DEF: RYVYL Reschedules Annual Meeting, Proposes Reverse Split

RYVYL Inc. has rescheduled its 2025 Annual Meeting to December 15, 2025, seeking stockholder approval for a reverse stock split, an increase in authorized shares, and director elections.

Summary

• The 2025 Annual Meeting of Stockholders was rescheduled from October 30, 2025, to December 15, 2025, to allow new stockholders to participate and to modify Proposal 3.
• Stockholders will vote on the election of four directors, the ratification of Simon & Edward, LLP as the independent auditor for fiscal year 2025, and two key amendments to the Amended and Restated Articles of Incorporation.
• The proposed amendments include a reverse stock split at a ratio of between one-for-twenty and one-for-fifty, to be determined by the Board of Directors no later than June 30, 2026.
• The reverse stock split aims to position the common stock of the Surviving Corporation (post-Merger with RTB Digital, Inc.) within a typical trading price range for newly public companies and to regain compliance with Nasdaq's $1.00 minimum bid price requirement.
• The company received a Nasdaq notice on June 12, 2025, for non-compliance with the $1.00 minimum bid price rule, with a compliance period until December 9, 2025.
• The second proposed amendment is to increase the number of authorized shares of Common Stock from 100,000,000 to 500,000,000 shares.
• This increase is sought to provide flexibility for future equity financings, potential acquisitions, and equity incentive plans, especially in connection with the pending merger with RTB Digital, Inc.
• The Board of Directors unanimously recommends a vote FOR all director nominees and FOR each of Proposal 2 (auditor ratification), Proposal 3 (reverse stock split), and Proposal 4 (increase in authorized shares).
• Former executives Ben Errez and Fredi Nisan resigned in August and October 2025, respectively, and subsequently entered into severance and advisory services agreements with the company.
• The company settled claims against Sky Financial & Intelligence LLC and Kenneth Haller on September 26, 2025, dismissing the case with prejudice.

Sentiment

Score: 3

Explanation: The company is at a critical juncture, addressing significant challenges including Nasdaq listing compliance, substantial net losses, and executive turnover. The proposed reverse stock split and increase in authorized shares are necessary steps to maintain listing and enable future strategic growth, particularly in light of the pending merger with RTB Digital, Inc. While these actions are crucial for the company's survival and future potential, the historical financial performance and the inherent risks associated with these proposals (e.g., dilution, uncertain market response to reverse split) suggest a high degree of uncertainty. The settlement of past legal issues is a positive, but the overall situation remains precarious.

Positives

• The Board of Directors unanimously recommends approval of all proposals, indicating internal alignment on strategic direction.
• Rescheduling the annual meeting allows for broader stockholder participation and addresses a material change in Proposal 3, demonstrating responsiveness to governance.
• The proposed reverse stock split aims to maintain Nasdaq listing, which is crucial for liquidity and investor confidence, and to position the stock price favorably post-merger with RTB Digital, Inc.
• Increasing authorized shares provides essential flexibility for future capital raises, potential acquisitions, and equity incentive plans, supporting the company's growth strategy and the pending merger.
• The confidential settlement of legal proceedings with Sky Financial & Intelligence LLC and Kenneth Haller resolves a significant past dispute and removes associated litigation risk.
• New independent directors (Gene Jones, Tod Browndorf) and George Oliva (Interim CEO/CFO) bring strong financial and executive backgrounds to the Board, potentially enhancing oversight and strategic guidance.

Negatives

• The company is currently non-compliant with Nasdaq's minimum bid price requirement ($1.00 per share), risking delisting if compliance is not regained by December 9, 2025.
• The Audit Committee is not compliant with Nasdaq's composition requirements, with a deadline of February 27, 2026, to add a third independent director.
• Significant executive turnover occurred with the resignations of former Chairman/EVP Ben Errez and former CEO/Director Fredi Nisan in 2025.
• The company reported substantial net losses for the past three fiscal years: $(26.8) million in 2024, $(53.1) million in 2023, and $(49.2) million in 2022.
• Total Shareholder Return (TSR) has been significantly negative over the past three years, indicating poor stock performance: (68.8%) for 2023-2024, (9.6%) for 2022-2023, and (89.0%) for 2021-2022.
• The reverse stock split carries potential disadvantages, including an uncertain market price increase, increased transaction costs for stockholders holding odd lots, and potential adverse effects on liquidity.
• A provision in the July Warrants could result in a significant reduction in their adjusted exercise price if the common stock price decreases shortly after a reverse split, potentially leading to less capital for the company upon exercise.
• The proposed increase in authorized shares could lead to dilution of existing stockholder earnings per share, book value per share, and voting power if new shares are issued.
• Related party transactions involved significant share repurchases from an entity controlled by former executives and ongoing consulting fees to former executives, raising potential governance concerns.

Risks

• Failure to regain compliance with Nasdaq's $1.00 minimum bid price requirement by December 9, 2025, could result in the delisting of the common stock.
• The reverse stock split may not increase the market price of the common stock proportionately or sustain any increase, potentially reducing the company's market capitalization.
• The reverse stock split could increase transaction costs for stockholders who hold less than a round lot (100 shares).
• Liquidity of the common stock could be adversely affected by the reduced number of shares outstanding after a reverse split.
• A provision in the July Warrants could significantly reduce their adjusted exercise price if the common stock price decreases shortly after a reverse split, leading to less proceeds for the company upon exercise.
• Failure to cure Audit Committee non-compliance by adding a third independent director by February 27, 2026, could result in delisting from Nasdaq.
• The increase in authorized shares could dilute existing stockholder value and voting power if new shares are issued for financings or other corporate purposes.
• If the increase in authorized shares is not approved, the company's ability to raise cash through equity financings, pursue acquisitions, or provide future equity incentive opportunities may be severely limited, harming business development and talent retention.

Future Outlook

The company intends to position the common stock of the Surviving Corporation (post-Merger with RTB Digital, Inc.) within a typical trading price range for newly public companies and to maintain its Nasdaq listing by increasing the stock price above the $1.00 minimum bid requirement. The increase in authorized shares is crucial for future equity financings, potential acquisitions, and equity incentive plans to fund operations and growth, especially in connection with the pending merger. The company aims 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." (George Oliva, Director and Interim 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."
• "The Company decided to reschedule the 2025 Annual Meeting for December 15, 2025 in order to allow a significant number of new stockholders to participate in, and vote on the proposals to be voted on, at the 2025 Annual Meeting and in order to modify one of the proposals to be voted upon."
• "The intention of the Board in obtaining approval for the Reverse Split is to position the Surviving Corporations shares of common stock post-Merger within a per share trading price range typical for newly public companies in addition to increasing the stock price sufficiently above the $1.00 minimum bid price requirement for continued listing on the Nasdaq Capital Market, if necessary in the future."
• "The Board of Directors believes that current and prospective investors will view an investment in our Common Stock more favorably if our Common Stock remains listed on Nasdaq."
• "The Board of Directors believes this is good governance and standard for many companies at this stage of development." (Regarding authorized shares increase)

Industry Context

RYVYL operates in the payments industry, which is undergoing transformation. The company's efforts to maintain its Nasdaq listing through a reverse stock split and increase authorized shares are common strategies for companies facing minimum bid price deficiencies and seeking capital for growth, especially in the context of mergers or strategic shifts. The pending merger with RTB Digital, Inc. suggests a strategic move to enhance its position or offerings within the technology and finance sectors. The need for capital and the focus on equity incentive plans are typical for growth-oriented companies in competitive tech industries.

Management Changes

Corporate Governance

Legal Proceedings

• The company vigorously prosecuted claims against Sky Financial & Intelligence LLC and Kenneth Haller and vigorously defended against all claims asserted by them.
• On September 26, 2025, the parties entered into a confidential settlement agreement.
• On October 16, 2025, the company filed a Request for Dismissal with the San Diego Superior Court, dismissing the case with prejudice.

Related Party Transactions

• **PrivCo Share Repurchases:** The company repurchased an aggregate of 200,000 shares of Common Stock from PrivCo (an entity controlled by former executives Ben Errez and Fredi Nisan) in two separate transactions in 2022 for a total of $6,410,000.
• **Fredi Nisan Consulting Agreement:** Effective November 1, 2025, through April 30, 2026, Mr. Nisan (former CEO/Director) will provide advisory services for $10,000 per month, plus pre-approved travel expenses.
• **Ben Errez Consulting Agreement:** Effective September 1, 2025, through February 28, 2026, Mr. Errez (former Chairman/EVP/Director) will provide advisory services for $10,000 per month, plus pre-approved travel expenses.
• **Nusinovich Brothers Employment:** Dan Nusinovich (brother of Fredi Nisan) was Development and Testing Manager/VP of Development, paid approximately $260,000 per year, with employment terminated August 31, 2025. Liron Nusinovich (brother of Fredi Nisan) was Risk Analyst/Junior Product Owner, paid approximately $131,000 per year, with employment terminated August 18, 2025.
• **Sky Financial & Intelligence LLC / Kenneth Haller:** The company purchased a portfolio of merchant accounts from Sky (controlled by former executive Kenneth Haller) for $16,000,000 cash and 500,000 restricted shares in March 2022. The company wrote off the entire purchase price in 2022 due to non-delivery of acquired assets. A confidential settlement agreement was reached on September 26, 2025, and the case was dismissed.

Stakeholder Impact

• **Shareholders:** Face potential dilution from increased authorized shares, risk of delisting if Nasdaq requirements are not met, and potential for increased transaction costs if holding odd lots after a reverse split. However, the reverse split aims to maintain Nasdaq listing, which is beneficial for liquidity and marketability. Shareholders are also voting on key corporate governance matters and strategic proposals.
• **Employees:** Executive turnover has occurred, with new management appointments. Equity incentive plans are in place, but the ability to grant future awards depends on the approval of increased authorized shares, which could impact employee motivation and retention.
• **Customers/Suppliers:** Not directly addressed in this proxy statement, but the company's strategic moves (merger, capital raises) could impact future service offerings and operational stability, potentially affecting customer and supplier relationships.
• **Creditors:** Not directly addressed, but the company's financial health and ability to raise capital could impact its capacity to meet financial obligations to creditors.

Next Steps

• Stockholders to vote on director elections, auditor ratification, reverse stock split, and increase in authorized shares at the December 15, 2025 Annual Meeting.
• The Board of Directors to determine the specific ratio and timing of the reverse stock split, if approved, no later than June 30, 2026.
• The company to file a certificate of amendment with the Nevada Secretary of State to effectuate the reverse stock split and/or increase in authorized shares, if approved.
• The company to add a third independent director to the Audit Committee by February 27, 2026, to regain Nasdaq compliance.
• The company to publish final voting results in a Current Report on Form 8-K within four business days after the Annual Meeting.
• The company to continue with the merger process with RTB Digital, Inc.
• The company to potentially engage in future equity financings and acquisitions, leveraging the increased authorized shares.

Key Dates

Recommendation

The company is at a critical juncture, addressing significant challenges including Nasdaq listing compliance, substantial net losses, and executive turnover. The proposed reverse stock split and increase in authorized shares are necessary steps to maintain listing and enable future strategic growth, particularly in light of the pending merger with RTB Digital, Inc. While these actions are crucial for the company's survival and future potential, the historical financial performance and the inherent risks associated with these proposals (e.g., dilution, uncertain market response to reverse split) suggest a high degree of uncertainty. The settlement of past legal issues is a positive, but the overall situation remains precarious. A "hold" recommendation reflects the view that while there are significant risks, the strategic initiatives could potentially stabilize and improve the company's position, warranting observation rather than immediate divestment or aggressive buying. Investors should monitor the outcome of the annual meeting proposals, the merger, and the company's ability to execute its strategic plan and regain Nasdaq compliance.

Keywords

RYVYL, RVYL, SEC filing, proxy statement, annual meeting, reverse stock split, authorized shares, Nasdaq listing, delisting risk, corporate governance, executive compensation, related party transactions, merger, RTB Digital, financial performance, shareholder vote