10-Q: RYVYL Navigates Q3 Losses Amid Strategic Shift & Merger Plans

RYVYL Inc. reported a reduced net loss in Q3 2025, driven by operational cost cuts and the sale of its European segment, while facing ongoing liquidity challenges and pursuing a transformative merger with RTB Digital.

Summary

• Net loss for Q3 2025 significantly improved to $1.95 million, down from $5.17 million in Q3 2024.
• Nine-month net loss for 2025 was $13.12 million, an improvement from $19.97 million in the same period of 2024.
• Revenue for Q3 2025 was relatively flat at $2.79 million, a slight decrease of 1.6% year-over-year.
• Nine-month revenue for 2025 decreased by 46.1% to $8.34 million, primarily due to the discontinuation of the QuickCard product.
• Gross profit for Q3 2025 increased by 30.6% to $1.39 million, while nine-month gross profit decreased by 37.3% to $3.98 million.
• Operating expenses decreased by 32.3% in Q3 2025 to $3.20 million and by 49.7% for the nine months to $13.48 million, driven by reductions in R&D, payroll, and professional fees.
• The company sold its European subsidiary, Ryvyl EU, effective June 1, 2025, for $16.5 million, resulting in a $6.5 million loss on sale.
• A public offering in July 2025 raised approximately $5.3 million in net proceeds.
• The company regained compliance with Nasdaq's Stockholders Equity Rule in October 2025 following a $5 million private placement of Series C preferred stock to RTB Digital, Inc.
• A merger agreement with RTB Digital, Inc. was signed on September 28, 2025, which will result in RTB becoming a wholly-owned subsidiary and the combined company being renamed RTB Digital, Inc.

Sentiment

Score: 3

Explanation: While the company showed improved net loss in Q3 and took steps to address Nasdaq compliance and liquidity through capital raises and a merger, the explicit 'going concern' warning, significant revenue decline over nine months, and substantial shareholder dilution from the proposed merger indicate a highly precarious financial position and significant operational challenges. The positive aspects are largely reactive measures to severe underlying issues.

Positives

• Net loss significantly improved in Q3 2025, decreasing by 62.3% to $1.95 million compared to $5.17 million in Q3 2024.
• Net loss for the nine months ended September 30, 2025, improved by 34.3% to $13.12 million from $19.97 million in the prior year.
• Gross profit increased by 30.6% in Q3 2025 to $1.39 million, despite a slight revenue decrease, indicating improved cost of revenue management.
• Operating expenses decreased substantially by 32.3% in Q3 2025 and 49.7% for the nine months, reflecting successful cost control measures.
• The $100 million 8% senior convertible note was fully retired during Q2 2025, reducing long-term debt.
• Successfully raised approximately $5.3 million in net proceeds from a public offering in July 2025.
• Regained compliance with Nasdaq's Stockholders Equity Rule on October 10, 2025, following a $5 million private placement.
• Resolved the SEC investigation without a monetary penalty, consenting to a judgment enjoining future violations of federal securities laws.
• Reached confidential settlement in the Sky Financial arbitration/lawsuit, leading to dismissal of the case.
• Reached an agreement in principle to settle the Cullen class action lawsuit for $300,000 cash, 700,000 common shares, and a put option ensuring a combined value of at least $1,000,000. Preliminary approval granted August 20, 2025.
• Reached an agreement in principle to settle the shareholder derivative lawsuits (Hertel, Gazaway, Brown).

Negatives

• The company faces substantial doubt about its ability to continue as a going concern due to insufficient cash to fund operations for the next 12 months.
• Total current assets decreased significantly from $95.38 million at December 31, 2024, to $19.78 million at September 30, 2025.
• Cash and restricted cash decreased from $92.03 million at the beginning of the nine-month period to $17.74 million at September 30, 2025.
• Working capital was negative $(4.2) million at September 30, 2025.
• Nine-month revenue decreased substantially by 46.1% to $8.34 million, primarily due to the discontinuation of the QuickCard product and the sale of Ryvyl EU.
• The sale of Ryvyl EU resulted in a $6.5 million loss on sale.
• Operating cash flow shifted from a positive $19.12 million in the nine months ended September 30, 2024, to net cash used of $(6.20) million in the same period of 2025.
• Significant increase in cash used in investing activities to $(76.35) million for the nine months ended September 30, 2025, primarily due to cash transferred in connection with the Ryvyl EU sale.
• Accumulated deficit increased to $(192.52) million at September 30, 2025, from $(179.41) million at December 31, 2024.
• Recorded a net impairment charge of $758,000 for intangible assets for the nine months ended September 30, 2025, which included a $1.1 million charge in Q2 2025 related to European NEMS Core software and a $0.1 million charge on a right-of-use asset in Q3 2025, partially offset by other adjustments.
• The company is not in compliance with Nasdaq's Minimum Bid Price Requirement ($1.00 per share) as of June 12, 2025, and has until December 9, 2025, to regain compliance.
• The proposed merger with RTB Digital, Inc. will significantly dilute existing RYVYL stockholders, who are expected to own approximately 15.15% of the combined company.
• Several ongoing legal proceedings, including sex discrimination and breach of contract lawsuits, with unspecified potential damages.

Risks

• Substantial doubt about the ability to continue as a going concern due to insufficient liquidity.
• Inability to comply with Nasdaq's Minimum Bid Price Requirement, potentially leading to delisting.
• The Series C Preferred Stock has a liquidation preference over common stock, potentially reducing common stock value in a liquidation event.
• Failure to realize anticipated benefits from the proposed merger with RTB Digital, Inc.
• Potential loss of key employees and disruption of business operations during the integration process with RTB.
• Diversion of management attention and resources due to the merger.
• Market price of common stock may decline as a result of the proposed merger or if anticipated benefits are not achieved.
• Existing stockholders' ownership position will be significantly diluted (expected to own ~15.15% post-merger).
• Changes to the board of directors and management team post-merger may alter business strategy.
• Challenges in managing the increased scale and complexity of the combined company's operations.
• Incurrence of substantial expenses related to the merger even if it is not completed.
• Potential negative reactions from financial markets, stockholders, customers, and employees if the merger is not completed.
• Uncertainty of litigation outcomes and potential material losses from ongoing legal proceedings.
• Dependence on proprietary technology which may not be adequately protected.
• Ability to manage expansion, growth, and operating expenses domestically.
• Ability to comply with new regulations and compliance requirements.
• Ability to compete and succeed in an evolving industry.
• Ability to respond and adapt to rapid changes in technology.
• Ability to maintain operations in the event financial condition is negatively impacted by litigation or governmental actions.

Future Outlook

The company's ability to continue as a going concern is contingent upon successfully executing its plan to raise additional capital through equity and debt financings, exploring strategic initiatives including M&A opportunities like the proposed merger with RTB Digital, Inc., accelerating business development efforts in diversified verticals, and implementing further cost control measures. Management believes this plan, if successful, will address liquidity shortfalls for the next 12 months, but there is no assurance of success or timely funding availability. The proposed merger with RTB Digital, Inc. is expected to make RTB's business the primary focus of the combined entity, with RYVYL continuing its current operations.

Management Comments

• 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.
• Mr. Nisans departure from his positions was not the result of any disagreement with the Company related to its operations, policies or practices.

Industry Context

RYVYL operates in the evolving global fintech industry, which demands integrated platforms supporting diverse offerings. The company's transition from its first-generation QuickCard product, which faced regulatory challenges in high-risk verticals like cannabis, to its second-generation NEMS Core platform, reflects an adaptation to dynamic market demands. The sale of its European segment and focus on North American treasury management, BIN sponsorship, ACH, and wire transfers indicates a strategic pivot towards less volatile, potentially more compliant, and scalable services, leveraging third-party sponsorship arrangements. The proposed merger with RTB Digital, Inc. suggests a move towards consolidation and diversification to enhance competitive advantage and address liquidity concerns within the broader fintech landscape.

Management Changes

Corporate Governance

Legal Proceedings

• Jacqueline Dollar (former CMO) filed a complaint alleging sex discrimination, retaliation, and intentional infliction of emotional distress, seeking unspecified damages. The company intends to vigorously defend.
• The company consented to an SEC judgment permanently enjoining it from violating certain federal securities laws, resolving the investigation without a monetary penalty.
• A putative class action lawsuit (Cullen v. RYVYL Inc.) alleging securities law violations is in principle settled for $300,000 cash, 700,000 common shares, and a put option for a total value of at least $1,000,000. Preliminary approval has been granted.
• Shareholder derivative complaints (Hertel, Gazaway, Brown) alleging failure to implement adequate internal controls and breach of fiduciary duties have reached an agreement in principle for settlement.
• A breach of contract arbitration/lawsuit against Sky Financial was resolved through a confidential settlement agreement, and the case was dismissed.
• J. Drew Byelick (former CFO) filed a lawsuit alleging breach of contract, fraudulent inducement, and misrepresentation. The company intends to vigorously defend.
• Kapcharge USA Inc. commenced a lawsuit alleging conversion, money had and received, breach of contract, and unfair competition. The company intends to vigorously defend.
• Rachael Mora filed a complaint alleging sex discrimination, sexual favoritism, retaliation, and negligent supervision/retention, seeking unspecified damages. The company intends to vigorously defend.

Related Party Transactions

• Fredi Nisan (former CEO) entered into an Advisory Services Agreement, effective November 1, 2025, through April 30, 2026, for a cash consulting fee of $10,000 per month.
• Fredi Nisan also received a severance payment of $350,000 (over 12 months) and immediate vesting of unvested equity grants upon his retirement as CEO, effective October 31, 2025.
• Ben Errez entered into an Advisory Services Agreement, effective September 1, 2025, through February 28, 2026, for a cash consulting fee of $10,000 per month.
• Two brothers of Fredi Nisan, Dan and Liron Nusinovich, were employed through August 2025, receiving approximately $260,000 and $131,000 per year, respectively.
• The company and RTB Digital, Inc. (the merger partner) entered into a Securities Purchase Agreement on October 6, 2025, where RTB purchased 50,000 shares of Series C convertible preferred stock for up to $5 million.
• The company and RTB Digital, Inc. also entered into an Executive Services Agreement on November 10, 2025, for RYVYL to provide accounting operations oversight to RTB for hourly fees.

Stakeholder Impact

• Shareholders face significant dilution from the proposed merger with RTB Digital, Inc., where existing RYVYL shareholders are expected to own only approximately 15.15% of the combined entity.
• Shareholders are exposed to the risk of delisting from Nasdaq due to non-compliance with the Minimum Bid Price Requirement.
• Employees may experience changes in management and corporate strategy following the merger with RTB Digital, Inc.
• Customers may experience changes in service offerings and platform focus as the company transitions to NEMS Core and integrates with RTB Digital, Inc.
• Creditors benefit from the retirement of the $100 million convertible note and recent capital raises, but are exposed to the ongoing 'going concern' risk.
• The Series C Preferred Stockholders (RTB Digital, Inc.) will have a liquidation preference over common stockholders, impacting common shareholder recovery in a liquidation event.

Next Steps

• Regain compliance with Nasdaq's Minimum Bid Price Requirement by December 9, 2025.
• Seek final court approval for the Cullen Class Action Settlement (hearing scheduled for December 19, 2025).
• Seek preliminary court approval for the shareholder derivative lawsuits settlement (hearing scheduled for November 14, 2025).
• Complete the merger with RTB Digital, Inc., subject to stockholder approval and Nasdaq listing.
• Continue accelerated business development efforts to drive volumes in diversified business verticals.
• Continue implementation of cost control measures and further right-sizing the organization.
• Continue actively engaging in discussions for additional funding opportunities.
• Provide executive oversight and project management for RTB's accounting operations under the Executive Services Agreement.

Key Dates

Recommendation

The company explicitly states "substantial doubt about the Companys ability to continue as a going concern," which is a critical red flag for investors. While there are efforts to raise capital and merge, the significant revenue decline, negative operating cash flow, and substantial dilution for existing shareholders (expected to own only ~15% post-merger) indicate a highly distressed situation. The ongoing non-compliance with Nasdaq's minimum bid price requirement further highlights the stock's poor performance and delisting risk. The proposed merger, while a potential lifeline, comes at a severe cost to current equity holders and introduces new integration risks. Given the severe financial distress, high dilution, and operational uncertainties, a strong sell recommendation is warranted.

Keywords

Fintech, Payment Processing, SEC Filing, 10-Q, RYVYL Inc., RVYL, Financial Technology, Nasdaq Listing, Merger, RTB Digital, Going Concern, Liquidity, Capital Raise, Corporate Governance, Risk Management, Financial Results, Quarterly Report, NEMS Core, QuickCard, Shareholder Dilution, Legal Proceedings