Due in 30‑60	Due in 60‑90	Due in more
Total		Overdue	than 30 days	days	days	than 90 days
$	42,466	2,521	7,354	12,553	14,427	5,611

As of March 31, 2023, the Company applied a range of loss rates to the CA portfolio of 1.59% to 1.86% for the allowance for CA losses. As of December 31, 2022, the Company applied a range of loss rates to the CA portfolio of 1.59% to 1.86%.

12

PAYONEER GLOBAL INC.

NOTE 3 – CAPITAL ADVANCE (“CA”) RECEIVABLES (continued):

Below is a rollforward for the allowance for CA losses (“ALCAL”):

	Three months ended
	March 31,
	2023		2022
Beginning balance	$	5,311	$	2,426
Adjustment for adoption of ASC 326		—		2,505
Provisions		1,261		1,812
Recoveries		(526)		(1,237)
Charge-offs		(631)		(1,101)
Ending balance	$	5,415	$	4,405

NOTE 4 - OTHER CURRENT ASSETS

Composition of other current assets, grouped by major classifications, is as follows:

	March 31,		December 31,
	2023		2022
Prepaid expenses	$	20,955	$	12,155
Income receivable		8,420		11,162
Prepaid income taxes		12,794		7,671
Other		2,352		5,290
Total other current assets	$	44,521	$	36,278

NOTE 5 – PROPERTY, EQUIPMENT AND SOFTWARE

Composition of property, equipment and software, grouped by major classifications, is as follows:

	March 31,		December 31,
	2023		2022
Computers, software and peripheral equipment	$	36,178	$	34,328
Leasehold improvements		9,814		9,741
Furniture and office equipment		4,530		4,418
Property, equipment and software		50,522		48,487
Accumulated depreciation		(36,187)		(34,095)
Property, equipment and software, net	$	14,335	$	14,392

Depreciation expense for the three months ended March 31, 2023 and 2022 was $2,112 and $1,916, respectively.

NOTE 6 – GOODWILL AND INTANGIBLE ASSETS

Goodwill

The following table presents goodwill balances and adjustments to those balances during the three months ended March 31, 2023:

				Foreign
				Currency
	December 31,		Goodwill	Translation	March 31,
	2022		Acquired	Adjustments	2023
Total goodwill	$	19,889	—	—	$	19,889

13

PAYONEER GLOBAL INC.

NOTE 6 – GOODWILL AND INTANGIBLE ASSETS (continued):

Intangible assets, net

Composition of intangible assets, grouped by major classifications, is as follows:

	March 31, 2023						December 31, 2022
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Internal use software	$	83,305	$	(41,415)	$	41,890	$	75,195	$	(38,607)	$	36,588
Developed technology		14,365		(6,190)		8,175		14,365		(5,509)		8,856
Intangible assets, net	$	97,670	$	(47,605)	$	50,065	$	89,560	$	(44,116)	$	45,444

Amortization expense for the three months ended March 31, 2023 and 2022 was $3,602 and $2,539 respectively.

During the three months ended March 31, 2023, the Company recognized impairment of internal use of software in the amount of $32, as well as the $293 impairment of acquired intangibles described in Note 2(c). The impairment is presented under Depreciation and amortization expenses. No impairment was recognized during the three months ended March 31, 2022.

Expected future intangible asset amortization as of March 31, 2023, excluding capitalized internal use software of $24,581 not yet placed in service as of that date, was as follows:

Fiscal years
2023 (Excluding the three months ended March 31, 2023)	$	7,493
2024		11,094
2025		6,657
2026		240
2027		—
Thereafter		—
Total	$	25,484

NOTE 7 - OTHER PAYABLES

Composition of other payables, grouped by major classifications, is as follows:

	March 31,		December 31,
	2023		2022
Employee related compensation	$	43,205	$	64,464
Commissions payable		16,525		12,159
Accrued expenses		9,011		10,001
Lease liability		9,462		8,360
Income tax payable		6,143		—
Other		2,705		2,350
Total other payables	$	87,051	$	97,334

NOTE 8 – DEBT

On October 28, 2021, Payoneer Early Payments Inc. (“PEPI”), a wholly-owned second tier subsidiary of the Company and its subsidiary (the “Borrower”) entered into a Receivables and Loan Security Agreement (the “Warehouse Facility”) with Viola Credit VI, L.P., Viola Credit Alternative Lending FNX SPV, L.P. (the “Lenders”) and Viola Credit Alternative Lending Management 2018 L.P. (collectively, the “Parties”) for the purpose of external financing of Capital Advance activity. The Company notes that the Lenders are related parties through the Company’s Board of Directors’ chairman’s ownership interest in the Lenders. Refer to Note 17 for further information regarding related party considerations.

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PAYONEER GLOBAL INC.

NOTE 8 – DEBT (continued):

In accordance with the Warehouse Facility agreement, the Lenders will make available to the Company an initial committed amount of $25,000, which may be increased at the request of the Company, and with the consent of the Lenders, in $25,000 increments up to $100,000. The associated borrowings will be secured by the assets of the Borrower, which consist primarily of capital advance receivables as well as a pledge of the equity of the Borrower. The recourse under the Warehouse Facility agreement is limited to Borrower's assets, and no other Payoneer entity guarantees repayment by the Borrower.

The Warehouse Facility agreement stipulates a borrowing base calculated at an advance rate of 80% out of the eligible portfolio outstanding receivables balance and that borrowings under the facility bear interest as follows: greater of 0.25% or LIBOR plus:

● 9.00% per annum if the commitment amount is $25,000;

● 7.75% per annum if the commitment amount is $50,000;

● 7.50% per annum if the commitment amount is $75,000;

● 7.00% per annum if the commitment amount is $100,000.

On June 8, 2022, the Warehouse Facility agreement was amended to create a condition that the total interest rate, calculated as the sum per above, shall not exceed 10.5% per annum for all outstanding balances.

The revolving period of the facility is 36 months from the closing date and the maturity date is 42 months from the date the Warehouse Facility agreement was entered into.

The Company recorded expenses, included in transaction cost, in the total amount of $421 and $320 for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, the outstanding associated balance was $17,120 with $152 of accrued expenses included in Other payables. As of December 31, 2022, the outstanding associated balance was $16,138 with $153 of accrued expenses included in Other payables.

The Warehouse Facility agreement includes certain affirmative and negative covenants that must be maintained by the Company and includes certain financial measures such as minimum tangible equity and minimum unrestricted cash at the Company level. As of March 31, 2023 and December 31, 2022, the Company was in compliance with all applicable covenants.

As of March 31, 2023 and December 31, 2022, the fair value of the debt approximates the book value due to the short time span between initiation and balance sheet date with the outstanding balance classified as Level 3 in the fair value leveling hierarchy as the inputs into the valuation are not observable.

NOTE 9 – OTHER LONG-TERM LIABILITIES

Composition of other long-term liabilities, grouped by major classifications, is as follows:

	March 31,		December 31,
	2023		2022
Reserves for uncertain tax positions	$	23,943	$	21,048
Long-term lease liabilities		5,302		6,514
Severance pay liabilities		2,232		2,252
Other		17		17
Total other long-term liabilities	$	31,494	$	29,831

NOTE 10 – WARRANTS

The Company has publicly traded warrants that are exercisable for shares of the Company’s common stock. Warrants may only be exercised for a whole number of shares at an exercise price of $11.50. These warrants expire on June 25, 2026, or earlier, if redeemed. At March 31, 2023, there were 25,158,086 warrants outstanding with a corresponding liability valued at $26,166. The warrants are considered to be a Level 1 fair value measurement due to the observability of the inputs.

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PAYONEER GLOBAL INC.

NOTE 10 – WARRANTS (continued):

The warrants are accounted for as liabilities in accordance with ASC 815-40, Derivatives and Hedging, and are presented within warrant liabilities on our condensed consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the condensed consolidated statements of comprehensive income. The following table presents the changes in the fair value of warrant liabilities (Level 1):

	Warrant
	Liability
Fair value as of December 31, 2022	$	25,914
Change in fair value		252
Fair value as of March 31, 2023	$	26,166

NOTE 11 – COMMITMENTS AND CONTINGENCIES

The Company’s business is subject to various laws and regulations in the United States and other countries from where the Company operates. Any regulatory action, tax or legal challenge against the Company for noncompliance with any regulatory or legal requirement could result in significant fines, penalties, or other enforcement actions, increased costs of doing business through adverse judgment or settlement, reputational harm, the diversion of significant amounts of management time and operational resources, and could require changes in compliance requirements or limits on the Company’s ability to expand its product offerings, or otherwise harm or have a material adverse effect on the Company’s business.

On September 28, 2021, the National Banking and Securities Commission (CNBV) and the Bank of Mexico revoked the banking license of a banking entity utilized by the Company due to the banking entity not meeting applicable capital requirements. As a result, the Company is unable to withdraw funds from the banking entity. The Company has reserved $2,250 for potential losses related to the inaccessible funds above the recovered amount. The Company applied for and recovered the maximum statutory reimbursement through the deposit insurance provided by Mexican Institute for the Protection of Banking Services (IPAB), totaling $140. The Company has filed a claim in liquidation for the remaining funds; however, the percentage of the deposit that will be recovered in liquidation is not known at this time.

From time to time, the Company is involved in other disputes or regulatory inquiries that arise in the ordinary course of business. These may include suits by its customers alleging, among other things, acting unfairly and/or not in conformity regarding pricing, rules or agreements, improper disclosure of our prices, rules, or policies or that our practices, prices, rules, policies, or customer agreements violate applicable law.

In addition to these types of disputes and regulatory inquiries, the operations of the Company are also subject to regulatory and/or legal review and/or challenges that tend to reflect the increasing global regulatory focus to which the industry in which the Company operates is subject and, when taken as a whole with other regulatory and legislative action, such actions could result in the imposition of costly new compliance burdens on the Company and may lead to increased costs and decreased transaction volume and revenue. Any claims or regulatory actions against the Company, whether meritorious or not, could be time consuming, result in costly litigation, settlement payments, damage awards (including statutory damages for certain causes of action in certain jurisdictions), fines, penalties, injunctive relief, or increased costs of doing business through adverse judgment or settlement, require the Company to change our business practices, require significant amounts of management time, result in the diversion of operational resources, or otherwise harm the business.

NOTE 12 – REVENUE

The following table presents revenue recognized from contracts with customers as well as revenue from other sources, which consists of interest income:

	Three months ended March 31,
	2023		2022
Revenue recognized at a point in time	$	131,892	$	125,943
Revenue recognized over time		10,064		10,156
Revenue from contracts with customers		141,956		136,099
Revenue from other sources		50,058		859
Total revenues	$	192,014	$	136,958

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PAYONEER GLOBAL INC.

NOTE 12 – REVENUE (continued):

Based on the information provided to and reviewed by our Chief Operating Decision Maker (“CODM”), we believe that the nature, amount, timing, and uncertainty of our revenue and cash flows and how they are affected by economic factors are most appropriately depicted through our primary regional markets. The following table presents our revenue disaggregated by primary regional market, with revenues being attributed to the country (in the region) in which the billing address of the transacting customer is located.

	Three months ended
	March 31,
	2023		2022
Primary regional markets
Greater China1	$	63,960	$	43,041
Europe2		38,621		28,461
North America3		25,536		20,276
Asia-Pacific2		25,381		19,019
South Asia, Middle East and North Africa2		19,945		15,412
Latin America2		18,571		10,749
Total revenues	$	192,014	$	136,958

________________________________________

(1)Greater China is inclusive of mainland China, Hong Kong and Taiwan

(2)No single country included in any of these regions generated more than 10% of total revenue

(3) The United States is our country of domicile. Of North America revenues, the US represents $24,575 and $19,782 during the three months ended March 31, 2023 and 2022, respectively.

NOTE 13 - TRANSACTION COSTS

Composition of transaction costs, grouped by major classifications, is as follows:

	Three Months Ended
	March 31,
	2023		2022
Bank and processor fees	$	20,119	$	19,916
Network fees		4,267		3,416
Chargebacks and operational losses		1,057		501
Card costs		468		431
Capital advance costs, net of recoveries		1,112		942
Other		58		369
Total transaction costs	$	27,081	$	25,575

NOTE 14 – STOCK-BASED COMPENSATION

Stock Options and RSUs

The following table summarizes the options to purchase shares of common stock activity under our equity incentive plans for the three months ended March 31, 2023:

	Options
Outstanding at December 31, 2022	34,923,788
Granted	—
Exercised	(2,867,840)
Forfeited	(280,153)
Outstanding at March 31, 2023	31,775,795
Exercisable at March 31, 2023	27,715,435

The weighted average exercise price of the options outstanding as of March 31, 2023 was $2.09 per share.

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PAYONEER GLOBAL INC.

NOTE 14 – STOCK-BASED COMPENSATION (continued):

The following table summarizes the RSUs activity under our equity incentive plans as of March 31, 2023:

	Units
Outstanding December 31, 2022	25,853,581
Granted	13,549,368
Vested	(3,427,974)
Forfeited	(800,961)
Outstanding March 31, 2023	35,174,014

In the three months ended March 31, 2023, the Company granted 13,549,368 RSUs under the Company’s Omnibus Stock Incentive Plan, which are subject to time-vesting and continued service conditions, and 900,000 of which are subject to time-vesting and continued service conditions as well as stock performance targets.

Employee Stock Purchase Plan

As of March 31, 2023, approximately 6,623,625 shares were reserved for future issuance under the Company’s Employee Stock Purchase Plan (“ESPP”). The fair value attributable to the ESPP was $2,082,528 as of November 15, 2022, the beginning of the current offering period, and was measured using the Monte Carlo model. The current offering period is expected to close May 15, 2023. The expense associated with the ESPP recognized during the quarter ended March 31, 2023 was $1,041,264.

The impact on our results of operations of recording stock-based compensation expense under the Company’s equity incentive plans, including the ESPP, were as follows:

	Three Months Ended
	March 31,
	2023		2022
Other operating expenses	$	2,799	$	2,937
Research and development expenses		3,383		2,144
Sales and marketing expenses		5,976		3,700
General and administrative expenses		4,769		4,127
Total stock-based compensation	$	16,927	$	12,908

NOTE 15 - INCOME TAXES

The Company had an effective tax rate of 54% for the three months ended March 31, 2023, compared to an effective tax rate of 9% for the three months ended March 31, 2022. For the three months ended March 31, 2023, the difference between the Company’s effective tax rate and the U.S. federal statutory rate of 21% was the result of foreign income taxed at different rates, including the provision for uncertain tax positions, as well as an increase in potential future tax benefits primarily related to share-based compensation and capitalized research and development, where the Company fully provides a valuation allowance with respect to its realization.

For the three months ended March 31, 2022, the difference between the Company’s effective tax rate and the U.S. federal statutory rate of 21% was the result of foreign income taxed at different rates and the provision for a full valuation allowance in respect of tax benefits from carry forward tax losses due to the uncertainty of the realization of such tax benefits.

NOTE 16 – NET EARNINGS PER SHARE

The Company computes net earnings per share using the two-class method required for participating securities. The two-class method requires income available to common shareholders for the period to be allocated between shares of Common Stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

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PAYONEER GLOBAL INC.

NOTE 16 – NET EARNINGS PER SHARE (continued):

The Company’s basic net earnings per share is calculated by dividing net income attributable to common shareholders by the weighted-average number of shares of common shares outstanding for the period, without consideration of potentially dilutive securities. The diluted net earnings per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net earnings per share is the same as basic net earnings per share in periods when the effects of potentially dilutive shares of common shares are anti-dilutive.

Basic and diluted net earnings per share attributable to common stockholders was calculated as follows:

	Three Months Ended
	March 31,
	2023		2022
	(In thousands, except share and per share data)
Numerator:
Net income	$	7,938	$	20,211
Denominator:
Weighted average common shares outstanding —
Basic		360,220,161		342,324,722
Add:
Dilutive impact of RSUs and options to purchase common stock		27,332,566		22,968,556
Dilutive impact of private Warrants		755,552		698,896
Weighted average common shares – diluted		388,308,279		365,992,174
Net income per share attributable to common stockholders — Basic earnings per share	$	0.02	$	0.06
Diluted earnings per share	$	0.02	$	0.06

Public Warrants, RSUs with market conditions, and Earn-Out Shares (as that term is defined in the Agreement and Plan of Reorganization dated February 3, 2021 (as amended) with FTAC Olympus Acquisition Corp.) have been excluded from the computation of diluted net earnings per share for the three month period ended March 31, 2023 as the conditions were not met or they were not in the money as of the end of the reporting period.

NOTE 17 – RELATED PARTY TRANSACTIONS

As indicated in Note 8, the Company entered into a Warehouse Facility agreement with Lenders where a member of the Board of Directors has an interest. The Company has evaluated the relationship and determined that the Warehouse Facility agreement represents a related party transaction that has been entered into in the ordinary course of business. As such, the Warehouse Facility agreement was reviewed and approved as a related party transaction in accordance with the related party transaction approval process implemented by the Company.

The Company analyzed the terms of the Warehouse Facility agreement and concluded that the terms represent a transaction conducted at arm’s length.

NOTE 18 – SUBSEQUENT EVENTS

On May 7, 2023, our Board of Directors authorized a stock repurchase program that provides for the repurchase of up to $80 million of our common stock over a period of 24 months. Any share repurchases under this stock repurchase program may be made through open market transactions, privately negotiated transactions or other means including in accordance with Rule 10b-18 and/or Rule 10b5-1 of the Exchange Act. The timing and total amount of repurchases is subject to business and market conditions and the company’s discretion.

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PAYONEER GLOBAL INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Throughout this section, unless otherwise noted, “we”, “us”, “our”, “Payoneer”, and the “Company” refer to Payoneer Global Inc.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis includes forward-looking statements that involve risks and uncertainties. You should review the sections titled “Cautionary Note on Forward-Looking Statements” and “Risk Factors” for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

Payoneer democratizes access to financial services, empowering the world’s small and medium sized businesses to transact, do business and grow globally. With a single connection to Payoneer’s global payment and commerce-enabling platform, our customers can manage their global financial operations and transact globally as easily as they do locally, allowing them to participate in the digital economy and enabling growth for enterprises, marketplaces and SMBs worldwide.

Payoneer was founded in 2005 as technology and the internet were transforming commerce and making it possible for anyone, anywhere to build and grow a digital business. From the beginning, we recognized the importance of offering services to both sides of two-sided commerce networks: small and medium businesses who would need help navigating the increasingly complex digital economy, and marketplaces who would need help supporting their increasingly distributed seller-base. Over the past 18 years, we have built a one-of-a-kind platform designed to serve the needs of digital businesses globally, with a focus on emerging markets.

At the core of the Payoneer platform is a robust, secured, regulated global payment infrastructure that simplifies the process for any business to pay and get paid globally as easily as it does locally. On top of this core, we continue to develop a comprehensive suite of products and services, providing sophisticated tools to help our customers grow.

Leveraging the strength of our payment infrastructure and the breadth of our product offerings, Payoneer operates as both a provider of services to enterprises and marketplaces as well as a B2B payment services provider, empowering all of our customers to transact internationally with ease. As a result, we have cultivated a meaningful brand in the global digital commerce ecosystem supporting millions of marketplaces, enterprises, and SMBs across more than 190 countries and territories and 7,000+ unique trade corridors.

We primarily generate revenues when Payoneer customers use the funds in their Payoneer account to make a payment, make a purchase or to withdraw the funds locally. Our revenue growth is based on (i) growing the volume of transactions processed through the Payoneer platform; and (ii) increasing the monetization rates of Payoneer services. Our efforts to increase the overall monetization rate of Payoneer services includes increasing our focus on acquiring customers in regions with higher rates of monetization, accelerating the growth of payment services with higher rates of monetization like B2B AP/AR, and also introducing new services for customers that generate improved monetization, like our Payoneer Commercial Mastercard. Volume is one of the primary drivers for our revenue growth. See “Key Metrics and Non-GAAP Financial Measures” for additional information.

Our customers have trusted the Payoneer platform to process $15.7 billion and $14.6 billion in volume during the three months ended March 31, 2023 and 2022, respectively.

Looking forward, we intend to continue to invest actively to enhance our global platform, deliver new products, extend our regulatory footprint, further automate our operations, increase new customer growth and make more acquisitions to accelerate our ability to deliver more value to customers around the world.

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PAYONEER GLOBAL INC.

Key Developments and Trends

Impact of the war in Ukraine

During 2022, a geopolitical and armed conflict between Ukraine and Russia, which developed into an ongoing war, resulted in economic sanctions on Russia, Belarus, and certain territories in Ukraine. Payoneer provides services to customers in Ukraine and in jurisdictions that are or may be impacted by these economic sanctions. We have developed and implemented a robust transaction monitoring program designed to comply with imposed sanctions and to monitor the impact the conflict may have on our results of operations. During 2022, we ceased to provide services to customers in Russia and have been reducing our payment services to Belarus customers, while at the same time revenues in Ukraine have remained relatively stable. For the three months ended March 31, 2023, Ukraine and Belarus, combined, accounted for less than 10% of our revenue, of which Belarus accounted for less than 1% of our revenue. Further escalation of the conflict may have a material effect on our results of operations.

Macroeconomic Conditions

Macroeconomic conditions, such as rising interest rates, inflation, the continued impact of COVID-19, the ongoing war in Ukraine, and disruptions in the banking sector, may affect our results of operations. For example, during 2022, and in response to rising inflation, the U.S. Federal Reserve raised the benchmark interest rate by 425 basis points. This contributed to an increase in interest income earned on our customer balances. U.S. and global inflation rates have remained elevated and the Federal Reserve, as well as other central banks, have continued to raise interest rates. Higher interest rates positively impact our interest income revenues associated with underlying customer accounts. However, a prolonged period of high interest rates is likely to slow economic growth, and business and consumer spend globally which may negatively impact the volumes processed on our platform. There remains a great deal of uncertainty related to the ongoing trajectory of U.S. interest rate policy, the likely impact of monetary tightening globally and the degree to which the global economy could be impacted. In addition, while we have commercial arrangements with multiple banks globally, we have not been materially affected by the recent volatility and uncertainty in the banking sector.

Repurchase Program

On May 7, 2023, our Board of Directors authorized a stock repurchase program that provides for the repurchase of up to $80 million of our common stock over a period of 24 months. Any share repurchases under this stock repurchase program may be made through open market transactions, privately negotiated transactions or other means including in accordance with Rule 10b-18 and/or Rule 10b5-1 of the Exchange Act. The timing and total amount of repurchases is subject to business and market conditions and the company’s discretion.

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PAYONEER GLOBAL INC.

Results of Operations

The period-to-period comparisons of our results of operations have been prepared using the historical periods in our consolidated financial statements. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related Notes included within this Quarterly Report on Form 10-Q.

	Three months ended
	March 31,				Increase/
	2023		2022		(Decrease)
	(in thousands except percentages)
Revenues	$	192,014	$	136,958	40	%
Transaction costs		27,081		25,575	6	%
Other operating expenses		40,095		34,759	15	%
Research and development expenses		29,280		25,915	13	%
Sales and marketing expenses		47,826		34,469	39	%
General and administrative expenses		26,681		18,128	47	%
Depreciation and amortization		6,039		4,455	36	%
Total operating expenses		177,002		143,301	24	%
Operating income (loss)		15,012		(6,343)	**	%
Financial income (expense):
Gain (loss) from change in fair value of Warrants		(252)		31,196	**	%
Other financial income (expense), net		2,350		(2,695)	**	%
Financial income, net		2,098		28,501	(93)	%
Income before taxes on income and share in gains of associated company		17,110		22,158	(23)	%
Taxes on income		9,172		1,967	**	%
Share in gains of associated company		—		20	**	%
Net income	$	7,938	$	20,211	(61)	%

^{**Not meaningful}​

Revenues

Revenues were $192.0 million for the three months ended March 31, 2023, an increase of $55.1 million, or 40%, compared to the prior-year period, driven mainly by an increase of $49.2 million in interest income resulting from an increase in customer balances held on our platform as well as rising interest rates. The remaining increase was driven by a combination of growth in the number of customers on our platform, growth in several high value regions, and continued adoption of our high value services.

Transaction costs

Transaction costs were $27.1 million for the three months ended March 31, 2023, an increase of $1.5 million, or 6%, compared to the prior-year period, while volume went up by 8%. Transaction costs grew at a lower rate than volume due to improved commercial terms, internal platform optimizations, and cost structure benefits from increased transaction volumes, partially offset by an increase in transaction costs related to our high value services..

Other operating expenses

Other operating expenses were $40.1 million for the three months ended March 31, 2023, an increase of $5.3 million, or 15%, compared to the prior-year period. The increase was driven by an increase of $3.2 million in third-party contract and consulting expenses,  and an increase of $1.1 million in information technology expenses.

Research and development expenses

Research and development expenses were $29.3 million for the three months ended March 31, 2023, an increase of $3.4 million, or 13%, compared to the prior-year period. The increase was driven by an increase of $5.6 million in employee compensation, benefits and other employee-related expenses mainly as a result of an increase in employee headcount in our research and development groups, which was partly decreased by $3.4 million in internal use of software capitalization due to increased investment in developing the platform. In addition, third-party contractor and consultant expenses increased by $0.7 million.

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PAYONEER GLOBAL INC.

Sales and marketing expenses

Sales and marketing expenses were $47.8 million for the three months ended March 31, 2023, an increase of $13.4 million, or 39%, compared to the prior-year period. The increase was driven by an increase of $6.1 million in employee compensation, benefits and other employee-related expenses, partly as a result of an increase in employee headcount in our sales and marketing groups, an increase of $4.5 million in third-party commissions, an increase of $1.7 million in third-party contractor and consultant expenses, and increased spend of $0.9 million related to marketing programs.

General and administrative expenses

General and administrative expenses were $26.7 million for the three months ended March 31, 2023, an increase of $8.6 million, or 47%, compared to the prior-year period. The increase was driven by an increase of $4.9 million in compensation, benefits and other employee-related expenses mainly as a result of an increase in employee headcount, and an increase of $0.9 million in spend related to legal services.

Depreciation and amortization expenses

Depreciation and amortization was $6.0 million for the three months ended March 31, 2023, an increase of $1.6 million or 36% compared to the prior-year period primarily driven by an increase in amortization of internal use of software as well as an increase in depreciation of property and equipment costs.

Financial income and expense, net

Financial income, net was $2.1 million for the three months ended March 31, 2023, a decrease of $26.4 million, compared to the prior-year period which benefitted from a $31.2 million gain related to the change in fair value of Warrant liabilities which did not recur. This was partially offset by the impact of revaluation of foreign currency balances and bank fees.

Income tax

Income tax expense was $9.2 million for the three months ended March 31, 2023, an increase of $7.2 million compared to the three months ended March 31, 2022. This increase was primarily driven by an increase in the Company’s US federal and state income tax liabilities and the result of taxes associated with our foreign subsidiaries.

Liquidity and Capital Resources

The following discussion of our liquidity and capital resources is based on the financial information derived from our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Sources of Liquidity

As of March 31, 2023, we had $544.5 million of cash and cash equivalents.

On October 28, 2021, Payoneer Early Payments Inc. (“PEPI”), a wholly-owned second tier subsidiary of the Company and its subsidiary (the “Borrower”) entered into a multi-party Receivables Loan and Security Agreement (the “Warehouse Facility”) with, inter alia, affiliates of Viola Ventures. The objective was to provide access to external financing for our capital advance activity. See Note 8 and Note 17 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information.

The Warehouse Facility bears interest at the greater of 0.25% or LIBOR, plus 9% annually and has a revolving maturity of 36 months from the commencement date with a payback period of an additional 6 months after the revolving maturity date. The initial borrowing commitment is $25 million but can be increased subject to the lender’s discretion up to $100 million. Additional commitments will carry interest rates ranging from 7.0% to 7.75%. In addition, pursuant to the Warehouse Facility, PEPI entered into an amendment on June 8, 2022, capping the total interest rate at 10.5% per annum for all outstanding balances.

When the LIBOR rate has either permanently or indefinitely ceased to be provided by the ICE Benchmark Administration or is determined by the Financial Conduct Authority to be no longer representative, an alternative Benchmark Replacement (as defined in the Receivables Loan and Security Agreement) will be selected.

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PAYONEER GLOBAL INC.

The Warehouse Facility is secured by eligible capital advance receivables at an initial rate of 80% of the total value of the underlying capital advance receivable outstanding. We are subject to financial covenants including minimum tangible equity, solvency and unrestricted cash requirements that are assessed based on our consolidated financial statements.

We believe our existing cash and cash equivalents and cash flows from operating activities will be sufficient to meet our operating working capital, share repurchase and capital expenditure requirements for at least the next twelve months. Our future financing requirements will depend on many factors including our growth rate, the timing and extent of spending to support development of our platform and the ongoing expansion needs of sales and marketing activities. We may enter into agreements with third parties with respect to investments in, or acquisitions of, businesses or technologies, which could also require us to seek additional equity or debt financing.

Cash Flows

The following table presents a summary of cash flows from operating, investing, and financing activities for the following comparative periods.

	Three months ended March 31,
	2023		2022
	(in thousands)
Net cash provided by operating activities	$	3,902	$	2,372
Net cash provided by (used in) investing activities		(57,004)		27,953
Net cash provided by (used in) financing activities		(364,490)		233,611
Effect of exchange rate changes on cash and cash equivalents		515		(78)
Change in cash, cash equivalents, restricted cash and customer funds	$	(417,077)	$	263,858

Operating Activities

Net cash provided by operating activities was $3.9 million for the three months ended March 31, 2023, an increase of $1.5 million compared to $2.4 million for the three months ended March 31, 2022. When adjusted for the non-cash gain related to change in fair value of warrant liabilities that did not recur in the current period, our net income has increased compared to the prior-year period, which contributed to the increase in cash provided by operating activities. This increase was partially offset by higher cash outflows related to trade payables and capital advances.

For the three months ended March 31, 2023, the Company had $7.9 million of net income, which includes non-cash expenses of $16.9 million related to stock-based compensation and $6.0 million related to depreciation and amortization. Net income was also adjusted for changes in current assets and liabilities, including net outflows of $10.1 million related to trade payables, $10.4 million related to other payables, $8.2 million related to other current assets, and $4.9 million related to capital advances. Other miscellaneous net inflows amounted to $6.7 million for the period.

For the three months ended March 31, 2022, the Company had $20.2 million of net income, which includes primary non-cash expenses of $13.1 million related to stock-based compensation and $4.5 million related to depreciation and amortization, and non-cash gains of $31.2 million related to change in fair value of Warrants. Net income was also adjusted for changes in current assets and liabilities, including a net outflow of $10.8 million related to other payables and net inflow of $8.7 million related to capital advances. Other miscellaneous net outflows amounted to $2.1 million for the period.

Investing Activities

Net cash used in investing activities was $57.0 million for the three months ended March 31, 2023, a change of $85.0 million compared to net cash provided by investing activities of $28.0 million for the three months ended March 31, 2022.

This change was predominantly related to an increase of $88.0 million in the balance of customer funds in transit in the current year compared to the previous year, as well as an increase of $3.8 million in capitalization of internal use software, offset by a cash inflow of $6.0 million related to the acquisition of the remaining interest in a joint venture as described in Note 2(c) to our unaudited condensed consolidated financial statements included elsewhere on this Quarterly Report on Form 10-Q.

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PAYONEER GLOBAL INC.

Financing Activities

Net cash used in financing activities was $364.5 million for the three months ended March 31, 2023, a change of $598.1 million compared to net cash provided by financing activities of $233.6 million for the three months ended March 31, 2022. This is predominantly driven by changes in our outstanding operating balances of $600.6 million during the current period as compared to the prior-year period.

Key Metrics and Non-GAAP Financial Measures

Our management uses a variety of financial and operating metrics to evaluate our business, analyze our performance, and make strategic decisions. We believe these metrics and non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as management. However, these measures are not financial measures calculated in accordance with GAAP and should not be considered as substitutes for financial measures that have been calculated in accordance with GAAP. We primarily review the following key performance indicators and non-GAAP measures when assessing our performance:

Volume

Volume refers to the total dollar value of transactions successfully completed or enabled by our platform, not including orchestration transactions. For a customer that both receives and later sends payments, we count the volume only once, with certain limited exceptions where both received and sent payments are counted. Volume serves as a key metric for overall business activity, as growing volume is one of the primary drivers for our revenue growth.

	Three months ended March 31,
	2023		2022
	(in millions)
Volume	$	15,735	$	14,620

Volume grew 8% for the three months ended March 31, 2023 compared to the three months ended March 31, 2022, respectively, driven by a combination of growth in digital commerce, ongoing recovery in travel volumes, and continued customer acquisition.

Revenue

We generate revenues mainly from transaction fees, which vary based on the type of service the customer utilizes. Transaction fee revenue principally consists of fees for withdrawals and usage. In addition, the Company generates revenue from non-volume-based products and services which are based on a fixed fee. We believe that Revenue demonstrates our ability to monetize on volumes. Our revenues can be impacted by the following:

(i) Mix in customer size, products, and services;

(ii) Mix between domestic and cross-border transactions;

(iii) Geographic region or country in which a transaction occurs; and

(iv) Pricing and other market conditions including interest rates.

Management closely monitors volume and revenue to ensure that we continue to grow funds and business activity into the platform, expanding our overall scale and the reach of our business.

25

PAYONEER GLOBAL INC.

Adjusted EBITDA

In addition to our financial results determined in accordance with GAAP, we believe Adjusted EBITDA, as a non-GAAP measure, is useful in evaluating our operating performance. We use Adjusted EBITDA to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial measure, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of Adjusted EBITDA is helpful to our investors as it is a metric used by management in assessing our operating performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measure as a tool for comparison. A reconciliation is provided below for our non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measure and the reconciliation of this non-GAAP financial measure to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

Adjusted EBITDA

	Three months ended March 31,
	2023		2022
	(in thousands)
Net income	$	7,938	$	20,211
Depreciation and amortization		6,039		4,455
Taxes on income		9,172		1,967
Other financial income (expense), net		(2,350)		2,695
EBITDA		20,799		29,328
Stock based compensation expenses(1)		16,927		12,908
Share in gain of associated company		—		(20)
M&A related expense (income)(2)		774		(619)
Loss (gain) from change in fair value of Warrants(3)		252		(31,196)
Adjusted EBITDA	$	38,752	$	10,401

⁽¹⁾ Represents non-cash charges associated with stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy.

⁽²⁾ Amounts for the three months ended March 31, 2023 relate to M&A-related third-party fees, including related legal, consulting and other expenditures. Amounts for the three months ended March 31, 2022 relate to a non-recurring fair value adjustment of a liability related to our 2020 acquisition of optile.

⁽³⁾ Changes in the estimated fair value of the warrants are recognized as gain or loss on the condensed consolidated statements of comprehensive income. The impact is removed from EBITDA as it represents market conditions that are not in control of the Company.

Critical Accounting Policies and Estimates

For more information, see “Payoneer Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Form 10-K filed with the SEC on February 28, 2023.

Recent Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position, result of operations or cash flows is disclosed in Note 2 to our unaudited condensed consolidated financial statement included elsewhere in this Quarterly Report on Form 10-Q.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have operations both within the United States and globally, and we are exposed to market risks in the ordinary course of our business, including the effects of interest rate changes and foreign currency fluctuations. Information relating to quantitative and qualitative disclosures about these market risks is described below.

26

PAYONEER GLOBAL INC.

Interest Rate Sensitivity

Our cash and cash equivalents as well as customer funds as of March 31, 2023, were held in cash deposits and money market funds. The fair value of our cash and cash equivalents as well as customer funds would not be significantly affected by either an increase or decrease in interest rates due mainly to the short-term nature of a majority of these instruments. However, a hypothetical 1% increase or decrease in interest rates could have a material effect on our revenues and earnings.

Any future borrowings incurred under our Warehouse Facility would accrue interest at a floating rate based on a formula tied to certain market rates at the time of incurrence (as described above), not to exceed 10.5% per annum for all outstanding balances.

Foreign Currency Risk

While most of our revenue is earned in U.S. dollars, our foreign currency exposure includes currencies of the countries in which our operations are located as well as currencies in which our customer funds are held and may be subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro, British Pound, Japanese Yen, Vietnamese Dong, Chinese Yuan, Australian Dollar, Canadian Dollar, New Zealand Dollar, Thai Baht, New Israeli Shekel, United Arab Emirates Dirham, Philippine Peso, Turkish Lira, Indian Rupee, and Hong Kong Dollar. A hypothetical 10% increase or decrease in current exchange rates could have a material impact on our financial results.

In addition, some of our services include the opportunity for Payoneer to generate revenues from foreign exchange transactions as part of the payment delivery process. Our ability to generate such revenues is partially dependent on external factors such as market conditions as applicable regulations and our ability to negotiate with third party financial institutions. The impact of these efforts to optimize foreign exchange can be material to revenues and earnings.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2023. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective.

During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

27

PAYONEER GLOBAL INC.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time we are a party to various litigation matters incidental to the conduct of our business. Refer to Note 11 (Commitment and Contingencies) to the condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

For more information on risks related to litigation, see the section titled “Risk Factors — General Risks Related to Payoneer — From time to time we are subject to various legal proceedings which could adversely affect our business, financial condition or results of operations” in our Annual Report on Form 10-K, filed with the SEC on February 28, 2023.

ITEM 1A. RISK FACTORS

As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K, filed with the SEC on February 28, 2023. However, we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

A total of 59,257 shares of our common stock were issued during the three months ended March 31, 2023 pursuant to an employment agreement supplement with a certain senior employee in connection with the optile acquisition consummated in 2020. The issuance of the securities described in this paragraph was made in reliance upon the exemption from registration requirements pursuant to Section 4(a)(2) of the Securities Act. Such shares were issued pursuant to the terms of the above agreement supplement, and we did not receive any proceeds from the issuance.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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PAYONEER GLOBAL INC.

ITEM 6. EXHIBITS

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

Exhibit No.	Description of Exhibit
10.1	Separation Agreement with Michael Levine (Included as Exhibit 10.16 to the Form 10-K filed with the SEC on February 28, 2023).†
10.2	Amendment to Separation Agreement with Michael Levine (Included as Exhibit 10.17 to the Form 10-K filed with the SEC on February 28, 2023).
10.3	Separation Agreement with Robert Clarkson (Included as Exhibit 10.18 to the Form 10-K filed with the SEC on February 28, 2023).†
10.4	Amendment #1 to Employment Agreement with John Caplan (Included as Exhibit 10.20 to the Form 10-K filed with the SEC on February 28, 2023).
10.5	Amendment #2 to Amended and Restated Employment Agreement with Scott Galit (Included as Exhibit 10.21 to the Form 10-K filed with the SEC on February 28, 2023).†
10.6	Israeli Sub-Plan to the Payoneer 2021 Employee Stock Purchase Plan.*
31.1	Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934.*
31.2	Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934.*
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

** Furnished herewith.

† Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish copies of any of the omitted schedules upon request by the Securities and Exchange Commission.

29

PAYONEER GLOBAL INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PAYONEER GLOBAL INC.
(Registrant)
By:	/s/ John Caplan
John Caplan
Chief Executive Officer
(Principle Executive Officer)
By:	/s/ Bea Ordonez
Bea Ordonez
Chief Financial Officer
(Principle Financial Officer)
Date: May 9th, 2023

30

EX-10.6

Exhibit 10.6

PAYONEER GLOBAL INC.

2021 EMPLOYEE STOCK PURCHASE PLAN

ISRAELI SUB-PLAN

This Israeli Sub-Plan (the “IL Sub-Plan”) to the 2021 Employee Stock Purchase Plan (as it may be amended or restated from time to time, the “Plan”) of Payoneer Global Inc. a Delaware corporation (the “Company”) shall apply only to Persons who are, as the date of grant, employed or engaged by an Israeli Employer  and who  are or are deemed to be, residents of the State of Israel for Israeli tax purposes.  

1.GENERAL

1.1.The Administrator, in its discretion, may grant a right to purchase Awards to Eligible Employees and shall determine whether any Award is intended to be a 102 Award. Each exercise of a right to purchase an Award shall be evidenced by a Subscription Agreement, which shall expressly identify the Award type, and be in such form and contain such provisions, as the Administrator shall from time to time deem appropriate.

1.2.The Plan shall apply to any Awards and rights to purchase Awards, in each case granted pursuant to this IL Sub-Plan, provided, that the provisions of this IL Sub-Plan shall supersede and govern in the case of any inconsistency or conflict, either explicit or implied, arising between the provisions of this IL Sub-Plan and the Plan.

1.3.Unless otherwise defined in this IL Sub-Plan, capitalized terms contained herein shall have the same meanings given to them in the Plan.

2. DEFINITIONS.

2.1.“102 Award” means any Award intended to qualify (as set forth in the Subscription Agreement) and which qualifies under Section 102, provided it is settled only in Shares.

2.2.“102 Capital Gain Track Award” means any Award granted by the Company to an Employee pursuant to Section 102(b)(2) or (3) (as applicable) of the Ordinance under the capital gain track.

2.3.“102 Non-Trustee Award” means any Award granted by the Company to an Employee pursuant to Section 102(c) of the Ordinance without a Trustee.

2.4.“102 Ordinary Income Track Award” means any Award granted by the Company to an Employee pursuant to Section 102(b)(1) of the Ordinance under the ordinary income track.

2.5.“102 Trustee Awards” means, collectively, 102 Capital Gain Track Awards and 102 Ordinary Income Track Awards.

2.6.“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person (with the term “control” or “controlled by” within the meaning of Rule 405 of Regulation C under the Securities Act), including, without limitation, any Parent or Subsidiary.

2.7.“Award” shall mean any Share purchased according to the Plan.

1

2.8.“Election” as defined in Section ‎3.2 below.

2.9.“Employee” means an “employee” within the meaning of Section 102(a) of the Ordinance (which as of the date of the adoption of this IL Sub-Plan means (i) an individual employed by an Employer, and (ii) an individual who is serving and is engaged personally (and not through an entity) as an “office holder” ("Nose Misra" (as such term is defined in the Israeli Companies' Law, 5759-1999)) by an Employer, excluding any controlling shareholder as to such term is defined in Section 32(9) of the Ordinance.), provided such Employee also satisfies the eligibility requirements under the Plan.

2.10.“Employer” means, for purpose of a 102 Trustee Award, an Affiliate, Subsidiary or Parent which is an “employing company” within the meaning and subject to the conditions of Section 102(a) of the Ordinance.

2.11.“ITA” means the Israel Tax Authority.

2.12.“Ordinance” means the Israeli Income Tax Ordinance (New Version), 1961, including the Rules and any other regulations, rules, orders or procedures promulgated thereunder, as may be amended or replaced from time to time.

2.13.“Required Holding Period” as defined in Section ‎3.5.1 below.

2.14.“Rules” means the Income Tax Rules (Tax Benefits in Share Issuance to Employees) 5763-2003.

2.15.“Section 102” means Section 102 of the Ordinance as now in effect or as hereafter amended and any tax rulings which are binding on the Company (or an the Participant’s Employer) with respect to the Awards governed by this IL Sub-Plan.

2.16.“Trust Agreement” means the agreement to be signed between the Company, an Employer and the Trustee for the purposes of Section 102.

2.17.“Trustee” means the trustee appointed by the Company’s Administrator to serve as a trustee and approved by the ITA, all in accordance with the provisions of Section 102(a) of the Ordinance, as may be replaced from time to time subject to the provisions of Section 102.

2.18.“Subscription Agreement” means a written or electronic agreement between the Company and the Participant, or a written or electronic notice delivered by the Company evidencing the exercise of an Award granted pursuant to the Plan, in substantially such form or forms and containing such terms and conditions, as the Administrator shall from time to time approve.

2.19.“Withholding Obligations” as defined in Section ‎4.5 below.

3.102 AWARDS

3.1.Tracks.  102 Trustee Awards granted pursuant to this Section ‎3 are intended to be granted as either 102 Capital Gain Track Awards or 102 Ordinary Income Track Awards.  102 Trustee Awards shall be granted subject to the special terms and conditions contained in this Section ‎3 and the general terms and conditions of the Plan, except for any provisions of the Plan applying to Awards under different tax laws or

regulations.

3.2.Election of Track.  The grant of 102 Trustee Awards shall be made under this IL Sub-Plan adopted by the Administrator, and as approved by the ITA or as deemed to be approved by the ITA all in accordance with the provisions of Section 102. Subject to Applicable Law, the Company may grant only one type of 102 Trustee Award at any given time to all Employees who are to be granted 102 Trustee Awards pursuant to this IL Sub-Plan and shall file an election with the ITA regarding the type of 102 Trustee Award it elects to grant before the date of grant of any 102 Trustee Award (the “Election”).  Such Election shall also apply to any other securities received by any Employee as a result of holding the 102 Trustee Awards.  The Company may change the type of 102 Trustee Award that it elects to grant only after the expiration of at least 12 months from the end of the year in which the first grant was made in accordance with the previous Election, or as otherwise provided by Applicable Law.  Any Election shall not prevent the Company from granting 102 Non-Trustee Awards.

3.3.Eligibility for Awards. Subject to Applicable Law, 102 Awards may only be granted to Employees.  Such 102 Awards may either be granted as 102 Trustee Awards or as a 102 Non-Trustee Awards .

3.4.102 Award Grant Date.  

3.4.1.Unless a special tax ruling is received from the ITA, the grant of 102 Trustee Awards shall not be made until 30 days have lapsed from the date the Plan has been submitted for approval to the ITA. Each 102 Award will be deemed granted on the date determined by the Administrator, subject to the provisions of the Plan, provided that (i) the Employee has signed all documents required by the Company or pursuant to Applicable Law, and (ii) with respect to any 102 Trustee Award, the Company has provided all applicable documents to the Trustee in accordance with the guidelines published by the ITA.

3.4.2.Unless otherwise permitted by the Ordinance, any grants of 102 Trustee Awards that are made on or after the date of the adoption of the Plan and this IL Sub-Plan or an amendment to the Plan or this IL Sub-Plan, as the case may be, that may become effective only at the expiration of thirty (30) days after the filing of the Plan and this IL Sub-Plan or any amendment thereof (as the case may be) with the ITA in accordance with the Ordinance shall be conditional upon the expiration of such 30-day period, and such condition shall be read and is incorporated by reference into any corporate resolutions approving such grants and into any Subscription Agreementevidencing such grants (whether or not explicitly referring to such condition), and the date of grant shall be at the expiration of such 30-day period, whether or not the date of grant indicated therein corresponds with this Section.  In the case of any contradiction, this provision and the date of grant determined pursuant hereto shall supersede and be deemed to amend any date of grant indicated in any corporate resolution or Subscription Agreement.

3.5.102 Trustee Awards.  

3.5.1.Each Share issued pursuant to the 102 Trustee Award shall be allocated or issued to and registered in the name of the Trustee and shall be held in trust or controlled and supervised by the Trustee (subject to the approval of the ITA) for the benefit of the Participant for the requisite period prescribed by the Ordinance (the “Required Holding Period”).  In the event that the requirements under Section 102 to qualify an Award as a 102 Trustee Award are not met, then the Award may be treated as a 102 Non-Trustee Award (as determined by the Company), all in accordance with the provisions of the Ordinance.  After the expiration of the Required Holding Period, the Trustee may release such 102 Trustee Awards and any such Shares, provided that (i) the Trustee has received an acknowledgment from the ITA

that the Participant has paid any applicable taxes due pursuant to the Ordinance, or (ii) the Trustee and/or the Company and/or the Employer withhold(s) all applicable taxes and compulsory payments due pursuant to the Ordinance arising from the 102 Trustee Awards.  The Trustee shall not release any 102 Trustee Awards prior to the payment in full of the Participant’s tax and compulsory payments arising from such 102 Trustee Awards or the withholding referred to in (ii) above.

3.5.2.Each 102 Trustee Award shall be subject to the relevant terms of the Ordinance, the Rules and any determinations, rulings or approvals issued by the ITA, which shall be deemed an integral part of the 102 Trustee Awards and shall prevail over any term contained in the Plan, this IL Sub-Plan or the Subscription Agreement that is not consistent therewith.  Any provision of the Ordinance, the Rules and any determinations, rulings or approvals by the ITA not expressly specified in the Plan, this IL Sub-Plan or Subscription Agreement that are necessary to receive or maintain any tax benefit pursuant to Section 102 shall be binding on the Participant.  Any Participant granted a 102 Trustee Award shall comply with the Ordinance and the terms and conditions of the Trust Agreement entered into between the Company and the Trustee.  The Participant shall execute any and all documents that the Company and/or the Affiliate and/or the Trustee determine from time to time to be necessary in order to comply with the Ordinance and the Rules.

3.5.3.During the Required Holding Period, the Participant shall not release from trust or sell, assign, transfer or give as collateral, the Shares issuable in connection with a 102 Trustee Award and/or any securities issued or distributed with respect thereto, until the expiration of the Required Holding Period.  Notwithstanding the above, if any such sale, release or other action occurs during the Required Holding Period it may result in adverse tax consequences to the Participant under Section 102 and the Rules, which shall apply to and shall be borne solely by such Participant.  Subject to the foregoing, the Trustee may, pursuant to a written request from the Participant, but subject to the terms of the Plan and this IL Sub-Plan, release and transfer such Shares to a designated third party, provided that both of the following conditions have been fulfilled prior to such release or transfer: (i) payment has been made to the ITA of all taxes and compulsory payments required to be paid upon the release and transfer of the Shares, and confirmation of such payment has been received by the Trustee and the Company, and (ii) the Trustee has received written confirmation from the Company that all requirements for such release and transfer have been fulfilled according to the terms of the Company’s corporate documents, any agreement governing the Shares, the Plan, this IL Sub-Plan, the Subscription Agreement and any Applicable Law.  

3.5.4.Upon or after receipt of a 102 Trustee Award, if required, the Participant may be required to sign an undertaking to release the Trustee from any liability with respect to any action or decision duly taken and executed in good faith by the Trustee in relation to the Plan, this IL Sub-Plan, or any 102 Trustee Awards granted to such Participant hereunder.

3.6.102 Non-Trustee Awards.  The foregoing provisions of this Section ‎3 relating to 102 Trustee Awards shall not apply with respect to 102 Non-Trustee Awards, which shall, however, be subject to the relevant provisions of Section 102 and the applicable Rules.  The Administrator may determine that 102 Non-Trustee Awards and/or any securities issued or distributed with respect thereto, shall be allocated or issued to the Trustee, who shall hold such 102 Non-Trustee Award and all accrued rights thereon (if any) in trust for the benefit of the Participant and/or the Company, as the case may be, until the full payment of tax arising from the 102 Non-Trustee Awards and/or any securities issued or distributed with respect thereto.  The Company may choose, alternatively, to require the Participant to provide the Company with a guarantee or other security, to the satisfaction of each of the Trustee and the Company, until the full payment of the applicable taxes.  

3.7.Written Participant Undertaking.  With respect to any 102 Trustee Award, as required by Section 102 and the Rules, by virtue of the receipt of such Award, the Participant is deemed to have provided, undertaken and confirmed the following written undertaking (and such undertaking is deemed incorporated into any documents signed by the Participant in connection with the grant of such Award), and which undertaking shall be deemed to apply and relate to all 102 Trustee Awards granted to the Participant, whether under the Plan and this IL Sub-Plan or other plans maintained by the Company, and whether prior to or after the date hereof:

3.7.1.The Participant shall comply with all terms and conditions set forth in Section 102 with regard to the “Capital Gain Track” or the “Ordinary Income Track”, as applicable, and the applicable rules and regulations promulgated thereunder, as amended from time to time;

3.7.2.The Participant is familiar with, and understands the provisions of, Section 102 in general, and the tax arrangement under the “Capital Gain Track” or the “Ordinary Income Track” in particular, and its tax consequences; the Participant agrees that the 102 Trustee Awards will be held by a Trustee appointed pursuant to Section 102 for at least the duration of the “Holding Period” (as such term is defined in Section 102) under the “Capital Gain Track” or the “Ordinary Income Track”, as applicable.  The Participant understands that any release of such 102 Trustee Awards or Shares from trust, or any sale of the Shares prior to the termination of the Holding Period, as defined above, will result in taxation at the marginal tax rate, in addition to deductions of appropriate social security, health tax contributions or other compulsory payments; and

3.7.3.The Participant agrees to the Trust Agreement signed between the Company, the Employer and the Trustee appointed pursuant to Section 102.  

3.8.As long as 102 Trustee Awards are held by the Trustee on behalf of the Participant, all rights of the Participant over such Awards are personal, may not be transferred, assigned, pledged or mortgaged, all in accordance with the provisions of Section 102, other than by will or laws of descent and distribution, and after the required taxes and payments have been fully made or secured. In the event that such Awards have been transferred by will or laws of descent and distribution, the provisions of Section 102 shall continue to apply on the heirs and transferees respectively. Any transfer will be subject to compliance with the requirements of the Plan and this IL Sub-Plan as in effect from time to time.

4.AGREEMENT REGARDING TAXES; DISCLAIMER

4.1.If the Company shall so require, as a condition of the release of Shares by the Trustee, a Participant shall agree that, no later than the date of such occurrence, the Participant will pay to the Company (or the Trustee, as applicable) or make arrangements satisfactory to the Company and the Trustee (if applicable) regarding payment of any applicable taxes and compulsory payments of any kind required by Applicable Law to be withheld or paid.  

4.2.TAX LIABILITY.  ALL TAX CONSEQUENCES UNDER ANY APPLICABLE LAW WHICH MAY ARISE FROM THE GRANT OF ANY AWARDS, THE SALE OR DISPOSITION OF ANY SHARES GRANTED HEREUNDER, THE ASSUMPTION, SUBSTITUTION, CANCELLATION OR PAYMENT IN LIEU OF AWARDS OR FROM ANY OTHER ACTION IN CONNECTION WITH THE FOREGOING (INCLUDING WITHOUT LIMITATION ANY TAXES AND COMPULSORY PAYMENTS, SUCH AS SOCIAL SECURITY OR HEALTH TAX PAYABLE BY THE PARTICIPANT OR THE COMPANY IN CONNECTION THEREWITH) SHALL BE BORNE AND PAID SOLELY BY THE PARTICIPANT, AND THE PARTICIPANT SHALL INDEMNIFY THE COMPANY, THE

AFFILIATE AND THE TRUSTEE, AND SHALL HOLD THEM HARMLESS AGAINST AND FROM ANY LIABILITY FOR ANY SUCH TAX OR PAYMENT OR ANY PENALTY, INTEREST OR INDEXATION THEREON.  EACH PARTICIPANT AGREES TO, AND UNDERTAKES TO COMPLY WITH, ANY RULING, SETTLEMENT, CLOSING AGREEMENT OR OTHER SIMILAR AGREEMENT OR ARRANGEMENT WITH ANY TAX AUTHORITY IN CONNECTION WITH THE FOREGOING WHICH IS APPROVED BY THE COMPANY.  

4.3.NO TAX ADVICE.  THE PARTICIPANT IS ADVISED TO CONSULT WITH A TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF RECEIVING, EXERCISING OR DISPOSING OF AWARDS HEREUNDER.  THE COMPANY DOES NOT ASSUME ANY RESPONSIBILITY TO ADVISE THE PARTICIPANT ON SUCH MATTERS, WHICH SHALL REMAIN SOLELY THE RESPONSIBILITY OF THE PARTICIPANT.  

4.4.TAX TREATMENT.  THE COMPANY AND ITS AFFILIATES (INCLUDING THE EMPLOYER) DOES NOT UNDERTAKE OR ASSUME ANY LIABILITY OR RESPONSIBILITY TO THE EFFECT THAT ANY AWARD SHALL QUALIFY WITH ANY PARTICULAR TAX REGIME OR RULES APPLYING TO PARTICULAR TAX TREATMENT, OR BENEFIT FROM ANY PARTICULAR TAX TREATMENT OR TAX ADVANTAGE OF ANY TYPE AND THE COMPANY AND ITS AFFILIATES (INCLUDING THE EMPLOYER) SHALL BEAR NO LIABILITY IN CONNECTION WITH THE MANNER IN WHICH ANY AWARD IS EVENTUALLY TREATED FOR TAX PURPOSES, REGARDLESS OF WHETHER THE AWARD WAS GRANTED OR WAS INTENDED TO QUALIFY UNDER ANY PARTICULAR TAX REGIME OR TREATMENT.  THIS PROVISION SHALL SUPERSEDE ANY DESIGNATION OF AWARDS OR TAX QUALIFICATION INDICATED IN ANY CORPORATE RESOLUTION OR SUBSCRIPTION AGREEMENT, WHICH SHALL AT ALL TIMES BE SUBJECT TO THE REQUIREMENTS OF APPLICABLE LAW.  THE COMPANY AND ITS AFFILIATES (INCLUDING THE EMPLOYER) DO NOT UNDERTAKE AND SHALL NOT BE REQUIRED TO TAKE ANY ACTION IN ORDER TO QUALIFY ANY AWARD WITH THE REQUIREMENTS OF ANY PARTICULAR TAX TREATMENT AND NO INDICATION IN ANY DOCUMENT TO THE EFFECT THAT ANY AWARD IS INTENDED TO QUALIFY FOR ANY TAX TREATMENT SHALL IMPLY SUCH AN UNDERTAKING.  NO ASSURANCE IS MADE BY THE COMPANY, ANY OF ITS AFFILIATES (INCLUDING THE EMPLOYER) THAT ANY PARTICULAR TAX TREATMENT ON THE DATE OF GRANT WILL CONTINUE TO EXIST OR THAT THE AWARD WILL QUALIFY AT THE TIME OF DISPOSITION THEREOF WITH ANY PARTICULAR TAX TREATMENT.  THE COMPANY AND THE AFFILIATE (INCLUDING THE EMPLOYER) SHALL NOT HAVE ANY LIABILITY OR OBLIGATION OF ANY NATURE IN THE EVENT THAT AN AWARD DOES NOT QUALIFY FOR ANY PARTICULAR TAX TREATMENT, REGARDLESS WHETHER THE COMPANY OR ITS AFFILIATES (INCLUDING THE EMPLOYER) COULD HAVE TAKEN ANY ACTION TO CAUSE SUCH QUALIFICATION TO BE MET AND SUCH QUALIFICATION REMAINS AT ALL TIMES AND UNDER ALL CIRCUMSTANCES AT THE RISK OF THE PARTICIPANT.  THE COMPANY AND ITS AFFILIATES (INCLUDING THE EMPLOYER) DO NOT UNDERTAKE OR ASSUME ANY LIABILITY TO CONTEST A DETERMINATION OR INTERPRETATION (WHETHER WRITTEN OR UNWRITTEN) OF ANY TAX AUTHORITY, INCLUDING IN RESPECT OF THE QUALIFICATION UNDER ANY PARTICULAR TAX REGIME OR RULES APPLYING TO PARTICULAR TAX TREATMENT.  IF THE AWARDS DO NOT QUALIFY UNDER ANY PARTICULAR TAX TREATMENT IT COULD RESULT IN ADVERSE TAX CONSEQUENCES TO THE PARTICIPANT.  

4.5.The Company or the Affiliate (including the Employer) may take such action as it may deem necessary or appropriate, in its discretion, for the purpose of or in connection with withholding of any

taxes and compulsory payments which the Trustee, the Company or the Affiliate (including the Employer) is required by any Applicable Law to withhold in connection with any Awards, including, without limitations, any income tax, social benefits, social insurance, health tax, pension, payroll tax, fringe benefits, excise tax, payment on account or other tax-related items related to the Participant’s participation in the Plan and applicable by law to the Participant (collectively, “Withholding Obligations”).  Such actions may include (i) requiring Participants to remit to the Company or the Employer in cash an amount sufficient to satisfy such Withholding Obligations and any other taxes and compulsory payments, payable by the Company or the Employer in connection with the Award; (ii) subject to Applicable Law, allowing the Participants to surrender Shares, in an amount that at such time, reflects a value that the Administrator determines to be sufficient to satisfy such Withholding Obligations; or (iii) any combination of the foregoing.  

4.6.Each Participant shall notify the Company in writing promptly and in any event within ten (10) days after the date on which such Participant first obtains knowledge of any tax bureau inquiry, audit, assertion, determination, investigation, or question relating in any manner to the Awards granted or received hereunder or Shares issued thereunder and shall continuously inform the Company of any developments, proceedings, discussions and negotiations relating to such matter, and shall allow the Company and its representatives to participate in any proceedings and discussions concerning such matters.  Upon request, a Participant shall provide to the Company any information or document relating to any matter described in the preceding sentence, which the Company, in its discretion, requires.

4.7.With respect to 102 Non-Trustee Awards, if the Participant ceases to be employed by the Company or any Parent, Subsidiary or Affiliate (including the Employer), the Participant shall extend to the Company and/or the Employer a security or guarantee for the payment of taxes due at the time of sale of Shares, all in accordance with the provisions of Section 102 and the Rules.  

4.8With regards to 102 Trustee Awards, the provisions of the Plan and/or the IL Sub-Plan and/or the Subscription Agreement shall be subject to the provisions of Section 102 and the Tax Assessing Officer’s permit, and any tax ruling received in connection with the Plan and this IL Sub-Plan, and any approval or guidelines issued by the ITA, and the said provisions, tax rulings, approval, guidance and permit shall be deemed an integral part of the Plan and of this IL Sub-Plan and of the Subscription Agreement . Any provision of Section 102 and/or the said permit and/or tax ruling and/or guidelines issued by the ITA which is necessary in order to receive and/or to keep any tax benefit pursuant to Section 102, which is not expressly specified in the Plan or this IL Sub-Plan or the Subscription Agreement, shall be considered binding upon the Company, the Employer and the Participant. The Participant may be required to execute any and all documents which the Company (or the Participant’s Employer) or the Trustee may reasonably determine to be necessary in order to comply with the provision of any applicable law, and, particularly, Section 102.

4.9Solely for the purpose of determining the tax liability pursuant to Section 102(b)(3) of the Ordinance, if on the date of grant the Company’s shares are listed on any established stock exchange or a national market system or if the Company’s shares will be registered for trading within ninety (90) days following the date of grant of the 102 Capital Gain Track Award, the fair market value of the Shares at the date of grant shall be determined in accordance with the average value of the Company’s shares on the thirty (30) trading days preceding the date of grantor on the thirty (30) trading days following the date of registration for trading, as the case may be.

5.RIGHTS AND OBLIGATIONS AS A SHAREHOLDER

5.1.A Participant shall have no rights as a shareholder of the Company with respect to any Shares covered by an Award until the Participant becomes the record holder of the subject Shares.  In the case of 102 Awards (if such Awards are being held by a Trustee), the Trustee shall have no rights as a shareholder of the Company with respect to the Shares covered by such Award until the Trustee becomes the record holder for such Shares for the Participant’s benefit, and the Participant shall not be deemed to be a shareholder and shall have no rights as a shareholder of the Company with respect to the Shares covered by the Award until the date of the release of such Shares from the Trustee to the Participant and the transfer of record ownership of such Shares to the Participant (provided however that the Participant shall be entitled to receive from the Trustee any cash dividend or distribution made on account of the Shares held by the Trustee for such Participant’s benefit, subject to any tax withholding and compulsory payment).  No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distribution of other rights for which the record date is prior to the date on which the Participant or Trustee (as applicable) becomes the record holder of the Shares covered by an Award, except as provided in the Plan.  

5.2.With respect to Shares issued in connection with Awards hereunder, any and all voting rights attached to such Shares shall be subject to the provisions of the Plan, and the Participant shall be entitled to receive dividends distributed with respect to such Shares, subject to the provisions of the Company’s Articles of Association, as amended from time to time, and subject to any Applicable Law.  

5.3.The Company may, but shall not be obligated to, register or qualify the sale of Shares under any applicable securities law or any other Applicable Law.

5.4.Shares issued pursuant to an Award shall be subject to the Company’s Articles of Association (as amended from time to time), any limitation, restriction or obligation applicable to shareholders included in any shareholders agreement applicable to all or substantially all of the holders of Shares (regardless of whether or not the Participant is a formal party to such shareholders agreement), any other governing documents of the Company, and all policies, manuals and internal regulations adopted by the Company from time to time, in each case, as may be amended from time to time, including any provisions included therein concerning restrictions or limitations on disposition of Shares (such as, but not limited to, right of first refusal and lock up/market stand-off) or grant of any rights with respect thereto, forced sale and bring along provisions, any provisions concerning restrictions on the use of inside information and other provisions deemed by the Company to be appropriate in order to ensure compliance with Applicable Laws.  Each Participant shall execute such separate agreement(s) as may be requested by the Company relating to matters set forth in this Section 5.4.  

6.GOVERNING LAW

6.1.This IL Sub-Plan shall be governed by and construed in accordance with the laws of the State of Israel (excluding its choice-of-law provisions) except that applicable Israeli laws, rules and regulations (as amended) shall apply to any mandatory tax matters arising hereunder.

****

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULES 13A-14 AND 15D-14(A) UNDER THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY

ACT OF 2002

I, John Caplan, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Payoneer Global Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 9, 2023

By:	/s/ John Caplan
Name:	John Caplan
Title:	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULES 13A-14 AND 15D-14(A) UNDER THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY

ACT OF 2002

I, Bea Ordonez, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Payoneer Global Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 9, 2023

By:	/s/ Bea Ordonez
Name:	Bea Ordonez
Title:	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION

906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Payoneer Global Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Caplan, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 9, 2023

By:	/s/ John Caplan
Name:	John Caplan
Title:	Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION

906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Payoneer Global Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bea Ordonez, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 9, 2023

By:	/s/ Bea Ordonez
Name:	Bea Ordonez
Title:	Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2023	May 01, 2023
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2023
Entity File Number	001-40547
Entity Registrant Name	Payoneer Global Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	86-1778671
Entity Address State Or Province	NY
Entity Address, Address Line One	150 W 30th St
Entity Address, City or Town	New York
Entity Address, Postal Zip Code	10001
City Area Code	212
Local Phone Number	600-9272
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		359,713,442
Entity Central Index Key	0001845815
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false
Common Stock [Member]
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	PAYO
Security Exchange Name	NASDAQ
Warrants
Title of 12(b) Security	Warrants, each exercisable for one share of common stock, $0.01 par value, at an exercise price of $11.50 per share
Trading Symbol	PAYOW
Security Exchange Name	NASDAQ

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 544,542	$ 543,299
Restricted cash	9,525	2,882
Customer funds	5,467,274	5,838,612
Accounts receivable (net of allowance of $246 at March 31, 2023 and December 31, 2022)	10,831	12,878
Capital advance receivables (net of allowance of $5,415 at March 31, 2023 and $5,311 at December 31, 2022)	42,073	37,155
Other current assets	44,521	36,278
Total current assets	6,118,766	6,471,104
Non-current assets:
Property, equipment and software, net	14,335	14,392
Goodwill	19,889	19,889
Intangible assets, net	50,065	45,444
Restricted cash	4,851	4,848
Deferred taxes	2,363	4,169
Investment in associated company		6,429
Severance pay fund	1,072	1,095
Operating lease right of use assets	15,223	15,260
Other assets	11,154	12,021
Total assets	6,237,718	6,594,651
Current liabilities:
Trade payables	31,767	41,566
Outstanding operating balances	5,467,274	5,838,612
Other payables	87,051	97,334
Total current liabilities	5,586,092	5,977,512
Non-current liabilities:
Long-term debt from related party (refer to Notes 8 and 17 for further information)	17,120	16,138
Warrant liability	26,166	25,914
Other long-term liabilities	31,494	29,831
Total liabilities	5,660,872	6,049,395
Commitments and contingencies (Note 11)
Shareholders' equity:
Preferred stock, $0.01 par value, 380,000,000 shares authorized; no shares were issued and outstanding at March 31, 2023 and December 31, 2022.
Common stock, $0.01 par value, 3,800,000,000 and 3,800,000,000 shares authorized; 359,202,123 and 352,842,025 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively.	3,592	3,528
Additional paid-in capital	674,021	650,433
Accumulated other comprehensive loss	(176)	(176)
Accumulated deficit	(100,591)	(108,529)
Total shareholders' equity	576,846	545,256
Total liabilities and shareholders' equity	$ 6,237,718	$ 6,594,651

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts receivable, net of allowance	$ 246	$ 246
Capital advance receivables, net of allowance	$ 5,415	$ 5,311
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	380,000,000	380,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	3,800,000,000	3,800,000,000
Common stock, shares issued	359,202,123	352,842,025
Common stock, shares outstanding	359,202,123	352,842,025

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
Revenues	$ 192,014	$ 136,958
Transaction costs (Exclusive of depreciation and amortization shown separately below and inclusive of $421 and $320 interest expense and fees associated with related party transaction during the three months ended March 31, 2023 and 2022, respectively; refer to Notes 8 and 17 for further information)	27,081	25,575
Other operating expenses (Exclusive of depreciation and amortization shown separately below)	40,095	34,759
Research and development expenses	29,280	25,915
Sales and marketing expenses	47,826	34,469
General and administrative expenses	26,681	18,128
Depreciation and amortization	6,039	4,455
Total operating expenses	177,002	143,301
Operating income (loss)	15,012	(6,343)
Financial income (expense):
Gain (loss) from change in fair value of Warrants	(252)	31,196
Other financial income (expense), net	2,350	(2,695)
Financial income, net	2,098	28,501
Income before taxes on income and share in gains of associated company	17,110	22,158
Taxes on income	9,172	1,967
Share in gains of associated company		20
Net income	7,938	20,211
Other comprehensive income, net of tax
Foreign currency translation adjustments		390
Other comprehensive income, net of tax		390
Comprehensive income	$ 7,938	$ 20,601
Per Share Data
Net income per share attributable to common stockholders - Basic earnings per share	$ 0.02	$ 0.06
Diluted earnings per share	$ 0.02	$ 0.06
Weighted average common shares outstanding - Basic	360,220,161	342,324,722
Weighted average common shares outstanding - Diluted	388,308,279	365,992,174

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
Interest expense and fees associated with related party transaction	$ 421	$ 320

XML

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (UNAUDITED) - USD ($) $ in Thousands	Common Stock	Additional paid-in capital	Accumulated other comprehensive income (loss)	Accumulated deficit Adjustment for adoption of ASC 326	Accumulated deficit	Adjustment for adoption of ASC 326	Total
Beginning balance at Dec. 31, 2021	$ 3,404	$ 575,470	$ 2,253	$ (2,505)	$ (94,054)	$ (2,505)	$ 487,073
Beginning balance (in shares) at Dec. 31, 2021	340,384,157
Exercise of options, vested RSUs, and shares granted	$ 22	3,659					3,681
Exercise of options, vested RSUs, and shares granted (in shares)	2,212,210
Stock-based compensation		13,114					13,114
Other comprehensive income, net of tax			390				390
Net income					20,211		20,211
Ending balance at Mar. 31, 2022	$ 3,426	592,243	2,643		(76,348)		521,964
Ending balance (in shares) at Mar. 31, 2022	342,596,367
Beginning balance at Dec. 31, 2022	$ 3,528	650,433	(176)		(108,529)		545,256
Beginning balance (in shares) at Dec. 31, 2022	352,842,025
Exercise of options, vested RSUs, and shares granted	$ 64	6,188					6,252
Exercise of options, vested RSUs, and shares granted (in shares)	6,360,098
Stock-based compensation		17,400					17,400
Net income					7,938		7,938
Ending balance at Mar. 31, 2023	$ 3,592	$ 674,021	$ (176)		$ (100,591)		$ 576,846
Ending balance (in shares) at Mar. 31, 2023	359,202,123

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash Flows from Operating Activities
Net income	$ 7,938	$ 20,211
Adjustment to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	6,039	4,455
Deferred taxes	1,806	1,523
Stock-based compensation expenses	16,927	13,114
Share in gains of associated company		(20)
Loss (gain) from change in fair value of Warrants	252	(31,196)
Foreign currency re-measurement loss	(416)	77
Changes in operating assets and liabilities:
Other current assets	(8,159)	(4,622)
Trade payables	(10,090)	176
Deferred revenue	323	(160)
Accounts receivable, net	2,047	(481)
Capital advance extended to customers	(71,184)	(67,706)
Capital advance collected from customers	66,266	76,356
Other payables	(10,414)	(10,794)
Other long-term liabilities	(635)	(1,050)
Operating lease right-of-use assets	2,335	2,381
Other assets	867	108
Net cash provided by operating activities	3,902	2,372
Cash Flows from Investing Activities
Purchase of property, equipment and software	(1,764)	(2,690)
Capitalization of internal use software	(7,588)	(3,812)
Severance pay fund (contributions) distributions, net	23	46
Customer funds in transit, net	(53,628)	34,409
Net cash inflow from acquisition of remaining interest in joint venture (Refer to Note 2(c) for further information)	5,953
Net cash provided by (used) in investing activities	(57,004)	27,953
Cash Flows from Financing Activities
Proceeds from issuance of common stock in connection with stock based compensation plan	5,865	3,681
Outstanding operating balances, net	(371,338)	229,299
Borrowings under related party facility (Refer to Notes 8 and 17 for further information)	9,842	7,163
Repayments under related party facility (Refer to Notes 8 and 17 for further information)	(8,859)	(6,532)
Net cash provided by (used in) financing activities	(364,490)	233,611
Effect of exchange rate changes on cash and cash equivalents	515	(78)
Net change in cash, cash equivalents, restricted cash and customer funds	(417,077)	263,858
Cash, cash equivalents, restricted cash and customer funds at beginning of period	6,386,720	4,838,433
Cash, cash equivalents, restricted cash and customer funds at end of period	5,969,643	5,102,291
Supplemental information of investing and financing activities not involving cash flows:
Property, equipment, and software acquired but not paid	400	147
Internal use software capitalized but not paid	2,609	1,265
Right of use assets obtained in exchange for new operating lease liabilities	$ 2,298	$ 7,303

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED) - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 31, 2022
Reconciliation of cash, cash equivalents, restricted cash and customer funds
Cash and cash equivalents	$ 544,542	$ 465,734
Current restricted cash	9,525	3,088
Non-current restricted cash	4,851	5,367
Customer funds	5,410,725	4,628,102
Total cash, cash equivalents, restricted cash and customer funds shown in the condensed consolidated statements of cash flows	5,969,643	5,102,291
Customer funds in transit	$ 56,549	$ 2,451

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GENERAL OVERVIEW

3 Months Ended

Mar. 31, 2023

GENERAL OVERVIEW

GENERAL OVERVIEW

NOTE 1 – GENERAL OVERVIEW

Unless otherwise noted herein, “we”, “us”, “our”, “Payoneer”, and the “Company” refer to Payoneer Global Inc.

Payoneer, incorporated in Delaware, empowers global commerce by connecting businesses, professionals, countries and currencies with its diversified cross-border payments platform. Payoneer enables small and medium-sized businesses (“SMB(s)”) around the globe to reach new audiences by reducing the complexity of cross-border trade, and 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.

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SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2023

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

a.    Principles of consolidation, basis of presentation and accounting principles:

The accompanying condensed consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America (hereafter – U.S. GAAP) and 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 comprehensive 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), 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 months ended March 31, 2023 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, 2022 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 Payoneer Global Inc. and its subsidiaries.

b.    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, allowance for capital advance receivables, income taxes, goodwill, revenue recognition, stock-based compensation, and loss contingencies.

c.    Investment in associated company:

In July 2019, the Company, through its wholly-owned subsidiary Payoneer Research and Development Ltd., entered into an agreement for the establishment of a joint venture company in the Peoples Republic of China (“PRC”). The objective of the joint venture was to apply for a local payment service provider license in accordance with PRC laws. The Company’s share in the Joint Venture was 46%, with the remaining ownership interest held by a local partner. Initial funds in the amount of $6,501 were contributed. The investment in the joint venture was presented as an investment in associated company in the Company’s consolidated balance sheets as the Company did not have control over the joint venture.

In January 2023, the Company, through Payoneer Research and Development Ltd., acquired all remaining interests from other partners in the joint venture. As part of the agreement, the acquiring company assumed responsibility for all expenses and income incurred or earned through the date of acquisition related to the joint venture.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued):

As substantially all of the fair value of the gross assets of the joint venture are concentrated in a group of similar assets (cash and cash equivalents and restricted deposits), the Company accounted for the transaction as an asset acquisition. As such, the Company’s basis in the acquired assets is valued at the amount of consideration transferred, as shown below.

Consideration paid
Cash1	$7,961
Foreign exchange loss on payment1	(100)
Investment in associated company	6,429
Total	$14,290
Assets acquired
Cash and cash equivalents	$6,957
Short-term restricted deposits	6,957
Prepaid assets	24
Tax receivable	59
Intangible assets	293
Total	$14,290
Net cash inflow related to acquisition
Cash and cash equivalents and restricted deposits acquired	$13,914
Cash paid	(7,961)
Net cash inflow	$5,953

________________________________________

(1) The underlying assets of the joint venture were previously valued in CNY. Due to a timing difference of payment date and acquisition agreement settlement date, $100 of foreign exchange loss was recognized at the time of payment through other financial income (expense), net on the condensed consolidated statements of comprehensive income.

The Company acquired $59 in tax receivables which we do not expect to utilize. As such, these receivables were written-off subsequent to acquisition through general and administrative expenses in the condensed consolidated statements of comprehensive income.

The Company also acquired $293 in intangible assets which were determined to have no use to the Company post-acquisition. As such, these assets were completely impaired through depreciation and amortization in the condensed consolidated statements of comprehensive income.

d.    Functional currency and translation:

Prior to January 1, 2023, the Company had a foreign subsidiary that used the local currency of the respective country as its functional currency. As of January 1, 2023, this subsidiary has changed its functional currency to be that of the Company, the U.S. dollar, due to a shift in the subsidiary’s primary revenue streams, which are now substantially all from services provided to the Company.

e.    Recently issued accounting pronouncements:

FASB Standards issued, but not adopted as of March 31, 2023

In 2020, the FASB issued amended guidance that provides transitional relief for the accounting impact of reference rate reform. For a limited duration, this guidance provides optional expedients and exceptions for applying GAAP to certain contract modifications, hedging relationships, and other transactions that will be impacted by a reference rate expected to be discontinued due to reference rate reform. The amended guidance is effective through December 31, 2024. The Company does not expect reference rate reform to have a material impact on the Company’s financial statements.

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CAPITAL ADVANCE ("CA") RECEIVABLES

3 Months Ended

Mar. 31, 2023

CAPITAL ADVANCE ("CA") RECEIVABLE

CAPITAL ADVANCE ("CA") RECEIVABLE

NOTE 3 – CAPITAL ADVANCE (“CA”) RECEIVABLES

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 three months ended March 31, 2023 and 2022, the Company has purchased and collected the following principal amounts associated with CAs:

	Three months ended
	March 31,
	2023		2022
Beginning CA receivables, gross	$	42,466	$	56,101
CA extended to customers		71,476		68,281
Change in revenue receivables		150		(4)
CA collected from customers		(65,973)		(76,352)
Charge-offs, net of recoveries		(631)		(1,101)
Ending CA receivables, gross	$	47,488	$	46,925
Allowance for CA losses		(5,415)		(4,405)
CA receivables, net	$	42,073	$	42,520

The outstanding gross balance at March 31, 2023 consists of the following current and overdue amounts:

			1‑30 days	30‑60	60‑90	Above 90
Total		Current	overdue	overdue	overdue	overdue
$	47,488	44,506	1,030	684	250	1,018

The outstanding gross balance at December 31, 2022 consists of the following current and overdue amounts:

			1‑30 days	30‑60	60‑90	Above 90
Total		Current	overdue	overdue	overdue	overdue
$	42,466	39,945	986	380	104	1,051

The following are current and overdue balances from above that are segregated into the timing of expected collections at March 31, 2023:

			Due in less	Due in 30‑60	Due in 60‑90	Due in more
Total		Overdue	than 30 days	days	days	than 90 days
$	47,488	2,982	8,409	8,591	15,390	12,116

The following are current and overdue balances from above that are segregated into the timing of expected collections at December 31, 2022:

			Due in less	Due in 30‑60	Due in 60‑90	Due in more
Total		Overdue	than 30 days	days	days	than 90 days
$	42,466	2,521	7,354	12,553	14,427	5,611

As of March 31, 2023, the Company applied a range of loss rates to the CA portfolio of 1.59% to 1.86% for the allowance for CA losses. As of December 31, 2022, the Company applied a range of loss rates to the CA portfolio of 1.59% to 1.86%.

NOTE 3 – CAPITAL ADVANCE (“CA”) RECEIVABLES (continued):

Below is a rollforward for the allowance for CA losses (“ALCAL”):

	Three months ended
	March 31,
	2023		2022
Beginning balance	$	5,311	$	2,426
Adjustment for adoption of ASC 326		—		2,505
Provisions		1,261		1,812
Recoveries		(526)		(1,237)
Charge-offs		(631)		(1,101)
Ending balance	$	5,415	$	4,405

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OTHER CURRENT ASSETS

3 Months Ended

Mar. 31, 2023

OTHER CURRENT ASSETS

OTHER CURRENT ASSETS

NOTE 4 - OTHER CURRENT ASSETS

Composition of other current assets, grouped by major classifications, is as follows:

	March 31,		December 31,
	2023		2022
Prepaid expenses	$	20,955	$	12,155
Income receivable		8,420		11,162
Prepaid income taxes		12,794		7,671
Other		2,352		5,290
Total other current assets	$	44,521	$	36,278

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PROPERTY, EQUIPMENT AND SOFTWARE

3 Months Ended

Mar. 31, 2023

PROPERTY, EQUIPMENT AND SOFTWARE

PROPERTY, EQUIPMENT AND SOFTWARE

NOTE 5 – PROPERTY, EQUIPMENT AND SOFTWARE

Composition of property, equipment and software, grouped by major classifications, is as follows:

	March 31,		December 31,
	2023		2022
Computers, software and peripheral equipment	$	36,178	$	34,328
Leasehold improvements		9,814		9,741
Furniture and office equipment		4,530		4,418
Property, equipment and software		50,522		48,487
Accumulated depreciation		(36,187)		(34,095)
Property, equipment and software, net	$	14,335	$	14,392

Depreciation expense for the three months ended March 31, 2023 and 2022 was $2,112 and $1,916, respectively.

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GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2023

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

NOTE 6 – GOODWILL AND INTANGIBLE ASSETS

Goodwill

The following table presents goodwill balances and adjustments to those balances during the three months ended March 31, 2023:

				Foreign
				Currency
	December 31,		Goodwill	Translation	March 31,
	2022		Acquired	Adjustments	2023
Total goodwill	$	19,889	—	—	$	19,889

NOTE 6 – GOODWILL AND INTANGIBLE ASSETS (continued):

Intangible assets, net

Composition of intangible assets, grouped by major classifications, is as follows:

	March 31, 2023						December 31, 2022
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Internal use software	$	83,305	$	(41,415)	$	41,890	$	75,195	$	(38,607)	$	36,588
Developed technology		14,365		(6,190)		8,175		14,365		(5,509)		8,856
Intangible assets, net	$	97,670	$	(47,605)	$	50,065	$	89,560	$	(44,116)	$	45,444

Amortization expense for the three months ended March 31, 2023 and 2022 was $3,602 and $2,539 respectively.

During the three months ended March 31, 2023, the Company recognized impairment of internal use of software in the amount of $32, as well as the $293 impairment of acquired intangibles described in Note 2(c). The impairment is presented under Depreciation and amortization expenses. No impairment was recognized during the three months ended March 31, 2022.

Expected future intangible asset amortization as of March 31, 2023, excluding capitalized internal use software of $24,581 not yet placed in service as of that date, was as follows:

Fiscal years
2023 (Excluding the three months ended March 31, 2023)	$	7,493
2024		11,094
2025		6,657
2026		240
2027		—
Thereafter		—
Total	$	25,484

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OTHER PAYABLES

3 Months Ended

Mar. 31, 2023

OTHER PAYABLES

OTHER PAYABLES

NOTE 7 - OTHER PAYABLES

Composition of other payables, grouped by major classifications, is as follows:

	March 31,		December 31,
	2023		2022
Employee related compensation	$	43,205	$	64,464
Commissions payable		16,525		12,159
Accrued expenses		9,011		10,001
Lease liability		9,462		8,360
Income tax payable		6,143		—
Other		2,705		2,350
Total other payables	$	87,051	$	97,334

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DEBT

3 Months Ended

Mar. 31, 2023

DEBT

DEBT

NOTE 8 – DEBT

On October 28, 2021, Payoneer Early Payments Inc. (“PEPI”), a wholly-owned second tier subsidiary of the Company and its subsidiary (the “Borrower”) entered into a Receivables and Loan Security Agreement (the “Warehouse Facility”) with Viola Credit VI, L.P., Viola Credit Alternative Lending FNX SPV, L.P. (the “Lenders”) and Viola Credit Alternative Lending Management 2018 L.P. (collectively, the “Parties”) for the purpose of external financing of Capital Advance activity. The Company notes that the Lenders are related parties through the Company’s Board of Directors’ chairman’s ownership interest in the Lenders. Refer to Note 17 for further information regarding related party considerations.

NOTE 8 – DEBT (continued):

In accordance with the Warehouse Facility agreement, the Lenders will make available to the Company an initial committed amount of $25,000, which may be increased at the request of the Company, and with the consent of the Lenders, in $25,000 increments up to $100,000. The associated borrowings will be secured by the assets of the Borrower, which consist primarily of capital advance receivables as well as a pledge of the equity of the Borrower. The recourse under the Warehouse Facility agreement is limited to Borrower's assets, and no other Payoneer entity guarantees repayment by the Borrower.

The Warehouse Facility agreement stipulates a borrowing base calculated at an advance rate of 80% out of the eligible portfolio outstanding receivables balance and that borrowings under the facility bear interest as follows: greater of 0.25% or LIBOR plus:

● 9.00% per annum if the commitment amount is $25,000;

● 7.75% per annum if the commitment amount is $50,000;

● 7.50% per annum if the commitment amount is $75,000;

● 7.00% per annum if the commitment amount is $100,000.

On June 8, 2022, the Warehouse Facility agreement was amended to create a condition that the total interest rate, calculated as the sum per above, shall not exceed 10.5% per annum for all outstanding balances.

The revolving period of the facility is 36 months from the closing date and the maturity date is 42 months from the date the Warehouse Facility agreement was entered into.

The Company recorded expenses, included in transaction cost, in the total amount of $421 and $320 for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, the outstanding associated balance was $17,120 with $152 of accrued expenses included in Other payables. As of December 31, 2022, the outstanding associated balance was $16,138 with $153 of accrued expenses included in Other payables.

The Warehouse Facility agreement includes certain affirmative and negative covenants that must be maintained by the Company and includes certain financial measures such as minimum tangible equity and minimum unrestricted cash at the Company level. As of March 31, 2023 and December 31, 2022, the Company was in compliance with all applicable covenants.

As of March 31, 2023 and December 31, 2022, the fair value of the debt approximates the book value due to the short time span between initiation and balance sheet date with the outstanding balance classified as Level 3 in the fair value leveling hierarchy as the inputs into the valuation are not observable.

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OTHER LONG-TERM LIABILITIES

3 Months Ended

Mar. 31, 2023

OTHER LONG-TERM LIABILITIES

OTHER LONG-TERM LIABILITIES

NOTE 9 – OTHER LONG-TERM LIABILITIES

Composition of other long-term liabilities, grouped by major classifications, is as follows:

	March 31,		December 31,
	2023		2022
Reserves for uncertain tax positions	$	23,943	$	21,048
Long-term lease liabilities		5,302		6,514
Severance pay liabilities		2,232		2,252
Other		17		17
Total other long-term liabilities	$	31,494	$	29,831

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WARRANTS

3 Months Ended

Mar. 31, 2023

WARRANTS.

WARRANTS

NOTE 10 – WARRANTS

The Company has publicly traded warrants that are exercisable for shares of the Company’s common stock. Warrants may only be exercised for a whole number of shares at an exercise price of $11.50. These warrants expire on June 25, 2026, or earlier, if redeemed. At March 31, 2023, there were 25,158,086 warrants outstanding with a corresponding liability valued at $26,166. The warrants are considered to be a Level 1 fair value measurement due to the observability of the inputs.

NOTE 10 – WARRANTS (continued):

The warrants are accounted for as liabilities in accordance with ASC 815-40, Derivatives and Hedging, and are presented within warrant liabilities on our condensed consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the condensed consolidated statements of comprehensive income. The following table presents the changes in the fair value of warrant liabilities (Level 1):

	Warrant
	Liability
Fair value as of December 31, 2022	$	25,914
Change in fair value		252
Fair value as of March 31, 2023	$	26,166

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2023

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 11 – COMMITMENTS AND CONTINGENCIES

The Company’s business is subject to various laws and regulations in the United States and other countries from where the Company operates. Any regulatory action, tax or legal challenge against the Company for noncompliance with any regulatory or legal requirement could result in significant fines, penalties, or other enforcement actions, increased costs of doing business through adverse judgment or settlement, reputational harm, the diversion of significant amounts of management time and operational resources, and could require changes in compliance requirements or limits on the Company’s ability to expand its product offerings, or otherwise harm or have a material adverse effect on the Company’s business.

On September 28, 2021, the National Banking and Securities Commission (CNBV) and the Bank of Mexico revoked the banking license of a banking entity utilized by the Company due to the banking entity not meeting applicable capital requirements. As a result, the Company is unable to withdraw funds from the banking entity. The Company has reserved $2,250 for potential losses related to the inaccessible funds above the recovered amount. The Company applied for and recovered the maximum statutory reimbursement through the deposit insurance provided by Mexican Institute for the Protection of Banking Services (IPAB), totaling $140. The Company has filed a claim in liquidation for the remaining funds; however, the percentage of the deposit that will be recovered in liquidation is not known at this time.

From time to time, the Company is involved in other disputes or regulatory inquiries that arise in the ordinary course of business. These may include suits by its customers alleging, among other things, acting unfairly and/or not in conformity regarding pricing, rules or agreements, improper disclosure of our prices, rules, or policies or that our practices, prices, rules, policies, or customer agreements violate applicable law.

In addition to these types of disputes and regulatory inquiries, the operations of the Company are also subject to regulatory and/or legal review and/or challenges that tend to reflect the increasing global regulatory focus to which the industry in which the Company operates is subject and, when taken as a whole with other regulatory and legislative action, such actions could result in the imposition of costly new compliance burdens on the Company and may lead to increased costs and decreased transaction volume and revenue. Any claims or regulatory actions against the Company, whether meritorious or not, could be time consuming, result in costly litigation, settlement payments, damage awards (including statutory damages for certain causes of action in certain jurisdictions), fines, penalties, injunctive relief, or increased costs of doing business through adverse judgment or settlement, require the Company to change our business practices, require significant amounts of management time, result in the diversion of operational resources, or otherwise harm the business.

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REVENUE

3 Months Ended

Mar. 31, 2023

REVENUE

REVENUE

NOTE 12 – REVENUE

The following table presents revenue recognized from contracts with customers as well as revenue from other sources, which consists of interest income:

	Three months ended March 31,
	2023		2022
Revenue recognized at a point in time	$	131,892	$	125,943
Revenue recognized over time		10,064		10,156
Revenue from contracts with customers		141,956		136,099
Revenue from other sources		50,058		859
Total revenues	$	192,014	$	136,958

NOTE 12 – REVENUE (continued):

Based on the information provided to and reviewed by our Chief Operating Decision Maker (“CODM”), we believe that the nature, amount, timing, and uncertainty of our revenue and cash flows and how they are affected by economic factors are most appropriately depicted through our primary regional markets. The following table presents our revenue disaggregated by primary regional market, with revenues being attributed to the country (in the region) in which the billing address of the transacting customer is located.

	Three months ended
	March 31,
	2023		2022
Primary regional markets
Greater China1	$	63,960	$	43,041
Europe2		38,621		28,461
North America3		25,536		20,276
Asia-Pacific2		25,381		19,019
South Asia, Middle East and North Africa2		19,945		15,412
Latin America2		18,571		10,749
Total revenues	$	192,014	$	136,958

________________________________________

(1)Greater China is inclusive of mainland China, Hong Kong and Taiwan

(2)No single country included in any of these regions generated more than 10% of total revenue

(3) The United States is our country of domicile. Of North America revenues, the US represents $24,575 and $19,782 during the three months ended March 31, 2023 and 2022, respectively.

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TRANSACTION COSTS

3 Months Ended

Mar. 31, 2023

TRANSACTION COSTS

TRANSACTION COSTS

NOTE 13 - TRANSACTION COSTS

Composition of transaction costs, grouped by major classifications, is as follows:

	Three Months Ended
	March 31,
	2023		2022
Bank and processor fees	$	20,119	$	19,916
Network fees		4,267		3,416
Chargebacks and operational losses		1,057		501
Card costs		468		431
Capital advance costs, net of recoveries		1,112		942
Other		58		369
Total transaction costs	$	27,081	$	25,575

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STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2023

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

NOTE 14 – STOCK-BASED COMPENSATION

Stock Options and RSUs

The following table summarizes the options to purchase shares of common stock activity under our equity incentive plans for the three months ended March 31, 2023:

	Options
Outstanding at December 31, 2022	34,923,788
Granted	—
Exercised	(2,867,840)
Forfeited	(280,153)
Outstanding at March 31, 2023	31,775,795
Exercisable at March 31, 2023	27,715,435

The weighted average exercise price of the options outstanding as of March 31, 2023 was $2.09 per share.

NOTE 14 – STOCK-BASED COMPENSATION (continued):

The following table summarizes the RSUs activity under our equity incentive plans as of March 31, 2023:

	Units
Outstanding December 31, 2022	25,853,581
Granted	13,549,368
Vested	(3,427,974)
Forfeited	(800,961)
Outstanding March 31, 2023	35,174,014

In the three months ended March 31, 2023, the Company granted 13,549,368 RSUs under the Company’s Omnibus Stock Incentive Plan, which are subject to time-vesting and continued service conditions, and 900,000 of which are subject to time-vesting and continued service conditions as well as stock performance targets.

Employee Stock Purchase Plan

As of March 31, 2023, approximately 6,623,625 shares were reserved for future issuance under the Company’s Employee Stock Purchase Plan (“ESPP”). The fair value attributable to the ESPP was $2,082,528 as of November 15, 2022, the beginning of the current offering period, and was measured using the Monte Carlo model. The current offering period is expected to close May 15, 2023. The expense associated with the ESPP recognized during the quarter ended March 31, 2023 was $1,041,264.

The impact on our results of operations of recording stock-based compensation expense under the Company’s equity incentive plans, including the ESPP, were as follows:

	Three Months Ended
	March 31,
	2023		2022
Other operating expenses	$	2,799	$	2,937
Research and development expenses		3,383		2,144
Sales and marketing expenses		5,976		3,700
General and administrative expenses		4,769		4,127
Total stock-based compensation	$	16,927	$	12,908

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INCOME TAXES

3 Months Ended

Mar. 31, 2023

INCOME TAXES

INCOME TAXES

NOTE 15 - INCOME TAXES

The Company had an effective tax rate of 54% for the three months ended March 31, 2023, compared to an effective tax rate of 9% for the three months ended March 31, 2022. For the three months ended March 31, 2023, the difference between the Company’s effective tax rate and the U.S. federal statutory rate of 21% was the result of foreign income taxed at different rates, including the provision for uncertain tax positions, as well as an increase in potential future tax benefits primarily related to share-based compensation and capitalized research and development, where the Company fully provides a valuation allowance with respect to its realization.

For the three months ended March 31, 2022, the difference between the Company’s effective tax rate and the U.S. federal statutory rate of 21% was the result of foreign income taxed at different rates and the provision for a full valuation allowance in respect of tax benefits from carry forward tax losses due to the uncertainty of the realization of such tax benefits.

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NET EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2023

NET EARNINGS PER SHARE

NET EARNINGS PER SHARE

NOTE 16 – NET EARNINGS PER SHARE

The Company computes net earnings per share using the two-class method required for participating securities. The two-class method requires income available to common shareholders for the period to be allocated between shares of Common Stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

NOTE 16 – NET EARNINGS PER SHARE (continued):

The Company’s basic net earnings per share is calculated by dividing net income attributable to common shareholders by the weighted-average number of shares of common shares outstanding for the period, without consideration of potentially dilutive securities. The diluted net earnings per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net earnings per share is the same as basic net earnings per share in periods when the effects of potentially dilutive shares of common shares are anti-dilutive.

Basic and diluted net earnings per share attributable to common stockholders was calculated as follows:

	Three Months Ended
	March 31,
	2023		2022
	(In thousands, except share and per share data)
Numerator:
Net income	$	7,938	$	20,211
Denominator:
Weighted average common shares outstanding —
Basic		360,220,161		342,324,722
Add:
Dilutive impact of RSUs and options to purchase common stock		27,332,566		22,968,556
Dilutive impact of private Warrants		755,552		698,896
Weighted average common shares – diluted		388,308,279		365,992,174
Net income per share attributable to common stockholders — Basic earnings per share	$	0.02	$	0.06
Diluted earnings per share	$	0.02	$	0.06

Public Warrants, RSUs with market conditions, and Earn-Out Shares (as that term is defined in the Agreement and Plan of Reorganization dated February 3, 2021 (as amended) with FTAC Olympus Acquisition Corp.) have been excluded from the computation of diluted net earnings per share for the three month period ended March 31, 2023 as the conditions were not met or they were not in the money as of the end of the reporting period.

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2023

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 17 – RELATED PARTY TRANSACTIONS

As indicated in Note 8, the Company entered into a Warehouse Facility agreement with Lenders where a member of the Board of Directors has an interest. The Company has evaluated the relationship and determined that the Warehouse Facility agreement represents a related party transaction that has been entered into in the ordinary course of business. As such, the Warehouse Facility agreement was reviewed and approved as a related party transaction in accordance with the related party transaction approval process implemented by the Company.

The Company analyzed the terms of the Warehouse Facility agreement and concluded that the terms represent a transaction conducted at arm’s length.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2023

SUBSEQUENT EVENT

SUBSEQUENT EVENTS

NOTE 18 – SUBSEQUENT EVENTS

On May 7, 2023, our Board of Directors authorized a stock repurchase program that provides for the repurchase of up to $80 million of our common stock over a period of 24 months. Any share repurchases under this stock repurchase program may be made through open market transactions, privately negotiated transactions or other means including in accordance with Rule 10b-18 and/or Rule 10b5-1 of the Exchange Act. The timing and total amount of repurchases is subject to business and market conditions and the company’s discretion.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2023

SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation, basis of presentation and accounting principles:

a.    Principles of consolidation, basis of presentation and accounting principles:

The accompanying condensed consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America (hereafter – U.S. GAAP) and 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 comprehensive 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), 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 months ended March 31, 2023 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, 2022 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 Payoneer Global Inc. and its subsidiaries.

Use of estimates in the preparation of financial statements:

b.    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, allowance for capital advance receivables, income taxes, goodwill, revenue recognition, stock-based compensation, and loss contingencies.

Investment in associated company:

c.    Investment in associated company:

In July 2019, the Company, through its wholly-owned subsidiary Payoneer Research and Development Ltd., entered into an agreement for the establishment of a joint venture company in the Peoples Republic of China (“PRC”). The objective of the joint venture was to apply for a local payment service provider license in accordance with PRC laws. The Company’s share in the Joint Venture was 46%, with the remaining ownership interest held by a local partner. Initial funds in the amount of $6,501 were contributed. The investment in the joint venture was presented as an investment in associated company in the Company’s consolidated balance sheets as the Company did not have control over the joint venture.

In January 2023, the Company, through Payoneer Research and Development Ltd., acquired all remaining interests from other partners in the joint venture. As part of the agreement, the acquiring company assumed responsibility for all expenses and income incurred or earned through the date of acquisition related to the joint venture.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued):

As substantially all of the fair value of the gross assets of the joint venture are concentrated in a group of similar assets (cash and cash equivalents and restricted deposits), the Company accounted for the transaction as an asset acquisition. As such, the Company’s basis in the acquired assets is valued at the amount of consideration transferred, as shown below.

Consideration paid
Cash1	$7,961
Foreign exchange loss on payment1	(100)
Investment in associated company	6,429
Total	$14,290
Assets acquired
Cash and cash equivalents	$6,957
Short-term restricted deposits	6,957
Prepaid assets	24
Tax receivable	59
Intangible assets	293
Total	$14,290
Net cash inflow related to acquisition
Cash and cash equivalents and restricted deposits acquired	$13,914
Cash paid	(7,961)
Net cash inflow	$5,953

________________________________________

(1) The underlying assets of the joint venture were previously valued in CNY. Due to a timing difference of payment date and acquisition agreement settlement date, $100 of foreign exchange loss was recognized at the time of payment through other financial income (expense), net on the condensed consolidated statements of comprehensive income.

The Company acquired $59 in tax receivables which we do not expect to utilize. As such, these receivables were written-off subsequent to acquisition through general and administrative expenses in the condensed consolidated statements of comprehensive income.

The Company also acquired $293 in intangible assets which were determined to have no use to the Company post-acquisition. As such, these assets were completely impaired through depreciation and amortization in the condensed consolidated statements of comprehensive income.

Functional currency and translation:

d.    Functional currency and translation:

Prior to January 1, 2023, the Company had a foreign subsidiary that used the local currency of the respective country as its functional currency. As of January 1, 2023, this subsidiary has changed its functional currency to be that of the Company, the U.S. dollar, due to a shift in the subsidiary’s primary revenue streams, which are now substantially all from services provided to the Company.

Recently issued accounting pronouncements:

e.    Recently issued accounting pronouncements:

FASB Standards issued, but not adopted as of March 31, 2023

In 2020, the FASB issued amended guidance that provides transitional relief for the accounting impact of reference rate reform. For a limited duration, this guidance provides optional expedients and exceptions for applying GAAP to certain contract modifications, hedging relationships, and other transactions that will be impacted by a reference rate expected to be discontinued due to reference rate reform. The amended guidance is effective through December 31, 2024. The Company does not expect reference rate reform to have a material impact on the Company’s financial statements.

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SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2023

SIGNIFICANT ACCOUNTING POLICIES

Summary of the Company's basis in acquired assets

Consideration paid
Cash1	$7,961
Foreign exchange loss on payment1	(100)
Investment in associated company	6,429
Total	$14,290
Assets acquired
Cash and cash equivalents	$6,957
Short-term restricted deposits	6,957
Prepaid assets	24
Tax receivable	59
Intangible assets	293
Total	$14,290
Net cash inflow related to acquisition
Cash and cash equivalents and restricted deposits acquired	$13,914
Cash paid	(7,961)
Net cash inflow	$5,953

________________________________________

(1) The underlying assets of the joint venture were previously valued in CNY. Due to a timing difference of payment date and acquisition agreement settlement date, $100 of foreign exchange loss was recognized at the time of payment through other financial income (expense), net on the condensed consolidated statements of comprehensive income.

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CAPITAL ADVANCE ("CA") RECEIVABLE (Tables)

3 Months Ended

Mar. 31, 2023

CAPITAL ADVANCE ("CA") RECEIVABLE

Schedule of purchased and collected principal amounts associated with Capital Advance (CA) receivables

During the three months ended March 31, 2023 and 2022, the Company has purchased and collected the following principal amounts associated with CAs:

	Three months ended
	March 31,
	2023		2022
Beginning CA receivables, gross	$	42,466	$	56,101
CA extended to customers		71,476		68,281
Change in revenue receivables		150		(4)
CA collected from customers		(65,973)		(76,352)
Charge-offs, net of recoveries		(631)		(1,101)
Ending CA receivables, gross	$	47,488	$	46,925
Allowance for CA losses		(5,415)		(4,405)
CA receivables, net	$	42,073	$	42,520

Schedule of current and overdue amounts of CAs

The outstanding gross balance at March 31, 2023 consists of the following current and overdue amounts:

			1‑30 days	30‑60	60‑90	Above 90
Total		Current	overdue	overdue	overdue	overdue
$	47,488	44,506	1,030	684	250	1,018

The outstanding gross balance at December 31, 2022 consists of the following current and overdue amounts:

			1‑30 days	30‑60	60‑90	Above 90
Total		Current	overdue	overdue	overdue	overdue
$	42,466	39,945	986	380	104	1,051

Schedule of current and overdue balances CAs that are segregated into the timing of expected collections

The following are current and overdue balances from above that are segregated into the timing of expected collections at March 31, 2023:

			Due in less	Due in 30‑60	Due in 60‑90	Due in more
Total		Overdue	than 30 days	days	days	than 90 days
$	47,488	2,982	8,409	8,591	15,390	12,116

The following are current and overdue balances from above that are segregated into the timing of expected collections at December 31, 2022:

			Due in less	Due in 30‑60	Due in 60‑90	Due in more
Total		Overdue	than 30 days	days	days	than 90 days
$	42,466	2,521	7,354	12,553	14,427	5,611

Schedule of rollforward for the allowance for CA losses ("ALCAL")

Below is a rollforward for the allowance for CA losses (“ALCAL”):

	Three months ended
	March 31,
	2023		2022
Beginning balance	$	5,311	$	2,426
Adjustment for adoption of ASC 326		—		2,505
Provisions		1,261		1,812
Recoveries		(526)		(1,237)
Charge-offs		(631)		(1,101)
Ending balance	$	5,415	$	4,405

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OTHER CURRENT ASSETS (Tables)

3 Months Ended

Mar. 31, 2023

OTHER CURRENT ASSETS

Schedule of composition of other current assets

Composition of other current assets, grouped by major classifications, is as follows:

	March 31,		December 31,
	2023		2022
Prepaid expenses	$	20,955	$	12,155
Income receivable		8,420		11,162
Prepaid income taxes		12,794		7,671
Other		2,352		5,290
Total other current assets	$	44,521	$	36,278

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PROPERTY, EQUIPMENT AND SOFTWARE (Tables)

3 Months Ended

Mar. 31, 2023

PROPERTY, EQUIPMENT AND SOFTWARE

Schedule of composition of property, equipment and software, grouped by major classifications

Composition of property, equipment and software, grouped by major classifications, is as follows:

	March 31,		December 31,
	2023		2022
Computers, software and peripheral equipment	$	36,178	$	34,328
Leasehold improvements		9,814		9,741
Furniture and office equipment		4,530		4,418
Property, equipment and software		50,522		48,487
Accumulated depreciation		(36,187)		(34,095)
Property, equipment and software, net	$	14,335	$	14,392

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GOODWILL AND INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2023

GOODWILL AND INTANGIBLE ASSETS

Goodwill balances and adjustments to those balances

				Foreign
				Currency
	December 31,		Goodwill	Translation	March 31,
	2022		Acquired	Adjustments	2023
Total goodwill	$	19,889	—	—	$	19,889

Schedule of composition of intangible assets, grouped by major classifications

	March 31, 2023						December 31, 2022
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Internal use software	$	83,305	$	(41,415)	$	41,890	$	75,195	$	(38,607)	$	36,588
Developed technology		14,365		(6,190)		8,175		14,365		(5,509)		8,856
Intangible assets, net	$	97,670	$	(47,605)	$	50,065	$	89,560	$	(44,116)	$	45,444

Schedule of expected future intangible asset amortization

Fiscal years
2023 (Excluding the three months ended March 31, 2023)	$	7,493
2024		11,094
2025		6,657
2026		240
2027		—
Thereafter		—
Total	$	25,484

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OTHER PAYABLES (Tables)

3 Months Ended

Mar. 31, 2023

OTHER PAYABLES

Schedule of composition of other payables, grouped by major classifications

	March 31,		December 31,
	2023		2022
Employee related compensation	$	43,205	$	64,464
Commissions payable		16,525		12,159
Accrued expenses		9,011		10,001
Lease liability		9,462		8,360
Income tax payable		6,143		—
Other		2,705		2,350
Total other payables	$	87,051	$	97,334

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OTHER LONG-TERM LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2023

OTHER LONG-TERM LIABILITIES

Summary of composition of other long-term liabilities, grouped by major classifications

	March 31,		December 31,
	2023		2022
Reserves for uncertain tax positions	$	23,943	$	21,048
Long-term lease liabilities		5,302		6,514
Severance pay liabilities		2,232		2,252
Other		17		17
Total other long-term liabilities	$	31,494	$	29,831

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WARRANTS (Tables)

3 Months Ended

Mar. 31, 2023

WARRANTS.

Schedule of changes in fair value of warrant liabilities

	Warrant
	Liability
Fair value as of December 31, 2022	$	25,914
Change in fair value		252
Fair value as of March 31, 2023	$	26,166

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REVENUE (Tables)

3 Months Ended

Mar. 31, 2023

REVENUE

Schedule of revenue recognized from contracts with customers as well as revenue from other sources

The following table presents revenue recognized from contracts with customers as well as revenue from other sources, which consists of interest income:

	Three months ended March 31,
	2023		2022
Revenue recognized at a point in time	$	131,892	$	125,943
Revenue recognized over time		10,064		10,156
Revenue from contracts with customers		141,956		136,099
Revenue from other sources		50,058		859
Total revenues	$	192,014	$	136,958

Schedule of revenue disaggregated by primary geographical market

	Three months ended
	March 31,
	2023		2022
Primary regional markets
Greater China1	$	63,960	$	43,041
Europe2		38,621		28,461
North America3		25,536		20,276
Asia-Pacific2		25,381		19,019
South Asia, Middle East and North Africa2		19,945		15,412
Latin America2		18,571		10,749
Total revenues	$	192,014	$	136,958

________________________________________

(1)Greater China is inclusive of mainland China, Hong Kong and Taiwan

(2)No single country included in any of these regions generated more than 10% of total revenue

(3) The United States is our country of domicile. Of North America revenues, the US represents $24,575 and $19,782 during the three months ended March 31, 2023 and 2022, respectively.

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TRANSACTION COSTS (Tables)

3 Months Ended

Mar. 31, 2023

TRANSACTION COSTS.

Schedule of composition of transaction costs, grouped by major classifications

	Three Months Ended
	March 31,
	2023		2022
Bank and processor fees	$	20,119	$	19,916
Network fees		4,267		3,416
Chargebacks and operational losses		1,057		501
Card costs		468		431
Capital advance costs, net of recoveries		1,112		942
Other		58		369
Total transaction costs	$	27,081	$	25,575

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STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2023

STOCK-BASED COMPENSATION

Schedule of options to purchase shares of common stock activity under our equity incentive plans

	Options
Outstanding at December 31, 2022	34,923,788
Granted	—
Exercised	(2,867,840)
Forfeited	(280,153)
Outstanding at March 31, 2023	31,775,795
Exercisable at March 31, 2023	27,715,435

Schedule of RSUs activity

NOTE 14 – STOCK-BASED COMPENSATION (continued):

The following table summarizes the RSUs activity under our equity incentive plans as of March 31, 2023:

	Units
Outstanding December 31, 2022	25,853,581
Granted	13,549,368
Vested	(3,427,974)
Forfeited	(800,961)
Outstanding March 31, 2023	35,174,014

Schedule of stock-based compensation expense

	Three Months Ended
	March 31,
	2023		2022
Other operating expenses	$	2,799	$	2,937
Research and development expenses		3,383		2,144
Sales and marketing expenses		5,976		3,700
General and administrative expenses		4,769		4,127
Total stock-based compensation	$	16,927	$	12,908

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NET EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2023

NET EARNINGS PER SHARE

Schedule of basic and diluted net earnings per share attributable to common stockholders

	Three Months Ended
	March 31,
	2023		2022
	(In thousands, except share and per share data)
Numerator:
Net income	$	7,938	$	20,211
Denominator:
Weighted average common shares outstanding —
Basic		360,220,161		342,324,722
Add:
Dilutive impact of RSUs and options to purchase common stock		27,332,566		22,968,556
Dilutive impact of private Warrants		755,552		698,896
Weighted average common shares – diluted		388,308,279		365,992,174
Net income per share attributable to common stockholders — Basic earnings per share	$	0.02	$	0.06
Diluted earnings per share	$	0.02	$	0.06

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SIGNIFICANT ACCOUNT POLICIES - Investment in associated company (Details) - USD ($) $ in Thousands	1 Months Ended
	Jan. 31, 2023	Jul. 31, 2019
Sharon Information Technology Shanghai and Shenzhen BaoLiJie, Ltc.
Assets acquired
Cash and cash equivalents	$ 6,957
Short-term restricted deposits	6,957
Prepaid assets	24
Tax receivable	59
Intangible assets	293
Total	14,290
Sharon Information Technology Shanghai and Shenzhen BaoLiJie, Ltc.
Consideration paid
Cash	7,961
Foreign exchange loss on payment	(100)
Investment in associated company	6,429
Total	$ 14,290
Peoples Republic of China ("PRC") [Member]
Asset Acquisition [Line Items]
Percentage of share in the Joint Venture		46.00%
Initial funds contributed for establishment of joint venture		$ 6,501

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SIGNIFICANT ACCOUNT POLICIES - Cash flows related to investment in associated company (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Jan. 31, 2023	Mar. 31, 2023
Net cash inflow related to acquisition
Net cash inflow		$ 5,953
Local partner
Net cash inflow related to acquisition
Cash and cash equivalents and restricted deposits acquired	$ 13,914
Cash paid	(7,961)
Net cash inflow	$ 5,953

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CAPITAL ADVANCE ("CA") RECEIVABLES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
CAPITAL ADVANCE ("CA") RECEIVABLE
CA receivable, gross, beginning balance	$ 42,466	$ 56,101
CA extended to customers	71,476	68,281
Change in revenue receivables	150	(4)
CA collected from customers	(65,973)	(76,352)
Charge-offs, net of recoveries	(631)	(1,101)
CA receivable, gross, ending balance	47,488	46,925
Allowance for CA losses	(5,415)	(4,405)	$ (5,311)
CA receivable, net, ending balance	$ 42,073	$ 42,520

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CAPITAL ADVANCE ("CA") RECEIVABLES - current and overdue amounts (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Financing Receivable, Past Due [Line Items]
Total	$ 47,488	$ 42,466	$ 46,925	$ 56,101
Current
Financing Receivable, Past Due [Line Items]
Total	44,506	39,945
1-30 days overdue
Financing Receivable, Past Due [Line Items]
Total	1,030	986
30-60 overdue
Financing Receivable, Past Due [Line Items]
Total	684	380
60-90 overdue
Financing Receivable, Past Due [Line Items]
Total	250	104
Above 90 overdue
Financing Receivable, Past Due [Line Items]
Total	$ 1,018	$ 1,051

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CAPITAL ADVANCE ("CA") RECEIVABLES - Timing of expected collections (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Financing Receivable, Past Due [Line Items]
Total	$ 47,488	$ 42,466	$ 46,925	$ 56,101
Overdue
Financing Receivable, Past Due [Line Items]
Total	2,982	2,521
Due in less than 30 days
Financing Receivable, Past Due [Line Items]
Total	8,409	7,354
Due in 30-60 days
Financing Receivable, Past Due [Line Items]
Total	8,591	12,553
Due in 60-90 days
Financing Receivable, Past Due [Line Items]
Total	15,390	14,427
Due in more than 90 days
Financing Receivable, Past Due [Line Items]
Total	$ 12,116	$ 5,611

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CAPITAL ADVANCE ("CA") RECEIVABLES - Allowance for CA losses (ALCAL) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Financing Receivable, Allowance for Credit Loss [Roll Forward]
ALCAL balance, beginning	$ 5,311	$ 2,426
Provision for ALCAL	1,261	1,812
Recoveries for ALCAL	(526)	(1,237)
CA receivables charged off	(631)	(1,101)
ALCAL balance, ending	$ 5,415	4,405
Adjustment for adoption of ASC 326
Financing Receivable, Allowance for Credit Loss [Roll Forward]
ALCAL balance, beginning		$ 2,505
Minimum
Financing Receivable, Allowance for Credit Loss [Line Items]
Percentage of loss rate to the allowance for CA losses	1.59%	1.59%
Maximum
Financing Receivable, Allowance for Credit Loss [Line Items]
Percentage of loss rate to the allowance for CA losses	1.86%	1.86%

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OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
OTHER CURRENT ASSETS
Prepaid expenses	$ 20,955	$ 12,155
Income receivable	8,420	11,162
Prepaid income taxes	12,794	7,671
Other	2,352	5,290
Total other current assets	$ 44,521	$ 36,278

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PROPERTY, EQUIPMENT AND SOFTWARE, NET (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property, equipment and software	$ 50,522		$ 48,487
Accumulated depreciation	(36,187)		(34,095)
Property, equipment and software, net	14,335		14,392
Depreciation expense	2,112	$ 1,916
Computers, software and peripheral equipment
Property, Plant and Equipment [Line Items]
Property, equipment and software	36,178		34,328
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, equipment and software	9,814		9,741
Furniture and office equipment
Property, Plant and Equipment [Line Items]
Property, equipment and software	$ 4,530		$ 4,418

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GOODWILL AND INTANGIBLE ASSETS, NET (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 19,889
Ending balance	$ 19,889

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GOODWILL AND INTANGIBLE ASSETS, NET - Intangible assets, net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Intangible assets	$ 97,670		$ 89,560
Accumulated amortization	(47,605)		(44,116)
Intangible assets net	50,065		45,444
Amortization expense	3,602	$ 2,539
Impairment of intangible assets		$ 0
Internal use software
Finite-Lived Intangible Assets [Line Items]
Intangible assets	83,305		75,195
Accumulated amortization	(41,415)		(38,607)
Intangible assets net	41,890		36,588
Impairment of intangible assets	32
Developed technology
Finite-Lived Intangible Assets [Line Items]
Intangible assets	14,365		14,365
Accumulated amortization	(6,190)		(5,509)
Intangible assets net	8,175		$ 8,856
Acquired intangibles
Finite-Lived Intangible Assets [Line Items]
Impairment of intangible assets	$ 293

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GOODWILL AND INTANGIBLE ASSETS - Future intangible asset (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Intangible assets net	$ 50,065	$ 45,444
Capitalized internal use software not yet placed in service	24,581
Excluding capitalized internal use software
Finite-Lived Intangible Assets [Line Items]
2023 (Excluding the three months ended March, 31, 2023)	7,493
2024	11,094
2025	6,657
2026	240
Intangible assets net	$ 25,484

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OTHER PAYABLES (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
OTHER PAYABLES
Employee related compensation	$ 43,205	$ 64,464
Commissions payable	16,525	12,159
Accrued expenses	9,011	10,001
Lease liability	9,462	8,360
Income tax payable	6,143
Other	2,705	2,350
Total	$ 87,051	$ 97,334

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DEBT (Details) - Receivables And Loan Security Agreement - USD ($) $ in Thousands			3 Months Ended
	Jun. 08, 2022	Oct. 28, 2021	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Debt Instrument [Line Items]
Aggregate principal amount		$ 100,000
Initial borrowing commitment		$ 25,000
Initial rate of value of underlying capital advance receivables outstanding		80.00%
Revolving maturity term		36 months
Additional payback period after revolving maturity date		42 months
Floating rate (in percent)		0.25%
Expenses included in transaction cost			$ 421	$ 320
Outstanding balance associated with related party			17,120		$ 16,138
Accrued expenses associated with related party			$ 152		$ 153
Maximum
Debt Instrument [Line Items]
Basis spread on floating rate	10.50%
LIBOR | Commitment amount equal to 25,000
Debt Instrument [Line Items]
Basis spread on floating rate		9.00%
LIBOR | Commitment amount equal to 50,000
Debt Instrument [Line Items]
Basis spread on floating rate		7.75%
LIBOR | Commitment amount equal to 75,000
Debt Instrument [Line Items]
Basis spread on floating rate		7.50%
LIBOR | Commitment amount equal to 100,000
Debt Instrument [Line Items]
Basis spread on floating rate		7.00%

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OTHER LONG-TERM LIABILITIES (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
OTHER LONG-TERM LIABILITIES
Reserves for uncertain tax positions	$ 23,943	$ 21,048
Long-term lease liabilities	5,302	6,514
Severance pay liabilities	2,232	2,252
Other	17	17
Total other long-term liabilities	$ 31,494	$ 29,831

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WARRANTS - Narrative (Details) $ / shares in Units, $ in Thousands	Mar. 31, 2023 USD ($) $ / shares shares
WARRANTS.
Exercise price of warrants | $ / shares	$ 11.50
Warrants outstanding | shares	25,158,086
Warrants outstanding amount | $	$ 26,166

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WARRANTS - Changes in fair value of warrant liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
WARRANTS.
Fair value at beginning of period	$ 25,914
Change in fair value of Warrants	252	$ (31,196)
Fair value at end of period	$ 26,166

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COMMITMENTS AND CONTINGENCIES (Details) - CNBV and Bank of Mexico $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Loss Contingencies [Line Items]
Maximum amount of exposure	$ 2,250
Deposit insurance provided by IPAB	$ 140

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REVENUE - Revenue Recognized From Contracts With Customers (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	$ 141,956	$ 136,099
Revenue from other sources	50,058	859
Total revenues	192,014	136,958
Revenue recognized at a point in time
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	131,892	125,943
Revenue recognized over time
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	$ 10,064	$ 10,156

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REVENUE - Primary Geographical Market (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Total revenues	$ 192,014	$ 136,958
Greater China
Disaggregation of Revenue [Line Items]
Total revenues	63,960	43,041
Europe
Disaggregation of Revenue [Line Items]
Total revenues	38,621	28,461
North America
Disaggregation of Revenue [Line Items]
Total revenues	25,536	20,276
Asia-Pacific
Disaggregation of Revenue [Line Items]
Total revenues	25,381	19,019
South Asia, Middle East and North Africa
Disaggregation of Revenue [Line Items]
Total revenues	19,945	15,412
Latin America
Disaggregation of Revenue [Line Items]
Total revenues	18,571	10,749
United States
Disaggregation of Revenue [Line Items]
Total revenues	$ 24,575	$ 19,782

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TRANSACTION COSTS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
TRANSACTION COSTS.
Bank and processor fees	$ 20,119	$ 19,916
Network fees	4,267	3,416
Chargebacks and operational losses	1,057	501
Card costs	468	431
Capital advance costs, net of recoveries	1,112	942
Other	58	369
Total transaction costs	$ 27,081	$ 25,575

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STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) - Stock options	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Options to purchase shares of common stock activity
Outstanding at beginning of period	34,923,788
Exercised	(2,867,840)
Forfeited	(280,153)
Outstanding at end of period	31,775,795
Exercisable at end of period	27,715,435
Weighted average exercise price | $ / shares	$ 2.09

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STOCK-BASED COMPENSATION - Summary of RSU activity (Details)	3 Months Ended
	Mar. 31, 2023 shares
Restricted stock units
RSUs Units
Outstanding at beginning of period	25,853,581
Granted	13,549,368
Vested	(3,427,974)
Forfeited	(800,961)
Outstanding at end of period	35,174,014
Restricted stock units subject to continued service conditions and market conditions
RSUs Units
Granted	900,000

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STOCK BASED COMPENSATION - Employee Stock Purchase Plan (Details) - ESPP	3 Months Ended
	Mar. 31, 2023 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares were reserved for future issuance | shares	6,623,625
Fair value attributable to ESPP	$ 2,082,528
ESPP expense recognized	$ 1,041,264

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STOCK-BASED COMPENSATION - Stock-based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 16,927	$ 12,908
Other operating expenses
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	2,799	2,937
Research and development expenses
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	3,383	2,144
Sales and marketing expenses
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	5,976	3,700
General and administrative expenses
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 4,769	$ 4,127

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INCOME TAXES (Details)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
INCOME TAXES
Effective income tax rate	54.00%	9.00%
U.S. federal statutory rate	21.00%	21.00%

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NET EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Numerator:
Net income	$ 7,938	$ 20,211
Denominator:
Weighted average common shares outstanding - Basic	360,220,161	342,324,722
Dilutive impact of RSUs and options to purchase common stock	27,332,566	22,968,556
Dilutive impact of warrants	755,552	698,896
Weighted average common shares outstanding - Diluted	388,308,279	365,992,174
Net income per share attributable to common stockholders - Basic earnings per share	$ 0.02	$ 0.06
Diluted earnings per share	$ 0.02	$ 0.06

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SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] - Stock repurchase program $ in Millions	May 07, 2023 USD ($)
Subsequent Event [Line Items]
Term of stock repurchase program	24 months
Maximum
Subsequent Event [Line Items]
Amount authorized for stock repurchase program	$ 80