RVYL Ryvyl Inc. - 10-K

Item 1A. Risk Factors

The following describes material risks, uncertainties, and other factors that could have a material effect on us and our operations. The risks described below may not be the only risks we face, as our business and operations may also be subject to risks that we do not yet know of, or that we currently believe are immaterial. If any of the events or circumstances described below actually occur, our business, financial condition, results of operations or cash flow could be materially and adversely affected and the trading price of our common stock could decline. The following risk factors should be read in conjunction with the other information contained herein, including the financial statements and the related notes. An investment in our securities involves a high degree of risk.

Risks Related to Our Business and Industry

Our financial situation creates doubt whether we will continue as a going concern if the merger is not completed.

As described in the notes to our consolidated financial statements included in this Report for the years ended December 31, 2025, and 2024, 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. Also, until recently, we had relied on the repatriation of profits from our European subsidiaries to cover some of our critical operating expenses, which we are no longer able to do following the sale of our wholly owned subsidiary, Ryvyl EU, effective June 1, 2025. As a result, management has determined that our cash balance as of December 31, 2025, will not be sufficient to fund our operations and capital needs for the next 12 months from the date of this Report. These conditions raise substantial doubt about our ability to continue as a going concern.

The foregoing assessment does not take into account the effect on our financial condition of the merger with RTB. Even with the consummation of the merger, at this time there can be no assurances that we with our current business or our combined business will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or additional financing through private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient, we will need to raise additional working capital. No assurance can be given that additional financing will be available, or if available, that we will be able to secure any such financing on acceptable terms. If adequate working capital is not available, we may be forced to discontinue operations.

The merger with RTB could materially and adversely affect the business and operations of Ryvyl.

Prior to the effective time of the merger and even as a result of the merger if it is consummated, some customers, potential customers, or vendors of Ryvyl may delay or defer decisions regarding whether to do business or continue to do business with Ryvyl, which could materially and adversely affect the revenues or potential revenues, earnings or potential earnings, cash flows, expenses, and prospects of the Ryvyl business, regardless of whether the merger is completed.

Further, the pursuit of the merger and the preparation for the integration in connection therewith may place a burden on Ryvyl’s management and internal resources. Any significant diversion of management attention away from ongoing business concerns and any difficulties encountered in the transition and integration process could have a material adverse effect on each company’s business, financial condition, and results of operations.

There is no assurance Ryvyl will be able to successfully enter the digital asset space or enhance its current business plan.

As a result of the sale of Ryvyl EU and the loss of Ryvyl’s businesses under their European segment in June 2025, Ryvyl’s management sought to acquire or combine with another business that Ryvyl considered as having complementary technology and ultimately determined to conclude the Merger Agreement with RTB. Management and the board of directors believes that the merger with RTB will enhance its current business and bring additional business opportunities. There are no assurances, however, that Ryvyl will close the merger or that the merger will result in a significant benefit to Ryvyl. If Ryvyl is unable to successfully enter the digital asset space or enhance its current business plan through its merger with RTB, Ryvyl will continue to operate its business in North America. The continuing Ryvyl business may be limited and unable to sustain the financial requirements of the business of Ryvyl as they existed at the end of 2025.

Low or changing demand for new products and the inability to develop and introduce new products at favorable margins could adversely impact our performance and prospects for future growth.

Ryvyl believes that our competitive advantage is due in part to our ability to develop and introduce new Ryvyl products in a timely manner at favorable margins. The uncertainties associated with developing and introducing new products, such as market demand and costs of development and production, may impede the successful development and introduction of new products on a consistent basis. Introduction of new technology may result in higher costs to us than that of the technology replaced. That increase in costs, which may continue indefinitely or until increased demand and greater availability in the sources of the new technology drive down its cost, could adversely affect our results of operations. Market acceptance of the new products introduced in recent years and scheduled for introduction in future years may not meet sales expectations due to various factors, such as the failure to accurately predict market demand, end-user preferences, evolving industry standards, or the emergence of new or disruptive technologies. Moreover, the ultimate success and profitability of the new products may depend on our ability to resolve technical and technological challenges in a timely and cost-effective manner. Our investment in productive capacity and in our commitment to fund advertising and product promotions in connection with these new products could erode profits if those expectations are not met.

The payments technology industry is highly competitive and highly innovative, and some of Ryvyl’s competitors have greater financial and operational resources than Ryvyl, which may give them an advantage with respect to the pricing of services offered to customers and the ability to develop new and disruptive technologies.

Ryvyl currently operates in the payments technology industry, which is highly competitive and highly innovative. In this industry, our primary competitors include other payment processors, credit card processing firms, third-party card processing software institutions, as well as financial institutions, ISOs, and payment facilitators. Some of our current and potential competitors may be larger than we are and have greater financial and operational resources or brand recognition than we have. Competitors may provide payment processing services to merchants at lower margins or at a loss in order to generate banking fees from such merchants. It is also possible that larger financial institutions could decide to perform some or all of the services that we currently provide or could provide in the future in-house. Ryvyl is facing increasing competition from competitors, including new entrant technology companies, who offer certain innovations in payment methods. Some of these competitors utilize proprietary software and service solutions. Some of these competitors have significant financial resources and robust networks and are highly regarded by consumers. In addition, some competitors, such as private companies or startup companies, may be less risk averse than we are and, therefore, may be able to respond more quickly to market demands. These competitors may compete in ways that minimize or remove the role of traditional card networks, acquirers, issuers and processors in the digital payments process. If these competitors gain a greater share of total digital payments transactions, it could have an adverse effect on our business, financial condition, results of operations and cash flows.

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Ryvyl could face substantial competition, which could reduce our market share and negatively impact our net revenue.

Notable companies in the payment facilitator industry include PayPal, Stripe, and Square. Many of our payment facilitator competitors are significantly larger than we are and have considerably greater financial, technical, marketing, and other resources than we do. Some competitors may have a lower cost of funds and access to funding sources that are not available to us. We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business, financial condition, and results of operations.

Litigation may adversely affect our business, financial condition, and results of operations.

From time to time in the normal course of our business operations, we may become subject to litigation involving intellectual property, data privacy and security, consumer protection, commercial disputes and other matters that may negatively affect our operating results if changes to our business operation are required. We may also be subject to a variety of claims including product warranty, product liability, and consumer protection claims related to product defects, among other litigation. We may also be subject to claims involving health and safety, other environmental impacts, or service disruptions or failures. The cost to defend such litigation may be significant and may require a diversion of our resources. There also may be adverse publicity associated with litigation that could negatively affect customer perception of our business, regardless of whether the allegations are valid or whether we are ultimately found liable. As a result, litigation may adversely affect our business, financial condition and results of operations. In addition, insurance may not cover existing or future claims, be sufficient to fully compensate us for one or more of such claims or continue to be available on terms acceptable to us. A claim brought against us that is uninsured or underinsured could result in unanticipated costs, thereby adversely affecting our results of operations and resulting in a reduction in the trading price of our stock.

We are increasingly dependent on information technology, and potential cyberattacks, security problems, or other disruption and expanding social media vehicles present new risks.

We rely on information technology networks and systems, including the internet, to process, transmit, and store electronic information, and to manage or support a variety of business processes, including financial transactions and records, billing, and operating data. Ryvyl may purchase some of our information technology from vendors, on whom our systems will depend, and we rely on commercially available systems, software, tools, and monitoring to provide security for processing, transmission, and storage of confidential operator and other customer information. We depend upon the secure transmission of this information over public networks. Our networks and storage applications could be subject to unauthorized access by hackers or others through cyberattacks, which are rapidly evolving and becoming increasingly sophisticated, or by other means, or may be breached due to operator error, malfeasance or other system disruptions. In some cases, it will be difficult to anticipate or immediately detect such incidents and the damage they cause. Any significant breakdown, invasion, destruction, interruption, or leakage of information from our systems could harm our business.

Further, in the normal course of our business, we collect, store and transmit proprietary and confidential information regarding our customers, employees, and others, including personally identifiable information. An operational failure or breach of security from increasingly sophisticated cyber threats could lead to loss, misuse or unauthorized disclosure of this information about our employees or customers, which may result in regulatory or other legal proceedings, and have a material adverse effect on our business. We also may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of cyber-attacks. Any such attacks or precautionary measures taken to prevent anticipated attacks may result in increasing costs, including costs for additional technologies, training and third-party consultants. The losses incurred from a breach of data security and operational failures as well as the precautionary measures required to address this evolving risk may adversely impact our financial condition, results of operations and cash flows.

Business interruptions or systems failures may impair the availability of our websites, applications, products or services, or otherwise harm our business.

Our systems and operations and those of our service providers and partners have experienced from time to time, and may experience in the future, business interruptions or degradation of service because of distributed denial of-service and other cyberattacks, insider threats, hardware and software defects or malfunctions, human error, earthquakes, hurricanes, floods, fires, and other natural disasters, public health crises (including pandemics), power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks, computer viruses or other malware, or other events. The frequency and intensity of weather events related to climate change are increasing, which could increase the likelihood and severity of such disasters as well as related damage and business interruption. A catastrophic event that could lead to a disruption or failure of our systems or operations could result in significant losses and require substantial recovery time and significant expenditures to resume or maintain operations. Further, some of our systems are not fully redundant and any failure of these systems, including due to a catastrophic event, may lead to operational outages or delays. While we try to mitigate risks from outages or delays, any planning and testing may not be effective or sufficient for all possible outcomes or events. As a provider of payments solutions, we are also subject to heightened scrutiny by regulators that may require specific business continuity, resiliency and disaster recovery plans, and rigorous testing of such plans, which may be costly and time-consuming to implement, and may divert our resources from other business priorities. Any of the foregoing risks could have a material adverse impact on our business, financial condition, and results of operations.

We have experienced, and expect to continue to experience, system failures, cyberattacks, unplanned outages, and other events or conditions from time to time that have and may interrupt the availability, or reduce or adversely affect the speed or functionality, of our products and services. While we continue to undertake system upgrades efforts designed to improve the availability, reliability, resiliency, and speed of our payments platform, these efforts are costly and time-consuming, involve significant technical complexity and risk, may divert our resources from new features and products, and may ultimately not be effective. A prolonged interruption of, or reduction in, the availability, speed, or functionality of our products and services could materially harm our business and financial condition. Frequent or persistent interruptions in our services could permanently harm our relationship with our customers and partners and our reputation. If any system failure or similar event results in damage to our customers or their business partners, they could seek significant compensation or contractual penalties from us for their losses. These claims, even if unsuccessful, would likely be time-consuming and costly for us to address.

In addition, any failure to successfully implement new information systems and technologies or improvements or upgrades to existing information systems and technologies in a timely manner could lead to regulatory scrutiny, significant fines and penalties, and mandatory and costly changes to our business, adversely impact our business, internal controls, results of operations, and financial condition, and ultimately could cause us to lose existing licenses that we need to operate or prevent or delay us from obtaining additional licenses that may be required for our business.

Software and hardware defects, failures, undetected errors and development delays could affect our ability to deliver our services, damage customer relations, expose us to liability and have an adverse effect on our business, financial condition and results of operations.

Our services are based on software and computing systems that may encounter development delays, and the underlying software may contain undetected errors, viruses, defects or vulnerabilities. The hardware infrastructure on which our systems run may have a faulty component or fail. Defects in our software services, underlying hardware or errors or delays in our processing of digital transactions could result in additional development costs, diversion of technical and other resources from our other development efforts and could result in loss of credibility with current or potential customers, harm to our reputation and exposure to liability claims. In instances in which we rely on third party software, our services are occasionally affected by defects, viruses, vulnerabilities, security incidents or other failures that take place at the vendor level. Depending on the circumstances, a vendor failure could cause delays, disruption or data loss or damage, and therefore cause harm to our credibility, reputation or financial condition. In addition, our insurance may not be adequate to compensate us for all losses or failures that may occur.

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Privacy regulation is an evolving area and compliance with applicable privacy regulations may increase our operating costs or adversely impact our ability to service our clients and market our products and services.

Because we are a service provider to banking partners who store, process and use data, some of which contains personal information, we are subject to complex and evolving federal, state, and foreign laws and regulations regarding privacy, data protection, and other matters. While we believe we are currently in compliance with applicable laws and regulations, many of these laws and regulations are subject to change and uncertain interpretation, and could result in investigations, claims, changes to our business practices, increased cost of operations, and declines in user growth, retention, or engagement, any of which could seriously harm our business.

Data privacy and security concerns relating to our technology and our practices could cause us to incur significant liability and deter current and potential users from using our products and services. Software bugs or defects, security breaches, and attacks on our systems could result in the improper disclosure and use of user data and interference with our users’ ability to use our products and services, harming our business operations.

Concerns about our practices with regard to the collection, use, disclosure, or security of personal information or other data-privacy-related matters, even if unfounded, could harm our financial condition, and operating results. Our policies and practices may change over time as expectations regarding privacy and data change. The services we help facilitate through our acquiring partners involve the storage and transmission of proprietary information, and bugs, theft, misuse, defects, vulnerabilities in those services, and security breaches expose us to a risk of loss of this information, improper use and disclosure of such information, litigation, and other potential liability. Systems and control failures, security breaches and/or inadvertent disclosure of user data could result in government and legal exposure, seriously harm our business, and impair our ability to attract and retain customers. We may experience cyber-attacks and other attempts to gain unauthorized access to our systems.

We may experience future security issues, whether due to employee error or malfeasance or system errors or vulnerabilities in our or other parties’ systems, which could result in significant legal and financial exposure. We may be unable to anticipate or detect attacks or vulnerabilities or implement adequate preventative measures. Attacks and security issues could also compromise trade secrets and other sensitive information, harming our business. As a result, we may suffer significant legal or financial exposure, which could harm our business, financial condition, and operating results.

Third-party claims of infringement against us could adversely affect our ability to market our products and require us to redesign our products or seek licenses from third parties.

We are susceptible to intellectual property lawsuits that could cause us to incur substantial costs, pay substantial damages, or prohibit us from distributing our products. Whether a product infringes a patent involves complex legal and factual issues, the determination of which is often uncertain. In addition, because patent applications can take many years to issue, there may be applications now pending of which we are unaware, which later may result in issued patents that our products may infringe. If any of our products infringe a valid patent, we could be prevented from distributing that product unless and until we obtain a license or redesign it to avoid infringement. A license may not be available or may require us to pay substantial royalties. We also may not be successful in any attempt to redesign the product to avoid any infringement. Infringement and other intellectual property claims, with or without merit, can be expensive and time-consuming to litigate, and we may not have the financial and human resources to defend ourselves against any infringement suits that may be brought against us.

We may employ individuals who were previously employed by companies that are developing similar products and technology, including our competitors or potential competitors. To the extent our employees are involved in research areas which are similar to those areas in which they were involved with their former employers, we may be subject to claims that such employees and/or we have inadvertently or otherwise used or disclosed the alleged trade secrets or other proprietary information of the former employers. Litigation may be necessary to defend against such claims, which could result in substantial costs and be a distraction to management and which may have a material adverse effect on us, even if we are successful in defending such claims.

We also rely in our business on trade secrets, know-how and other proprietary information. We seek to protect this information, in part, through the use of confidentiality agreements with employees, consultants, advisors and others. Nonetheless, we cannot assure you that those agreements will provide adequate protection for our trade secrets, know-how or other proprietary information and prevent their unauthorized use or disclosure. To the extent that consultants, key employees or other third parties apply technological information independently developed by them or by others to our proposed products, disputes may arise as to the proprietary rights to such information which may not be resolved in our favor. Most of our consultants are employed by or have consulting agreements with third parties and any inventions discovered by such individuals generally will not become our property. There is a risk that other parties may breach confidentiality agreements or that our trade secrets become known or independently discovered by competitors, which could adversely affect us.

If we cannot keep pace with technological developments to provide new and innovative products and services, the use of our products and services and, consequently, our revenues, could decline.

Technological changes impact the industries in which we operate, including payment technologies, internet browser technologies, artificial intelligence and machine learning. We expect that new technologies applicable to the industries in which we operate will continue to emerge and may be superior to, or otherwise render obsolete, the technologies we currently use in our products and services. We cannot predict the effects of technological changes on our business and whether or not technological developments or innovations will become widely adopted. Developing and incorporating new technologies into new and existing products and services may require significant investment, take considerable time for development and adoption, require new regulatory compliance, and may not ultimately be successful. We may rely on third parties for the development of and access to new or evolving technologies. These third parties may restrict or prevent our access to, or utilization of, those technologies, as well as their platforms or products. Our ability to develop, provide or incorporate new technologies and adapt our existing products and services or develop future and new products and services using new technologies may be limited or restricted by industry-wide standards, platform providers, payments networks, changes to laws and regulations, changing customer expectations, third-party intellectual property rights, and other factors. If we are unable to develop and incorporate new technologies and adapt to technological changes and evolving industry standards in a timely or cost-effective manner, our business, results of operations, or reputation could be harmed.

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As a public company, we have to bear the cost of public reporting under SEC requirements, Nasdaq compliance and management time and effort.

As a public company, we incur significant legal, accounting, and other expenses that are not usually incurred by a private company, including the costs associated with public company reporting requirements and Nasdaq compliance. The Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and Nasdaq to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls, corporate governance practices, and minimum stockholder equity requirements. Further, in July 2010, the DoddFrank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, was enacted that enhanced the corporate governance and executive compensation related provisions that public companies must follow. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations resulting in additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate. Our management and other personnel devote a substantial amount of time to these compliance programs and monitoring of public company reporting obligations. As a general matter, we anticipate that in the future there will be further regulations and disclosure obligations on public companies. As regulation evolves, we will need to devote additional time and financial resources to comply with new compliance programs and rules.

The rules and regulations applicable to public companies have substantially increased our legal and financial compliance costs and make some activities more time-consuming and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition, and results of operations. The increased costs will decrease our net income and may require us to reduce costs in other areas of our business or increase the prices of our products or services. For example, these rules and regulations made it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs in the future to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified people to serve on our board of directors, our committees of the board of directors, and as executive officers.

If we are not able to comply with the applicable continued listing requirements or standards of Nasdaq, the Ryvyl common stock could be delisted from Nasdaq.

Our common stock is currently listed on Nasdaq. In order to maintain that listing, we must satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders’ equity, minimum share price, and certain corporate governance requirements. In the past, we have received deficiency notices due to our inability to meet various of the listing requirements, including the minimum stockholders’ equity requirement and the minimum closing bid price. There can be no assurances that we will be able to comply with the applicable listing standards of Nasdaq. As of the date of this report, we are in compliance with the Nasdaq listing requirements, and if the merger is consummated, it is anticipated that the combined company will continue to be in compliance with the Nasdaq listing requirements.

If Ryvyl is not able to maintain its compliance with the listing requirements of the Nasdaq Stock Market, then the common stock of Ryvyl will be subject to delisting. In the event that the Ryvyl common stock is delisted from Nasdaq and is not eligible for quotation on another market or exchange, trading of our common stock could be conducted in the over-the-counter market established for unlisted securities, such as the OTC Markets. This would be a material breach of the Merger Agreement, and RTB and Ryvyl would have to determine if continuing the merger would be practical in light of the change in listing of the common stock.

In the event that the Ryvyl common stock is delisted from Nasdaq, U.S. broker-dealers may be discouraged from effecting transactions in shares of the Ryvyl common stock because it may be considered a penny stock and thus be subject to the penny stock rules.

The SEC has adopted a number of rules to regulate a “penny stock” that restricts transactions involving stock which is deemed to be a penny stock. Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 5g7, and 15g-9 under the Exchange Act. These rules may have the effect of reducing the liquidity of penny stocks. “Penny stocks” generally are equity securities with a price of less than $5.00 per share (other than securities registered on certain national securities exchanges or traded on Nasdaq if current price and volume information with respect to transactions in such securities is provided by the exchange or system). The Ryvyl common stock may, in the future constitute, a “penny stock” within the meaning of the rules. The additional sales practice and disclosure requirements imposed upon U.S. broker-dealers may discourage such broker-dealers from effecting transactions in shares of our common stock, which could severely limit the market liquidity of such shares of common stock and impede their sale in the secondary market.

A U.S. broker-dealer selling a penny stock to anyone other than an established customer or “accredited investor”(generally, an individual with a net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser’s written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt. In addition, the “penny stock” regulations require the U.S. broker-dealer to deliver, prior to any transaction involving a “penny stock”, a disclosure schedule prepared in accordance with SEC standards relating to the “penny stock” market, unless the broker-dealer or the transaction is otherwise exempt. A U.S. broker-dealer is also required to disclose commissions payable to the U.S. broker-dealer and the registered representative and current quotations for the securities. Finally, a U.S. broker-dealer is required to submit monthly statements disclosing recent price information with respect to any “penny stock” held in a customer’s account and information with respect to the limited market in “penny stocks”.

You should be aware that, according to the SEC, the market for “penny stocks” has suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) “boiler room” practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, resulting in investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities.

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, our stock price and our trading volume could decline.

The trading market for the Ryvyl common stock depends, in part, on the research and reports that securities or industry analysts publish about us or our business. While we currently have certain analyst coverage, if one or more of the analysts who cover us downgrade the Ryvyl common stock or publish inaccurate or unfavorable research about our business, our stock price could decline. In addition, if our operating results fail to meet the forecast of analysts, our stock price could decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for the Ryvyl common stock could decrease, which might cause our stock price and trading volume to decline.

Sales, or the availability for sale, of substantial amounts of Ryvyl’s common stock could adversely affect the value of its common stock.

Ryvyl cannot predict the effect, if any, that future sales of its common stock, or the availability of its common stock for future sales, will have on the market price of its common stock. Sales of substantial amounts of its common stock in the public market and the availability of shares for future sale could adversely affect the prevailing market price of its common stock. This in turn could impair Ryvyl’s future ability to raise capital through an offering of its equity securities.

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Ryvyl is a “non-accelerated filer” and a “smaller reporting company” for SEC filing purposes and it cannot be certain if the reduced disclosure requirements applicable will make Ryvyl’s common stock less attractive to investors.

For so long as Ryvyl remains a ‘non-accelerated filer” it may take advantage of certain exemptions from various requirements that are applicable to public companies that are not ‘non-accelerated filers,” including not being required to comply with the independent auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in Ryvyl’s periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Investors may find Ryvyl’s common stock less attractive because Ryvyl relies on these exemptions. If some investors find Ryvyl’s common stock less attractive as a result, there may be a less active trading market for Ryvyl’s common stock, and Ryvyl’s stock price may be more volatile or may decline.

In addition, Section 107 of the JOBS Act also provides that a “smaller reporting company” can take advantage of an extended transition period for complying with new or revised accounting standards. However, Ryvyl chose to “opt out” of this extended transition period, and as a result, it intends to comply with new or revised accounting standards on the relevant dates that adoption of those standards may be required. Ryvyl’s decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

If shares of Ryvyl’s common stock cease to be listed on a national exchange Ryvyl’s securities will not be eligible for federal preemption rights and be subject to state “blue sky” laws which may affect Ryvyl’s capabilities of raising capital.

Each state has its own securities laws, often called “blue sky” laws, which (i) limit sales of securities to a state’s residents unless the securities are registered in that state or qualify for an exemption from registration, and (ii) govern the reporting requirements for broker-dealers doing business directly or indirectly in the state. Before a security is sold in a state, there must be a registration in place to cover the transaction, or the transaction must be exempt from registration. The applicable broker must be registered in that state. it does not know whether securities will be registered or exempt from registration under the laws of any state. If Ryvyl’s securities cease to be listed on the national exchange, a determination regarding registration will be made by those broker-dealers, if any, who agree to serve as the market-makers for Ryvyl’s common stock. Registering or qualifying shares with states can be time consuming. Compliance and regulatory costs may vary from state to state and may adversely affect future financings and Ryvyl’s ability to raise capital.

If Ryvyl’s common stock is delisted from a national exchange some institutional investors may not be allowed to purchase Ryvyl’s shares and may be required to liquidate their current positions in Ryvyl’s stock which could negatively affect the price and volatility of Ryvyl’s shares.

Institutional investors may be restricted by their investment policies from investing in shares of companies that are not listed on a national exchange and may be required to liquidate their positions if Ryvyl’s securities are delisted from a national exchange. Liquidations, should they occur, may increase volatility and cause wide fluctuations and further declines in the prices of Ryvyl’s securities.

Ryvyl does not intend to pay dividends for the foreseeable future and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of Ryvyl’s common stock.

Ryvyl has never declared or paid any dividends on Ryvyl’s common stock. Ryvyl intends to retain any earnings to finance the operation and expansion of Ryvyl’s business, and it does not anticipate paying any cash dividends in the future. As a result, you may only receive a return on your investment in Ryvyl’s common stock if the market price of Ryvyl’s common stock increases.

Future sales and issuances of Ryvyl’s equity securities or rights to purchase Ryvyl’s equity securities, including pursuant to Ryvyl’s equity incentive plans, would result in dilution of the percentage ownership of Ryvyl’s stockholders and could cause Ryvyl’s stock price to fall.

To the extent Ryvyl raises additional capital by issuing equity securities, Ryvyl’s stockholders may experience substantial dilution. Ryvyl may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner it determines from time to time. If Ryvyl sells common stock, convertible securities or other equity securities in more than one transaction, investors may be diluted by subsequent sales. Such sales may also result in material dilution to Ryvyl’s existing stockholders, and new investors could gain rights superior to existing stockholders.

The public market for Ryvyl’s common stock has been volatile. This volatility may affect the ability of Ryvyl’s investors to sell their shares as well as the price at which they sell their shares.

Ryvyl’s per share and day-to-day trading prices have often been volatile. This volatility may continue or increase in the future. Furthermore, in recent years the stock market has experienced extreme price and volume fluctuations that are unrelated or disproportionate to the operating performance of the affected companies. Those broad market fluctuations may adversely affect the market price of Ryvyl’s common stock.

Ryvyl has the right to issue shares of preferred stock. If it was to issue preferred stock, it is likely to have rights, preferences and privileges that may adversely affect the common stock.

Ryvyl is authorized to issue 4,930,000 shares of preferred stock of which there are 50,000 shares issued and outstanding designated as the Series C Preferred Stock. The preferred stock of Ryvyl is characterized as “blank check” preferred stock, which means that the board of directors has the discretion without shareholder approval to set the rights and preferences of series of preferred stock. As such, Ryvyl’s board of directors is empowered to issue preferred stock in one or more series, and to fix for any series the dividend rights, dissolution or liquidation preferences, redemption prices, conversion rights, voting rights, and other rights, preferences and privileges for the preferred stock. No shares of preferred stock are presently issued and outstanding and it has no immediate plans to issue shares of preferred stock. The issuance of shares of preferred stock, depending on the rights, preferences and privileges attributable to the preferred stock, could adversely reduce the voting rights and powers of the common stock and the portion of Ryvyl’s assets allocated for distribution to common stockholders in a liquidation event, and could also result in dilution in the book value per share of Ryvyl’s common stock. The preferred stock could also be utilized, under certain circumstances, as a method for raising additional capital or discouraging, delaying or preventing a change in control of Ryvyl, to the detriment of the holders of Ryvyl’s common stock. Ryvyl cannot assure you that it will not, under certain circumstances, issue shares of Ryvyl’s preferred stock.

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Risks Related to the Merger with RTB

The pro rata portion of the Merger Shares is not adjustable based on the market price of Ryvyl common stock or cash assets of RTB, so the merger consideration at the closing may have a greater or lesser value than at the time the Merger Agreement was signed.

The Merger Agreement has set the exchange ratio formula for the RTB common stock to be exchanged for Ryvyl common stock, and the exchange ratio is based on the fully-diluted outstanding common stock of RTB and the fully-diluted outstanding common stock of Ryvyl, after taking into account each company’s outstanding options and warrants, irrespective of the exercise prices of such options and warrants, and Ryvyl’s and RTB’s net cash balances, in each case immediately prior to the closing of the merger.

The exchange ratio formula in the Merger Agreement counts all warrants and options regardless of their exercise price. This means that warrants with exercise prices significantly above the current market price are included in the fully diluted share count, which affects the exchange ratio calculation.

There are additional securities being assumed by Ryvyl, that if converted or exercised for the common stock of Ryvyl will dilute all the shareholders of Ryvyl immediately after the merger is consummated. These securities include certain warrants that may be outstanding, certain convertible debt principal and interest due thereon, and the assumption of outstanding equity compensation plans of RTB.

The relative ownership position of our stockholders will be diluted as a result of the Merger.

The merger will dilute the ownership position of our existing stockholders. Immediately following the closing of the transactions contemplated by the Merger Agreement and without taking into account certain additional shares of common stock issued and to be issued upon the various assumed securities, (i) the aggregate number of shares of common stock issued to the former stockholders and other equity holders of RTB as consideration for the merger is expected to represent approximately 84.85% of the outstanding equity interests of the combined companies, and (ii) the Ryvyl equity holders as of immediately after to the merger are expected to own approximately 15.15% of the outstanding equity interests of the combined companies. The Ryvyl stockholders, along with the RTB shareholders that hold Ryvyl common stock immediately after the merger, will experience further dilution of their ownership position as a result of the conversion of the assumed RTB convertible debt in the amount of approximately $36,960,000, that will occur after consummation of the merger, certain warrants and the issued securities previously issued under the RTB equity award plans. Consequently, our existing stockholders, as a general matter, will have less influence over our management and policies after the effective time of the Merger than they currently exercise over our management and policies.

The merger will result in changes to Ryvyl’s board of directors and management team that will affect Ryvyl’s business strategy post-merger as compared to its current business strategy.

If the parties complete the merger, the composition of Ryvyl’s board of directors and management team will change from the respective current Board and management team. The board of directors of the combined companies will be reconstituted to consist of seven (7) members, six (6) of whom will be identified by RTB prior to the closing of the merger, with Brett Moyer continuing to serve on Ryvyl’s board of directors after the closing. The new composition of Ryvyl’s board of directors and management team will affect our overall business strategy and operating decisions subsequent to the consummation of the merger. Failure to complete the merger may result in Ryvyl or RTB paying the equivalent of a termination fee or expenses to the other party and could significantly harm the market price of Ryvyl common stock and negatively affect the future business and operations of each company.

If the merger is not consummated, Ryvyl will be significantly impaired financially and may not be able to sustain its business .

If (i) RTB terminates the Merger Agreement due to a material breach by Ryvyl that is not cured, (ii) RTB terminates the Merger Agreement because Ryvyl fails to satisfy any condition to closing under Section 8.02 of the Merger Agreement rising materially from Ryvyl’s action or refusal to act, or (iii) Ryvyl breaches the Securities Purchase Agreement for the Series C Preferred Stock (together a “Material Breach Event”), then Ryvyl is required to redeem all the outstanding Series C Preferred Stock for an aggregate redemption price of $6,500,000. In addition, upon a Material Breach Event, Ryvyl will be required to issue Series C Warrants to RTB. The Series C Warrant terms include: (i) warrants for the number of shares calculated as the quotient of (a) the aggregate purchase price paid for Series C Preferred Stock ($6,500,000) divided by (b) the exercise price for the warrants, and (ii) the exercise price of the warrants to be based on the volume-weighted average price of Ryvyl’s common stock for the five trading days following public announcement of the Material Breach Event, with a floor price of $0.08 per share, and (iii) a term of five years from the date of issuance.

The payment of the redemption price would seriously reduce the ability of Ryvyl to carry on its business, unless it was able to find financing to be able to meet its obligations, which would also include the expenses of the attempted merger transaction. The issuance of the Series C Warrants would result in a significant dilution to the stockholders of Ryvyl and would likely impede the ability of Ryvyl to raise capital. Overall, the obligations under the Purchase Agreement would substantially impair the ability of Ryvyl to continue its business, locate an alternative merger candidate, and continue its listing on the Nasdaq Stock Market.

The merger may be completed even though certain events occur prior to the closing that materially and adversely affect Ryvyl or RTB. The Merger Agreement provides that either Ryvyl or RTB can refuse to complete the merger if there is a material adverse change affecting the other party between September 28, 2025, the date of the Merger Agreement, and the closing of the merger. However, certain types of changes do not permit either party to refuse to complete the merger, even if such change could be said to have a material adverse effect on Ryvyl or RTB, including:

General domestic and international economic, business or regulatory conditions or political conditions (including the imposition of or changes in international tariffs, sanctions, trade policies or disputes or any “trade war” and any cessation, outbreak or escalation of hostilities, any acts of war or terrorism or any other national or international calamity, crisis or emergency), or the securities, credit, financial, debt or other capital markets in general;

acts of God, natural disasters, calamities, disease outbreaks or pandemics;

any decline, in and of itself, in the market price or trading volume of Ryvyl common stock (it being understood and agreed that the facts or circumstances giving rise to or contributing to such decline may be taken into account in determining whether there has been, or would reasonably be expected to be, a Ryvyl material adverse effect, unless otherwise excluded);

any failure, in and of itself, by Ryvyl to meet any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics for any period (it being understood and agreed that the facts or occurrences giving rise to or contributing to such failure may be taken into account in determining whether there has been, or would reasonably be expected to be, a Ryvyl material adverse effect, unless otherwise excluded);

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the execution and delivery of the Merger Agreement, the public announcement thereof, the pendency of the Merger Agreement, the impact thereof on the relationships of Ryvyl with customers, suppliers or partners or the consummation of the merger;

any changes after the date of the Merger Agreement not announced prior to the date of the Merger Agreement in any law applicable to the merger or GAAP; and

any action or omission taken by Ryvyl pursuant to the prior written request of RTB to the extent that any such event, circumstance, development, occurrence, change or effect has a materially disproportionate adverse effect on Ryvyl, taken as a whole, relative to the adverse effect such event, circumstance, development, occurrence, change or effect has on other companies operating in the industry in which Ryvyl and its Subsidiaries operate.

If adverse changes occur and Ryvyl and RTB still complete the merger, the market price of the combined company’s common stock may suffer. This in turn may reduce the value of the merger to the stockholders of Ryvyl, RTB, or both.

The market price of the common stock of the combined company following the merger may decline as a result of the merger.

The market price of combined company’s common stock may decline as a result of the merger for a number of reasons including if:

investors react negatively to the prospects of the combined company’s business and financial condition following the merger;

the effect of the merger on the combined company’s business and prospects is not consistent with the expectations of financial or industry analysts; or

the combined company does not achieve the perceived benefits of the merger as rapidly or to the extent anticipated by financial or industry analysts.

The market price of our common stock after the proposed Merger with RTB may be affected by factors different from those currently affecting our shares of common stock.

The businesses of Ryvyl, on the one hand, and of RTB, on the other hand, differ and, accordingly, the results of operations of Ryvyl subsequent to the completion of the proposed Merger and the market price of our common stock may be affected by factors different from those currently affecting the independent results of operations and market price of our common stock.

Ryvyl and RTB stockholders may not realize a benefit from the merger commensurate with the ownership dilution they will experience in connection with the merger.

If the combined company is unable to realize the strategic and financial benefits currently anticipated from the merger, Ryvyl’s and RTB’s stockholders will have experienced substantial dilution of their ownership interests in their respective companies without receiving the expected commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the expected strategic and financial benefits currently anticipated from the merger.

We may fail to realize all of the anticipated benefits of the proposed Merger with RTB.

The success of the proposed merger with RTB, will depend, in part, on our ability to realize the anticipated benefits from combining the businesses of Ryvyl with RTB. To realize these anticipated benefits, however, we must successfully combine the businesses of Ryvyl with RTB. If we are unable to successfully combine the businesses of Ryvyl with RTB, the anticipated benefits and any cost savings of the merger may not be realized fully or at all or may take longer to realize than expected. There is no guarantee that any cost saving or other economic benefits will occur, and we may incur unanticipated charges or make payments that were not previously contemplated.

Ryvyl and RTB have operated, and, until the completion of the merger, will continue to operate, independently. It is possible that the integration process could result in the loss of key employees and the disruption of each of Ryvyl’s and RTB’s ongoing business, or inconsistencies in standards, controls, procedures, and policies that adversely affect Ryvyl’s and RTB’s ability to maintain their relationships with their respective clients, customers, and employees, which could have a negative impact on our ability to achieve the anticipated benefits of the merger. Integration efforts between the two companies may, to some extent, also divert management’s attention and resources. These integration matters could have an adverse effect on each of Ryvyl and RTB during such transition period.

During the pendency of the merger, Ryvyl and RTB may not be able to enter into a business combination with another party at a favorable price because of restrictions in the Merger Agreement, which could adversely affect their respective businesses.

Covenants in the Merger Agreement impede the ability of Ryvyl and RTB to make acquisitions, subject to certain exceptions relating to fiduciary duties, as set forth in the Merger Agreement, or to complete other transactions that are not in the ordinary course of business pending completion of the merger. As a result, if the merger is not completed, the parties may be at a disadvantage to their competitors during such period. In addition, while the Merger Agreement is in effect, each party is generally prohibited from soliciting, initiating, encouraging, or entering certain extraordinary transactions, such as a merger, sale of assets, or other business combination outside the ordinary course of business with any third party, subject to certain exceptions relating to fiduciary duties, as set forth in the Merger Agreement. Any such transactions could be more favorable to such party’s stockholders than the transactions contemplated by the Merger Agreement.

Recent changes to the Nevada corporate law impose restrictions on persons acquiring a controlling interest in Ryvyl.

Certain anti-takeover provisions of Nevada law could have the effect of delaying or preventing a third-party from acquiring us, even if the acquisition arguably could benefit our stockholders.

Nevada’s “combinations with interested stockholders” statutes (NRS 78.411 through 78.444, inclusive) prohibit specified types of business “combinations” between certain Nevada corporations and any person deemed to be an “interested stockholder” for two years after such person first becomes an “interested stockholder” unless the corporation’s board of directors approves the combination (or the transaction by which such person becomes an “interested stockholder”) in advance, or unless the combination is approved by the board of directors and sixty percent of the corporation’s voting power not beneficially owned by the interested stockholder, its affiliates and associates. Further, in the absence of prior approval certain restrictions may apply even after such two year period. However, these statutes do not apply to any combination of a corporation and an interested stockholder after the expiration of four years after the person first became an interested stockholder. For purposes of these statutes, an “interested stockholder” is any person who is (1) the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares of the corporation, or (2) an affiliate or associate of the corporation and at any time within the two previous years was the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the then outstanding shares of the corporation. The definition of the term “combination” is sufficiently broad to cover most significant transactions between a corporation and an “interested stockholder.” A Nevada corporation may elect in its articles of incorporation not to be governed by these particular laws, but if such election is not made in the corporation’s original articles of incorporation, the amendment (1) must be approved by the affirmative vote of the holders of stock representing a majority of the outstanding voting power of the corporation not beneficially owned by interested stockholders or their affiliates and associates, and (2) is not effective until 18 months after the vote approving the amendment and does not apply to any combination with a person who first became an interested stockholder on or before the effective date of the amendment. We did not make such an election in our original articles of incorporation and have not amended our articles of incorporation to so elect.

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Nevada’s “acquisition of controlling interest” statutes (NRS 78.378 through 78.3793, inclusive) contain provisions governing the acquisition of a controlling interest in certain Nevada corporations. These “control share” laws provide generally that any person that acquires a “controlling interest” in certain Nevada corporations may be denied voting rights, unless a majority of the disinterested stockholders of the corporation elects to restore such voting rights. These laws would apply to us if we were to have 200 or more stockholders of record (at least 100 of whom have addresses in Nevada appearing on our stock ledger) and do business in the State of Nevada directly or through an affiliated corporation, unless our articles of incorporation or bylaws in effect on the tenth day after the acquisition of a controlling interest provide otherwise. These laws provide that a person acquires a “controlling interest” whenever a person acquires shares of a subject corporation that, but for the application of these provisions of the NRS, would enable that person to exercise (1) one fifth or more, but less than one third, (2) one third or more, but less than a majority or (3) a majority or more, of all of the voting power of the corporation in the election of directors. Once an acquirer crosses one of these thresholds, shares which it acquired in the transaction taking it over the threshold and within the 90 days immediately preceding the date when the acquiring person acquired or offered to acquire a controlling interest become “control shares” to which the voting restrictions described above apply. These laws may have a chilling effect on certain transactions if our articles of incorporation or bylaws are not amended to provide that these provisions do not apply to us or to an acquisition of a controlling interest, or if our disinterested stockholders do not confer voting rights in the control shares.

The consummation of the merger and the other transactions contemplated by the Merger Agreement are subject to a number of conditions, which, if not satisfied or waived, would adversely impact the parties’ ability to complete the Merger and the other transactions contemplated by the Merger Agreement.

The merger and the other transactions contemplated by the Merger Agreement are subject to certain closing conditions, including, among others, requisite stockholder approvals. There can be no assurance that these conditions will be satisfied or waived, if permitted. Therefore, there can be no assurance with respect to the timing of the closing of the merger and the other transactions contemplated by the Merger Agreement or that the merger and the other transactions contemplated by the Merger Agreement will be completed at all.

Business acquisition activity involves numerous risks, including the risks that Ryvyl may be unable to integrate the acquired business successfully and that Ryvyl may assume liabilities that could adversely affect it.

In order to transform its business, pursue strategic opportunities, and enhance stockholder value, Ryvyl entered into the Merger Agreement. Ryvyl cannot be sure the merger will result in a successful acquisition, development or launch of products that will prove to be commercially successful or will improve the long-term viability of Ryvyl’s business. General expansion of the combined company business, any acquisitions or licenses acquisitions, increasing staffing levels each and all could require the post combination company to have to raise significant capital and potentially incur significant dilution through the direct or indirect issuance of new shares of common stock. These strategic transactions involve many risks, including, but not limited to, the following:

difficulties in achieving identified financial revenue synergies, growth opportunities, operating synergies, and cost savings;

difficulties in assimilating the personnel, operations and products of RTB, and the potential loss of key employees and advisers;

difficulties in consolidating intellectual properties portfolios and corporate infrastructures of the respective parties;

Ryvyl’s inability to achieve expected revenues and gross margins for any products Ryvyl may acquire;

the diversion of management’s attention from other business concerns; and

difficulties in reorganizing, winding-down, or liquidating operations if not successful.

Business development activities require significant transaction costs, including substantial fees for investment bankers, attorneys, and accountants. Any acquisition could result in the assumption of material unknown and/or unexpected liabilities. Ryvyl also cannot provide assurance that the combined company will achieve any cost savings or synergies relating to recent or future acquisitions. Additionally, in any acquisition agreement, the negotiated representations, warranties, and agreements of the selling parties may not entirely protect Ryvyl or the combined company, and liabilities resulting from any breaches could exceed negotiated indemnity limitations. These factors could impair the future growth and ability to compete, divert resources from other potentially more profitable areas, or otherwise cause a material adverse effect on its business, financial position, and results of operations.

If Ryvyl does not successfully consummate a strategic transaction, its board of directors may decide to pursue a dissolution and liquidation of Ryvyl. In such an event, the amount of cash available for distribution to Ryvyl stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

There can be no assurance that the process to identify a strategic transaction will result in a successfully consummated transaction. If no transaction is completed, Ryvyl’s board of directors may decide to pursue a dissolution and liquidation of the company. In such an event, the amount of cash available for distribution to Ryvyl stockholders will depend heavily on the timing of such decision and, ultimately, such liquidation since the amount of cash available for distribution continues to decrease as Ryvyl funds its operations while it evaluates its strategic alternatives. In addition, if the Ryvyl board of directors was to approve and recommend, and its stockholders were to approve, a dissolution and liquidation of the company, Ryvyl would be required under Nevada corporate law to pay outstanding obligations of the Company. The management will have to take into account any penalty payment that will be due if the merger transaction is not consummated because of a Material Breach by Ryvyl. As a result of this requirement, a portion of Ryvyl’s assets may need to be reserved pending the resolution of such obligations. In addition, Ryvyl may be subject to litigation or other claims related to a dissolution and liquidation of the company. If a dissolution and liquidation were pursued, the Ryvyl board of directors, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of Ryvyl common stock could lose all or a significant portion of their investment in the event of a liquidation, dissolution or winding up of the company.

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Ryvyl is or may become a target of certain demands by individual or class action plaintiffs based on securities or derivative lawsuits in connection with the merger, which could result in substantial costs and may delay or prevent the consummation of the merger.

Securities class action lawsuits and derivative lawsuits are often brought against companies that have entered into merger agreements in an effort to enjoin the relevant merger or seek monetary relief. Ryvyl and the members of the Ryvyl board of directors may be defendants in one or more lawsuits relating to the Merger Agreement and the merger and, even if such lawsuits are without merit, addressing said demand letters and defending against the pertinent claims can result in substantial costs and divert management time and resources of both Ryvyl and RTB. Ryvyl cannot predict the future development of events in connection with the demand letters, nor can it predict the outcome of any such potential lawsuits. Neither Ryvyl nor RTB is able to predict the amount of time and expense that would be required to resolve such litigation. An unfavorable resolution of any such litigation surrounding the merger could delay or prevent its consummation. In addition, the costs of defending the litigation, even if resolved in Ryvyl’s favor, could be substantial, and such litigation could distract both Ryvyl and RTB from pursuing the consummation of the merger and other potentially beneficial business opportunities relevant to the post-merger company’s business.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

RESULTS OF OPERATIONS

Year Ended December 31,

Change

Amount

Revenue

Amount

Revenue

Amount

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 goodwill

Impairment of intangible assets

Restructuring charges

Total operating expenses

Loss from operations

Other income (expense):

Interest expense

Accretion of debt discount

Legal settlements expense

Other income (expense)

Total other (expense), net

Loss from continuing operations before income taxes

Provision for income taxes

Net loss from continuing operations

(Loss) income from discontinued operations, net of tax

Net loss

Revenue

Historically, the Company generated the majority of its revenue from the acceptance and processing of credit and debit card payments on behalf of merchants that operate principally online. Such revenue was generated from fees charged based on a percentage of the value of each transaction processed and/or upon fixed amounts specified in each transaction or service. Following the sale of the Company’s wholly owned subsidiary, Ryvyl EU, effective June 1, 2025, the Company now primarily generates revenue from fees earned from payment processing transactions where the Company arranges for the delivery of those services to the merchant by a payment processor and from banking services, which primarily include incoming and outgoing ACH and wire transfer transactions. 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. For banking services transactions, the Company typically charges specified fees on a per transaction basis, which may vary from customer to customer.

Total revenue for the year ended December 31, 2025, decreased by $7.0 million, or 38.7%, compared to the year ended December 31, 2024. The decrease in revenue was primarily driven by the previously disclosed loss of revenue associated with the Company’s discontinuation of its QuickCard product during the first quarter of 2024.

Cost of Revenue

Cost of revenue primarily consists of various fees charged by payment processors, fees paid to Independent Sales Organization partners (ISOs), and fees paid to banks for banking transactions. Total cost of revenue for the year ended December 31, 2025, decreased by $4.9 million, or 45.9%, compared to the year ended December 31, 2024. The decrease in consolidated cost of revenue is consistent with the decline in revenue primarily associated with the QuickCard product transition, as discussed above.

Operating Expenses

Operating expenses for the year ended December 31, 2025, decreased by $16.2 million, or 46.7%, compared to the year ended December 31, 2024. The decrease was primarily driven by the following:

Research and development expenses decreased by $3.3 million or 85.5%, primarily due to the completion of the development of the NEMS Core platform and no new major projects in 2025.

General and administrative expenses increased by $1.4 million, or 47.8%, primarily due to impairments recorded during the year on the ROU asset related to one of the Company’s operating leases.

Payroll and payroll taxes decreased $4.4 million, or 45.6%, primarily due to reductions in force during the year to better align with the Company’s reduced operations following the discontinuation of the QuickCard product and sale of Ryvyl EU, effective June 1, 2025.

Professional fees decreased $1.0 million, or 22.7%, primarily due to lower legal, audit, accounting advisory, and financial statement audits and tax services fees.

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Depreciation and amortization decreased $1.6 million or 80.3%, primarily due to lower amortization expense following the impairment of the majority of the Company’s remaining intangible assets during the year.

Impairment of goodwill and intangible assets decreased $7.9 million, or 81.2%, primarily due to the full impairment of the Company’s goodwill and customer relationships intangible assets of $6.7 million and $3.0 million, respectively, during 2024, partially offset by the impairment of the Company’s internal-use software intangible asset of $1.8 million during 2025.

Restructuring charges increased $0.3 million, or 16%, primarily due to severance and termination benefits incurred in connection with additional reductions in force during 2025, as part of management’s efforts to better right size the Company’s cost structure following the discontinuation of the QuickCard product and the sale of Ryvyl EU, effective June 1, 2025.

Other Expense, Net

Other expense, net for the year ended December 31, 2025, decreased $2.9 million, or 53.1%, compared to the year ended December 31, 2024. This decrease was primarily driven by the following:

Interest expense increased $0.9 million, or 106.3%, primarily due to interest incurred on the note payable secured by the Company on January 23, 2025, which was subsequently retired during the second quarter of 2025.

Accretion of debt discount decreased by $2.1 million, or 93.4%, due to the write-off of a majority of the remaining unamortized discount on the convertible note due to its early retirement during the first half of 2025.

Legal settlements decreased $1.2 million or 56.2%, due to lower legal settlements activity during 2025.

Other income, net was $0.3 million for the year ended December 31, 2025, compared to other expense, net of $0.3 million during the year ended December 31, 2024. The year-over-year change was primarily driven by derecognition expense on conversion of convertible debt, which improved from an expense of $0.6 million for the year ended December 31, 2024, to a gain of $0.2 million for the year ended December 31, 2025, primarily due to the Company’s early retirement of its convertible note during the first half of 2025.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s consolidated working capital at December 31, 2025, was $1.1 million, which included cash of $7.4 million and a negligible amount 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 Note issued in November 2021. Our material liquidity needs principally relate to working capital requirements.

As further described in section titled “Going Concern” under Note 2, Summary of Significant Accounting Policies, 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 Ryvyl EU, effective June 1, 2025. Additionally, the Company’s remaining businesses continue to generate operating losses, which is expected to continue to occur for at least the next 12 months. Due to these developments, management has determined that its cash balance as of December 31, 2025, 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 and October 2025, and continues to be actively engaged in discussions with multiple parties for additional funding opportunities;

exploring strategic initiatives, including M&A opportunities; 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 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, which is expected to close during the second quarter of 2026;

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.

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Cash Flow Activities

The following table shows cash flows for the periods presented (in thousands):

Year Ended December 31,

Net cash (used in) provided by operating activities

Net cash used in investing activities

Net cash provided by (used in) financing activities

Effects of exchange rates on cash and restricted cash

Net (decrease) increase in cash and restricted cash

Cash Flows from Operating Activities

For the year ended December 31, 2025, net cash used in operating activities was $23.0 million, primarily due to a net loss of $17.5 million, and net outflows related to changes in accounts payable of $1.1 million and payment processing liabilities of $17.6 million. These outflows were partially offset by the change in prepaid and other current assets of $0.5 million, and non-cash adjustments, primarily, depreciation and amortization of $0.5 million, noncash lease expense of $0.9 million, stock compensation expense of $0.9 million, loss on the sale of Ryvyl EU of $6.5 million, impairment of intangible assets of $1.8 million, and restructuring charges of $1.9 million.

For the year ended December 31, 2024, net cash provided by operating activities was $21.2 million, primarily due to net inflows related to changes in prepaid and other current assets of $0.7 million, cash due from gateways of $12.7 million, accounts payable and other accrued liabilities of $3.2 million, and payment processing liabilities of $14.0 million, and non-cash adjustments, primarily, depreciation and amortization of $2.3 million, stock based compensation of $0.6 million, accretion of debt discount of $2.3 million, changes in fair value of derivative liability of $0.6 million, impairment of goodwill and intangibles of $9.7 million, and restructuring charges of $1.6 million. These inflows were partially offset primarily by a net loss of $26.8 million during the year.

Cash Flows from Investing Activities

For the year ended December 31, 2025, net cash used by investing activities was $76.4 million, primarily driven by cash transferred in connection with the sale of Ryvyl EU of $75.0 million and capitalized software development costs of $1.1 million.

For the year ended December 31, 2024, net cash used by investing activities was $1.8 million, primarily due to outflows related to capitalized software development costs of $1.8 million.

Cash Flows from Financing Activities

For the year ended December 31, 2025, net cash provided by financing activities was $13.9 million, primarily driven by proceeds from the short term note payable secured on January 23, 2025 of $15.0 million, issuance of common stock in a public offering of $5.4 million, common warrant exercises of $1.5 million, and issuance of Series C convertible preferred stock of $5.0 million. These inflows were partially offset by outflows related to the repayment of the Company’s convertible note of $13.0 million. For the year ended December 31, 2024, net cash used in financing activities was immaterial.

CRITICAL ACCOUNTING ESTIMATES

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates and assumptions affect, among other things, the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

We evaluate our estimates and assumptions on an ongoing basis based on historical experience and other factors that we believe to be reasonable under the circumstances. Our significant accounting policies are described in Note 1, Summary of Significant Accounting Policies , of this Report. Management has determined that the Company did not have any critical accounting estimates during the periods presented.

RECENT DEVELOPMENTS

Merger Agreement with RTB Digital, Inc.

Basic Merger Terms

Ryvyl and RTB entered into an Agreement and Plan of Merger, dated as of September 28, 2025 (the “Merger Agreement”), whereby RTB would combine with Ryvyl. The Merger Agreement contains the terms and conditions of the proposed business combination of Ryvyl and RTB. Under the Merger Agreement, RYVYL Merger Sub Inc., a wholly owned subsidiary of Ryvyl (“Merger Sub”), will merge with and into RTB, with RTB surviving as a wholly owned subsidiary of Ryvyl (referred to as the “merger”).

At the effective time of the merger (the “Effective Time”), certain outstanding securities of the RTB securityholders will be converted into the right to receive the Pro Rata Portion of the Merger Shares (defined terms in the Merger Agreement. In addition, Ryvyl will assume the RTB stock option plan and certain other outstanding securities which will from then be exercisable for exchangeable into Ryvyl common stock. It is anticipated that outstanding RTB warrants will have been “net” exercised prior to the closing in exchange for shares of RTB common stock in accordance with their terms and shall no longer be outstanding and shall automatically be cancelled, extinguished, and retired and shall cease to exist, provided, however, that in the event that any such RTB warrants are not so exercised, to the extent that by their terms they do not continue to represent the right to acquire securities of the Company on comparable terms to those of RTB warrants, then the parties of the Merger Agreement shall negotiate in good faith and use commercially reasonable efforts to mutually agree as promptly as practicable to such amendments the Merger Agreement as are necessary to reflect an assumption, exchange or similar accommodation for such RTB warrants, provided that such assumption, exchange or similar accommodation shall be reasonably satisfactory to each party of the Merger Agreement. Additionally, pursuant to the Merger Agreement, Ryvyl will assume the outstanding convertible notes of RTB, which after the merger will be converted into shares of the combined company.

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As of January 30,2026, as a result of the merger, current holders of RTB’s common stock, and options and warrants to purchase RTB’s common stock are expected to own, or hold rights to acquire, in the aggregate of approximately 15,215,399 shares of Ryvyl common stock, representing approximately 84.85% (excluding the shares that may be issued on conversion of the RTB convertible notes) of the fully-diluted common stock of Ryvyl, which for these purposes is defined as the outstanding common stock of Ryvyl (including the shares of common stock issued in the merger), plus all options and warrants of Ryvyl outstanding immediately prior to the merger, plus all options and warrants of RTB converted into options and warrants of Ryvyl in connection with the merger (the “Fully-Diluted Common Stock of Ryvyl”), and Ryvyl’s current stockholders, option holders and warrant holders are expected to own, or hold rights to acquire, in the aggregate approximately 15.15% of the Fully-Diluted Common Stock of Ryvyl, in each case, following the Effective Time of the merger. The assumption and conversion of the RTB convertible notes after consummation of the merger will substantially reduce the foregoing percentages. Also, as a result of the merger, the Series C Preferred Stock issued by Ryvyl to RTB will be cancelled.

Business of RTB

RTB (d/b/a “Roundtable”) has developed and operates a professional SaaS (Software as a Service) platform which hosts an exclusive coalition of professionally-managed online media channels. RTB’s operations primarily consisted of software development; advertising and sponsorship sales; and identifying and signing a group of select “Platform Partners” to operate on its platform. Each channel is organized around a topic and is operated by an invite only Platform Partner, typically a major media company, but also drawn from subject matter experts, reporters, and thought leaders. Platform Partners publish professional content and oversee an online community for their respective channels, leveraging RTB’s proprietary, Web3-based, socially-driven, mobile-enabled, video-focused technology platform (“Platform”) engaging niche audiences within a single coalition.

Platform Partners incur the costs of content creation on their respective channels and receive a share of the revenue associated with their content, typical 50% after certain direct costs are deducted. Because of the state-of the-art technology and large scale of the Platform and the expertise in search engine optimization, user engagement, ad monetization and content distribution, Platform Partners continually benefit from ongoing technological advances and audience development expertise. While the Platform Partners benefit from these critical performance improvements, they may also save substantial technology, infrastructure, advertising sales, member marketing and management costs.

RTB operates websites at thestreet.com/crypto, RoundtableSports.io, TheHockeyNews.com, Roundtable.io, MissWorld.com, rtb.MissWorld.com, and others. The information contained on the official website of RTB (RTB.io) and information about RTB on any other personal, viral, social network informational websites or software applications, do not constitute part of this report or future reports or schedules filed with the Securities and Exchange Commission (“SEC”) or other state securities regulatory bodies.

RTB’s strategy includes acquiring related online media, publishing and technology businesses by merger or acquisition that management believes will expand the scale of unique users interacting on the RTB technology platform. RTB believe that with an increased scale in unique users, RTB will be able to obtain improved advertising terms and grow advertising revenue.

The Platform

The proprietary online publishing, community, and video platform provides the Platform Partners (who are third parties producing and publishing content typically on their own domains), and individual creators contributing content to the RTB owned and operated sites (“Expert Contributors”), the ability to produce and manage editorially focused content through tools and services provided by RTB. RTB has also developed proprietary advertising technology, techniques and relationships that allows RTB, the Platform Partners, and the Expert Contributors to monetize editorially focused online content through various display and video advertisements and other monetization services (the “Monetization Solutions” and, together with the Platform, the “Platform Services”).

The Platform is comprised state-of-the-art publishing tools, video services, social/community engagement features, content distribution channels, newsletter technology, content recommendations, notifications, white-label apps for iOS and Android, and other technology that delivers a complete set of features to drive a digital media business upon an entirely cloud-based suite of services. The software engineering and product development teams of RTB are experienced at delivering these services at scale. RTB continues to develop the Platform software by combining proprietary code with components from the open-source community, plus select commercial services, as well as identifying, acquiring, and integrating other platform technologies where RTB see unique long-term benefits to us.

The Platform Services include:

Content management, content recommendations, and traffic redistribution;

Hosting and bandwidth;

Secure, blockchain-based storage of user data and content;

Video publishing, hosting, and player solution;

Community/social features, including ability for users to post text, images & videos; video threads; “likes”, comments and @mentions; reporting and moderation tools including AI-based moderation and spam control; user reputation and gamification;

Native iOS and Android mobile Apps, with in-app notifications and white-label capability for major brands;

Real-time reporting as well as integration with Google Analytics;

User account management with multi-level access controls;

Content and user account migration to the Platform, including text, images, videos, emails and membership data;

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Technical support team to support the Platform Partners and staff (if applicable) on the Platform;

Advertising serving, trafficking/insertion orders, yield management, reporting and collection;

Ability to pay Platform Partners via crypto;

Various integrations to enable syndication of content e.g., MSN, Yahoo, Apple News, Google News and RSS feeds; and

Other features, as they may be added to the Platform from time to time.

Platform Partners Business Model

Platform Partners use the Platform Services to produce, manage, host and monetize their content in accordance with the terms and conditions of partner agreements between each of the Platform Partners and RTB (the “Partner Agreements”). The Platform Partners incur the costs with respect to creating their content; thus, not requiring expenditures by RTB. Pursuant to the Partner Agreements, RTB and the Platform Partners split revenue generated from the Platform Services used in connection with the Platform Partner’s content based on certain criteria. Criteria include whether the revenue was from digital advertising sales, was generated by the Platform Partner or RTB, was generated in connection with a subscription or a membership, was generated from syndicating or third party licensing, or was derived from affiliate links.

Subject to the terms and conditions of each Partner Agreement and in exchange for the Platform Services, the Platform Partners grant RTB, for so long as the Platform Partner’s assets are hosted on the Platform, (i) the right to use, host, store, cache, reproduce, publish, publicly display, distribute, transmit, modify, adapt and create derivative works of the content provided by the Platform Partner to provide, maintain and improve the Platform Services; (ii) use, publicly display, distribute and transmit the name, logo, and trademarks of the Platform Partner to identify them as users of the Platform Services; (iii) exclusive control of ads.txt with respect to the Platform Partner’s domains; and (iv) with some exceptions, the exclusive right to include the Platform Partner’s website domains and related URLs in a consolidated listing assembled by third party measurement companies such as comScore, Nielsen or other similar measuring services selected by RTB. As such, the Platform serves as the primary digital media and social platform with respect to each of the Platform Partners’ website domains during the applicable term of each Partner Agreement.

The Role of Bitcoin and Cryptocurrency: Fuel for Growth

RTB believes that it can reduce the typical waiting period that a Platform Partner would have to receive revenue from the current industry typical time period of 30-90 days to a practically instantaneous transfer through the establishment of “liquidity pools” that would allow the swapping of ad revenue receivables for BTC or stablecoins. As currency accumulates in RTB “liquidity pool”, it will be used as “growth collateral” to back up revenue guarantees offered to major media partners recruited to utilize the platform. Since these guarantees are based on existing advertising and sponsorship revenues, and RTB expects to outperform the partners’ prior top-line monetization, RTB also expects the treasury to continue growing. The sequence looks like this:

Media partners/publishers generate ad inventory on their online properties;

Major brands purchase ads, paying us using “fiat” or traditional currencies;

We then convert this revenue to Bitcoin, stablecoins or other currencies;

Publishers receive (typically) 50% of this as revenue sharing; and

The remaining 50% is added to RTB’s liquidity pool.

In the near future it is anticipated that publishers will be given the option to withdraw their earnings immediately and directly via cryptocurrency transfer. RTB believes this feature will provide an additional competitive advantage.

RTB does not issue, mine or lend cryptocurrency, and crypto trading activity is limited to risk management within its treasury holdings.