RTB 10-K & 10-Q changes, risk factors and insider trading
RTB Digital, Inc. · Nasdaq · Services-Management Consulting Services · CIK 1419275 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “There is no assurance Ryvyl will be able to successfully enter the digital asset space or enhance its current business plan.”
New heading “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.”
New heading “As a public company, we have to bear the cost of public reporting under SEC requirements, Nasdaq compliance and management time and effort.”
New heading “Sales, or the availability for sale, of substantial amounts of Ryvyl’s common stock could adversely affect the value of its common stock.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “Risks Related to the Merger with RTB”
New heading “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.”
New heading “The relative ownership position of our stockholders will be diluted as a result of the Merger.”
New heading “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.”
New heading “If the merger is not consummated, Ryvyl will be significantly impaired financially and may not be able to sustain its business.”
New heading “The market price of the common stock of the combined company following the merger may decline as a result of the merger.”
New heading “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.”
New heading “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.”
New heading “We may fail to realize all of the anticipated benefits of the proposed Merger with RTB.”
New heading “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.”
New heading “Recent changes to the Nevada corporate law impose restrictions on persons acquiring a controlling interest in Ryvyl.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “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.”
Removed heading “We have entered into a Securities Purchase Agreement to sell a material subsidiary, which represents a substantial portion of our current business. Additionally, we may be required to pay significant liquidated damages if the prospective purchaser is unable to close the acquisition.”
Removed heading “The loss of key personnel or the inability of replacements to quickly and successfully perform in their new roles could adversely affect our business.”
Removed heading “Our executive officers, directors, and principal shareholders maintain the ability to control substantially all matters submitted to shareholders for approval.”
Removed heading “Low 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.”
Removed heading “Expectations relating to environmental, social, and governance (ESG) considerations could expose us to potential liabilities, increased costs, and reputational harm.”
Removed heading “Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, have and could in the future, adversely affect our business, financial condition, results of operations, or prospects.”
Removed heading “Fluctuations in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.”
Removed heading “Changes to U.S. tariff and import/export regulations may affect our portfolio companies, and may negatively impact our business, results of operations or financial condition.”
Removed heading “We are currently operating in a period of severe capital markets disruptions and economic uncertainty which could impair our Company’s financial position and operating results and affect the industries in which we conduct our business and, in turn, harm our operating results.”
Removed heading “Risks Related to Our Financial Position and Need for Capital”
Removed heading “Our revenue projections related to our new licensing arrangements with payment services providers may not materialize due to customer acquisition and banking compliance issues that are outside of our control.”
Removed heading “Our financial statements may be materially affected if our estimates prove to be inaccurate as a result of our limited experience in making critical accounting estimates.”
Removed heading “The restatement of our historical financial statements has consumed a significant amount of our time and resources and may continue to do so.”
Removed heading “Our financial statements may be materially affected as a result of material weaknesses in internal accounting controls.”
Removed heading “We will require additional financing to sustain or grow our operations. Raising additional capital may cause dilution to our existing stockholders and investors, restrict our operations or require us to relinquish rights to our products and/or product candidates on unfavorable terms to us.”
Removed heading “We may not realize the anticipated benefits of acquisitions or investments in joint ventures, or those benefits may be delayed or reduced in their realization.”
Removed heading “Our operating results may fluctuate significantly as a result of a variety of factors, many of which are outside of our control, which could cause fluctuations in the price of our securities.”
Removed heading “Risks Related to Cybersecurity, Information Technology, and Intellectual Property”
Removed heading “We are highly dependent on information systems and systems failures or interruption could significantly disrupt our business, which may, in turn, negatively affect our financial results and the market price of our common stock.”
Removed heading “Risks Related to Owning Our Common Stock”
Removed heading “We are subject to increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives.”
Largest changes
“The U.S. and global markets have, from time to time, experienced periods of disruption due to events such as terrorist attacks; acts of war; natural disasters, such as earthquakes, tsunamis, fires, floods or hurricanes; and outbreaks of epidemic, pandemic or contagious diseases. Such events have created, and continue to create, economic and political uncertainties and have contributed to recent global economic instability. In particular, the U.S. …”see in full comparison
“Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, have and could in the future, adversely affect our business, financial condition, results of operations, or prospects.”see in full comparison
“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.”see in full comparison
“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.”see in full comparison
“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. …”see in full comparison
“Changes to U.S. tariff and import/export regulations may affect our portfolio companies, and may negatively impact our business, results of operations or financial condition.”see in full comparison
Full comparison: every changed paragraph (144)
Our
financial situation creates doubt whether we will continue as a going concern.concern if the merger is not completed.
As
described in the Notesnotes to theour Financialconsolidated Statementsfinancial statements included in this Report for the years ended December 31, 2024,2025, and 2023,2024,
there the Company hasis a substantial doubt
about the Company’sour ability to continue as a going concern. For the year ended December 31, 2024,2025, we had a net loss
of $26.8$17.5 million,
and as of December 31, 2024,2025, we had an accumulated deficit of $179.4$196.9 million. ThereAlso, canuntil 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 no assurances that we will be ablesufficient to achievefund our operations and capital needs for the next 12 months from
athe leveldate of revenuesthis 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.Report. These conditions raise substantial doubt about our ability to continue as a going concern. If adequate working capital is not
available, we may be forced to discontinue operations, which would cause investors to lose their entire investment.
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.
We
have entered into a Securities Purchase Agreement to sell a material subsidiary, which represents a substantial portion of our current
business. Additionally, we may be required to pay significant liquidated damages if the prospective purchaser is unable to close the
acquisition.
As
described elsewhere in this Report, we entered into a Securities Purchase Agreement with a prospective purchaser, which provides for
the sale to such prospective purchaser of all of the issued and outstanding shares of capital stock of our indirect subsidiary, Ryvyl
EU (the “Ryvyl EU Shares”), which represents a materially significant portion of the Company’s current business and
substantially all the business classified under the Company’s International reporting segment as described in the Notes to the
Financial Statements for the year ended December 31, 2024 and 2023. We also entered into a Termination Agreement with such prospective
purchaser, providing us with the right to terminate the Securities Purchase Agreement and such prospective purchaser’s right to
purchaser our Ryvyl EU business, if we pay such prospective purchaser $16.5 million on or before April 23, 2025 (or as may be extended
an additional 30 days until May 23, 2025 in consideration for our payment of $500,000 to such prospective purchaser). In the event that
we are unable to terminate the sale of our Ryvyl EU business, the prospective purchaser would be able to acquire our Ryvyl EU business,
which represents a substantial percentage of our current business. The loss of such business would have a material adverse effect on
our business and financial condition and would likely result in the termination of our business.
Additionally,
if the prospective purchaser is unable to acquire the Ryvyl EU Shares for any reason other than our breach, including the inability to
obtain any regulatory clearances required for such transfer from the applicable Bulgarian governmental authorities, then we are required
to pay such prospective purchaser liquidated damages in the amount of $16.5 million. In the event that the prospective purchaser is unable
to acquire the Ryvyl EU Shares, as a result of our breach, then we are required to pay the prospective purchaser liquidated damages in
an amount equal to the appraised value of the Ryvyl EU Shares. Our payment of either of such liquidated damages amounts to the prospective
purchaser would have a material adverse impact on our business and financial condition and, in the event of our obligation to pay $16.5
million, would likely result in the termination of our business, and in the event of our obligation to pay the appraised value of the
Ryvyl EU Shares, would definitely result in the termination of our business.
The
loss of key personnel or the inability of replacements to quickly and successfully perform in their new roles could adversely affect
our business.
We depend on the leadership and experience of our relatively small
number of key executive management personnel, particularly our Chairman of the Board of Directors (the “Board”) and Executive
Vice President, Ben Errez, our Director and Chief Executive Officer, Fredi Nisan, and our Chief Financial Officer, George Oliva. The loss
of the services of any of our key executives or any of our executive management members could have a material adverse effect on our business
and prospects, as we may not be able to find suitable individuals to replace such personnel on a timely basis or without incurring increased
costs, or at all. Furthermore, if we lose or terminate the services of one or more of our key employees or if one or more of our current
or former executives or key employees joins a competitor or otherwise competes with us, it could impair our business and our ability to
successfully implement our business plan. Additionally, if we are unable to hire qualified replacements for our executive and other key
positions in a timely fashion, our ability to execute our business plan would be harmed. Even if we can quickly hire qualified replacements,
we would expect to experience operational disruptions and inefficiencies during any transition. We believe that our future success will
depend on our continued ability to attract and retain highly skilled and qualified personnel. There is a high level of competition for
experienced, successful personnel in our industry. Our inability to meet our executive staffing requirements in the future could impair
our growth and harm our business.
Our
executive officers, directors, and principal shareholders maintain the ability to control substantially all matters submitted to shareholders
for approval.
As of March 24, 2025, our executive officers, directors, and shareholders
who owned more than 5% of our outstanding Common Stock, in the aggregate, beneficially owned 2,307,471 shares of Common Stock representing
approximately 27% of our outstanding capital stock. As a result, if these shareholders were to choose to act together, they would be able
to control substantially all matters submitted to our shareholders for approval, as well as our management and affairs. For example, these
persons, if they choose to act together, would control the election of directors and approval of any merger, consolidation or sale of
all or substantially all of our assets. This concentration of voting power could delay or prevent an acquisition of us on terms that other
shareholders may desire.
Low
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.
Our
competitive advantage is due in part to our ability to develop and introduce new 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 investments in productive capacity
and commitments to fund advertising and product promotions in connection with these new products could erode profits if those expectations
are not met.
AThe
prolongedmerger economicwith downturnRTB could materially and adversely affect ourthe business.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.
Uncertain
global economic conditions could adversely affect our business. The COVID-19 pandemic negatively impacted some of our clients as they
saw reductions in revenues due to business closures which caused our processing volume to decline. Negative global and national economic
trends, such as decreased consumer and business spending, high unemployment levels and declining consumer and business confidence, pose
challenges to our business and could result in declining revenues, profitability and cash flow. Although we continue to devote significant
resources to support our brands, unfavorable economic conditions may negatively affect demand for our products.
The
payments technology industry is highly
competitive and highly innovative, and some of ourRyvyl’s competitors have greater financial
and operational resources than we do,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.
WeRyvyl
operatecurrently operates in the payments technology industry, which is highly competitive and highly innovative. In this industry, our primary
competitors 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 institutions
could decide to perform some or all of the services that we currently provide or could provide in the future in-house. We areRyvyl
is facing
increasing competition from competitors, including new entrant technology companies, who offer certain innovations in payment
methods. methods.
Some of these competitors utilize proprietary software and service solutions. Some of these competitors have significant financial
resources resources
and robust networks and are highly regarded by consumers. In addition, some competitors, such as private companies or startup
companies, 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. process.
If these competitors gain a greater share of total digital payments transactions, it could have an adverse effect on our business,
financial financial
condition, results of operations and cash flows.
WeRyvyl
could face substantial competition, which could reduce our market share and negatively impact our net revenue.
Litigation
may adversely affect our business, financial conditioncondition, 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. Please see the section titled Legal Proceedings
elsewhere in this Report for more details on the Company’s currently ongoing litigation.
Expectations
relating to environmental, social, and governance (ESG) considerations could expose us to potential liabilities, increased costs, and
reputational harm.
We
are subject to laws, regulations, and other measures that govern a wide range of topics, including those related to matters beyond our
core products and services. For instance, new laws, regulations, policies, and international accords relating to ESG matters, including
sustainability, climate change, human capital, and diversity, are being developed and formalized in Europe, the U.S., and elsewhere,
which may entail specific, target-driven frameworks and/or disclosure requirements. Any failure, or perceived failure, by us to adhere
to our public statements, comply fully with developing interpretations of ESG laws and regulations, or meet evolving and varied stakeholder
expectations and standards could harm our business, reputation, financial condition, and operating results.
Adverse
developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance
by financial institutions, have and could in the future, adversely affect our business, financial condition, results of operations, or
prospects.
The
funds in our accounts are held in banks or other financial institutions. Our funds held in non-interest bearing and interest-bearing
accounts would exceed any applicable Federal Deposit Insurance Corporation (“FDIC”) insurance limits. Should events, including
limited liquidity, defaults, non-performance or other adverse developments occur with respect to the banks or other financial institutions
that hold our funds, or that affect financial institutions or the financial services industry generally, or concerns or rumors about
any events of these kinds or other similar risks, our liquidity may be adversely affected. For example, on March 10, 2023, the FDIC announced
that Silicon Valley Bank had been closed by the California Department of Financial Protection and Innovation. Although we did not have
any funds in Silicon Valley Bank or other institutions that have been closed, we cannot guarantee that the banks or other financial institutions
that hold our funds will not experience similar issues.
Our
business is dependent on our strategic banking relationships to process our electronic transactions. If we are unable to secure or retain
a banking partner due to market conditions in the financial services industry, our financial condition will be materially affected.
In
addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing
terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit
and liquidity sources, thereby making it more difficult for us to acquire financing on terms favorable to us could have material adverse
impacts on our liquidity, our business, financial condition or results of operations, and our prospects. Our business is dependent on
our strategic banking relationships to process our electronic transaction. Our business and our relationships with banking partners has
been, and may in the future, be adversely impacted by these developments in ways that we cannot predict at this time. There may be additional
risks that we have not yet identified, and we cannot guarantee that we will be able to avoid negative consequences directly or indirectly
from any failure of one or more banks or other financial institutions.
In
February 2024, the Company transitioned its QuickCard product in North America away from terminal-based to app-based processing. This
transition was driven by a change in our banking partner that was prompted by recent changes in the compliance environment and banking
regulations impacting certain niche high-risk business verticals, which were the predominant revenue driver for QuickCard.
Management
planned to recover the loss of revenues resulting from this product transition through the acceleration of business development
efforts to launch the new app-based product in existing and new business verticals. However, due to continuous changes in the
regulatory environment and our previous banking relationships, during the second quarter of 2024, management determined that the
app-based product may not be a viable long-term solution for certain niche high-risk business verticals and made the decision to
terminate the rollout of the app-based product in those specific business verticals. To address this change, the Company recently
introduced a licensing product for its payments processing platform, which it believes will enable it to serve the same customer
base in such verticals through a business partner with more suitable banking compliance capabilities. Revenues from the new
licensing product are not expected to materialize until late 2025. Due of this strategy shift as well as a reorganization of the
Company’s business to better align with management’s revised strategy, which was executed during the second quarter of
2024, the recovery of the loss of revenues resulting from this product transition is now not expected to occur until late
2025.
The
decline in revenues resulting from this product transition has adversely impacted the Company’s liquidity in its North America
segment in the short term. As a result, management has determined that its cash in the North America segment as of December 31, 2024,
will not be sufficient to fund the segment’s operations and capital needs for the next 12 months from the date of this Report.
Refer to the “Going Concern” paragraph within Note 2, Summary of Significant Accounting Policies, of this
Report for management’s response plan and further assessment.
Fluctuations
in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.
As
much of the Company’s current operations are conducted in Europe, the Company receives a significant amount of currency in Euros
from its operations, however, the Company’s reporting currency is U.S. dollars. Accordingly, fluctuations in the value of the Euro
relative to the U.S. dollar could affect its results of operations due to translational remeasurements. As its international operations
expand relative to its domestic operations, an increasing portion of its revenue and operating expenses will be denominated in non-US
currencies. Accordingly, the Company’s revenue and operating expenses will become increasingly subject to fluctuations due to changes
in foreign currency exchange rates. If the Company is not able to successfully hedge against the risks associated with currency fluctuations,
the Company’s business, financial condition and results of operations could be materially adversely affected.
Changes
to U.S. tariff and import/export regulations may affect our portfolio companies, and may negatively impact our business, results of operations
or financial condition.
On February 1, 2025, President Donald Trump announced the imposition
of a 25% additional tariff on imports from Canada and Mexico as well as an additional 10% tariff on imports from China as part of a broader
strategy to leverage access to American markets in exchange for concessions from other countries. The continued pursuit of such a strategy
could result in changes to American trade policy that would negatively impact our Company by subjecting it to the material negative effects
associated with aforementioned tariffs and an increasingly uncertain investment environment. For example, significant potential
changes to U.S. trade policies, treaties and tariffs, create uncertainty about the future relationship between the United States
and other countries. These developments may have material adverse effects on global economic conditions and the stability of global financial
markets, and may significantly reduce global trade. Any of these factors could dampen economic activity and thereby limit customers’
payment processing volumes, resulting in a material adverse effect on their business, financial condition and results of operations, which
in turn would negatively impact us. We cannot predict whether, or to what extent, any tariff or other trade protections may affect us
or our Company.
We
are currently operating in a period of severe capital markets disruptions and economic uncertainty which could impair our Company’s
financial position and operating results and affect the industries in which we conduct our business and, in turn, harm our operating
results.
The
U.S. and global markets have, from time to time, experienced periods of disruption due to events such as terrorist attacks; acts of war;
natural disasters, such as earthquakes, tsunamis, fires, floods or hurricanes; and outbreaks of epidemic, pandemic or contagious diseases.
Such events have created, and continue to create, economic and political uncertainties and have contributed to recent global economic
instability. In particular, the U.S. capital markets have recently experienced, and continue to experience, extreme volatility and disruption
as a result of inflation, changing interest rates, the Russia-Ukraine war, conflicts in the Middle East and the possibility of an economic
recession. These events are having an adverse impact on the ability of lenders to originate loans, increase funding costs, limit access
to the capital markets or result in an inability for us to raise capital, which could have a material adverse effect on our business,
financial condition and results of operations. Volatility and dislocation in the capital markets can also create a challenging environment
in which to raise or access debt capital. If sustained for a prolonged period of time, the current market conditions could result in
difficulties refinancing, obtaining additional indebtedness, or raising capital necessary to sustain our business, including the cancellation
of the sale of Ryvyl EU. The equity or debt capital that will be available to us in the future, if at all, may be at increased costs
and on less favorable terms and conditions than what we currently experience.
Risks
Related to Our Financial Position and Need for Capital
Our
revenue projections related to our new licensing arrangements with payment services providers may not materialize due to customer acquisition
and banking compliance issues that are outside of our control.
As
part of the Company’s plan to diversify its business, it recently launched a new licensing product for its payment processing platform.
The Company will generate revenues from these arrangements from use-based license fees that it will charge to the payment services providers.
The Company’s ability to generate revenues from these licensing arrangements is contingent on the success of the licensees in utilizing
and servicing their customers on their platforms, as the licensees will have exclusive control over, among other things, implementation
and operations of the point of banking system, procurement of ACH processing solutions, and customer acquisitions.
The
licensees will also have control in determining clients and industries utilizing the licensed technology, which requires an understanding
of various banking laws and regulations that may impact the licensee’s servicing of customer accounts. For example, federal money
laundering statutes and Bank Secrecy Act regulations discourage financial institutions from working with operators of certain industries,
particularly those with heightened cash reporting obligations and restrictions. As a result, banks may refuse to process certain payments
and/or require onerous reporting obligations by payment processors to avoid compliance risk. These and other complexities surrounding
banking and payment processing laws may make it difficult for the licensees to acquire customers, thereby negatively impacting the Company’s
ability to generate revenues from these arrangements.
Our
financial statements may be materially affected if our estimates prove to be inaccurate as a result of our limited experience in making
critical accounting estimates.
Financial
statements prepared in accordance with generally accepted accounting principles (“GAAP”) require the use of estimates, judgments,
and assumptions that affect the reported amounts. Actual results may differ materially from these estimates under different assumptions
or conditions. These estimates, judgments, and assumptions are inherently uncertain, and, if they prove to be wrong, then we face the
risk that charges to income will be required. In addition, because we have limited to no operating history and limited experience in
making these estimates, judgments, and assumptions, the risk of future charges to income may be greater than if we had more experience
in these areas. Any such charges could significantly harm our business, financial condition, results of operations, and the price of
our securities.
The
restatement of our historical financial statements has consumed a significant amount of our time and resources and may continue to do
so.
We
have previously restated our consolidated financial statements for the quarters ended March 31, 2021, June 30, 2021, September 30, 2021,
March 31, 2022, June 30, 2022, and September 30, 2022, and for the annual period ended December 31, 2021, and previously presented the
effects of the restatement adjustments in the Company’s 2022 Annual Report. The restatement process was highly time and resource-intensive
and involved substantial attention from management, as well as significant legal and accounting costs. Although we have completed the
restatements, we cannot guarantee that we will have no further inquiries from the SEC or The Nasdaq Stock Market LLC (“Nasdaq”)
regarding our restated consolidated financial statements or matters relating thereto.
Any
future inquiries from the SEC or Nasdaq as a result of the restatement of our historical financial statements will, regardless of the
outcome, likely consume a significant amount of our resources in addition to those resources already consumed in connection with the
restatement itself.
Further,
many companies that have been required to restate their historical financial statements have experienced a decline in stock price and
stockholder lawsuits related thereto.
Our
financial statements may be materially affected as a result of material weaknesses in internal accounting controls.
We
are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and Nasdaq rules and regulations. The Sarbanes-Oxley
Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate
disclosure controls and procedures, is designed to prevent fraud. We must perform system and process evaluation and testing of our internal
controls over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting
in this Report, as required by Section 404 of the Sarbanes-Oxley Act (“Section 404”). This requires significant management
efforts and requires us to incur substantial professional fees and internal costs to expand our accounting and finance functions. Any
failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to
meet our reporting obligations. In addition, any testing by us, as and when required, conducted in connection with Section 404, or any
subsequent testing by our independent registered public accounting firm, as and when required, may reveal deficiencies in our internal
controls over financial reporting that are deemed to be significant deficiencies or material weaknesses, including the material weakness
described below, or that may require prospective or retroactive changes to our financial statements, or may identify other areas for
further attention or improvement. Furthermore, we cannot be certain that our efforts will be sufficient to remediate or prevent future
material weaknesses or significant deficiencies from occurring.
We
previously identified control deficiencies in the design and implementation of our internal control over financial reporting that constituted
a material weakness. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting
such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected
on a timely basis. Any failure to implement and maintain effective internal control over financial reporting could adversely affect the
results of the period including management evaluations and annual independent registered public accounting firm attestation reports regarding
the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports
that are filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also
cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the
trading price of our stock.
Management
completed its remediation of the identified control deficiencies as of September 30, 2024, and intends to continue to take additional
actions as may be deemed appropriate to further strengthen the Company’s internal control over financial reporting. However, because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Additionally, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate. In the future, we may identify additional
material weaknesses that may cause us to fail to meet our reporting obligations or result in material misstatements of our financial
statements. If we fail to remediate such material weaknesses or if we otherwise fail to establish and maintain effective control over
financial reporting, our ability to accurately and timely report our financial results could be adversely affected.
We
will require additional financing to sustain or grow our operations. Raising additional capital may cause dilution to our existing stockholders
and investors, restrict our operations or require us to relinquish rights to our products and/or product candidates on unfavorable terms
to us.
We
will need to seek additional capital through a variety of means, including through private and public equity offerings and debt financings,
collaborations, strategic alliances, and marketing or licensing arrangements. To the extent that we raise additional capital through
the sale of equity or convertible debt securities, or through the issuance of shares under other types of contracts, or upon the exercise
or conversion of outstanding options, warrants, convertible debt or other similar securities, the ownership interests of our stockholders
will be diluted, and the terms of such financings may include liquidation or other preferences, anti-dilution rights, conversion and
exercise price adjustments and other provisions that adversely affect the rights of our stockholders, including rights, preferences and
privileges that are senior to those of our holders of Common Stock in terms of the payment of dividends or in the event of a liquidation.
In addition, debt financing, if available, could include covenants limiting or restricting our ability to take certain actions, such
as incurring additional debt, making capital expenditures, entering into licensing arrangements, or declaring dividends and may require
us to grant security interests in our assets. If we raise additional funds through collaborations, strategic alliances, or marketing,
distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue
streams, product or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional
funds through equity or debt financing when needed, we may need to curtail or cease our operations.
Our
growth will be dependent on our ability to access additional equity and debt capital. We may seek additional capital through a variety
of means, including through private and public equity offerings and debt financings, collaborations, and strategic alliances. To the
extent that we raise additional capital through the sale of equity or convertible debt securities, or through the issuance of shares
under other types of contracts, or upon the exercise or conversion of outstanding options, warrants, convertible debt or other similar
securities, the ownership interests of our stockholders will be diluted, and the terms of such financings may include liquidation or
other preferences, anti-dilution rights, conversion and exercise price adjustments and other provisions that adversely affect the rights
of our stockholders, including rights, preferences, and privileges that are senior to those of our holders of Common Stock in terms of
the payment of dividends or in the event of a liquidation. In addition, debt financing, if available, could include covenants limiting
or restricting our ability to take certain actions, such as incurring additional debt, making capital expenditures or declaring dividends
and may require us to grant security interests in our assets. If we raise additional funds through collaborations, strategic alliances,
or marketing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams,
products, and services. If we are unable to raise additional funds through equity or debt financing when needed, we may need to curtail
or cease our operations.
We
may not realize the anticipated benefits of acquisitions or investments in joint ventures, or those benefits may be delayed or reduced
in their realization.
Acquisitions
and investments are likely to be a component of our growth and the development of our business in the future. Acquisitions can broaden
and diversify our product concepts. In reviewing potential acquisitions or investments, we target assets or companies that we believe
offer attractive products or offerings, the ability for us to leverage our offerings, competencies, or other synergies.
The
combination of two or more independent businesses is a complex, costly, and time-consuming process that will require significant management
attention and resources. The integration process may disrupt the businesses and, if implemented ineffectively, would limit the expected
benefits of the acquisition. The failure to meet the challenges involved in integrating businesses and realizing the anticipated benefits
could cause an interruption of, or a loss of momentum in, our activities and could adversely affect our results of operations. The overall
integration of the businesses may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of customer
and other business relationships, and diversion of management’s attention. The difficulties of combining the operations of the
companies include, among others:
Management's Discussion & Analysis (MD&A)
New heading “Basic Merger Terms”
New heading “Business of RTB”
New heading “Platform Partners Business Model”
New heading “The Role of Bitcoin and Cryptocurrency: Fuel for Growth”
Removed heading “Cash Due from Gateways”
Largest changes
For the year ended December 31,see in full comparison2023,2024, net cash provided by operating activities was$33.2$21.2 million, primarily due to net inflows related to changesprepaidsin prepaid and other current assets of$6.6$0.7 million, cash due from gateways of $12.7 million, accounts payable and othercurrentaccrued liabilities of$2.3$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$47.9derivative liability of $0.6 million, impairment of goodwill and intangibles of $9.7 million, and restructuring charges of $1.6 million.ThereThese inflows were partially offset primarily by a net loss of$53.1$26.8 millionnon-cash expense adjustments of $35.3 million consisting primarily of depreciation and amortization, stock compensation expense, and non-cash expenses related toduring therestructuring of our convertible note.year.
“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. …”see in full comparison
“Management has assessed that its intended plan described above, if successfully implemented, is appropriate and sufficient to address the liquidity shortfall in its North America segment 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 sufficient to continue our operations in the North America segment. …”see in full comparison
Management has assessed that its intended plan described above, if successfully implemented, is appropriate and sufficient to addresssee in full comparisontheits liquidity shortfallin its North America segmentand 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 ouroperationsoperations. Theinconsolidated financial statements do not include any adjustments that might be necessary if theNorthCompanyAmericais unable to continue assegment.a going concern.
“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. …”see in full comparison
“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 …”see in full comparison
Full comparison: every changed paragraph (54)
The following results of operations are provided on
a consolidated basis and by reportable segment for the years ended December 31, 2024, and 2023 (dollars in thousands):
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.
We
generate the majority of our revenue from the acceptance and processing of credit and debit card payments on behalf of merchants that
operate principally online. We charge our customers a transaction fee that is generally calculated based on a percentage of the total
transaction amount processed. We also generate revenue from banking and online payments services for which we charge fees for various
activities that include, but are not limited to, incoming and outgoing payments, bank account opening, account maintenance, foreign exchange
services, etc.
Total
revenue for the year ended December 31, 2024, decreased by $9.9 million, or 15%, compared to the year ended December 31, 2023. At the
reportable segment level, revenue in North America decreased by $30.8 million, or 62.9%, compared to the year ended December 31, 2023,
while revenue in the International segment increased by $20.9 million, or 123.5%, compared to the year ended December 31, 2023. The decrease
in revenue in North America was driven by the loss of revenues associated with the product transition further described in Note 2, Summary
of Significant Accounting Policies. The increase in revenue in the International segment was primarily driven by the continued growth
in processing volume, which increased from $1.7 billion for the year ended December 31, 2023 to $3.7 billion for the year ended December
31, 2024. The increase in processing volume is primarily attributable to the continued expansion of our ISO and partnership network and
growth in our payments processing and banking-as-a-service offerings.
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.
Cost
of revenue primarily consist of interchange and assessment fees, and various other fees paid to third-party payment processors and financial
institutions. It also includes commission payments to the ISOs responsible for establishing and maintaining merchant relationships.
Total
cost of revenue for the year ended December 31, 2024, decreased by $6.6 million, or 16.4%, compared to the year ended December 31, 2023.
At the reportable segment level, cost of revenue in North America decreased by $19.0 million, or 63.8%, compared to the year ended December
31, 2023, while in the International segment, cost of revenue increased by $12.4 million, or 119.0%, compared to the year ended December
31, 2023. The decrease in cost of revenue in North America was consistent with the decline in revenue for the segment. The increase in
cost of revenue in the International segment is primarily attributable to the increase in processing volume described in the Company’s
revenue discussion above, which resulted in higher interchange and other processing fees, and commission payments to ISOs.
Operating
expenses for the year ended December 31, 2024,2025, increaseddecreased by $5.3$16.2 million, or 13.9%,46.7%, compared to the year ended December 31, 2023.2024. The
increasedecrease was primarily driven by the following:
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 for the year ended December 31, 2024,2025, decreased by $35.7$2.9 million, or 88.2%,53.1%, compared to the year ended December 31, 2023.2024. This
This decrease was primarily driven by the following:
The
Company’s consolidated working capital
at December 31, 20242025, was negative $8.2$1.1 million, which included cash of $2.6$7.4 million and
restricted casha negligible amount of $89.4restricted million.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 convertibleNote note.issued in November 2021. Our material liquidity needs principally relate to working capital
requirements and research and development expenditures.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:
Due
to the decline in revenues resulting from the product transition further described in Note 2, Summary of Significant Accounting Policies,
of this Report, the Company’s liquidity in its North America segment has been adversely impacted. As a result, management has
determined that its cash in the North America segment as of December 31, 2024, will not be sufficient to fund the segment’s operations
and capital needs for the next 12 months from the date of this Report.
The
Company’s ability to successfully address this liquidity shortfall is contingent upon the successful execution of management’s
intended plan over the next twelve months, which includes, without limitation:
Management
has assessed that its intended plan described above, if successfully implemented, is appropriate and sufficient to address theits liquidity
shortfall in its North America segment 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 operationsoperations.
The inconsolidated financial statements do not include any adjustments that might be necessary if the NorthCompany Americais unable to continue as
segment.a going concern.
The
following table shows cash flows for the periods presented (dollars in thousands):
For
the year ended December 31, 2024,2025, net cash providedused byin operating
activities was $21.2$23.0 million, primarily due to a net inflowsloss of $17.5 million,
and net outflows related to changes in cashaccounts due from gatewayspayable of $12.7$1.1 million, accounts payable
and other current liabilities of $3.2 million,million and payment processing liabilities of $14.0$17.6 million. These inflows outflows
were partially offset
by athe netchange lossin prepaid and other current assets of $26.8$0.5 millionmillion, and non-cash expenseadjustments, adjustmentsprimarily, depreciation
and amortization of $17.4$0.5 millionmillion, consistingnoncash primarilylease expense of depreciation$0.9 andmillion, amortization,stock compensation expense of $0.9 million, loss on the sale
debtof discountRyvyl accretion,EU of $6.5 million, impairment of goodwill and intangible assets,assets of $1.8 million, and restructuring charges.charges of $1.9 million.
For
the year ended December 31, 2023,2024, net cash provided by operating activities was $33.2$21.2 million, primarily due to net inflows related to
changes prepaids
in prepaid and other current assets of $6.6$0.7 million, cash due from gateways of $12.7 million, accounts payable and other current accrued
liabilities of $2.3$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 $47.9derivative liability of $0.6 million, impairment of goodwill and intangibles of $9.7 million, and restructuring charges of $1.6 million. There
These inflows were partially offset primarily by a net loss of $53.1$26.8 million non-cash expense adjustments of $35.3 million consisting
primarily of depreciation and amortization, stock compensation expense, and non-cash expenses related toduring the restructuring of our convertible
note.year.
For
the year ended December 31, 2024,2025, net cash used by investing activities was $1.8$76.4 million, primarily duedriven to outflows related to capitalized
software development costs. For the year ended December 31, 2023, netby cash providedtransferred byin investing activities was $2.3 million primarilyconnection
due proceeds fromwith the sale of aRyvyl buildingEU ownedof by$75.0 themillion Company’sand subsidiary,capitalized Chargesoftware Savvy.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.
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.
For
the year ended December 31, 2024, net cash used in financing activities was immaterial. For the year ended December 31, 2023, net cash
used in financing activities was $3.0 million, due to a partial repayment of principal on our convertible note in connection with the
restructuring of that note during the year.
WeThe
preparepreparation ourof consolidated financial statements in accordanceconformity with accounting principles generally accepted in the U.S. (“GAAP”).
GAAP requires usmanagement 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 consolidated financial statements and the reported amounts of revenues and expenses during
the reporting period. We base our estimates on historical experience, anticipated future trends, and other assumptions we believe to
be reasonable under the circumstances. Because these estimates require significant judgment, our actualActual results maycould differ materially
from ourthose 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.
Cash
Due from Gateways
The
Company generates the majority of its revenue from payment processing services provided to its merchant clients. When a merchant makes
a sale, the process of receiving the payment card information and engaging the banks for transferring the proceeds to the merchant’s
account via digital gateways, are the activities for which the Company gets to collect fees.
The
gateways have strict guidelines pertaining to the scheduling of the release of funds to merchants based on several criteria that include,
but are not limited to, return and chargeback history, associated risk for the specific business vertical, average transaction amount,
etc. To mitigate potential credit losses associated with these risks, these gateway policies determine reserve requirements and a payment
in arrears strategy. While reserve and payment in arrears restrictions are in effect for a merchant payout, the Company records the reserved
amounts against cash due from the gateways until released.
Cash
due from gateways is only applicable to payment processing services provided in North America, as. Ryvyl EU has its own gateway and,
therefore, similar receivables are not created.
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.
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:
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:
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.
In
February 2024, the Company transitioned its QuickCard product in North America away from terminal-based to app-based processing. This
transition was driven by a change in our banking partner that was prompted by recent changes in the compliance environment and banking
regulations impacting certain niche high-risk business verticals, which were the predominant revenue driver for QuickCard.
Management
planned to recover the loss of revenues resulting from this product transition through the acceleration of business development efforts
to launch the new app-based product in existing and new business verticals. However, due to continuous changes in the regulatory environment
and our previous banking relationships, during the second quarter of 2024, management determined that the app-based product may not be
a viable long-term solution for certain niche high-risk business verticals and made the decision to terminate the rollout of the app-based
product in those specific business verticals. To address this change, during the third quarter of 2024, the Company introduced a licensing
product for its payments processing platform, which it believes will enable it to serve the same customer base in such verticals through
a business partner with more suitable banking compliance capabilities. Revenues from the new licensing product are not expected to materialize
until late 2025. Due of this strategy shift as well as a reorganization of the Company’s business to better align with management’s
revised strategy, which was executed during the second quarter of 2024, the recovery of the loss of revenues resulting from this product
transition is now not expected to occur until late 2025.
The
decline in revenues resulting from this product transition has adversely impacted the Company’s liquidity in its North America
segment in the short term. As a result, management has determined that its cash in the North America segment as of December 31, 2024,
will not be sufficient to fund the segment’s operations and capital needs for the next 12 months from the date of this Report.
Management’s intended plan over the next twelve months to address the liquidity shortfall in the North America segment includes,
but is not limited to, the following:
Management
has assessed that its intended plan described above, if successfully implemented, is appropriate and sufficient to address the liquidity
shortfall in its North America segment 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 sufficient to continue our operations in the North America
segment. Refer to the “Going Concern” paragraph within Note 2, Summary of Significant Accounting Policies, of this
Report for additional information.
What changed in the latest 10-Q
Risk Factors
New heading “Risks Related to the Combined Company (“RTB”)”
New heading “If RTB fails to retain current users or add new users, or if the users decrease their level of engagement with the Platform, the RTB business would be seriously harmed.”
New heading “Generative Artificial Intelligence (“AI”) technology may negatively impact our ability to attract, engage, and retain audiences; protect and monetize our intellectual property; maintain and grow our revenue streams; avoid reputational harm; and involve other risks.”
New heading “The market in which RTB participates is intensely competitive, and if it does not compete effectively, its operating results could be harmed.”
New heading “If Internet search engines’ algorithms and methodologies are modified, traffic to our content could be reduced and our ability to attract and retain our audiences could be adversely impacted.”
New heading “The sales and payment cycle for online advertising is long, and such sales may not occur when anticipated or at all, all of which could adversely affect the RTB business.”
New heading “RTB is dependent on the continued services and on the performance of key third party content contributors, the loss of which could adversely affect the RTB business.”
New heading “The RTB revenues could decrease if the Platform does not continue to operate as intended.”
New heading “The growing percentage of users whose computers, tablets, or phones do not support identification through third party cookies, mobile identifiers, or other tracking technologies could adversely affect the RTB business, results of operations, and financial conditions.”
New heading “The RTB Platform Partners may engage in intentional or negligent misconduct or other improper activities on the Platform or otherwise misuse the Platform, which may damage the RTB brand image, business and results of operations.”
New heading “The Platform and technology systems of RTB contain open-source software, which may pose particular risk to RTB proprietary software, features and functionalities in a manner that negatively affect the RTB business.”
New heading “Risks Related to RTB Business and Cryptocurrency Strategy”
New heading “Among RTB’s principal assets are cryptocurrency holdings, primarily Bitcoin, which constitute a material portion of total assets. Cryptocurrency holdings are subject to extreme price volatility, regulatory uncertainty, custody risks, and potential total loss.”
New heading “Our cryptocurrency holdings will be less liquid than our cash and cash equivalents and may not be able to serve as a source of liquidity for RTB.”
New heading “The RTB cryptocurrency acquisition strategy will expose us to risk of non-performance by counterparties, including in particular risks relating to custodians, including as a result of inability or refusal of a counterparty to perform because of a deterioration in the counterparty’s financial condition and liquidity or for any other reason.”
New heading “Policymakers in the U.S. are just beginning to consider what regulatory regime for digital assets would look like and the elements that would serve as the foundation for such a regime. RTB may be unable to effectively react to proposed legislation and regulation of digital assets, which would adversely affect the RTB business.”
New heading “Regulatory changes classifying crypto-assets as “securities” could lead to our classification as an “investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”) and could adversely affect the market price of cryptocurrencies and the market price of shares of our securities.”
New heading “Investors in RTB will not be afforded the protections and safeguards offered by the 1940 Act to investors in registered investment companies such as mutual funds and exchange-traded funds, including, but not limited to, limitations on the amount of leverage that RTB may use and strict limitations on its ability to engage in transactions with its affiliates.”
New heading “Risks Related to RTB Economic and Operational Risks”
New heading “RTB may have difficulty managing growth.”
New heading “The strategic relationships that RTB may be able to develop and on which it may come to rely may not be successful.”
New heading “Interruptions or performance problems associated with the RTB technology and infrastructure may adversely affect the business and operating results.”
New heading “Cyber-attacks and other security threats and disruptions could have a material adverse effect on the RTB business.”
New heading “We operate the RTB exclusive coalition of professional-managed online media channels on third party cloud platforms and data center hosting facilities.”
New heading “Real or perceived errors, failures, or “bugs” in the Platform could adversely affect our operating results and growth prospects.”
New heading “Malware, viruses, hacking attacks, and improper or illegal use of the Platform could harm the RTB business and results of operations.”
New heading “If we are unable to protect our intellectual property rights, our business could suffer.”
New heading “RTB could be required to cease certain activities or incur substantial costs due to claims of infringement of another party’s intellectual property rights.”
New heading “RTB is subject to many laws and regulations in the United States and abroad that are constantly evolving and involve matters central to its business.”
New heading “RTB is subject to risks from changes to regulations, government funding, trade policies and tariffs imposed by governments that impact the advertising clients of RTB.”
New heading “The RTB services involve the storage and transmission of digital information; therefore, cybersecurity incidents, including those caused by unintentional errors and those intentionally caused by third parties, may expose RTB to a risk of loss, unauthorized disclosure or other misuse of this information, litigation liability, regulatory exposure, reputational harm and increased security costs.”
New heading “Existing or future strategic alliances, long-term investments and acquisitions may have a material and adverse effect on the RTB business, reputation, and results of operations.”
New heading “The RTB products may require availability of components or known technology from third parties and their nonavailability can impede growth.”
New heading “As the general economic and market conditions present uncertainty as to the ability of RTB to secure additional capital, there can be no assurances that RTB will be able to secure additional financing on acceptable terms, or at all, as and when necessary to continue to conduct operations.”
New heading “RTB has a history of losses.”
New heading “The RTB results of operations may fluctuate significantly and may not meet expectations of management or those of securities analysts and investors.”
New heading “Any future litigation against RTB could be costly and time-consuming to defend.”
New heading “The ability of RTB to utilize our net operating loss carryforwards may be limited.”
New heading “The RTB business is subject to the risk of catastrophic events such as pandemics, earthquakes, flooding, fire, and power outages, and to interruption by man-made acts, such as war and terrorism.”
New heading “Business interruptions or systems failures may impair the availability of our websites, applications, products or services, or otherwise harm our business.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “The market price of our common stock is expected to be volatile and may drop following the merger.”
New heading “RTB will need to raise additional capital by issuing securities or debt or through licensing or similar arrangements, which may cause significant dilution to the outstanding shares, restrict our operations, or require RTB to relinquish proprietary rights. Future issuances of the common stock pursuant to outstanding options and warrants also will result in additional dilution.”
New heading “RTB’s internal control over financial reporting may not meet the standards required by Section 404 of the Sarbanes-Oxley Act, and failure to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, could have a material adverse effect on our business and share price.”
New heading “Because RTB is a “smaller reporting company,” it will not be required to comply with certain disclosure requirements that are applicable to other public companies; however, it cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make the common stock of RTB less attractive to investors.”
New heading “Our executive officers, directors, and principal stockholders currently control, or could significantly influence all matters submitted to stockholders for approval.”
New heading “RTB may become involved in securities class action litigation that could divert management’s attention and harm the company’s business and insurance coverage may not be sufficient to cover all costs and damages.”
New heading “Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third party claims against us and may reduce the amount of money available to us.”
Largest changes
“RTB is subject or will be subject in the future to myriad constantly evolving laws, statutes and regulations in the United States as well as in other countries where it may do business. …”see in full comparison
“We cannot provide assurance that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report its financial condition, results of operations or cash flows. …”see in full comparison
“The RTB services involve the storage and transmission of digital information; therefore, cybersecurity incidents, including those caused by unintentional errors and those intentionally caused by third parties, may expose RTB to a risk of loss, unauthorized disclosure or other misuse of this information, litigation liability, regulatory exposure, reputational harm and increased security costs.”see in full comparison
“RTB may become involved in securities class action litigation that could divert management’s attention and harm the company’s business and insurance coverage may not be sufficient to cover all costs and damages.”see in full comparison
“RTB is subject to risks from changes to regulations, government funding, trade policies and tariffs imposed by governments that impact the advertising clients of RTB.”see in full comparison
“Because many of the expenses are based upon forecast demand and may be difficult to reduce in the short term, volatility in quarterly revenue could cause significant variations in quarterly results of operations. RTB may not forecast our revenue or expenses accurately, which may cause results of operations to diverge from estimates or the expectations of securities analysts, and investors. …”see in full comparison
Full comparison: every changed paragraph (126)
Following the closing of the merger with Ryvyl Inc., effective May 12, 2026, the Company’s business, operations, and risk profile have changed significantly. The risk factors set forth below supersede and replace those previously disclosed and reflect the business of the combined company following the Merger.
Risks Related to the Combined Company (“RTB”)
If RTB fails to retain current users or add new users, or if the users decrease their level of engagement with the Platform, the RTB business would be seriously harmed.
The success of the RTB business and ability to attract and retain advertisers heavily depends on the size of the user base and the level of engagement of users. Several factors could negatively affect user retention, growth, and engagement, including if:
Generative Artificial Intelligence (“AI”) technology may negatively impact our ability to attract, engage, and retain audiences; protect and monetize our intellectual property; maintain and grow our revenue streams; avoid reputational harm; and involve other risks.
Recent advances in the use of AI may significantly alter the market for the RTB products and services. These technologies make it easier to access, duplicate, and distribute the RTB content, or otherwise generate output based on the RTB content, without authorization, fair compensation, or proper attribution. These technologies may reduce online traffic and audience sizes, infringe RTB intellectual property rights, harm existing and potential new revenue streams, damage the RTB brand, and adversely affect the RTB business, financial condition, and results of operations. The RTB reputation may also be harmed if these technologies wrongly attribute inaccurate information to us. RTB seeks to limit such threats; however, controlling unauthorized use of content and intellectual property is difficult and preventative measures implemented by RTB may not prevent misuse, misattribution, and infringement of the RTB intellectual property. Although RTB does not believe these threats have been material to its businesses to date, RTB expects to continue to be subject to these threats and, as a result may experience a negative impact on its business and financial condition.
The market in which RTB participates is intensely competitive, and if it does not compete effectively, its operating results could be harmed.
The digital media and Software-as-a-Service industries are fragmented and highly competitive. There are many players in these markets, many with greater name recognition and financial resources, which may give them a competitive advantage. The general business of online media, combined with some level or method of leveraging community attracts many potential entrants, and in the future, there may be strong competitors that will compete with RTB in general or in selected markets. These and other companies may be better financed and be able to develop their markets more quickly and penetrate those markets more effectively. RTB expects competition to intensify in the future. All of this could adversely affect our revenues and operating results.
If Internet search engines’ algorithms and methodologies are modified, traffic to our content could be reduced and our ability to attract and retain our audiences could be adversely impacted.
The RTB search engine optimization capability in connection with audience acquisition efforts substantially depends on various internet search engines, such as Google, to direct a significant amount of traffic to the content published on the Platform. Algorithms are used by these search engines to determine search result listings and the order of the listings displayed in response to specific searches. Search engines frequently revise their algorithms in an attempt to optimize their search result listings. Future algorithm changes by Google or any other search engines could cause content published on the Platform to receive less favorable placements, which could reduce the number of readers who view this content and impact the RTB ability to effectively serve digital advertisements to the RTB audience. If RTB is unable to respond effectively to changes made by search engine providers to their algorithms and other processes, this could have a material adverse effect on RTB revenues and operating results.
The sales and payment cycle for online advertising is long, and such sales may not occur when anticipated or at all, all of which could adversely affect the RTB business.
The decision process is typically lengthy for brand advertisers and sponsors to commit to online campaigns and subject to delays which may be beyond the control of RTB. In addition, some advertisers and sponsors take months after the campaign runs to pay, and some may not pay at all, or require partial “make-goods” based on performance. This could have a material adverse effect on the RTB business, financial condition, or results of operations.
RTB is dependent on the continued services and on the performance of key third party content contributors, the loss of which could adversely affect the RTB business.
RTB relies on content contributed by third party providers to attract users that drive advertising and subscription revenue. The loss of the services of any of such key contributors could have a material adverse effect on the RTB business, operating results, and financial condition. Competition for contributors is intense, and there can be no assurance that RTB will be able to successfully attract, assimilate, or retain them, which could have a material adverse effect on the RTB business, financial condition, or results of operations.
The RTB revenues could decrease if the Platform does not continue to operate as intended.
The Platform performs complex functions and is vulnerable to undetected errors or unforeseen defects that could result in a failure to operate or inefficiency. The occurrence of errors and defects could result in loss of or delay in revenue, loss of market share, increased development costs, diversion of development resources and injury to the RTB reputation or damage to the RTB efforts to expand brand awareness.
The growing percentage of users whose computers, tablets, or phones do not support identification through third party cookies, mobile identifiers, or other tracking technologies could adversely affect the RTB business, results of operations, and financial conditions.
RTB relies heavily on its ability to collect and disclose data and metrics in order to attract new advertisers and retain existing advertisers. Any restriction, whether by law, regulation, policy, or other reason, on its ability to collect and disclose data that the RTB advertisers find useful would impede the RTB ability to attract and retain advertisers.
RTB uses “cookies,” or small text files placed on user devices when an Internet browser is used, as well as mobile device identifiers, to connect users’ computers anonymously to information that RTB gathers, enabling the Platform to demonstrate to advertisers its efficacy. More and more devices have offered functionalities that block such anonymized identifiers and some prominent technology companies have announced intentions to discontinue the use of cookies entirely. Additionally, there are statutes that limit the gathering of information of users that make it more difficult for RTB to operate, and if violated subject it to damages. Although RTB believes the Platform is well-positioned to continue to provide key data insights to advertisers without cookies, actions by advertisers to buy advertising based on alternative identifiers could lead to changes in purchase behavior of advertisers, thereby possibly impacting the RTB operations, and the RTB financial condition could be adversely affected.
The RTB Platform Partners may engage in intentional or negligent misconduct or other improper activities on the Platform or otherwise misuse the Platform, which may damage the RTB brand image, business and results of operations.
The Platform provides the RTB owned and operated media businesses, Platform Partners, and individual creators contributing content the ability to produce and manage editorially focused content through tools and services provided by RTB. RTB might not be able to monitor or edit a significant portion of the content, such as advertising content, that appears on the Platform. If misconduct and misuse of the Platform for inappropriate or illegal purposes occurs, user experience on the Platform may suffer, and claims may be brought against RTB. The RTB business and public perception of the RTB brand may be materially and adversely affected if we face any related lawsuits or other liabilities.
The Platform and technology systems of RTB contain open-source software, which may pose particular risk to RTB proprietary software, features and functionalities in a manner that negatively affect the RTB business.
RTB uses open-source software in the Platform and technology systems, and it plans to continue to use open-source software in the future. RTB has have set up an internal system to monitor the open-source software used by RTB in its operations and functionality and to manage the risks posed to the RTB business. RTB may face claims from third parties claiming ownership of, or demanding release of, the open-source software or derivative works that RTB developed using such software. These claims could result in litigation and could require RTB to make its software source code freely available, purchase a costly license or cease offering the implicated services unless and until RTB can re-engineer them to avoid infringement. This could require significant additional technology and development resources, and RTB may not be able to complete such re-engineering successfully.
Risks Related to RTB Business and Cryptocurrency Strategy
Among RTB’s principal assets are cryptocurrency holdings, primarily Bitcoin, which constitute a material portion of total assets. Cryptocurrency holdings are subject to extreme price volatility, regulatory uncertainty, custody risks, and potential total loss.
Due to the lack of an operating history and the concentration of crypto asset holdings, it is difficult to evaluate the RTB business and future prospects. RTB may not be able to achieve or maintain profitability in any given period.
RTB will operate in a highly competitive environment and will compete against companies and other entities with similar strategies, including companies with significant cryptocurrency holdings, and the RTB business, operating results, and financial condition may be adversely affected if RTB is are unable to compete effectively.
The emergence or growth of other digital assets, including those with significant private or public sector backing, including by governments, consortiums or financial institutions, could have a negative impact on the price of cryptocurrencies and adversely affect the RTB business.
Our cryptocurrency holdings will be less liquid than our cash and cash equivalents and may not be able to serve as a source of liquidity for RTB.
We will face risks relating to the custody of our crypto assets. If RTB or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to the cryptocurrencies, or if the private keys are lost or destroyed, or other similar circumstances or events occur, RTB may lose some or all of its crypto assets, and the RTB financial condition and results of operations could be materially adversely affected.
Bitcoin prices have experienced significant volatility, with prices ranging from approximately $15,000 to over $120,000 per Bitcoin over the past three years. RTB’s Bitcoin holdings are classified as indefinite-lived intangible assets under GAAP, subject to impairment testing. Declines in Bitcoin prices could result in material impairment charges, while appreciation cannot be recognized until Bitcoin is sold.
RTB maintains custody of its Bitcoin through Anchorage Digital, a regulated digital asset custodian. RTB faces risks of loss, theft, or restricted access to Bitcoin holdings due to cybersecurity breaches, custodian insolvency, or regulatory action. Unlike traditional banking deposits, cryptocurrency holdings are not protected by FDIC insurance or similar government guarantees.
The RTB cryptocurrency acquisition strategy will expose us to risk of non-performance by counterparties, including in particular risks relating to custodians, including as a result of inability or refusal of a counterparty to perform because of a deterioration in the counterparty’s financial condition and liquidity or for any other reason.
Cryptocurrency and other digital assets are novel assets, which will expose us to significant legal, commercial, regulatory and technical uncertainty, which could materially adversely affect our financial position, operations and prospects.
Policymakers in the U.S. are just beginning to consider what regulatory regime for digital assets would look like and the elements that would serve as the foundation for such a regime. RTB may be unable to effectively react to proposed legislation and regulation of digital assets, which would adversely affect the RTB business.
The status of crypto assets as “securities” in any relevant jurisdiction, as well as the status of cryptocurrency-related products and services in general, is subject to a high degree of uncertainty. If RTB is unable to properly characterize such products or service offerings, RTB may be subject to regulatory scrutiny, inquiries, investigations, fines, and other penalties, which may adversely affect the RTB business, operating results and financial condition.
RTB may be subject to money transmission licensing requirements, anti-money laundering compliance, sanctions screening, and other regulatory obligations related to its cryptocurrency payment operations. Changes in regulation could restrict RTB’s ability to hold, trade, or utilize Bitcoin, or could impose substantial compliance costs.
Regulatory changes classifying crypto-assets as “securities” could lead to our classification as an “investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”) and could adversely affect the market price of cryptocurrencies and the market price of shares of our securities.
RTB would not be able to operate its business according to the RTB business plans if it is required to register as an investment company under the 1940 Act. If RTB is characterized as an investment company, it would likely have to terminate its business operations or substantially change them in a way that may impair its value and the then equity holders may lose the value of their holdings in RTB.
Investors in RTB will not be afforded the protections and safeguards offered by the 1940 Act to investors in registered investment companies such as mutual funds and exchange-traded funds, including, but not limited to, limitations on the amount of leverage that RTB may use and strict limitations on its ability to engage in transactions with its affiliates.
RTB believes that it is not subject to the same legal and regulatory obligations, including certain compliance and reporting obligations that apply to registered investment companies under the 1940 Act, such as mutual funds and exchange-traded funds, or to obligations applicable to investment advisers.
RTB may be restricted in the manner in which it conducts its operations to ensure that it is not deemed to be an investment company for purposes of the 1940 Act.
Due to the unregulated nature and lack of transparency surrounding the operations of many cryptocurrency trading venues, cryptocurrency trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in cryptocurrency trading venues and adversely affect the value of our cryptocurrency holdings.
Risks Related to RTB Economic and Operational Risks
RTB may have difficulty managing growth.
RTB has added, and expects to continue to add, Platform Partner and end-user support capabilities, continue software development activities, and expand administrative capabilities. In the past two years, RTB has entered into strategic transactions that have significantly expanded business and placed significant strain on its resources. To manage any further growth, organically or through further acquisitions, RTB will be required to improve existing, and implement new, operational and financial systems and properly manage its employee base. If it is unable to manage growth effectively, the business could be harmed. RTB will also require additional funding for its current and any expanded operations, the absence of which will limit its ability to pursue its business plan.
The strategic relationships that RTB may be able to develop and on which it may come to rely may not be successful.
RTB will seek to develop strategic relationships with advertising, media, technology, and other companies to enhance market penetration, business development, and advertising sales revenues. There can be no assurance that these relationships will develop and mature or that potential competitors will not develop more substantial relationships with the same or more attractive partners. The inability to successfully implement the RTB strategy of building valuable strategic relationships could harm the overall business of RTB.
Interruptions or performance problems associated with the RTB technology and infrastructure may adversely affect the business and operating results.
RTB believes that its growth will depend in part on the ability of users, customers, and Platform Partners to access the Platform at any time or within an acceptable amount of time. If RTB experiences performance problems due to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, capacity constraints due to an overwhelming number of users accessing the Platform software simultaneously, denial of service attacks, or other security related incidents, users may decide to use other businesses. Generally, if the Platform software is unavailable or if users are unable to access it within a reasonable amount of time or at all, the business would be negatively affected.
Moreover, the Partner Agreements with the Platform Partners include service level standards that obligate RTB to provide credits or termination rights in the event of a significant disruption of the Platform, which may adversely affect the business and operating results if Platform Partners elect to use the credits or terminate its use of the Platform.
Cyber-attacks and other security threats and disruptions could have a material adverse effect on the RTB business.
As a tech-powered media company, RTB Faces cybersecurity threats, such as ransomware and denial-of-service, and attacks on technical infrastructure. Customers and suppliers face similar cybersecurity threats, and a cybersecurity incident impacting RTB or any of these entities could materially, adversely affect operations, performance and results of operations.
The sophistication of threats continues to evolve and grow, including the risk associated with the use of emerging technologies, such as artificial intelligence and quantum computing, for nefarious purposes. In addition to cybersecurity threats, RTB faces threats to the security of systems and employees from terrorist acts, sabotage or other disruptions, any of which could adversely affect the business. The improper conduct of employees or others working on behalf of RTB who have access to confidential or sensitive information could also adversely affect the RTB business and reputation. Customers (including sites that RTB operates for customers) and suppliers experience similar security threats.
If RTB is unable to protect sensitive information, including complying with evolving information security, data protection and privacy regulations, customers or governmental authorities could investigate the adequacy of the RTB threat mitigation and detection processes and procedures; and could bring actions against RTB for noncompliance with applicable laws and regulations. Moreover, depending on the severity of an incident, customers’ data, employees’ data, intellectual property (including trade secrets and research, development and engineering know-how), and other third-party data (such as suppliers) could be compromised, which could adversely affect the RTB business. Products and services provided by RTB to customers also carry cybersecurity risks, including risks that they could be breached or fail to detect, prevent or combat attacks, which could result in losses to the customers and claims against RTB, and could harm relationships with RTB customers and financial results.
Given the persistence, sophistication, volume and novelty of threats RTB faces, RTB may not be successful in preventing or mitigating an attack that could have a material adverse effect on RTB and the costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by other means.
The RTB suppliers face similar security threats and an incident at one of these entities could adversely impact the RTB business. These entities are typically outside RTB control and may have access to RTB information with varying levels of security and cybersecurity resources, expertise, safeguards and capabilities. Adversaries actively seek to exploit security and cybersecurity weaknesses in a supply chain. Breaches in the supply chain could in the future compromise RTB data and adversely affect customer deliverables. RTB also must rely on its supply chain for adequately detecting and reporting cyber incidents, which could affect its ability to report or respond to cybersecurity incidents effectively or in a timely manner. Failures by the RTB suppliers could result in damages to the customers and have an adverse effect on the RTB business and operations.
We operate the RTB exclusive coalition of professional-managed online media channels on third party cloud platforms and data center hosting facilities.
RTB relies on software and services licensed from, and cloud platforms provided by, third parties to offer digital media services. Any errors or defects in third party software or cloud platforms could result in errors in, or a failure of, the RTB digital media services, which could harm the RTB reputation and business and force RTB to seek more expensive alternatives. Failure of these third-party systems could cause us to render credits or pay penalties or cause the Platform Partners to terminate their contractual arrangements with RTB.
RTB is subject to certain standard terms and conditions with Google Cloud and other technology providers, companies which have broad discretion to change their terms of service and other policies, and those changes may be unfavorable to RTB.
Management's Discussion & Analysis (MD&A)
New heading “RTB Digital, Inc.”
New heading “Other (expense) income, net”
New heading “RTB Digital, Inc.”
New heading “Six Months Ended June 30, 2026 (Unaudited) Compared to Six Months Ended June 30, 2025 (Unaudited):”
New heading “(In thousands, except for percentages)”
New heading “Cost of Revenue”
New heading “Operating Expenses”
New heading “Other (expense) income, net”
New heading “Operating Activities”
New heading “Investing Activities”
New heading “Financing Activities”
Removed heading “Reverse Stock Split”
Removed heading “Recent Developments”
Removed heading “Closing of Merger Agreement with RTB Digital, Inc.”
Removed heading “Compliance with Nasdaq’s Stockholders’ Equity Rule”
Removed heading “Other Expense, Net”
Largest changes
“As further described in the subsection titled “Going Concern” above, since the first quarter of 2024, the Company’s liquidity has been adversely impacted by the loss of revenues stemming from the discontinuation of its QuickCard product. As also noted therein, through the first quarter of 2025, the Company had relied on the repatriation of profits from its European subsidiaries to cover some of its critical operating expenses, which it is no longer able to do following the sale of its wholly owned subsidiary, Ryvyl EU, effective June 1, 2025. …”see in full comparison
“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. …”see in full comparison
“Operating expenses decreased $1.6 million, or 27.9%, to $4.2 million for the three months ended March 31, 2026, from $5.8 million for the three months ended March 31, 2025. The decrease was primarily driven by decreases in research and development of $0.4 million, general and administrative expenses of $0.4 million, payroll and payroll taxes of $1.8 million due to lower headcount, and restructuring charges of $0.4 million. …”see in full comparison
“On April 23, 2026, the Company received written notice (“Notice”) regarding its non-compliance of the minimum stockholders’ equity requirement of $2.5 Million for continued listing on Nasdaq Capital Market under Rule 5550(b)(1) (the “Equity Rule”). The Notice stated that, unless the Company timely requested an appeal of the determination to the Nasdaq Hearings Panel (the “Panel”) by April 30, 2026, the Company’s Common Stock will be delisted from the Nasdaq Capital Market at the opening of business on May 4, 2026. …”see in full comparison
“Substantial doubt exists as to our ability to continue as a going concern based on the fact that we do not have adequate working capital to finance our day-to-day operations. As described in the Notes to the Financial Statements included in our 2025 Form 10-K and in this Report, respectively, for the years ended December 31, 2025, and 2024, and the three-month periods ended March 31, 2026, and 2025, there is a substantial doubt about our ability to continue as a going concern. …”see in full comparison
“Six Months Ended June 30, 2026 (Unaudited) Compared to Six Months Ended June 30, 2025 (Unaudited):”see in full comparison
Full comparison: every changed paragraph (57)
In
this Report, unless the context otherwise
requires, all references to “the Company,” “we,” “our”
and “us” refer collectively to
RTB RYVYLDigital Inc., a Nevada corporation, and its subsidiaries.
Our
Management’s Discussion and Analysis
and Results of Operations contains not only statements that are historical facts, but also
statements that are forward-looking. Forward-looking
statements are, by their very nature, uncertain and risky. These risks and uncertainties
include international, national and local general
economic and market conditions; demographic changes; our ability to successfully make
and integrate acquisitions; our ability to consummate the proposed merger transaction with RTB Digital, Inc.,; new product development
and introduction; existing government regulations and changes in, or the failure to comply with, government regulations, including without
limitation, our ability to maintain the listing of our common stock on the Nasdaq Capital Market; adverse publicity; competition; the
loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy
or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology;
our ability to continue operating as a going concern; and other risks that might be detailed from time to time in our filings with the
SEC.
Reverse
Stock Split
On
January 2, 2026, the Company effected a reverse stock split of the Company’s shares of common stock, par value $0.001 (“Common
Stock”) outstanding at a ratio of one-for-thirty-five (the “Reverse Stock Split”). All share and per share information
in this Report have been retroactively adjusted for all periods presented, unless otherwise indicated, to give effect to the reverse
stock split, including the unaudited condensed consolidated financial statements and notes thereto.
Going Concern
Substantial
doubt exists as to our ability to continue as a going concern based on the fact that we do not have adequate working capital
to finance our day-to-day operations. As described in the Notes to the Financial Statements included in our 2025 Form 10-K and in this
Report, respectively, for the years ended December 31, 2025, and 2024, and the three-month periods ended March 31, 2026, and 2025, there
is a substantial doubt about our ability to continue as a going concern. For the year ended December 31, 2025, we had a net
loss of $17.5 million, and as of December 31, 2025, we had an accumulated deficit of $196.9 million. For the three months ended March
31, 2026, we had net loss of $3.3 million, and as of March 31, 2026, we had an accumulated deficit of $200.2 million.
Recent
Developments
Closing of Merger Agreement with RTB Digital,
Inc.
On May 12, 2026, the Company completed its previously
announced Merger Agreement, dated September 28, 2025, pursuant to which Merger Sub merged with an into RTB (the “Merger Transaction”),
with RTB surviving as a wholly owned subsidiary of the Company (the “Surviving Corporation”). Pursuant to the terms of the
Merger Agreement, RTB capital stock and certain other outstanding securities were exchanged for 11,893,886 shares of common stock of the
Company, as consideration for the Merger Transaction. In addition, the Company assumed a number of securities of RTB, including an outstanding
convertible loan note and interest due thereon, certain unexercised warrants and the RTB equity award plans. The Company will also issue
109,410 shares due under its investment banking agreement with Maxim Partners LLC. At the consummation of the Merger Transaction, the
Company was renamed to RTB Digital, Inc.
Compliance
with Nasdaq’s Stockholders’ Equity Rule
On April 23, 2026, the Company received written notice (“Notice”)
regarding its non-compliance of the minimum stockholders’ equity requirement of $2.5 Million for continued listing on Nasdaq Capital
Market under Rule 5550(b)(1) (the “Equity Rule”). The Notice stated that, unless the Company timely requested an appeal of
the determination to the Nasdaq Hearings Panel (the “Panel”) by April 30, 2026, the Company’s Common Stock will be delisted
from the Nasdaq Capital Market at the opening of business on May 4, 2026. The Company timely requested a hearing before the Panel on April
29, 2026, which stayed any suspension or delisting action pending the Panel’s decision. On May 13, 2026, the Company received a
letter from the Panel indicating that, based on completion of the Merger Transaction, the matter is now moot, the previously scheduled
hearing has been cancelled, and the Company’s Common Stock will continue to be listed and traded on the Nasdaq Capital Market.
RTB Digital, Inc.
Three
Six Months Ended MarchJune 31,30, 2026 (Unaudited)
Compared to ThreeSix Months MarchEnded 31,June 30, 2025 (Unaudited):
Consolidated revenue increased $1.8 million, or 350.7%, to $2.3 million for the three months ended June 30, 2026, from $0.5 million for the three months ended June 30, 2025. The increase in consolidated revenue was driven by an increase of $1.7 million in Fintech Operations and an increase of $0.1 million in Platform Operations. The Fintech Operations segment is new, which the Company acquired effective May 12, 2026, in connection with its merger with Ryvyl Inc. The increase in Platform Operations revenue was primarily driven by increases in programmatic ads and syndication revenue, partially offset by direct ads and sponsorship revenues.
Consolidated
revenue decreased $0.3 million, or 8.5%, to $2.5 million for the three months ended March 31, 2026, from $2.8 million for the three months
ended March 31, 2025. The decline in consolidated revenue was primarily driven by non-recurring revenue reported in the first quarter
of 2025 with no similar non-recurring activity in the first quarter of 2026.
Consolidated cost of revenue increased $1.2 million, or 536.8%, to $1.5 million for the three months ended June 30, 2026, from $0.2 million for the three months ended June 30, 2025. The increase in consolidated cost of revenue was driven by an increase of $1.0 million in Fintech Operations and a $0.2 million increase in Platform Operations. The increase in cost of revenue for Fintech Operations is consistent with the change in revenue noted above and the gross margin profile expected for this business segment. The increase in cost of revenue for Platform Operations was primarily driven by an increase in the revenue guarantee to a key programmatic ads partner and an increase in content personnel costs as the Company continues to build out its platform and operations for this business segment, in line with its strategic objectives.
Consolidated cost of revenue was relatively flat,
as it increased $0.01 million, or 1.0%, to $1.41 million for the three months ended March 31, 2026, from $1.40 million for the three months
ended March 31, 2025. Cost of revenue primarily consists of various fees charged by payment processors and fees paid to Independent Sales
Organizations. Excluding the non-recurring revenue activity described above, the relatively flat year-over-year change in cost of revenue
is in line with the year-over-year change in revenue.
Operating expenses decreased $1.6 million, or
27.9%, to $4.2 million for the three months ended March 31, 2026, from $5.8 million for the three months ended March 31, 2025. The decrease
was primarily driven by decreases in research and development of $0.4 million, general and administrative expenses of $0.4 million, payroll
and payroll taxes of $1.8 million due to lower headcount, and restructuring charges of $0.4 million. These decreases were partially offset
by increases in professional fees of $0.2 million, stock-based compensation of $0.3 million, and impairment of ROU asset of $0.9 million.
Other
Expense, Net
OtherConsolidated expense,operating net,expenses decreasedincreased by$8.9
million, $1.1 million,
or 81.8%,976.1%, to $0.2$9.8 million for the three months ended MarchJune 31,30, 2026, from $1.3$0.9 million for the three months ended MarchJune 31,30, 2025.
The The
decreaseincrease was primarily driven by a decrease interest expense due to the retirement of the Company’s short-term note payable in the
second quarter of 2025 that was partially offset by an increase in legal settlements expense of $0.2 million.following:
Research and development – Increased ~$0.1 million due higher amortization related to acquired intangible assets and capitalized software development costs, primarily related to Platform Operations.
Selling and marketing – Increased $1.7 million, primarily driven by an increase of $1.1 million due to a significant increase in sports partners with over 150 reporters and team publishers having joined the Company in 2026, and higher marketing expenses of $0.1 million to expand and refresh the Company’s brand. Additionally, approximately $0.2 million of the increase relates to selling and marketing expenses of the Fintech Operations business, acquired by the Company during the second quarter, as noted above.
General and administrative – Increased $7.0 million and was due to $2.3 million of expenses related to the Fintech Operations business, inclusive of a $1.2 million advisory fee paid in connection with the closing of the merger, and a $4.8 million increase in expenses for the Platform Operations business. The Fintech Operations business is new in Q2 2026, as noted above, and the expenses incurred during Q2 2026 primarily related to professional fees of $1.8 million (primarily, merger closing advisory fee, and merger related legal and accounting costs), personnel costs of $0.3 million (including payroll taxes), and stock-based compensation of $0.2 million. The increase in expenses for the Platform Operations business was primarily driven by an increases in professional fees (primarily, consulting, legal, and accounting, including merger related support) of $0.8 million, higher personnel costs (including stock-based compensation) of $0.2 million due to increased headcount, and a $3.3 million charge ($2.7 million of it noncash) incurred during the second quarter of 2026 to modify and settle outstanding warrants issued to Ryvyl investors prior to the merger.
Other (expense) income, net
Other expense, net, increased $1.1 million or 226.9%, to $0.6 million for the three months ended June 30, 2026, from other income, net of $0.5 million for the three months ended June 30, 2025. The increase was driven by $0.2 million of other expense related to the change in the fair value associated with the Company’s March 2026 Convertible Note and Warrants, $0.2 million of other expense related to the change in the fair value of crypto assets, and $0.5 million gain on the sale of short-term investments recognized in the three months ended June 30, 2025, with no similar activity in the three months ended June 30, 2026.
RTB Digital, Inc.
Six Months Ended June 30, 2026 (Unaudited) Compared to Six Months Ended June 30, 2025 (Unaudited):
(In thousands, except for percentages)
Revenue
Consolidated revenue increased $1.9 million, or 199.4%, to $2.9 million for the six months ended June 30, 2026, from $1.0 million for the six months ended June 30, 2025. The increase in consolidated revenue was driven by an increase of $1.7 million in Fintech Operations and an increase of $0.2 million in Platform Operations. The Fintech Operations segment is new, which the Company acquired effective May 12, 2026, in connection with its merger with Ryvyl Inc. The increase in Platform Operations revenue was primarily driven by increases in programmatic ads and syndication revenue.
Cost of Revenue
Consolidated cost of revenue increased $1.3 million, or 231.4%, to $1.8 million for the six months ended June 30, 2026, from $0.6 million for the six months ended June 30, 2025. The increase in consolidated cost of revenue was driven by an increase of $1.0 million in Fintech Operations and a $0.3 million increase in Platform Operations. The increase in cost of revenue for Fintech Operations is consistent with the change in revenue noted above and the gross margin profile expected for this business segment. The increase in cost of revenue for Platform Operations was primarily driven by an increase in the revenue guarantee to a key programmatic ads partner and an increase in content personnel costs as the Company continues to build out its platform and operations for this business segment, in line with its strategic objectives.
Operating Expenses
Consolidated operating expenses increased $12.1 million, or 756.3%, to $13.6 million for the six months ended June 30, 2026, from $1.6 million for the six months ended June 30, 2025. The increase was primarily driven by the following:
Research and development – Increased $0.2 million due higher amortization related to acquired intangible assets and capitalized software development costs, primarily related to Platform Operations.
Selling and marketing – Increased $2.9 million, primarily driven by an increase of $2.2 million due to a significant increase in sports partners with over 150 reporters and team publishers having joined the Company in 2026, higher marketing expenses of $0.2 million to expand and refresh the Company’s brand, and higher sales headcount and commissions of $0.2 million. Additionally, approximately $0.2 million of the increase relates to selling and marketing expenses for the Fintech Operations segment, acquired by the Company during the second quarter of 2026, as noted above.
General and administrative – Increased $8.9 million, driven by $2.6 million of expenses related to the Fintech Operations business, inclusive of a $1.2 million advisory fee paid in connection with the closing of the merger, and a $6.6 million increase in expenses for the Platform Operations business. The Fintech Operations business is new in Q2 2026, as noted above, and the expenses incurred during Q2 2026 primarily related to professional fees of $1.8 million (primarily, merger closing advisory fee, and merger related legal and accounting costs), personnel costs of $0.3 million (including payroll taxes), and stock-based compensation of $0.2 million. The increase in expenses for the Platform Operations business was primarily driven by an increases in professional fees (primarily, consulting, legal, and accounting, including merger related support) of $2.3 million, higher personnel costs (including stock-based compensation) of $0.3 million due to increased headcount, an increase in events and travel of $0.3 million, and a $3.3 million charge ($2.7 million of it noncash) incurred during the second quarter of 2026 to modify and settle outstanding warrants issued to Ryvyl investors prior to the merger.
Other (expense) income, net
Other expense, net, increased $2.2 million or 470.9%, to $1.8 million for the six months ended June 30, 2026, from other income, net of $0.5 million for the six months ended June 30, 2025. The increase was driven by $0.4 million loss on the sale of crypto assets, $0.4 million of other expense related to the change in the fair value associated with the Company’s March 2026 Convertible Note and Warrants, $1.0 million of other expense related to the change in the fair value of crypto assets, and $0.5 million gain on the sale of short-term investments recognized in the six months ended June 30, 2025, with no corresponding activity in the six months ended June 30, 2026.
TheAs of June 30, 2026, the Company’s consolidated
working capital
at March 31, 2026 was $0.3approximately $4.1 million, which included $5.5 millioncash of $0.5 million, restricted cash of $0.3 million, and $0.3 millionUSDC of restricted cash.$0.1
million. Historically, the Company
has primarily financed its operations with proceeds from cash from operations, the salessale of equity securities,
and proceeds from itsconvertible $100debt. million
2021The Convertible Note. OurCompany’s material liquidity needs principally relate to working capital requirements.
Additionally, as of June 30, 2026, the Company also held 35.37 bitcoins for investment but also, from time to time, for use in operational purposes, which had a fair value of approximately $2.1 million. See Note 2, Summary of Significant Accounting Policies, for additional information.
We believe that our existing cash and cash equivalents and other sources of liquidity available to us will be sufficient to meet our working capital needs for at least the next 12 months. From time to time, we have raised capital by issuing equity or debt securities such as our September 2025 Convertible Notes and 2026 Convertible Note and Warrants, and we may do so in the future. However, such funding may not be available on terms acceptable to us or at all.
As further described in the subsection titled
“Going Concern” above, since the first quarter of 2024, the Company’s liquidity has been adversely impacted by
the loss of revenues stemming from the discontinuation of its QuickCard product. As also noted therein, through the first quarter of 2025,
the Company had relied on the repatriation of profits from its European subsidiaries to cover some of its critical operating expenses,
which it is no longer able to do following the sale of its wholly owned subsidiary, Ryvyl EU, effective June 1, 2025. Additionally, the
Company’s remaining businesses continue to generate operating losses, which are expected to continue for the foreseeable future.
As a result, management has determined that its cash balance as of March 31, 2026, will not be sufficient to fund the Company’s
operations and capital needs for the next 12 months from the date of this Report. The Company’s ability to successfully address
its liquidity shortfall is contingent upon the successful execution of management’s intended remediation plan over the next twelve
months, which include, but are not limited to the following:
Management
has assessed that its intended plan described above, if successfully implemented, is appropriate and sufficient to address its liquidity
shortfall, and to provide funds to cover operations for the next 12 months from the date of the issuance of this Report. However, there
can be no assurance that we will be successful in implementing our plan, that our projections of our future capital needs will prove
accurate, or that any additional funding will be available on a timely manner, on favorable terms, or be sufficient to continue our operations.
The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue
as a going concern.
Operating Activities
For the six months ended June 30, 2026, net cash used in operation activities was $5.2 million, comprised of a net loss of $14.4 million, adjusted for non-cash expenses of $3.4 million, consisting primarily of depreciation and amortization, stock-based compensation, changes in the fair value of debt instruments, stock issued for services, and unrealized losses on crypto assets. Additionally, the net change in operating assets and liabilities was positive $5.9 million, primarily related to changes in accounts receivable of $0.3 million; accounts payable and accrued liabilities of $5.6 million, which were driven by settlement timing.
For the six months ended June 30, 2025, net cash used in operation activities was $0.6 million, comprised of a net loss of $0.7 million, adjusted for non-cash income of $0.2 million, consisting primarily of depreciation and amortization of 0.1 million; stock-based compensation of $0.2 million; partially offset by a gain on the sale of short-term investments of $0.5 million. Additionally, the net change in operating assets and liabilities was positive $0.3 million, primarily related to the change in accounts payable of $0.4 million
Investing Activities
For the six months ended June 30, 2026, net cash provided by investing activities was $3.4 million, comprised primarily of proceeds from the sale of crypto assets of $10.2 million and cash acquired in connection with the Ryvyl merger of $4.7 million, which were partially offset by cash outflows of $0.5 million for the cash portion of a $1.8 million note receivable issued during the second quarter of 2026, a nonrefundable deposit on a digital media investment of $10.0 million, purchases of USDC of $0.5 million, and capitalized software development costs of $0.7 million.
For the six months ended June 30, 2025, net cash provided by investing activities was $1.4 million, comprised primarily of proceeds from the issuance of SAFE notes payable of $1.1 million and the sale of short-term investments of $0.5 million, which were partially offset by capitalized software development costs of $0.2 million.
Financing Activities
For the six months ended June 30, 2026, net cash provided by financing activities was $2.0 million, comprised primarily of $2.0 million proceeds from the issuance of a $2.0 convertible note during the first quarter of 2026. For the six months ended June 30, 2025, net cash provided by (used in) financing activities was zero.
Operating
Activities – Net cash used in operating activities for the three months ended March 31, 2026, and 2025, was $2.1 million and
$15.6 million, respectively. The net cash used by operating activities was primarily driven by the timing of settlement of assets and
liabilities.
Investing
Activities – Net cash used in investing activities for the three months ended March 31, 2026, was $0.0 million, while cash
used in investing activities for the three months ended March 31, 2025, was $1.3 million. The net cash used in investing activities for
the three months ended March 31, 2025, primarily relates to capitalized software development costs.
Financing
Activities – Net cash provided by financing activities during the three months ended March 31, 2026, was $0.4 million and was
primarily driven by proceeds from common warrant exercises during the quarter. Net cash provided by financing activities for the three
months ended March 31, 2025, was primarily driven by proceeds from a short-term note payable obtained by the Company in connection with
the January 2025 SPA, partially offset by the partial repayment of the convertible note that was fully retired during the second quarter
of 2025.
WeThe preparation of the Company’s condensed
prepare our consolidated financial statements in accordanceconformity with accounting principles generally accepted in the U.S. (“GAAP”).
GAAP requires usmanagement to make estimates and assumptions that affect the
reported amounts of assetsassets, liabilities, revenue, and liabilitiesexpenses, andas well as related disclosure of contingent
assets and liabilitiesliabilities. atActual
results could differ from the dateCompany’s estimates. To the extent that there are material differences between these estimates and
actual results, the Company’s financial condition or operating results will be materially affected. The Company bases its estimates
on current and past experience, to the extent that historical experience is predictive of the consolidated financial statements and the reported amounts of revenues and expenses during
the reporting period. We base our estimates on historical experience, anticipated future trends,performance and other assumptions wethat
the believeCompany to
bebelieves are reasonable under the circumstances. BecauseThe Company evaluates these estimates requireon significantan judgment,ongoing our actual results may differ materially
from our estimates.basis.
Estimates, judgments, and assumptions in these condensed consolidated financial statements include, but are not limited to, those related to the capitalization of platform development costs and associated useful lives, acquired intangible assets and associated useful lives, goodwill, valuation allowances for deferred tax assets, valuation of stock options and warrants, credit losses, and assumptions used to calculate certain contingent liabilities.
RTB insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 2 Form 4 filings (1 insider, 2 trade dates, 30,000 shares, about $288.4K) and open-market sales in 0 filings. Net open-market shares: 30,000 (purchases minus sales); net value about $288.4K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-21 | Dorsett Jason Christopher |
Open-market purchase | 11,000 | $8.32 | $91.5K |
| 2026-09-17 | Dorsett Jason Christopher |
Open-market purchase | 19,000 | $10.36 | $196.8K |
| 2026-06-04 | Madhavji Alykhan |
Option exercise | 145,881 | $1.89 | $275.7K |
| 2026-05-21 | Fletcher Steven C. |
Other | 690 | — | — |
Well-known investors holding RTB (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Millennium Management (Israel Englander) | 2026-06-30 | 41,939 | $632.4K | 0.0% | New position |