10-K: REGO Payment Architectures Reports 2024 Annual Results, Focuses on Mazoola Platform Monetization

REGO Payment Architectures, Inc. files its 10-K for 2024, highlighting its focus on monetizing the Mazoola digital wallet platform and expanding into new markets while addressing ongoing financial challenges.

Summary

• REGO Payment Architectures, Inc. reported a net loss attributable to common stockholders of $11.6 million for the year ended December 31, 2024, compared to $18.9 million for the year ended December 31, 2023.
• The company's accumulated deficit as of December 31, 2024, was approximately $147.7 million.
• As of March 31, 2025, REGO had a cash position of approximately $1.6 million.
• REGO is focused on monetizing its Mazoola Digital Wallet Platform in the FinTech industry through white label, licensing, and partnership agreements.
• The company is expanding its product suite to address the aging parents demographic with its Silver Shield product.
• REGO has four issued patents and is pursuing additional patent protection.
• The company is targeting established brands with large family-focused account bases, including banks and telecommunication companies.
• REGO's management believes that its existing cash resources will not be sufficient to sustain operations during the next twelve months and will need to raise additional capital.
• The company's independent accountants' report for the fiscal year ended December 31, 2024, contains a qualification raising substantial doubt about its ability to continue as a going concern.
• The company has extended the maturity dates of its 10% Secured Convertible Promissory Notes and 4% Secured Convertible Promissory Notes to February 28, 2025, with a possible extension to April 30, 2025.

Sentiment

Score: 3

Explanation: The document presents a concerning financial picture with significant losses, an accumulated deficit, and a going concern warning from the auditor. While there are some positive developments in terms of partnerships and product expansion, the overall sentiment is negative due to the company's financial instability and need for additional capital.

Positives

• REGO is focused on monetizing its Mazoola Digital Wallet Platform in the FinTech industry through white label, licensing, and partnership agreements.
• The company is expanding its product suite to address the aging parents demographic with its Silver Shield product.
• REGO has strategic partnerships with Computer Services, Inc. (CSI) and Jack Henry & Associates to offer its family wallet to their networks of financial institutions.
• The company has four issued patents and is pursuing additional patent protection.

Negatives

• REGO Payment Architectures, Inc. reported a net loss attributable to common stockholders of $11.6 million for the year ended December 31, 2024.
• The company's accumulated deficit as of December 31, 2024, was approximately $147.7 million.
• As of March 31, 2025, REGO had a cash position of approximately $1.6 million.
• REGO's management believes that its existing cash resources will not be sufficient to sustain operations during the next twelve months and will need to raise additional capital.
• The company's independent accountants' report for the fiscal year ended December 31, 2024, contains a qualification raising substantial doubt about its ability to continue as a going concern.

Risks

• REGO's ability to continue as a going concern is uncertain due to its history of losses and the need for additional capital.
• The company faces risks associated with developing and marketing new technologies in a competitive industry.
• REGO's success depends on consumer and industry acceptance of its platform, which is currently unproven.
• The company is subject to fluctuations in demand for its platform due to various economic and market factors.
• Security breaches and other disruptions could compromise REGO's information and expose it to liability.
• REGO's lack of patent and/or copyright protection and any unauthorized use of the platform by third parties may adversely affect its business.
• The company may be subject to claims with respect to the infringement of intellectual property rights of others.
• The impact of laws regulating financial institutions may adversely impact REGO's business.
• Any capacity constraints or system disruptions, including natural disasters, could have a material adverse effect on REGO's business.
• Use of REGO's services for illegal purposes could be detrimental to its business.
• REGO may be subject to credit card transaction fraud.
• If REGO is unable to effectively protect its intellectual property rights on a worldwide basis, it may not be successful in the planned international expansion of its Platform.
• REGO's strategic alternatives process may not result in a successful corporate transaction or liquidity event.
• If REGO is unable successfully to manage growth, its operations could be adversely affected.
• As a public company, REGO is required to incur substantial expenses.
• If REGO does not have current information about its Company available to market makers, they will not be able to trade its stock.
• REGO operates in a highly competitive industry and competes against many large companies.
• Trading in REGO's common stock has been limited, there is no significant trading market for its common stock, and purchasers of its common stock may be unable to sell their shares.
• REGO may not be able to qualify to have its common stock listed on a national stock exchange.
• Applicable SEC rules governing the trading of penny stocks may limit the trading and liquidity of REGO's common stock which may affect the trading price of its common stock.
• REGO has outstanding shares of preferred stock with rights and preferences superior to those of its common stock.
• Sales of a substantial number of shares of REGO's common stock in the public market originally issued through the conversion of preferred stock, exercise of options or warrants, or additional financing transactions could adversely affect the market price of its common stock and would have a dilutive effect upon its shareholders.
• REGO may require shareholders to authorize additional shares for it to properly finance its business.
• Managements judgment could impact the amount of non-cash compensation expense.

Future Outlook

REGO anticipates generating revenue from multiple sources, including subscription fees, service fees, transaction fees, and revenue sharing with banking and distribution partners. The company expects to seek additional revenue streams through private labeling licenses, data analytics sales, and advertising revenue. Management believes the Company will be able to finance its operations through June 2025.

Management Comments

• Management believes that building on its COPPA advantage the future of REGO Payment Architectures, Inc. will be based on the foundational architecture of the Platform that will allow its use across multiple financial markets where secure controlled payments are needed.
• Management believes this approach will enable the Company to reduce expenses while broadening its reach.

Industry Context

REGO operates in the highly competitive global payments industry, facing competition from larger companies with greater resources. The company is focusing on the FinTech industry, which is experiencing rapid growth and innovation, particularly in digital payments and mobile banking. REGO is positioning itself as a provider of family-focused financial solutions, emphasizing ease of use, security, and compliance with regulations like COPPA and GDPR.

Comparison to Industry Standards

• The U.S. Fintech market has achieved a $4.10 trillion market size in 2024 and projects a Compound Annual Growth Rate (CAGR) of 11.2% over the next 10 years.
• In the U.S., the leading FinTech segment is digital payment, which is projected to exceed $3 trillion in 2025 and increasing to approximately $7 trillion by 2029.
• Mobile POS Payments comprise the largest digital payment sector with a projected total transaction value of approximately $2 trillion in 2025.
• 60% of credit unions and 49% of banks believe partnerships with FinTech companies are important.
• In 2025, the U.S. will account for more than 62% of the global FinTech transaction value.
• 75% of global consumers have used at least one fintech service to pay online or by using a mobile application.
• 78% of U.S. consumers prefer to bank via a mobile app or website.
• In 2024, 9 out of 10 Americans were using digital payments.
• Comparable companies include PayPal, Apple, Goldman Sachs, PWC, JP Morgan, Samsung, Amazon, Venmo, Amex Bluebird, FamZoo and Visa Buxx.

Legal Proceedings

• In September 2014, the Company received a subpoena from the Securities and Exchange Commission with respect to the preservation and production of documents relating to an investigation into trading in the Companys stock.
• The subpoena states that it should not be construed as an indication by the Securities and Exchange Commission that any violation of law has occurred, nor as a reflection upon any person, entity or security.
• The Company has been cooperating fully with the terms of the subpoena.

Related Party Transactions

• The Company entered into an employment agreement with Peter S. Pelullo, its Chief Executive Officer, who is a more than 5% beneficial owner.
• The Company has entered into a consulting agreement with the son of Mr. Pelullo, at a cost of $10,000 per month, plus expenses.

Stakeholder Impact

• Shareholders face the risk of dilution if the company raises additional capital through equity offerings.
• Employees' job security is uncertain due to the company's financial instability.
• Customers may be concerned about the long-term viability of the Mazoola platform.
• Suppliers and creditors face the risk of non-payment if the company's financial situation does not improve.

Next Steps

• REGO intends to seek to raise financing through the sale of debt and/or equity securities.
• The company will continue to focus on product distribution and licensing and technology and product development.
• REGO will continue to explore strategic alternatives.

Key Dates

Keywords

Mazoola, FinTech, COPPA, GDPR, digital wallet, mobile payment, financial literacy, REGO Payment Architectures, financial platform