[10-Q] RYVYL Inc. Quarterly Earnings Report
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(MARK ONE)
For
the quarterly period ended
OR
For the transition period from to
Commission
file number:
RTB DIGITAL, INC.
(Exact name of small business issuer as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification Number) |
| (Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The Nasdaq Stock Market LLC ( |
Indicate
by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past
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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 | ☐ |
| ☒ | 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 12, 2026, the Registrant had
TABLE OF CONTENTS
| Page | |||
| PART I Consolidated Financial Information | |||
| Item 1. | Financial Statements | 1 | |
| Condensed Consolidated Balance Sheets as of March 31, 2026 (unaudited) and December 31, 2025 | 1 | ||
| Condensed Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended March 31, 2026 (unaudited) and 2025 (unaudited) | 2 | ||
| Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2026 (unaudited) and 2025 (unaudited) | 3 | ||
| Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 (unaudited) and 2025 (unaudited) | 4 | ||
| Notes to Unaudited Condensed Consolidated Financial Statements | 5 | ||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 | |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 30 | |
| Item 4. | Controls and Procedures | 30 | |
| PART II Other Information | |||
| Item 1. | Legal Proceedings | 31 | |
| Item 1.A | Risk Factors | 32 | |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 32 | |
| Item 3. | Defaults Upon Senior Securities | 33 | |
| Item 4. | Mine Safety Disclosures | 33 | |
| Item 5. | Other Information | 33 | |
| Item 6. | Exhibits | 33 | |
| Signatures | 34 | ||
i
Table of Contents
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RYVYL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
| March 31, 2026 | December 31, 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| USDC | ||||||||
| Accounts receivable, net of allowance for credit losses of $ | ||||||||
| Prepaid and other current assets | ||||||||
| Total current assets | ||||||||
| Non-current Assets: | ||||||||
| Intangible assets, net | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Other assets | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Payment processing liabilities, net | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Long term debt, net of debt discount | ||||||||
| Operating lease liabilities, less current portion | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 14) | ||||||||
| Stockholders’ (Deficit) Equity: | ||||||||
| Convertible Preferred stock: $ Preferred stock, Series C, par value $ | ||||||||
| Common stock, par value $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ (deficit) equity | ( | ) | ||||||
| Total liabilities and stockholders’ (deficit) equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
Table of Contents
RYVYL INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except share and per share data)
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Research and development | ||||||||
| General and administrative | ||||||||
| Payroll and payroll taxes | ||||||||
| Professional fees | ||||||||
| Stock compensation expense | ||||||||
| Depreciation and amortization | ||||||||
| Impairment of ROU asset | ||||||||
| Restructuring charges | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Legal settlements expense | ( | ) | ||||||
| Accretion of debt discount | ( | ) | ||||||
| Other (expense) income, net | ( | ) | ||||||
| Total other expense, net | ( | ) | ( | ) | ||||
| Loss from continuing operations before income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| Net loss from continuing operations | ( | ) | ( | ) | ||||
| Income from discontinued operations, net of tax | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Comprehensive income statement: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Foreign currency translation adjustment | ||||||||
| Total comprehensive loss | $ | ( | ) | $ | ( | ) | ||
| Net loss per share: | ||||||||
| Basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of common shares outstanding: | ||||||||
| Basic and diluted | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
Table of Contents
RYVYL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(In thousands, except share data)
(Unaudited)
| Common Stock | Preferred Stock | Additional | Total | |||||||||||||||||||||||||
| Shares | Amount | Series C Shares | Amount | Paid In Capital | Accumulated Deficit | Stockholders’ Deficit | ||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Issuance of common stock under equity incentive plans | - | - | - | - | ||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | |||||||||||||||||||||||
| Common stock issued in connection with legal settlements | - | - | - | |||||||||||||||||||||||||
| Common warrant exercises | - | - | - | - | ||||||||||||||||||||||||
| Shares cancelled in connection with the net settlement of vested stock awards | ( | ) | - | - | - | - | - | - | ||||||||||||||||||||
| Fractional shares adjustment due to reverse stock split | - | - | - | - | - | - | ||||||||||||||||||||||
| Net loss and comprehensive loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Common Stock | Preferred Stock | Additional | Other Accumulated |
Total | ||||||||||||||||||||||||||||
| Shares | Amount | Series B Shares |
Amount | Paid In Capital |
Comprehensive Income |
Accumulated Deficit |
Stockholders’ Deficit |
|||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||
| Issuance of common stock under equity incentive plans | - | - | - | - | - | |||||||||||||||||||||||||||
| Common stock issued for conversion of Preferred B stock | - | ( |
) | - | - | - | - | - | ||||||||||||||||||||||||
| Preferred B stock repurchase | - | - | ( |
) | ( |
) | - | - | - | |||||||||||||||||||||||
| Capital contributions | - | - | - | - | - | |||||||||||||||||||||||||||
| Net loss and comprehensive loss | - | - | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | |
- | - | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
Table of Contents
RYVYL INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization expense | ||||||||
| Noncash lease expense | ( | ) | ||||||
| Stock compensation expense | ||||||||
| Common stock issued in connection with legal settlements | ||||||||
| Impairment of ROU asset | ||||||||
| Loss on disposal of property and equipment | ||||||||
| Restructuring charges | ||||||||
| Accretion of debt discount | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | ||||||||
| Prepaid and other current assets | ||||||||
| Cash due from gateways, net | ||||||||
| Other assets | ( | ) | ( | ) | ||||
| Accounts payable | ||||||||
| Accrued and other current liabilities | ( | ) | ( | ) | ||||
| Payment processing liabilities, net | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | ( | ) | ||||||
| Capitalized software development costs | ( | ) | ||||||
| Purchases of intangible assets | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Repayments on convertible debt | ( | ) | ||||||
| Repayments on long-term debt | ( | ) | ( | ) | ||||
| Proceeds from short-term note payable | ||||||||
| Proceeds from common warrant exercises | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash and restricted cash | ||||||||
| Net decrease in cash and restricted cash | ( | ) | ( | ) | ||||
| Cash and restricted cash – beginning of period | ||||||||
| Cash and restricted cash – end of period | $ | $ | ||||||
| Supplemental cash flow disclosures | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Non-cash financing and investing activities: | ||||||||
| Interest accrual from note payable | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
Table of Contents
RYVYL, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Description of the Business and Basis of Presentation
Organization
Ryvyl is a financial technology company that provides global payment acceptance and disbursement solutions. Ryvyl enables merchants to accept credit card payments through arrangements with third-party acquiring banks and payment processors. Credit card payment processing services represent the substantial majority of Ryvyl’s revenues.
Through our Bank Identification Number (“BIN”) sponsorship arrangement, Ryvyl enables businesses to process credit card transactions, providing direct access to global card networks without the need for a traditional banking license. Although Ryvyl is not itself a payment processor, it serves as an intermediary - similar in certain respects to an independent sales organization (“ISO”) - connecting merchants with acquiring partners. However, in contrast to traditional ISOs, Ryvyl performs a broader set of functions that are typically carried out by processors, including:
| ● | applications processing and merchant underwriting; |
| ● | merchant onboarding and account configuration; |
| ● | ongoing risk monitoring and transaction-level oversight; and |
| ● | customer service and merchant support. |
In addition, Ryvyl also facilitates equipment servicing or replacement, security verifications, and handles customer support inquiries. Performing these activities enables Ryvyl to maintain direct control over the merchant experience and support processes. Ryvyl focuses on merchants operating in underserved and, in some cases, higher risk industry verticals, where Ryvyl believes that its operating structure and risk-management capabilities allow it to support customer segments that many acquiring banks and processors may not be able to serve directly.
Through the fourth quarter of 2025, the Company also offered disbursement services through its internally developed disbursements platform, NEMS Core. NEMS Core was a complementary product to our acquiring services and allowed customers to initiate, validate, route, and settle disbursements through an automated, modular workflow. Effective the first quarter of 2026, the Company no longer offers these services. Revenues previously generated through the NEMS Core platform were not significant to the consolidated revenues of the Company.
Prior to the sale of the Company’s subsidiary, Ryvyl (EU) EAD (“Ryvyl EU”), which was effective June 1, 2025, the Company operated through two distinct business segments designed to meet the diverse and evolving needs of global markets. As a result of the sale of Ryvyl EU, our operations are now solely conducted in North America.
Reverse Stock Split
Effective January 2, 2026, the Company effected
a reverse split of its Common Stock, where every 35 shares of the Company’s pre-reverse split outstanding common stock were combined
and reclassified into one share of common stock. Proportionate voting rights and other rights of common stockholders were not affected
by the reverse stock split. Fractional shares of common stock resulting from the reverse stock split were rounded up to the nearest whole
share on a broker basis. All stock options outstanding and common stock reserved for issuance under the Company’s equity incentive
plan outstanding immediately prior to the reverse stock split were adjusted by dividing the number of affected shares of common stock
by 35 and, as applicable, multiplying the exercise price by 35. All share numbers, share prices, exercise prices, and per share amounts
in this Quarterly Report on Form 10-Q (“Report”) and the Annual Report on Form 10-K for the year ended December 31, 2025,
previously filed, have been adjusted, on a retroactive basis to reflect the
5
Table of Contents
2. Summary of Significant Accounting Policies
Going Concern
In February 2024, the Company stopped processing credit card payments on its QuickCard platform because our processing partner’s bank informed them that they no longer wished to process payments for cannabis merchants. QuickCard was our first-generation product and was designed to address the needs of previously all-cash businesses. During the third quarter of 2024, the Company began to offer a license of the QuickCard platform, which it believed would enable it to once again serve the customer base it had lost following the discontinuation of the original QuickCard offering. However, between the remainder of 2024 and all of 2025, the Company was unable find a suitable licensing partner and, as such, it is no longer actively seeking to license the QuickCard product. As a result, the Company no longer anticipates being able to recover the loss of revenues that resulted from the discontinuation of its QuickCard product.
The loss of revenues resulting from the discontinuation of QuickCard has adversely impacted the Company’s liquidity. Through the first quarter of 2025, the Company relied on the repatriation of profits from its European subsidiaries to cover some of its critical operating expenses, which it is no longer able to do following the sale of Ryvyl EU, effective June 1, 2025. In addition, the Company’s remaining businesses continue to generate operating losses, which is expected to continue to occur for at least the next 12 months from the date of this Report.
Due to these developments, management has determined that its cash balance as of March 31, 2026, will not be sufficient to fund the Company’s operations and capital needs for the next 12 months from the date of this Report. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is contingent upon the successful execution of management’s intended plan over the next twelve months to improve its liquidity position, which include, without limitation:
| ● | raising additional capital through a variety of means, including private and public equity offerings and debt financings. The Company recently executed multiple successful capital raises in July 2025, October 2025, and December 2025, and continues to be actively engaged in discussions with multiple parties for additional funding opportunities; | |
| ● | exploring strategic initiatives, including M&A opportunities, which on September 28, 2025, resulted in the Company, Ryvyl Merger Sub Inc., and RTB Digital, Inc., a Delaware corporation (“RTB”), entering into an Agreement and Plan of Merger pursuant to which Merger Sub merged with and into RTB (the “Merger”), effective May 12, 2026, with RTB surviving the Merger as a wholly-owned subsidiary of the Company; | |
| ● | continued execution of its accelerated business development efforts to drive volumes in diversified business verticals with the Company’s other products; and | |
| ● | continued implementation of cost control measures to more effectively manage spending and further right-sizing the organization, where appropriate; |
Management has assessed that its intended plan described above, if successfully implemented, is appropriate and sufficient to address its liquidity shortfall and to provide funds to cover operations for the next 12 months from the date of the issuance of this Report. However, there can be no assurance that we will be successful in implementing our plan, that our projections of our future capital needs will prove accurate, or that any additional funding will be available on a timely manner, on favorable terms, or be sufficient to continue our operations. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
6
Table of Contents
Basis of Presentation and Consolidation
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany transactions and balances have been eliminated in the accompanying condensed consolidated financial statements.
Unaudited Interim Financial Information
Certain information and footnote disclosures normally included in the Company’s annual audited consolidated financial statements and accompanying notes have been condensed or omitted in this accompanying interim consolidated financial statements and footnotes. Accordingly, the accompanying interim condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the U.S. Securities and Exchange Commission (“SEC”) on April 15, 2026 (the “2025 Annual Report”).
In the opinion of management, these interim condensed consolidated financial statements include all adjustments and accruals, consisting only of normal, recurring adjustments that are necessary for a fair statement of the results of all interim periods reported herein. The results of the interim periods are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period.
Use of Estimates
The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with 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 date of the interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be materially affected. The Company bases its estimates on current and past experience to the extent that historical experience is predictive of future performance, and other assumptions that the Company believes are reasonable under the circumstances. The Company evaluates these estimates on an ongoing basis.
Reclassification
Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported financial position, results of operations or cash flows of the Company.
7
Table of Contents
Cash and Restricted Cash
Cash consists of cash on hand and cash on deposit with banks. Restricted cash primarily consists of reserves required by third-party acquiring bank partners in connection with services they provided to our merchant customers.
USDC
The Company holds USDC, a stablecoin, which is a crypto asset that is designed to maintain a value equivalent to one U.S. dollar. Our USDC is held in a secured digital wallet at a federally chartered crypto bank in the U.S. The Company acquired its USDC holding during the fourth quarter of 2025 in connection with the issuance of Series C convertible preferred stock (see Note 9, Equity, of this Report). In accordance with ASC 350-60, Intangibles – Goodwill and Other - Crypto Assets, the Company accounts for its USDC holding as a financial instrument that is measured at fair value at each reporting period, with changes recognized in net income. While not accounted for as cash or cash equivalent, we treat our USDC holdings as a liquidity resource.
Payment Processing Liabilities
Payment processing liabilities principally represent funds collected from banking services clients that have yet to be distributed to those clients’ customers at the end of the period. These liabilities are secured by funds held in restricted cash accounts and are presented as restricted cash in the condensed consolidated balance sheets.
Revenue Recognition
Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
Historically, the Company generated the majority of its revenue from payment processing services. Payment processing services revenue was typically based on a percentage of the value of each transaction processed and/or upon fixed amounts specified for each transaction or service. The Company satisfied its performance obligations and, therefore, recognized the processing fees as revenue at a point in time, upon the authorization of a merchant sale transaction. Following the sale of the Company’s wholly owned subsidiary, Ryvyl EU, effective June 1, 2025, the Company generates a substantial majority of its revenues from fees earned from payment processing transactions where the Company arranges for the delivery of those services to the merchant by a payment processor. Through the fourth quarter of 2025, the Company also generated an immaterial amount of revenues from banking services offered through its internally developed platform, NEMS Core, which are no longer offered, effective the first quarter of 2026.
For revenue earned from arranging for the delivery of payment processing services to merchants by a payment processor, the Company typically charges specified fees on a per transaction basis, a percentage share of the transaction amount, or a combination of both. The Company satisfies the performance obligation related to these transactions at a point in time, upon the authorization of the transaction in the payment processor’s platform. Revenue from these transactions is recognized on a gross basis, as the Company has determined that it is the principal in the arrangements governing those transactions.
Research and Development Costs
Research and development costs primarily consist of salaries and benefits for research and development personnel and outsourced contracted services, as well as associated supplies and materials. These costs are expensed as incurred.
Internal-use Software Development Costs
Internal-use software development costs consist of the costs related to outsourced consultants who are directly associated with and who devote time to creating and enhancing internally developed software for the Company’s platforms. Internal-use software development activities generally consist of three stages: (i) the preliminary project stage, (ii) the application development stage, and (iii) the postimplementation-operation stage. In accordance with ASC 350-40, Internal Use Software, costs incurred in the preliminary and postimplementation-operation stages of software development are expensed as incurred. Costs incurred in the application development stage, including significant enhancements and upgrades, are capitalized. Capitalized internal-use software development costs are included within intangible assets, net on the unaudited condensed consolidated balance sheets, and are amortized on a straight-line basis over an estimated useful life of three years upon the software or additional features being ready for their intended use.
8
Table of Contents
Accounts Receivable, Net
Accounts receivable primarily consist of amounts recorded in connection with the sale of payment processing terminals and related accessories. Accounts receivable are recorded at invoiced amounts, net of an allowance for credit losses, and do not bear interest. In accordance with Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), the Company measures its allowance for credit losses using an expected credit loss model that reflects the Company’s current estimate of expected credit losses inherent in the enterprise and the accounts receivable balance. In determining the expected credit losses, the Company considers its historical loss experience, the aging of its accounts receivable balance, current economic and business conditions, and anticipated future economic events that may impact collectability. The Company reviews its allowance for credit losses periodically and, as needed, amounts are written-off when determined to be uncollectible. As of March 31, 2026 and 2025, the allowance for credit losses was immaterial.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets primarily consist of prepaid expenses, inventory, and short-term deposits.
Property and Equipment, Net
Property
and equipment primarily consist of computer equipment and furniture and fixtures. Property and equipment are stated at historical cost
less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets,
which range from
Fair Value Measurements
The Company applies fair value accounting for assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Fair value accounting establishes a three-level hierarchy priority for disclosure of assets and liabilities recorded at fair value. The ordering of priority reflects the degree to which objective prices in external active markets are available to measure fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable.
The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The three levels in the hierarchy are as follows:
| ● | Level 1 – Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. |
| ● | Level 2 – Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
| ● | Level 3 – Unobservable inputs that cannot be directly corroborated by observable market data and that typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. |
The fair value of the Company’s USDC holding is based on the quoted (unadjusted) price in the principal market for the digital asset, which is based on Level 1 inputs, in accordance with ASC 820, Fair Value Measurements.
9
Table of Contents
Goodwill and Intangible Assets
ASC 350-20, Intangibles—Goodwill and Other—Goodwill, requires companies to assess goodwill for impairment annually or more frequently if indicators of impairment exist. Testing goodwill for impairment is performed at the reporting unit level and requires companies to compare the fair value of a reporting unit with its carrying amount, including goodwill. Goodwill is considered impaired if the carrying value of a reporting unit exceeds its fair value. Following the sale of the Company’s wholly owned subsidiary, Ryvyl EU, effective June 1, 2025, the Company no longer has any goodwill.
Intangible assets consist of capitalized internal-use software development costs related to outsourced consultants who are directly associated with and who devote time to creating and enhancing internally developed software for the Company’s platforms. As of March 31, 2026, the Company is no longer capitalizing any additional internal-use software development costs, as there are no new active software projects.
Leases
The Company leases office space under non-cancellable operating leases with various expiration dates. The Company determines whether an arrangement is a lease for accounting purposes at contract inception. Operating leases are recorded as right-of-use (“ROU”) assets, which are included within noncurrent assets, and lease liabilities, which are included within current and noncurrent liabilities on our condensed consolidated balance sheets.
As of the date of this Report, the Company is past due on rent payments under its office lease for its San Diego facility. The landlord has inquired regarding payment but has not delivered any formal notice asserting a default under the lease. The Company is currently evaluating its options with respect to this lease, including potential modifications or a potential termination of the lease. However, there can be no assurance that the matter will be resolved on favorable terms.
Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. ROU assets are based on the lease liability and are increased by prepaid lease payments and decreased by lease incentives received, where applicable. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate because the interest rate implicit in the Company’s leases is not readily determinable. The Company’s incremental borrowing rate is estimated to approximate the interest rate that the Company would pay to borrow on a collateralized basis with similar terms and payments as the lease, and in economic environments where the leased asset is located. Certain leases require the Company to pay taxes, maintenance, and other operating expenses associated with the leased asset. Such amounts are not included in the measurement of the ROU assets and lease liabilities. These lease costs are recognized as lease expenses when incurred.
10
Table of Contents
The
Company evaluates ROU assets related to leases for indicators of impairment whenever events or changes in circumstances indicate that
the carrying amount of those assets may not be recoverable. When a decision has been made to exit a lease prior to the contractual term
or to sublease that space, the Company evaluates the asset for impairment and recognizes the associated impact to the ROU asset and related
expense, if applicable. The evaluation is performed at the asset group level initially and when appropriate, at the lowest level of identifiable
cash flows, which is at the individual lease level. Undiscounted cash flows expected to be generated by the related ROU asset are estimated
over the ROU asset’s useful life. If the evaluation indicates that the carrying amount of the ROU asset may not be recoverable,
any potential impairment is measured based upon the fair value of the related ROU asset or asset group as determined by appropriate valuation
techniques. During the quarter ended March 31, 2026, the Company identified indicators of impairment for the ROU asset related to one
of its operating leases, which indicated that the carrying value of the ROU asset may not be recoverable. Based on the Company’s
impairment analysis, it recorded an impairment charge of $
Foreign Currency
Assets and liabilities of our foreign subsidiaries are translated into the reporting currency using the exchange rates in effect on the condensed consolidated balance sheet dates. Equity accounts are translated at historical rates, except for the change in retained earnings during the period, which is the result of the income statement translation process. Revenue and expense accounts are translated using the weighted average exchange rate during the period. The cumulative translation adjustments associated with the net assets of foreign subsidiaries are recorded in accumulated other comprehensive income in the accompanying consolidated statements of stockholders’ equity. Following the sale of the Company’s wholly owned foreign subsidiary, Ryvyl EU, effective June 1, 2025, the Company is no longer exposed to changes in exchange rates that would impact its condensed consolidated balance sheets on a go forward basis.
Stock Based Compensation
Stock-based compensation expense relates to restricted stock awards (“RSAs”), restricted stock units (“RSUs”), and stock options granted to employees and non-employee directors under the Company’s equity incentive plans, which are measured based on the grant-date fair value. The fair value of RSAs and RSUs is determined by the closing price of the Company’s common stock on the grant date. The fair value of stock options is estimated on the date of grant using the Black-Scholes-Merton option valuation model. Generally, stock-based compensation expense is recorded on a straight-line basis over the requisite service period. The Company accounts for forfeitures as they occur.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the condensed consolidated financial statements, net of operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than not that some portion of or all the deferred tax assets will not be realized. Judgment is required in determining and evaluating income tax provisions and valuation allowances for deferred income tax assets. We recognize an income tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by tax authorities, based on the technical merits of the position.
Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. As of March 31, 2026, and December 31, 2025, the Company has a full valuation allowance on its deferred tax assets.
11
Table of Contents
Net Loss Per Share
The Company’s basic net loss per share is computed by dividing the loss available to common shareholders by the weighted average number of common shares outstanding during the period without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss available to common shareholders by the weighted-average number of shares of common stock outstanding, adjusted for the dilutive effect of all potential shares of common stock. In periods in which the Company reports a net loss, all potential common shares are excluded from the calculation of diluted loss per share, as their effect would be anti-dilutive. As such, for the quarters ended March 31, 2026, and 2025, the Company’s diluted net loss per share was the same as the basic net loss per share, as there were no common stock equivalents outstanding that would have a dilutive effect.
Recently Adopted Accounting Pronouncements
In July 2025, the FASB issued ASU No. 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). The amendments allow an entity to apply a practical expedient when estimating expected credit losses, which assumes that the current conditions as of the balance sheet date will not change for the remaining life of the accounts receivable and contract assets arising from contracts with customers. The amendments are effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those fiscal years, with early adoption permitted. If the practical expedient is elected, the amendments should be applied prospectively. The Company adopted the amendments effective for the current fiscal year and the adoption did not have a material impact on the Company’s financial statements and related disclosures.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024 03”), and in January 2025, the FASB issued ASU No. 2025-01, Clarifying the Effective Date (“ASU 2025-01”). The amendments are intended to enhance disclosures regarding an entity’s costs and expenses by requiring additional disaggregated information disclosures about certain income statement expense line items. The amendments, as clarified by ASU 2025-01, are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the effect of adopting the new disclosure requirements.
In September 2025, the FASB issued ASU No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). The amendments are intended to clarify and modernize the accounting for costs related to internal-use software. The guidance removes all references to project stages and clarifies the threshold entities apply to begin capitalizing costs. The amendments are effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted. The Company does not expect the adoption to have a material impact on the Company’s financial statements.
3. Discontinued Operations
Pursuant
to a stock purchase agreement (the “SPA”) and a Termination Agreement (the “Termination Agreement”), both dated
January 23, 2025, and entered into between the Company and a purchaser (the “Purchaser”), the Company and the Purchaser completed
the sale of its wholly owned subsidiary Ryvyl EU, effective June 1, 2025, which comprised substantially all of the business previously
reported under the Company’s International reporting segment. Domiciled in Sofia, Bulgaria, Ryvyl EU is a European Union regulated
electronic money institution that provides complete payment solutions by offering acquiring, issuing, banking services across Europe.
Pursuant to the terms of the SPA and Termination Agreement, the Company received total consideration of $
12
Table of Contents
In accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations, since the sale of Ryvyl EU met the held-for-sale criteria as of the second quarter of 2025 and the sale transaction was completed within the same quarter, historical assets and liabilities of Ryvyl EU have not been segregated and reported as discontinued operations in the condensed consolidated balance sheets for all historical periods presented. Pursuant to the same guidance, the income statement activity of Ryvyl EU has been segregated and reported as discontinued operations for all periods presented in the condensed consolidated income statements for all historical periods presented. Additionally, cash flows related to discontinued operations have not been segregated and are included in the unaudited condensed consolidated statement of cash flows for all periods presented.
The results of operations from discontinued operations for the three months ended March 31, 2026, and 2025, consist of the following (in thousands):
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ( | ) | ||||||
| General and administrative | ( | ) | ||||||
| Payroll and payroll taxes | ( | ) | ||||||
| Professional fees | ( | ) | ||||||
| Depreciation and amortization | ( | ) | ||||||
| Other (expense) income, net | ( | ) | ||||||
| Income from discontinued operations | ||||||||
| Loss on sale of discontinued operations | ||||||||
| Income from discontinued operations before income taxes | ||||||||
| Provision for income taxes | ( | ) | ||||||
| Income from discontinued operations, net of tax | $ | $ | ||||||
Selected financial information related to cash flows from discontinued operations for the three months ended March 31, 2026, and 2025, is as follows (in thousands):
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Depreciation of property and equipment | $ | $ | ||||||
| Amortization of intangible assets | $ | $ | ||||||
| Purchases of property and equipment | $ | $ | ||||||
13
Table of Contents
4. Property and Equipment, Net
The following table details property and equipment, less accumulated depreciation (in thousands):
| March 31, 2026 | December 31, 2025 | |||||||
| Computers and equipment | $ | $ | ||||||
| Furniture and fixtures | ||||||||
| Improvements | ||||||||
| Total property and equipment | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Net property and equipment | $ | $ | ||||||
Depreciation
expense was
5. Intangible Assets, Net
The following tables detail intangible assets (in thousands):
| March 31, 2026 | ||||||||||||||||||
| Estimated Useful Life | Cost | Accumulated Amortization | Impairment Loss | Net | ||||||||||||||
| Customer relationships | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||
| Business technology/IP | ( | ) | ||||||||||||||||
| Capitalized internal-use software | ( | ) | ( | ) | ||||||||||||||
| Total intangible assets | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||
| December 31, 2025 | ||||||||||||||||||
| Estimated Useful Life | Cost | Accumulated Amortization | Impairment Loss | Net | ||||||||||||||
| Customer relationships | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||
| Business technology/IP | ( | ) | ||||||||||||||||
| Capitalized internal-use software | ( | ) | ( | ) | ||||||||||||||
| Total intangible assets | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||
Amortization
expense was $
The estimated future amortization expense related to intangible assets as of March 31, 2026, is as follows (in thousands):
| Fiscal years: | Amount | |||
| 2026 (remainder) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | $ | |||
14
Table of Contents
6. Accrued Liabilities
The following table details the balance in accrued liabilities (in thousands):
| March 31, 2026 | December 31, 2025 | |||||||
| Accrued legal settlements | $ | $ | ||||||
| Payroll related accruals | ||||||||
| Accrued legal and professional fees | ||||||||
| Accrued taxes | ||||||||
| Other accrued liabilities | ||||||||
| Total accrued liabilities | $ | $ | ||||||
7. Note Payable
Stock Purchase Agreement and Financing
On
January 23, 2025, in connection with the Company securing financing, it entered into a stock purchase agreement (the “January 2025
SPA”) with a purchaser (the “Purchaser”), which provides for the sale to the Purchaser of all of the issued and outstanding
shares of capital stock (the “Ryvyl EU Shares”) of the Company’s indirect subsidiary domiciled in Bulgaria, Ryvyl (EU)
EAD (“Ryvyl EU”), by Transact Europe Holdings EOOD, the Company’s wholly owned subsidiary, also domiciled in Bulgaria
(“Transact Europe”) for an aggregate purchase price of $
On
January 23, 2025,
15
Table of Contents
The
Company analyzed the terms of the January 2025 SPA and Termination Agreement and determined that they should be accounted for together
as a single transaction, as neither agreement would have been entered into without the other and the exercise of each party’s rights
under each agreement would result in the termination of each party’s rights under the other agreement (i.e., the January 2025 SPA
would have been void and of no further effect if the Company exercised its termination rights under the Termination Agreement, and the
Termination Agreement would have been void and of no further effect in the event that the January 2025 SPA was not so terminated and
the Purchaser closes on its purchase of the Ryvyl EU Shares). Further, the Company determined that the terms of the agreements, in particular
the Company’s unilateral termination right, were such that the Company would not be considered to have surrendered control of the
Ryvyl EU Shares until the termination deadline passes and, therefore, the substance of the transaction effectively represented short-term
secured debt (rather than a true sale), akin to a repurchase agreement in which a seller-borrower of securities sells those securities
to a buyer-lender with an agreement to repurchase them at a stated price plus interest at a specified date or in specified circumstances,
which would be accounted for as a collateralized borrowing, in accordance with ASC 860-30. As such, the Company accounted for the transaction
as a secured borrowing by recognizing the Financing Purchase Price as cash in the accompanying condensed consolidated balance sheets,
recording an obligation (liability) to return the cash to the Purchaser, and recognizing the difference between the Financing Purchase
Price and $
Modification Agreement
On
April 23, 2025, the Company, Transact Europe, and the Purchaser executed and entered into a modification agreement (the “Modification
Agreement”) which provides that, notwithstanding the terms of the Termination Agreement or the January 2025 SPA, the Purchaser
will not take any actions to close on the purchase of the Ryvyl EU Shares before May 6, 2025, so that the Company and the Purchaser may
attempt to enter into an alternative transaction in lieu of the securities purchase transaction under the January 2025 SPA. The Company
had the right, at any time, on or before May 6, 2025, to extend this period, so that the Purchaser would not exercise such right to purchase
the Ryvyl EU Shares, until May 27, 2025, in consideration for the Company’s payment to the Purchaser of $
On
May 7, 2025, the Purchaser provided a letter of notice to the Company and Transact Europe, stating that due to the Company not exercising
its right to terminate the SPA by payment to the Purchaser of $
Since
the $
16
Table of Contents
8. Long-Term Debt
The following table summarizes the Company’s debt (in thousands):
| March 31, 2026 | December 31, 2025 | |||||||
| $ | ||||||||
| $ | ||||||||
| Total debt | ||||||||
| Less: current portion | ( | ) | ( | ) | ||||
| Long-term debt | $ | $ | ||||||
Small Business Association CARES Act Loans
On June 9, 2020, the Company entered into a
On
May 8, 2020, Charge Savvy, a wholly-owned subsidiary of the Company, entered into a
9. Equity
Underwritten Public Offering
On
July 16, 2025, the Company announced the closing of an aggregate of
Convertible Preferred Stock
As of March 31, 2026, and December 31, 2025, preferred stock consisted of the following (in thousands, except number of shares):
| March 31, 2026 | ||||||||||||||||||||
| Preferred Shares Authorized | Preferred Shares Issued and Outstanding | Carrying Value | Liquidation Preference | Common Stock Issuable Upon Conversion | ||||||||||||||||
| Series C | $ | $ | ||||||||||||||||||
| Undesignated preferred shares | ||||||||||||||||||||
| Total Preferred Stock | $ | $ | ||||||||||||||||||
17
Table of Contents
| December 31, 2025 | ||||||||||||||||||||
| Preferred Shares Authorized | Preferred Shares Issued and Outstanding | Carrying Value | Liquidation Preference | Common Stock Issuable Upon Conversion | ||||||||||||||||
| Series C | $ | $ | ||||||||||||||||||
| Undesignated preferred shares | ||||||||||||||||||||
| Total Preferred Stock | $ | $ | ||||||||||||||||||
Series A and Series B Preferred Stock
On July 31, 2023, the Company issued
On January 27, 2025, all shares of Series B Preferred Stock held by the Investor were repurchased upon payment of the First Installment Payment pursuant to the Repurchase Agreement entered into with the Investor on January 23, 2025. All previously issued Series A and Series B preferred shares were cancelled.
Series C Convertible Preferred Stock
On October 6, 2025, the Company entered into a
Securities Purchase Agreement (the “Series C Purchase Agreement”) with RTB, pursuant to which the Company sold an aggregate
of
18
Table of Contents
On
December 9, 2025,
The Series C Convertible Preferred Stock is classified within permanent equity, as its embedded features are indexed to the Company’s own stock and it is not mandatorily redeemable, thereby not representing an unconditional obligation to transfer cash or other assets. Accordingly, the instrument meets the criteria for equity classification under ASC 815-40, Derivatives and Hedging—Contracts in an Entity’s Own Equity, and ASC 480, Distinguishing Liabilities from Equity. The Series C Convertible Preferred Stock was recorded in the accompanying consolidated balance sheets at its issuance-date fair value and is presented within stockholders’ equity.
The holders of the Series C Preferred Stock have the following rights and preferences:
Voting – Each share of Series C Preferred Stock shall entitle the holders thereof to cast that number of votes equal to the number of whole shares of common stock into which such shares of Series C Preferred Stock are convertible as of the record date for determining stockholders entitled to vote on such matter, but subject to the Issuable Maximum and the Authorized Maximum (as defined in the Series C Purchase Agreement) and any other conversion limitations). The number of shares that may be voted are limited by a blocker provision in compliance with Nasdaq requirements.
Dividends – Holders shall be entitled to receive dividends on shares of Preferred Stock equal (on an as-if-converted-to-common-stock basis, disregarding for such purpose any conversion limitations hereunder) to and in the same form as dividends actually paid on shares of the common stock when, as and if such dividends are paid on shares of the common stock. No other dividends shall be paid on shares of Preferred Stock. No such dividends have been declared to date.
Liquidation – Upon any liquidation, dissolution or winding-up of the Company, the holders shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the stated value plus any accrued and unpaid dividends and any other amounts due and owing under the Certificate of Designation of the Series C Preferred Stock, for each share of Series C Preferred Stock before any distribution or payment shall be made to the holders of Junior Securities (as defined in the Series C Purchase Agreement) and if the assets of the Company shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the holders shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.
Conversion
at Option of Holder – Each share of Series C Preferred Stock shall be convertible, at any time and from time to time from and
after the original issue date at the option of the holders thereof, into that number of shares of common stock determined by dividing
the stated value of such share of Series C Preferred Stock by $
Mandatory Redemption Upon Material Breach Event - Upon a Material Breach Event (as defined in the Series C Purchase Agreement), the Company shall redeem all outstanding shares of Series C Preferred Stock at an aggregate redemption price equal to the aggregate stated value of the shares of Series C Preferred Stock on the closing date of the Series C Purchase Agreement (as defined therein).
10. Income Taxes
The Company recorded income tax expense of less
than
As of March 31, 2026, we have no material unrecognized tax benefits and we expect no material unrecognized tax benefits for the next 12 months.
19
Table of Contents
11. Stock-Based Compensation
Equity Incentive Plans
The
Company adopted the 2023 Equity Incentive Plan (“2023 Plan”) on November 2, 2023, which provides employees, directors, and
consultants with opportunities to acquire the Company’s shares, or to receive monetary payments based on the value of such shares.
Management has determined that it is in the best interests of the Company to replace the 2020 Incentive and Nonstatutory Stock Option
Plan, the 2021 Incentive and Nonstatutory Stock Option Plan, and the 2021 Restricted Stock Plan, with one plan, the 2023 Plan, pursuant
to which the Company will be able to grant stock option awards, stock appreciation rights, restricted stock awards, restricted stock
units, and other stock-based awards. The 2023 Plan provides for up to
Stock Option Activity
The following table provides a summary of stock option activity for the three months ended March 31, 2026:
| Number of Shares | Weighted Average Exercise Price | |||||||
| Outstanding at December 31, 2025 | $ | |||||||
| Granted | ||||||||
| Exercised | ||||||||
| Cancelled/forfeited/expired | ( | ) | ||||||
| Outstanding at March 31, 2026 | $ | |||||||
| Exercisable at March 31, 2026 | $ | |||||||
There
were
Restricted Stock Activity
The following table provides a summary of RSA activity for the three months ended March 31, 2026:
| Number of Shares | Weighted Average Grant Date Fair Value | |||||||
| Unvested at December 31, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ||||||||
| Unvested at March 31, 2026 | $ | |||||||
The
total grant date fair value of RSAs that vested was $
20
Table of Contents
The following table provides a summary of RSU activity for the three months ended March 31, 2026:
| Number of Shares | Weighted Average Grant Date Fair Value | |||||||
| Unvested at December 31, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ||||||||
| Unvested at March 31, 2026 | $ | |||||||
The
total grant date fair value of RSUs that vested was $
12. Leases
The
Company leases office space under operating leases at
The
Company’s operating lease expense totaled $
Future minimum lease payments under our operating leases and reconciliation to lease liability as of March 31, 2026, are as follows (in thousands):
| Fiscal years: | Amount | |||
| 2026 (remainder) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | ||||
| Less: present value discount | ( | ) | ||
| Operating lease liability | $ | |||
13. Related Party Transactions
Family Relationships
Through
August 2025, the Company employed two brothers of its then-serving Chief Executive Officer, Fredi Nisan, Dan and Liron Nusinovich, who
were paid approximately $
The Company did not pay any commissions to the related parties mentioned above for the three months ended March 31, 2026, and 2025.
Fredi Nisan
On September 25, 2025, the Company and Fredi Nisan (“Mr. Nisan”) entered into an Advisory Services Agreement (the “Nisan Consulting Agreement”), effective as of November 1, 2025, and continuing through April 30, 2026. Pursuant to the terms and conditions of the Nisan Consulting Agreement, Mr. Nisan would provide services relating to advising the Company on strategic initiatives and other revenue-generating advice and consulting in exchange for a monthly cash consulting fee over the agreement term. As of the date of this Report, the Nisan Consulting Agreement has ended, and the Company has satisfied all its obligations pursuant to the terms thereof.
21
Table of Contents
Ben Errez
On August 15, 2025, the Company and Mr. Errez entered into an Advisory Services Agreement (the “Errez Consulting Agreement”), effective as of September 1, 2025, and continuing through February 28, 2026. Pursuant to the terms and conditions of the Errez Consulting Agreement, Mr. Errez would provide services relating to advising the Company on strategic initiatives and other revenue-generating advice and consulting in exchange for a monthly cash consulting fee over the agreement term. As of the date of this Report, the Nisan Consulting Agreement has ended, and the Company has satisfied all its obligations pursuant to the terms thereof.
14. Commitments and Contingencies
Purchase Commitments
Aside from the Company’s operating lease commitments, which are disclosed in Note 12, Leases, the Company also has the following non-cancellable purchase commitments under services contracts with vendors for software products, as of March 31, 2026:
| Fiscal years: | Amount | |||
| 2026 (remainder) | $ | |||
| 2027 | ||||
| 2028 | ||||
| Total | $ | |||
Severance Agreements
As
previously disclosed in the Current Report on Form 8-K filed by the Company with the SEC on October 1, 2025, effective October 31, 2025
(the “Termination Date”), Fredi Nisan retired as Chief Executive Officer of the Company. In connection with his reported
retirement, the Company and Mr. Nisan entered into a Severance Benefits Offer and General Waiver and Release of Claims agreement (the
“Severance Agreement”). Pursuant to the Severance Agreement, Mr. Nisan received a cash payment of $
Employment Agreements
As
previously disclosed in the Current Report on Form 8-K filed by the Company with the SEC on September 24, 2025, on September 22, 2025,
the Company entered into an employment agreement with Mr. Oliva in connection with the continuation of his role as Chief Financial Officer
of the Company (the “Employment Agreement”). Pursuant to the Employment Agreement, Mr. Oliva will continue his employment
on an “at-will” basis with compensation to be set by the Company’s management team on an annual basis, eligibility
for bonuses in accordance with the Company’s applicable bonus programs, and eligibility for other benefits such as participation
in any retirement plans and insurance plans.
22
Table of Contents
Merger Agreement with RTB Digital, Inc.
As previously disclosed in the Current Report on Form
8-K filed by the Company with the SEC on October 2, 2025, on September 28, 2025, the Company, RYVYL Merger Sub Inc., a Delaware corporation
and wholly owned direct subsidiary of the Company (“Merger Sub”), and RTB Digital, Inc., a Delaware corporation (“RTB”),
entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which Merger Sub will merge with and into
RTB (the “Merger”), with RTB surviving the Merger as a wholly-owned subsidiary of the Company (the corporation surviving the
Merger, the “Surviving Corporation”). At the effective time of the Merger (the “Effective Time”), among other
things, a number of shares of RTB capital stock will be exchanged for shares of common stock equal to an exchange ratio calculated pursuant
to the terms set forth in the Merger Agreement, as consideration for the Merger. In addition, the Company will assume a number of securities
of RTB, including an outstanding convertible loan note and the interest due thereon, certain unexercised warrants and the RTB equity award
plans. Upon the consummation of the Merger, the Company will be renamed “RTB Digital, Inc.” The Company will also pay its
financial advisor an advisory fee of approximately $
The Merger Agreement contains customary representations, warranties and covenants of the Company and RTB, including covenants relating to the conduct of the business of both the Company and RTB from the date of signing the Merger Agreement through the closing, obtaining the requisite approval of the stockholders of the Company and RTB, maintaining listing of the common stock of the Company on the Nasdaq Capital Market (“Nasdaq”) and applying for the continued listing of RTB Digital, Inc. after the closing of the Merger, on Nasdaq.
The Merger Agreement provides that the parties will use their respective reasonable best efforts to take all actions reasonably necessary, proper or advisable to consummate and make effective, as promptly as reasonably practicable, the transactions contemplated by the Merger Agreement. The consummation of the Merger is subject to the satisfaction or waiver of customary conditions pursuant to the terms set forth in the Merger Agreement. Following the Merger, RTB’s business will be the primary business of the combined companies, but the Company will continue its current operations, thereafter. The Merger is expected to close during the second quarter of 2026. See Note 16, Subsequent Events, of this Report for additional details.
Legal Proceedings
From time to time, the Company is and may become involved in legal proceedings. The Company records a liability for those legal proceedings when it determines it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company also discloses when it is reasonably possible that a material loss may be incurred, however, the amount cannot be reasonably estimated. From time to time, the Company may enter into discussions regarding settlement of these matters, and may enter into settlement agreements, if it believes settlement is in the best interest of the Company and its shareholders.
The following is a summary of our current outstanding litigation. Note that references to GreenBox POS are for historical purposes. GreenBox POS changed its name to RYVYL Inc. on October 13, 2022.
| ● | On December 12, 2022, Jacqueline Dollar (a/k/a Jacqueline Reynolds), former Chief Marketing Officer of the Company, filed a complaint against the Company, Fredi Nisan, and Does 1-20 in San Diego Superior Court. Ms. Dollar is alleging she was undercompensated compared to her male counterparts and retaliated against after raising concerns to management resulting in sex discrimination in violation of the California Fair Employment and Housing Act (“FEHA”) and failure to prevent discrimination in violation of FEHA. Ms. Dollar is also claiming intentional infliction of emotional distress. Ms. Dollar is seeking an unspecified amount of damages related to, among other things, payment of past and future lost wages, stock issuances, bonuses and benefits, compensatory damages, and general, economic, non-economic, and special damages. On January 21, 2026, Ms. Dollar filed a notice of conditional settlement of entire case with the Court. The parties have since entered into a confidential settlement agreement, pursuant to which all claims are to be dismissed upon satisfaction of all settlement terms. |
| ● | As previously disclosed in the Company’s 10-Q for the period ending March 31, 2025, as filed on May 20, 2025, since December 2022, the Company has been cooperating with an ongoing investigation by the SEC regarding possible violations of the federal securities laws. Following discussions with the Staff of the SEC, the Company made certain disclosures addressing the concerns regarding the Company’s 2020 Registration Statement on Form S-1 filed on December 23, 2020 and subsequent reporting, which are contained in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2025 under Part I, Note 14, Commitments and Contingencies, and Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments, and under the Part II section titled “Legal Proceedings.” On April 27, 2026, the SEC filed a settled action against the Company and its founders, memorializing the previously disclosed settlement. SEC v. RYVYL Inc., et al., Case No. 3:26-cv-02672-WQH-MMP (S.D. Cal.). The proposed final judgment, approved by the Court on May 11, 2026, does not require the Company to pay any monetary penalty and fully resolves all claims regarding the Company. |
| ● | On June 22, 2023, a shareholder derivative complaint was filed in the United States District Court for the Southern District of California against certain of the Company’s current and/or former officers and directors (the “Hertel Defendants”), Christy Hertel, derivatively on behalf of RYVYL Inc., f/k/a GreenBox POS v. Ben Errez et al., Case No. 3:23-CV-01165-GPC-SBC. On August 4, 2023, a second shareholder derivative complaint was filed in the United States District Court for the Southern District of California against the Hertel Defendants, Marcus Gazaway, derivatively on behalf of RYVYL Inc., f/k/a GreenBox POS v. Ben Errez et al., Case No. 3:23-CV-01425-LAB-BLM. Both derivative complaints generally allege that the Hertel Defendants failed to implement adequate internal controls that would prevent false and misleading financial information from being published by the Company and that controlling shareholders participated in overpayment misconduct resulting in violations of Sections 10(b), 14(a) and 20 of the Exchange Act and breached their fiduciary duties and, purportedly on behalf of the Company. On April 2, 2024, the Court granted the parties’ joint motion for an order consolidating the Hertel and Gazaway cases under the caption In re RYVYL Inc. Derivative Litigation, Lead Case No. 3:23-CV-01165-GPC-SBC (S.D. Cal.). On May 6, 2024, the Court issued an order staying the action until after the final resolution of any motion to dismiss the securities class action detailed above. On May 1, 2024, a third nearly identical shareholder derivative complaint was filed in Clark County, Nevada by plaintiff Christina Brown, derivatively on behalf of RYVYL, Inc., v. Ben Errez et al., Case No. A-24-892382-C. |
23
Table of Contents
| ● | On June 25, 2024, J. Drew Byelick, a former Chief Financial Officer of the Company, filed a complaint against the Company in the United States District Court for the Southern District of California, Case No. ’24CV1096 JLS MSB. Mr. Byelick alleged breach of contract, fraudulent inducement of employment, along with intentional misrepresentation and concealment. The Company moved to dismiss the complaint for failure to state a claim and for other violations of the federal rules of civil procedure. The Court granted that motion on December 20, 2024, but permitted Mr. Byelick to file an amended complaint. Mr. Byelick filed his first amended complaint on January 19, 2025, asserting the same core claims. The Company moved to dismiss the first amended complaint for similar reasons as its motion to dismiss the original complaint. The Court granted that motion, in part, on April 18, 2025, ruling that Mr. Byelick was incapable of pleading certain claims (and dismissing those claims) but adequately pled others for purposes of a motion to dismiss only. Mr. Byelick subsequently filed a motion for partial summary judgment, which the Court denied in full as premature. Discovery is closed, but a trial date has not yet been set. Given the uncertainty of litigation, and the legal standards that must be met for success on the merits, the Company cannot predict the outcome at this time or estimate a reasonably possible loss or range of loss that may result from this action. |
| ● | On July 2, 2025, Plaintiff Kapcharge USA Inc. commenced a lawsuit against Defendants Ryvyl Inc., FFS Data Corporation, CML Management, LLC and Cynthia Lambert in San Diego Superior Court, Case No. 25CU035045C. This lawsuit stems from a dispute between Kapcharge on the one hand and FFS Data Corporation (“FFS”), and CML Management, LLC on the other hand, related to a payment processor agreement between Kapcharge and FFS. Kapcharge alleges causes of action for Conversion, Money Had and Received, Violation of Penal Code § 496, Restitution, Breach of Contract (against FFS, CML, and Lambert), and Unfair Competition in Violation of California Business and Professions Code § 17200 et seq. The Company denies all allegations of liability and intends to vigorously defend against all claims. Kapcharge filed a demurrer on August 28, 2025 related to the causes of action for Conversion and Violation of Penal Code § 496. On April 8, 2026, Kapcharge and Ryvyl filed a stipulation for stay of the proceedings and to continue the demurrer hearing. On May 12, 2026, the parties entered into a confidential settlement agreement, pursuant to which all claims are to be dismissed. |
| ● | On July 15, 2025, Plaintiff Rachael Mora filed a complaint against the Company, Fredi Nisan, and Does 1-20 in San Diego Superior Court. Ms. Mora is alleging sex discrimination and sexual favoritism in violation of the California Fair Employment and Housing Act (“FEHA”), and failure to prevent discrimination in violation of FEHA. Ms. Mora is also claiming retaliation and negligent supervision/negligent retention. Ms. Mora is seeking an unspecified amount of damages related to, among other things, payment of past and future lost wages, stock issuances, bonuses and benefits, compensatory damages, and general, economic, non-economic, and special damages. As the Company cannot predict the outcome of the matter, the probability of an outcome cannot be determined. The Company intends to vigorously defend against all claims. | |
| ● | On December 29, 2025, Plaintiff Ellenoff, Grossman & Schole LLP (“EGS”), filed a complaint against the Company in the Supreme Court of the State of New York County of New York. EGS is alleging breach of contract, account stated, and quantum meriut. The Company denies liability and intends to vigorously defend against all claims. Given the stage of the lawsuit, the uncertainty of litigation, and the legal standards that must be met for success on the merits, the Company cannot predict the outcome at this time or estimate a reasonably possible loss or range of loss that may result from this action. |
| ● | On March 16, 2026, Plaintiff Ideyalabs, LLC (“Ideyalabs”), filed a complaint against the Company and two of its wholly owned subsidiaries in San Diego Superior Court, Case No. 26CU014745C. Ideyalabs alleged breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. The Company denies liability and intends to vigorously defend against all claims. Given the stage of the lawsuit, the uncertainty of litigation, and the legal standards that must be met for success on the merits, the Company cannot predict the outcome at this time or estimate a reasonably possible loss or range of loss that may result from this action. |
15. Segment Reporting
Prior
to June 1, 2025, the Company operated under
16. Subsequent Events
Closing of Merger Agreement with RTB Digital, Inc.
On May 12, 2026, the Company completed its previously
announced Merger Agreement, dated September 28, 2025, pursuant to which Merger Sub merged with an into RTB (the “Merger Transaction”),
with RTB surviving as a wholly owned subsidiary of the Company (the “Surviving Corporation”). Pursuant to the terms of the
Merger Agreement, RTB capital stock and certain other outstanding securities were exchanged for
Compliance with Nasdaq’s Stockholders’ Equity Rule
On April 23, 2026, the Company received written
notice (“Notice”) regarding its non-compliance of the minimum stockholders’ equity requirement of $
24
Table of Contents
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information included in this Quarterly Report on Form 10-Q (this “Report”) and other materials we have filed or may filed, as well as information included in our oral or written statements, contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (“the Exchange Act”). These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “would” or the negative or plural of these words, or similar expressions or variations. Such forward-looking statements are subject to a number of risks, uncertainties, assumptions, and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein and in our other filings with the U.S. Securities and Exchange Commission (the “SEC”). You should not rely upon forward-looking statements as predictions of future events.
You should not place undue reliance on forward-looking statements. The cautionary statements set forth in this Report identify important matters or factors which you should consider in evaluating our forward-looking statements. These matters or factors include, among other things:
| ● | our ability to effectively execute our business plans for the existing business of the Company and the new business plans of RTB Digital, Inc.; | |
| ● | our ability to manage our expansion, growth and operating expenses,, including the integration of RTB Digital, Inc.’s business operations; | |
| ● | our ability to comply with new regulations and compliance requirements that affect our business; | |
| ● | our ability to evaluate and measure our business, prospects and performance metrics; | |
| ● | our ability to compete and succeed in an evolving industry; | |
| ● | our ability to respond and adapt to rapid changes in technology; | |
| ● | risks in connection with completed or potential acquisitions, post-acquisition integrations, dispositions and other strategic growth opportunities and initiatives, including, without limitation, the proposed merger transaction with RTB Digital, Inc.; | |
| ● | our need for, and ability to raise, additional capital to support the development and expansion of the business of RTB Digital, Inc.; | |
| ● | our ability to maintain the listing of our common stock on the Nasdaq Capital Market or any other national securities exchange; | |
| ● | our ability to maintain operations in the event our financial condition is negatively impacted as the result of litigation or actions of any governmental agencies against us or against any of our officers or directors; and | |
| ● | our dependence on our proprietary technology, which we may not be able to protect. |
The foregoing list of important factors does not include all such factors, nor necessarily present them in order of importance. In addition, you should consult other disclosures made by us (such as in our other filings with the SEC or in our press releases) for other factors that may cause actual results to differ materially from those projected by us. For additional information regarding risk factors that could affect our results, see “Risk Factors” beginning on page 9 of our 2025 Annual Report and “Risk Factors” on page 32 of this Report.
We intend the forward-looking statements to speak only as of the time of such statements and do not undertake or plan to update or revise such forward-looking statements as more information becomes available or to reflect changes in expectations, assumptions or results. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Report, could materially and adversely affect our results of operations, financial condition, liquidity, and future performance.
25
Table of Contents
In this Report, unless the context otherwise requires, all references to “the Company,” “we,” “our” and “us” refer collectively to RYVYL Inc., a Nevada corporation, and its subsidiaries.
Our Management’s Discussion and Analysis and Results of Operations contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to successfully make and integrate acquisitions; our ability to consummate the proposed merger transaction with RTB Digital, Inc.,; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations, including without limitation, our ability to maintain the listing of our common stock on the Nasdaq Capital Market; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; our ability to continue operating as a going concern; and other risks that might be detailed from time to time in our filings with the SEC.
Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this Report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
Reverse Stock Split
On January 2, 2026, the Company effected a reverse stock split of the Company’s shares of common stock, par value $0.001 (“Common Stock”) outstanding at a ratio of one-for-thirty-five (the “Reverse Stock Split”). All share and per share information in this Report have been retroactively adjusted for all periods presented, unless otherwise indicated, to give effect to the reverse stock split, including the unaudited condensed consolidated financial statements and notes thereto.
Going Concern
Substantial doubt exists as to our ability to continue as a going concern based on the fact that we do not have adequate working capital to finance our day-to-day operations. As described in the Notes to the Financial Statements included in our 2025 Form 10-K and in this Report, respectively, for the years ended December 31, 2025, and 2024, and the three-month periods ended March 31, 2026, and 2025, there is a substantial doubt about our ability to continue as a going concern. For the year ended December 31, 2025, we had a net loss of $17.5 million, and as of December 31, 2025, we had an accumulated deficit of $196.9 million. For the three months ended March 31, 2026, we had net loss of $3.3 million, and as of March 31, 2026, we had an accumulated deficit of $200.2 million.
Recent Developments
Closing of Merger Agreement with RTB Digital, Inc.
On May 12, 2026, the Company completed its previously announced Merger Agreement, dated September 28, 2025, pursuant to which Merger Sub merged with an into RTB (the “Merger Transaction”), with RTB surviving as a wholly owned subsidiary of the Company (the “Surviving Corporation”). Pursuant to the terms of the Merger Agreement, RTB capital stock and certain other outstanding securities were exchanged for 11,893,886 shares of common stock of the Company, as consideration for the Merger Transaction. In addition, the Company assumed a number of securities of RTB, including an outstanding convertible loan note and interest due thereon, certain unexercised warrants and the RTB equity award plans. The Company will also issue 109,410 shares due under its investment banking agreement with Maxim Partners LLC. At the consummation of the Merger Transaction, the Company was renamed to RTB Digital, Inc.
Compliance with Nasdaq’s Stockholders’ Equity Rule
On April 23, 2026, the Company received written notice (“Notice”) regarding its non-compliance of the minimum stockholders’ equity requirement of $2.5 Million for continued listing on Nasdaq Capital Market under Rule 5550(b)(1) (the “Equity Rule”). The Notice stated that, unless the Company timely requested an appeal of the determination to the Nasdaq Hearings Panel (the “Panel”) by April 30, 2026, the Company’s Common Stock will be delisted from the Nasdaq Capital Market at the opening of business on May 4, 2026. The Company timely requested a hearing before the Panel on April 29, 2026, which stayed any suspension or delisting action pending the Panel’s decision. On May 13, 2026, the Company received a letter from the Panel indicating that, based on completion of the Merger Transaction, the matter is now moot, the previously scheduled hearing has been cancelled, and the Company’s Common Stock will continue to be listed and traded on the Nasdaq Capital Market.
26
Table of Contents
RESULTS OF OPERATIONS
Three Months Ended March 31, 2026 (Unaudited) Compared to Three Months March 31, 2025 (Unaudited):
(In thousands, except for percentages)
| Three Months Ended March 31, | ||||||||||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||||||||||
| % of | % of | |||||||||||||||||||||||
| Amount | Revenue | Amount | Revenue | Amount | % | |||||||||||||||||||
| Revenue | $ | 2,535 | 100.0 | % | $ | 2,769 | 100.0 | % | $ | (234 | ) | (8.5 | )% | |||||||||||
| Cost of revenue | 1,414 | 55.8 | % | 1,400 | 50.6 | % | 14 | (1.0 | )% | |||||||||||||||
| Gross profit | 1,121 | 44.2 | % | 1,369 | 49.4 | % | (248 | ) | (18.1 | )% | ||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Research and development | 75 | 3.0 | % | 448 | 16.2 | % | (373 | ) | (83.1 | )% | ||||||||||||||
| General and administrative | 767 | 30.3 | % | 1,140 | 41.2 | % | (373 | ) | (32.7 | )% | ||||||||||||||
| Payroll and payroll taxes | 784 | 30.9 | % | 2,623 | 94.7 | % | (1,839 | ) | (70.1 | )% | ||||||||||||||
| Professional fees | 1,184 | 46.7 | % | 1,019 | 36.8 | % | 165 | 16.2 | % | |||||||||||||||
| Stock compensation expense | 376 | 14.8 | % | 55 | 2.0 | % | 321 | 583.6 | % | |||||||||||||||
| Depreciation and amortization | 33 | 1.3 | % | 82 | 3.0 | % | (49 | ) | (59.8 | )% | ||||||||||||||
| Impairment of ROU asset | 932 | 36.8 | % | - | - | 932 | NM | (1) | ||||||||||||||||
| Restructuring charges | 13 | 0.5 | % | 403 | 14.6 | % | (390 | ) | (96.8 | )% | ||||||||||||||
| Total operating expenses | 4,164 | 164.3 | % | 5,770 | 208.4 | % | (1,606 | ) | (27.8 | )% | ||||||||||||||
| Loss from operations | (3,043 | ) | (120.0 | )% | (4,401 | ) | (158.9 | )% | 1,358 | (30.9 | )% | |||||||||||||
| Other income (expense): | ||||||||||||||||||||||||
| Interest expense | (6 | ) | (0.2 | )% | (1,229 | ) | (44.4 | )% | 1,223 | (99.5 | )% | |||||||||||||
| Legal settlements expense | (200 | ) | (7.9 | )% | - | - | (200 | ) | NM | (1) | ||||||||||||||
| Accretion of debt discount | - | - | (128 | ) | (4.6 | )% | (128 | ) | (100.0 | )% | ||||||||||||||
| Other (expense) income | (32 | ) | (1.3 | )% | 47 | 1.7 | % | (79 | ) | (168.1 | )% | |||||||||||||
| Total other (expense), net | (238 | ) | (9.4 | )% | (1,310 | ) | (47.3 | )% | 1,072 | (81.8 | )% | |||||||||||||
| Loss from continuing operations before income taxes | (3,281 | ) | (129.4 | )% | (5,711 | ) | (206.2 | )% | 2,430 | (42.5 | )% | |||||||||||||
| Provision for income taxes | 4 | 0.2 | % | 141 | 5.1 | % | (137 | ) | (97.2 | )% | ||||||||||||||
| Net loss from continuing operations | (3,285 | ) | (129.6 | )% | (5,852 | ) | (211.3 | )% | 2,567 | (43.9 | )% | |||||||||||||
| Loss from discontinued operations, net of tax | - | - | 3,096 | 111.8 | % | (3,096 | ) | (100.0 | )% | |||||||||||||||
| Net loss | $ | (3,285 | ) | (129.6 | )% | $ | (2,756 | ) | (99.5 | )% | $ | (529 | ) | (19.2 | )% | |||||||||
| (1) | Not Meaningful (“NM”) |
27
Table of Contents
Revenue
Consolidated revenue decreased $0.3 million, or 8.5%, to $2.5 million for the three months ended March 31, 2026, from $2.8 million for the three months ended March 31, 2025. The decline in consolidated revenue was primarily driven by non-recurring revenue reported in the first quarter of 2025 with no similar non-recurring activity in the first quarter of 2026.
Cost of Revenue
Consolidated cost of revenue was relatively flat, as it increased $0.01 million, or 1.0%, to $1.41 million for the three months ended March 31, 2026, from $1.40 million for the three months ended March 31, 2025. Cost of revenue primarily consists of various fees charged by payment processors and fees paid to Independent Sales Organizations. Excluding the non-recurring revenue activity described above, the relatively flat year-over-year change in cost of revenue is in line with the year-over-year change in revenue.
Operating Expenses
Operating expenses decreased $1.6 million, or 27.9%, to $4.2 million for the three months ended March 31, 2026, from $5.8 million for the three months ended March 31, 2025. The decrease was primarily driven by decreases in research and development of $0.4 million, general and administrative expenses of $0.4 million, payroll and payroll taxes of $1.8 million due to lower headcount, and restructuring charges of $0.4 million. These decreases were partially offset by increases in professional fees of $0.2 million, stock-based compensation of $0.3 million, and impairment of ROU asset of $0.9 million.
Other Expense, Net
Other expense, net, decreased by $1.1 million, or 81.8%, to $0.2 million for the three months ended March 31, 2026, from $1.3 million for the three months ended March 31, 2025. The decrease was primarily driven by a decrease interest expense due to the retirement of the Company’s short-term note payable in the second quarter of 2025 that was partially offset by an increase in legal settlements expense of $0.2 million.
Liquidity and Capital Resources
The Company’s consolidated working capital at March 31, 2026 was $0.3 million, which included $5.5 million of cash and $0.3 million of restricted cash. Historically, the Company has financed its operations with proceeds from cash from operations, the sales of equity securities, and proceeds from its $100 million 2021 Convertible Note. Our material liquidity needs principally relate to working capital requirements.
28
Table of Contents
As further described in the subsection titled “Going Concern” above, since the first quarter of 2024, the Company’s liquidity has been adversely impacted by the loss of revenues stemming from the discontinuation of its QuickCard product. As also noted therein, through the first quarter of 2025, the Company had relied on the repatriation of profits from its European subsidiaries to cover some of its critical operating expenses, which it is no longer able to do following the sale of its wholly owned subsidiary, Ryvyl EU, effective June 1, 2025. Additionally, the Company’s remaining businesses continue to generate operating losses, which are expected to continue for the foreseeable future. As a result, management has determined that its cash balance as of March 31, 2026, will not be sufficient to fund the Company’s operations and capital needs for the next 12 months from the date of this Report. The Company’s ability to successfully address its liquidity shortfall is contingent upon the successful execution of management’s intended remediation plan over the next twelve months, which include, but are not limited to the following:
| ● | raising additional capital through a variety of means, including private and public equity offerings and debt financings. The Company recently executed multiple successful capital raises in July 2025, October 2025, and December 2025, and continues to be actively engaged in discussions with multiple parties for additional funding opportunities; | |
| ● | exploring strategic initiatives, including M&A opportunities, which on September 28, 2025, resulted in the Company, Ryvyl Merger Sub Inc., and RTB Digital, Inc., a Delaware corporation (“RTB”), entering into an Agreement and Plan of Merger pursuant to which Merger Sub merged with and into RTB (the “Merger”), effective May 12, 2026, with RTB surviving the Merger as a wholly-owned subsidiary of the Company; | |
| ● | continued execution of its accelerated business development efforts to drive volumes in diversified business verticals with the Company’s other products; and | |
| ● | continued implementation of cost control measures to more effectively manage spending and further right-sizing the organization, where appropriate; |
Management has assessed that its intended plan described above, if successfully implemented, is appropriate and sufficient to address its liquidity shortfall, and to provide funds to cover operations for the next 12 months from the date of the issuance of this Report. However, there can be no assurance that we will be successful in implementing our plan, that our projections of our future capital needs will prove accurate, or that any additional funding will be available on a timely manner, on favorable terms, or be sufficient to continue our operations. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Cash Flow Activities
The following table summarizes cash flow activities for the periods presented (in thousands):
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash used in operating activities | $ | (2,065 | ) | $ | (15,581 | ) | ||
| Cash used in investing activities | - | (1,269 | ) | |||||
| Cash provided by financing activities | 391 | 1,998 | ||||||
| Effects of exchange rates on cash and restricted cash | - | 312 | ||||||
| Net decrease in cash and restricted cash | $ | (1,674 | ) | $ | (14,540 | ) | ||
Operating Activities – Net cash used in operating activities for the three months ended March 31, 2026, and 2025, was $2.1 million and $15.6 million, respectively. The net cash used by operating activities was primarily driven by the timing of settlement of assets and liabilities.
29
Table of Contents
Investing Activities – Net cash used in investing activities for the three months ended March 31, 2026, was $0.0 million, while cash used in investing activities for the three months ended March 31, 2025, was $1.3 million. The net cash used in investing activities for the three months ended March 31, 2025, primarily relates to capitalized software development costs.
Financing Activities – Net cash provided by financing activities during the three months ended March 31, 2026, was $0.4 million and was primarily driven by proceeds from common warrant exercises during the quarter. Net cash provided by financing activities for the three months ended March 31, 2025, was primarily driven by proceeds from a short-term note payable obtained by the Company in connection with the January 2025 SPA, partially offset by the partial repayment of the convertible note that was fully retired during the second quarter of 2025.
Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the U.S. (“GAAP”). GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experience, anticipated future trends, and other assumptions we believe to be reasonable under the circumstances. Because these estimates require significant judgment, our actual results may differ materially from our estimates.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining adequate disclosure controls and procedures over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, as amended. Our management, under the supervision and with the participation of our Interim Chief Executive Officer / Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures over financial reporting as of March 31, 2026, based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our management concluded that, as of March 31, 2026, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting, as defined in the Exchange Act Rule 13a-15(f), that occurred during the three months ended March 31, 2026, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
30
Table of Contents
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time-to-time, the Company is involved in legal proceedings. The following is a summary of our current outstanding litigation. Note that references to GreenBox POS are for historical purposes. GreenBox POS changed its name to RYVYL Inc. on October 13, 2022.
| ● | On December 12, 2022, Jacqueline Dollar (a/k/a Jacqueline Reynolds), former Chief Marketing Officer of the Company, filed a complaint against the Company, Fredi Nisan, and Does 1-20 in San Diego Superior Court. Ms. Dollar is alleging she was undercompensated compared to her male counterparts and retaliated against after raising concerns to management resulting in sex discrimination in violation of the California Fair Employment and Housing Act (“FEHA”) and failure to prevent discrimination in violation of FEHA. Ms. Dollar is also claiming intentional infliction of emotional distress. Ms. Dollar is seeking an unspecified amount of damages related to, among other things, payment of past and future lost wages, stock issuances, bonuses and benefits, compensatory damages, and general, economic, non-economic, and special damages. On January 21, 2026, Ms. Dollar filed a notice of conditional settlement of entire case with the Court. The parties have since entered into a confidential settlement agreement, pursuant to which all claims are to be dismissed upon satisfaction of all settlement terms.. |
| ● | As previously disclosed in the Company’s 10-Q for the period ending March 31, 2025, as filed on May 20, 2025, since December 2022, the Company has been cooperating with an ongoing investigation by the SEC regarding possible violations of the federal securities laws. Following discussions with the Staff of the SEC, the Company made certain disclosures addressing the concerns regarding the Company’s 2020 Registration Statement on Form S-1 filed on December 23, 2020 and subsequent reporting, which are contained in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2025 under Part I, Note 14, Commitments and Contingencies, and Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments, and under the Part II section titled “Legal Proceedings.” On April 27, 2026, the SEC filed a settled action against the Company and its founders, memorializing the previously disclosed settlement. SEC v. RYVYL Inc., et al., Case No. 3:26-cv-02672-WQH-MMP (S.D. Cal.). The proposed final judgment, approved by the Court on May 11, 2026, does not require the Company to pay any monetary penalty and, fully resolves all claims regarding the Company. |
| ● | On June
22, 2023, a shareholder derivative complaint was filed in the United States District Court for the Southern District of California
against certain of the Company’s current and/or former officers and directors (the “Hertel Defendants”), Christy
Hertel, derivatively on behalf of RYVYL Inc., f/k/a GreenBox POS v. Ben Errez et al., Case No. 3:23-CV-01165-GPC-SBC. On August 4,
2023, a second shareholder derivative complaint was filed in the United States District Court for the Southern District of California
against the Hertel Defendants, Marcus Gazaway, derivatively on behalf of RYVYL Inc., f/k/a GreenBox POS v. Ben Errez et al., Case
No. 3:23-CV-01425-LAB-BLM. Both derivative complaints generally allege that the Hertel Defendants failed to implement adequate internal
controls that would prevent false and misleading financial information from being published by the Company and that controlling shareholders
participated in overpayment misconduct resulting in violations of Sections 10(b), 14(a) and 20 of the Exchange Act and breached their
fiduciary duties and, purportedly on behalf of the Company. On April 2, 2024, the Court granted the parties’ joint motion for
an order consolidating the Hertel and Gazaway cases under the caption In re RYVYL Inc. Derivative Litigation, Lead Case No. 3:23-CV-01165-GPC-SBC
(S.D. Cal.). On May 6, 2024, the Court issued an order staying the action until after the final resolution of any motion to dismiss
the securities class action detailed above. On May 1, 2024, a third nearly identical shareholder derivative complaint was filed in
Clark County, Nevada by plaintiff Christina Brown, derivatively on behalf of RYVYL, Inc., v. Ben Errez et al., Case No. A-24-892382-C. The Complaints seeks damages and contribution from the Hertel Defendants and a direction that the Company and the Hertel Defendants take actions to reform and improve corporate governance and internal procedures to comply with applicable laws. The Hertel Defendants deny all allegations of liability and intend to vigorously defend against all claims. On May 8, 2025, all parties reached an agreement in principle to fully resolve and settle all claims alleged in the lawsuits, and on September 30, 2025 they filed a Stipulation and Agreement of Settlement. On November 14, 2025, the Court granted the parties’ Joint Motion for Preliminary Approval of Settlement. On December 12, 2025, the parties filed a Joint Motion for Final Approval of Settlement, which was set for hearing on January 9, 2026. On January 13, 2026, the Court granted the Motion for Final Approval of the Settlement. |
| ● | On June 25, 2024, J. Drew Byelick, a former Chief Financial Officer of the Company, filed a complaint against the Company in the United States District Court for the Southern District of California, Case No. ’24CV1096 JLS MSB. Mr. Byelick alleged breach of contract, fraudulent inducement of employment, along with intentional misrepresentation and concealment. The Company moved to dismiss the complaint for failure to state a claim and for other violations of the federal rules of civil procedure. The Court granted that motion on December 20, 2024, but permitted Mr. Byelick to file an amended complaint. Mr. Byelick filed his first amended complaint on January 19, 2025, asserting the same core claims. The Company moved to dismiss the first amended complaint for similar reasons as its motion to dismiss the original complaint. The Court granted that motion, in part, on April 18, 2025, ruling that Mr. Byelick was incapable of pleading certain claims (and dismissing those claims) but adequately pled others for purposes of a motion to dismiss only. Mr. Byelick subsequently filed a motion for partial summary judgment, which the Court denied in full as premature. Discovery is closed, but trial date has not yet been set. Given the uncertainty of litigation, and the legal standards that must be met for success on the merits, the Company cannot predict the outcome at this time or estimate a reasonably possible loss or range of loss that may result from this action. |
31
Table of Contents
| ● | On July 2, 2025, Plaintiff Kapcharge USA Inc. commenced a lawsuit against Defendants Ryvyl Inc., FFS Data Corporation, CML Management, LLC and Cynthia Lambert in San Diego Superior Court, Case No. 25CU035045C. This lawsuit stems from a dispute between Kapcharge on the one hand and FFS Data Corporation (“FFS”), and CML Management, LLC on the other hand, related to a payment processor agreement between Kapcharge and FFS. Kapcharge alleges causes of action for Conversion, Money Had and Received, Violation of Penal Code § 496, Restitution, Breach of Contract (against FFS, CML, and Lambert), and Unfair Competition in Violation of California Business and Professions Code § 17200 et seq. The Company denies all allegations of liability and intends to vigorously defend against all claims. Kapcharge filed a demurrer on August 28, 2025 related to the causes of action for Conversion and Violation of Penal Code § 496. On April 8, 2026, Kapcharge and Ryvyl filed a stipulation for stay of the proceedings and to continue the demurrer hearing. On May 12, 2026, the parties entered into a confidential settlement agreement, pursuant to which all claims are to be dismissed. |
| ● | On July 15, 2025, Plaintiff Rachael Mora filed a complaint against the Company, Fredi Nisan, and Does 1-20 in San Diego Superior Court. Ms. Mora is alleging sex discrimination and sexual favoritism in violation of the California Fair Employment and Housing Act (“FEHA”), and failure to prevent discrimination in violation of FEHA. Ms. Mora is also claiming retaliation and negligent supervision/negligent retention. Ms. Mora is seeking an unspecified amount of damages related to, among other things, payment of past and future lost wages, stock issuances, bonuses and benefits, compensatory damages, and general, economic, non-economic, and special damages. As the Company cannot predict the outcome of the matter, the probability of an outcome cannot be determined. The Company intends to vigorously defend against all claims. | |
| ● | On December 29, 2025, Plaintiff Ellenoff, Grossman & Schole LLP (“EGS”), filed a complaint against the Company in the Supreme Court of the State of New York County of New York. EGS is alleging breach of contract, account stated, and quantum meriut. The Company denies liability and intends to vigorously defend against all claims. Given the stage of the lawsuit, the uncertainty of litigation, and the legal standards that must be met for success on the merits, the Company cannot predict the outcome at this time or estimate a reasonably possible loss or range of loss that may result from this action. |
| ● | On March 16, 2026, Plaintiff Ideyalabs, LLC (“Ideyalabs”), filed a complaint against the Company and two of its wholly owned subsidiaries in San Diego Superior Court, Case No. 26CU014745C. Ideyalabs alleged breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. The Company denies liability and intends to vigorously defend against all claims. Given the stage of the lawsuit, the uncertainty of litigation, and the legal standards that must be met for success on the merits, the Company cannot predict the outcome at this time or estimate a reasonably possible loss or range of loss that may result from this action. |
ITEM 1A. RISK FACTORS
Investors are directed to review the risk factors that are set forth in the Proxy Statement of the Company dated February 9, 2026, relating to the business of RTB Digital, Inc. starting on page 40 thereof. There have been no material changes with respect to risk factors previously disclosed in the Company’s 2025 Annual Report and indicated herein.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
32
Table of Contents
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Trading Arrangements
During
the quarterly period ended March 31, 2026, none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Exchange
Act)
ITEM 6. EXHIBITS
| Exhibit | Reference | Filed or Furnished | ||||||||
| Number | Exhibit Description | Form | Exhibit | Filing Date | Herewith | |||||
| 31.1 | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Exchange Act Rule 13a-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||
| 32.1* | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act 2002 | X | ||||||||
| 101.INS | Inline XBRL Instance Document | X | ||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema | X | ||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | X | ||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | X | ||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | X | ||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | X | ||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||||
| * | In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed. |
33
Table of Contents
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| RTB DIGITAL, INC. | ||
| (Registrant) | ||
| Date: May 14, 2026 | By: | /s/ George Oliva |
| George Oliva | ||
Interim
Chief Executive Officer and (Principal
Executive Officer and | ||
34