DEFR14A: RYVYL Proposes Reverse Split, Boosts Shares Amid Nasdaq Listing Pressure

RYVYL Inc. schedules its 2025 Annual Meeting to address Nasdaq minimum bid price non-compliance with a proposed reverse stock split and seeks to increase authorized shares for future financing and strategic growth.

Summary

• RYVYL Inc. will conduct its 2025 Annual Meeting of Stockholders virtually on October 30, 2025, at 4:00 p.m. ET.
• Stockholders are asked to vote on the election of four directors, the ratification of Simon & Edward, LLP as the independent registered public accounting firm for fiscal year 2025, and two amendments to the Company's Articles of Incorporation.
• One proposed amendment is for a reverse stock split at a ratio between one-for-five and one-for-fifteen, at the Board's discretion, primarily to regain compliance with Nasdaq's $1.00 minimum bid price requirement.
• The Company received a Nasdaq notice on June 12, 2025, regarding non-compliance, with a deadline of December 9, 2025, to regain compliance.
• The second proposed amendment seeks to increase the number of authorized common stock shares from 100,000,000 to 500,000,000 to provide flexibility for future equity financings, potential acquisitions of digital assets, and equity incentive plans.
• The Board of Directors unanimously recommends a vote FOR all proposals.
• Significant management and board changes have occurred, including the resignations of Ben Errez, Min Wei, Genevieve Baer, Ezra Laniado, and David Montoya, and the appointments of Brett Moyer, Gene Jones, Tod Browndorf, and George Oliva as directors.
• The Audit Committee is currently non-compliant with Nasdaq's independence requirements, having only two members, and the Company plans to add a third independent director by February 27, 2026.

Sentiment

Score: 3

Explanation: The sentiment is largely negative due to significant net losses, declining TSR, Nasdaq non-compliance, and governance issues. While the company is taking steps to address listing requirements and plans for future growth, these are reactive measures to existing problems rather than indicators of strong performance. The potential for further dilution from increased authorized shares and the risks associated with the reverse split contribute to a cautious outlook.

Positives

• The Board of Directors is proactively addressing Nasdaq listing compliance issues by proposing a reverse stock split.
• The Company is planning for future growth and strategic initiatives, including exploring opportunities for digital asset acquisitions and a Crypto Treasury Allocation policy.
• New directors (Brett Moyer, Gene Jones, Tod Browndorf, George Oliva) have been appointed, bringing strong financial backgrounds and relevant expertise to the Board.
• The Company is implementing measures, such as power of attorney for the legal team and equity software, to improve timely Section 16(a) report filings after previous delinquencies.

Negatives

• The Company is currently non-compliant with Nasdaq's $1.00 minimum bid price requirement, with its closing bid price at $0.29 on September 10, 2025.
• The Audit Committee is not in compliance with Nasdaq's independence requirements, lacking a third independent director, and faces a deadline of February 27, 2026, to regain compliance.
• The Company reported significant net losses of $(26,825,337) in 2024 and $(53,101,287) in 2023.
• Total Shareholder Return (TSR) was substantially negative, declining by (9.6%) for 2023-2024 and (68.8%) for 2022-2023.
• Several officers and directors filed late Section 16(a) reports during fiscal year 2024.
• The Company wrote off the entire $16,000,000 purchase price for merchant accounts from Sky Financial & Intelligence, LLC in 2022 due to non-delivery of acquired assets, indicating a failed acquisition.

Risks

• Failure to cure Nasdaq minimum bid price non-compliance could result in the delisting of common stock from Nasdaq.
• There is no assurance that a reverse stock split will increase the market price of common stock proportionately or result in a permanent increase.
• If the market price does not increase proportionately after a reverse split, the Company's market capitalization could be significantly reduced.
• A reverse stock split could increase the number of stockholders holding 'odd lots' (less than 100 shares), potentially increasing transaction costs for these stockholders.
• Liquidity could be adversely affected by the reduced number of shares outstanding after a reverse stock split.
• A provision in the July Warrants could lead to a significant reduction in the adjusted exercise price after a reverse split if the stock price declines, potentially reducing proceeds from warrant exercises.
• Failure to secure a qualified candidate to add to the Audit Committee by February 27, 2026, could result in delisting from Nasdaq.
• A lack of sufficient unissued and unreserved authorized shares could limit business development, financing alternatives, harm stockholder value, and adversely impact the ability to attract and retain highly qualified management.
• Future issuance of additional authorized shares could dilute existing stockholders' earnings per share, book value per share, and voting power.
• The authorized but unissued shares, while not currently intended for such use, could potentially be used by the Board to deter future attempts to gain control of the Company.

Future Outlook

The Company is actively pursuing an 'Enhanced Plan' to enhance its existing business plan by exploring opportunities for the acquisition of digital assets and the adoption of a Crypto Treasury Allocation policy. It anticipates needing to raise cash through future equity financings to fund operations, potential acquisitions related to the Enhanced Plan, and to support future equity incentive awards. The Company also intends to cure its Audit Committee non-compliance by adding a third independent director by February 27, 2026.

Management Comments

• "YOUR VOTE IS IMPORTANT TO US. Whether you own a few shares or many, and whether or not you plan to attend the Annual Meeting, we urge you to promptly submit your vote via the Internet, telephone, or mail." Fredi Nisan, Director and Chief Executive Officer.
• "On behalf of the board of directors and management, I would like to express our appreciation for your continued support." Fredi Nisan, Director and Chief Executive Officer.
• "The Board of Directors unanimously recommends a vote FOR the approval of each of the Director Nominees in Proposal 1, and a vote FOR each of Proposal 2, Proposal 3, and Proposal 4."

Industry Context

The Company's pursuit of digital asset acquisitions and a Crypto Treasury Allocation policy indicates a strategic pivot or expansion into the evolving blockchain and cryptocurrency sectors. This aligns with a broader trend of traditional financial companies exploring or integrating digital assets, driven by technological innovation and increasing institutional interest in the crypto economy. The need for a reverse stock split to maintain Nasdaq listing, however, suggests the Company is facing challenges in its current market performance, which could be a reflection of competitive pressures or operational issues within the payments industry, or a general downturn affecting smaller cap companies.

Comparison to Industry Standards

• The Company's negative Total Shareholder Return (TSR) of (9.6%) for 2023-2024 and (68.8%) for 2022-2023 indicates significant underperformance relative to general industry expectations for growth-oriented companies.
• The persistent net losses of $(26.8) million in 2024 and $(53.1) million in 2023 are below profitability standards for established companies and raise concerns for growth-stage firms without a clear path to positive earnings.
• The Nasdaq minimum bid price non-compliance (closing bid price of $0.29 on September 10, 2025, below $1.00) is a critical indicator of underperformance against exchange listing standards, which can severely impact investor confidence and access to capital markets.
• The Audit Committee's non-compliance with Nasdaq's independence requirements also deviates from best corporate governance practices.

Management Changes

Corporate Governance

Legal Proceedings

• The Company entered into a settlement agreement on September 26, 2025, relating to a previously failed asset purchase agreement with Sky Financial & Intelligence, LLC, where the Company had written off a $16,000,000 purchase price due to non-delivery of acquired assets.

Related Party Transactions

• The Company repurchased an aggregate of 200,000 shares of common stock from PrivCo (an entity controlled by Messrs. Errez and Nisan) in two transactions for a total of $6,410,000 ($5,590,000 for 100,000 shares at $55.90/share and $820,000 for 100,000 shares at $8.20/share).
• Dan Nusinovich, brother of CEO Fredi Nisan, was employed as VP of Development with an annual salary of approximately $260,000. His employment was terminated on August 31, 2025.
• Liron Nusinovich, brother of CEO Fredi Nisan, was employed as Junior Product Owner with an annual salary of approximately $131,000. His employment was terminated on August 18, 2025.
• The Company entered into an asset purchase agreement with Sky Financial & Intelligence, LLC (owned by Kenneth Haller, a former employee) for $16,000,000 cash and 500,000 restricted common shares. The entire purchase price was written off in 2022 due to non-delivery of assets, and a settlement agreement was reached on September 26, 2025.

Stakeholder Impact

• **Shareholders**: Face potential dilution from the proposed increase in authorized shares and the possibility of a reverse stock split, which may not proportionally increase stock price. Existing shareholders will have their share count reduced by the reverse split ratio. The Nasdaq non-compliance and potential delisting pose a significant risk to investment value and liquidity.
• **Employees**: Executive compensation details are provided, and the 2023 Equity Incentive Plan allows for equity awards, which can incentivize employees. However, the termination of two related-party employees (Nusinovich brothers) indicates workforce adjustments.
• **Customers/Suppliers**: No direct impact mentioned, but the Company's financial health and strategic shift towards digital assets could indirectly affect its ability to serve customers or maintain supplier relationships.
• **Creditors**: The Company's net losses and need for future financing may be a concern for creditors, though no specific impact is detailed in the filing.

Next Steps

• Hold the 2025 Annual Meeting of Stockholders virtually on October 30, 2025, to vote on proposed amendments and director elections.
• If approved, the Board will determine the exact ratio and timing for the reverse stock split and file the amendment with the Secretary of State of Nevada.
• The Company must regain compliance with Nasdaq's $1.00 minimum bid price requirement by December 9, 2025.
• The Company intends to add a third independent director to its Audit Committee by February 27, 2026, to cure Nasdaq non-compliance.
• Management will continue to pursue the 'Enhanced Plan,' exploring digital asset acquisitions and a Crypto Treasury Allocation policy.
• The Company will continue to implement power of attorney for the in-house legal team and equity software to ensure timely Section 16(a) report filings.

Key Dates

Recommendation

The filing reveals significant red flags that warrant a 'sell' recommendation. The Company is facing Nasdaq delisting due to a sub-$1.00 share price, necessitating a reverse stock split which often fails to provide sustained price improvement and can signal underlying weakness. Persistent substantial net losses in both 2023 and 2024, coupled with severely negative Total Shareholder Returns, indicate a deteriorating financial performance. Governance issues, such as the Audit Committee's non-compliance with Nasdaq rules and a history of late Section 16(a) filings by management, raise concerns about internal controls and transparency. Furthermore, the write-off of a $16 million asset purchase due to non-delivery highlights poor due diligence or execution. While the Company mentions plans for digital asset acquisitions and a crypto treasury, these are forward-looking statements without concrete details or a proven track record of successful execution in this new area, and the proposed increase in authorized shares signals potential significant future dilution. Given the current financial distress, governance weaknesses, and operational missteps, the risks outweigh any speculative future upside.

Keywords

RYVYL Inc., RVYL, SEC Filing, Proxy Statement, Annual Meeting, Reverse Stock Split, Nasdaq Listing, Authorized Shares, Equity Financing, Corporate Governance, Director Election, Audit Committee, Financial Performance, Digital Assets, Crypto Treasury, Executive Compensation, Related Party Transactions