UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

For the transition period from to

Commission file number: 001-34294

RYVYL INC.

(Exact name of small business issuer as specified in its charter)

Nevada		22-3962936
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

3131 Camino Del Rio North, Suite 1400 San Diego, CA		92108
(Address of principal executive offices)		(Zip Code)

(855) 201-1613

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value per share		RVYL		The Nasdaq Stock Market LLC (Nasdaq Capital Market)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 13, 2025, the Registrant had 36,085,978 shares of common stock, $0.001 par value per share, outstanding.

TABLE OF CONTENTS

		Page
PART I Consolidated Financial Information
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024	1
	Condensed Consolidated Statements of Operations and Comprehensive Income for the Three Months and Nine Months Ended September 30, 2025 (unaudited) and 2024 (unaudited)	2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months and Nine Months Ended September 30, 2025 (unaudited) and 2024 (unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 (unaudited) and 2024 (unaudited)	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42

PART II Other Information
Item 1.	Legal Proceedings	43
Item 1.A	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 3.	Defaults Upon Senior Securities	49
Item 4.	Mine Safety Disclosures	49
Item 5.	Other Information	49
Item 6.	Exhibits	49
Signatures		50

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RYVYL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	September 30, 2025			December 31, 2024
	(Unaudited)
ASSETS
Current Assets:
Cash	$	1,155		$	2,599
Restricted cash		16,581			89,432
Accounts receivable, net of allowance for credit losses of $311 and $142, respectively		839			1,076
Cash due from gateways, net of allowance of $152 and $34, respectively		-			88
Prepaid and other current assets		1,209			2,189
Total current assets		19,784			95,384
Non-current Assets:
Property and equipment, net		115			165
Goodwill		-			18,856
Intangible assets, net		1,467			1,802
Operating lease right-of-use assets, net		1,807			3,425
Other assets		240			2,644
Total non-current assets		3,629			26,892
Total assets	$	23,413		$	122,276

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	1,698		$	3,515
Accrued liabilities		5,316			8,146
Payment processing liabilities, net		16,326			90,802
Current portion of operating lease liabilities		636			839
Other current liabilities		45			240
Total current liabilities		24,021			103,542
Long term debt, net of debt discount		615			17,363
Operating lease liabilities, less current portion		1,999			2,863
Total liabilities		26,635			123,768
Commitments and contingencies (Note 15)

Stockholders’ Equity:
Convertible Preferred stock: $0.01 par value; 5,000,000 shares authorized
Series A Preferred Stock: 15,000 shares designated; 0 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		-			-
Series B Preferred Stock: 55,000 shares designated; 0 shares and 55,000 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		-			1
Common stock, par value $0.001 per share, 100,000,000 shares authorized, shares issued and outstanding of 32,142,324 and 8,032,318 at September 30, 2025 and December 31, 2024, respectively		32			8
Additional paid-in capital		189,270			179,157
Accumulated other comprehensive income		-			(1,251	)
Accumulated deficit		(192,524	)		(179,407	)
Total stockholders’ deficit		(3,222	)		(1,492	)
Total liabilities and stockholders’ deficit	$	23,413		$	122,276

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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RYVYL INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Revenue	$	2,786		$	2,832		$	8,338		$	15,478
Cost of revenue		1,393			1,765			4,357			9,132
Gross profit		1,393			1,067			3,981			6,346

Operating expenses:
Advertising and marketing		17			29			22			62
Research and development		(216	)		815			362			3,027
General and administrative		924			(102	)		3,412			2,640
Payroll and payroll taxes		1,240			2,292			4,359			7,365
Professional fees		511			1,056			2,196			3,351
Stock compensation expense		133			136			629			542
Depreciation and amortization		(12	)		505			229			1,504
Impairment of goodwill		-			-			-			6,675
Impairment of intangible assets		(330	)		-			758			-
Restructuring charges		937			-			1,510			1,636
Total operating expenses		3,204			4,731			13,477			26,802
Loss from operations		(1,811	)		(3,664	)		(9,496	)		(20,456	)

Other income (expense):
Interest expense		(32	)		(345	)		(1,785	)		(497	)
Accretion of debt discount		-			(273	)		(150	)		(1,978	)
Changes in fair value of derivative liability		-			-			-			14
Derecognition expense on conversion of convertible debt		-			-			176			(69	)
Legal settlements expense		(155	)		(1,598	)		(155	)		(1,598	)
Other (expense) income		45			48			71			147
Total other expense, net		(142	)		(2,168	)		(1,843	)		(3,981	)

Loss from continuing operations before income taxes		(1,953	)		(5,832	)		(11,339	)		(24,437	)
Provision for income taxes		-			450			305			616
Net loss from continuing operations		(1,953	)		(6,282	)		(11,644	)		(25,053	)
Income (Loss) from discontinued operations, net of tax		-			1,108			(1,472	)		5,079
Net loss	$	(1,953	)	$	(5,174	)	$	(13,116	)	$	(19,974	)

Comprehensive income statement:
Net loss	$	(1,953	)	$	(5,174	)	$	(13,116	)	$	(19,974	)
Foreign currency translation gain (loss)		-			1,338			1,250			719
Total comprehensive loss	$	(1,953	)	$	(3,836	)	$	(11,866	)	$	(19,255	)

Net loss per share:
Basic	$	(0.07	)	$	(0.76	)	$	(0.83	)	$	(3.12	)
Diluted	$	(0.07	)	$	(0.76	)	$	(0.78	)	$	(3.12	)
Weighted average number of common shares outstanding:
Basic		28,546,842			6,812,248			15,812,318			6,408,993
Diluted		29,797,041			6,812,248			16,767,263			6,408,993

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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RYVYL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

	Common Stock				Preferred Stock						Additional			Other Accumulated						Total
	Shares		Amount		Series B Shares			Amount			Paid In Capital			Comprehensive Income (Loss)			Accumulated Deficit			Stockholders’ Equity

Balance at December 31, 2024		8,032,318	$	8		53,499		$	1		$	179,157		$	(1,251	)	$	(179,407	)	$	(1,492	)

Issuance of common stock under equity incentive plans		15,760		-		-			-			55			-			-			55

Common stock issued for conversion of Preferred B stock		314,912		-		(400	)		-			-			-			-			-

Preferred B stock repurchase		-		-		(53,099	)		(1	)		1			-			-			-

Capital contributions		-		-		-			-			9			-			-			9

Net loss and comprehensive loss		-		-		-			-			-			1,102			(2,756	)		(1,654	)
Balance at March 31, 2025		8,362,990	$	8		-		$	-		$	179,222		$	(149	)	$	(182,163	)	$	(3,082	)

Issuance of common stock under equity incentive plans		475,563		1		-			-			396			-			-			397

Common stock issued for conversion of convertible debt		7,118,843		7		-			-			3,956			-			-			3,963

Stock-based compensation		-		-		-			-			44			-			-			44

Net loss and comprehensive loss		-		-		-			-			-			149			(8,408	)		(8,259	)
Balance at June 30, 2025		15,957,396	$	16		-		$	-		$	183,618		$	-		$	(190,571	)	$	(6,937	)

Issuance of common stock under equity incentive plans		121,982		-		-			-			61			-			-			61

Issuance of restricted common stock under equity incentive plans		306,331		-		-			-			95			-			-			95

Issuance of restricted common stock for compensation		372,000		-		-			-			107			-			-			107

Stock-based compensation		-		-		-			-			48			-			-			48

Shares cancelled in connection with the net settlement of vested stock awards		-		-		-			-			(24	)		-			-			(24	)

Issuance of common stock and warrants in public offering, net of issuance costs		15,384,615		16		-			-			5,365			-			-			5,381

Net loss and comprehensive loss		-		-		-			-			-			-			(1,953	)		(1,953	)
Balance at September 30, 2025		32,142,324	$	32		-		$	-		$	189,270		$	-		$	(192,524	)	$	(3,222	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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	Common Stock					Preferred Stock					Additional			Other Accumulated						Total Stockholders’
	Shares			Amount		Series B Shares			Amount		Paid In Capital			Comprehensive Income (Loss)			Accumulated Deficit			Equity (Deficit)

Balance at December 31, 2023		5,996,948		$	6		55,000		$	1	$	175,664		$	401		$	(152,581	)	$	23,491

Issuance of common stock under equity incentive plans		6,333			-		-			-		119			-			-			119

Issuance of restricted common stock under equity incentive plans		14,443			-		-			-		93			-			-			93

Issuance of common stock upon exercise of stock options		6,218			-		-			-		-			-			-			-

Shares cancelled in connection with the net settlement of vested stock awards		(22,455	)		-		-			-		(100	)		-			-			(100	)

Net loss and comprehensive loss		-			-		-			-		-			(445	)		(2,689	)		(3,134	)
Balance at March 31, 2024		6,001,487		$	6		55,000		$	1	$	175,777		$	(44	)	$	(155,270	)	$	20,470

Issuance of restricted common stock under equity incentive plans		42,659			-		-			-		279			-			-			279

Issuance of common stock upon conversion of convertible debt		169,220			-		-			-		240			-			-			240

Issuance of common stock upon conversion of Series B preferred stock		567,262			1		(875	)		-		(1	)		-			-			-

Shares cancelled in connection with the net settlement of vested stock awards		(30,528	)		-		-			-		(75	)		-			-			(75	)

Net loss and comprehensive loss		-			-		-			-		-			(174	)		(12,111	)		(12,285	)
Balance at June 30, 2024		6,750,100		$	7		54,125		$	1	$	177,620		$	(218	)	$	(167,382	)	$	10,028

Issuance of restricted common stock under equity incentive plans		32,866			-		-			-		132			-			-			132

Issuance of common stock upon conversion of convertible debt		-			-		-			-		-			-			-			-

Issuance of common stock upon conversion of Series B preferred stock		194,596			-		(175	)		-		-			-			-			-

Shares cancelled in connection with the net settlement of vested stock awards		(19,687	)		-		-			-		(1	)		-			-			(1	)

Net loss and comprehensive loss		-			-		-			-		-			1,338			(5,174	)		(3,836	)
Balance at September 30, 2024		6,957,875		$	7		53,950		$	1	$	177,751		$	1,120		$	(172,555	)	$	6,323

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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RYVYL INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2025			2024
Cash flows from operating activities:
Net loss	$	(13,116	)	$	(19,974	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense		325			1,826
Noncash lease expense		603			205
Stock compensation expense		629			542
Accretion of debt discount		150			1,978
Derecognition expense upon conversion of convertible debt		(176	)		68
Changes in fair value of derivative liability		-			(14	)
Loss on sale of Ryvyl EU		6,497			-
Impairment of intangible assets		758			-
Impairment of goodwill		-			6,675
Restructuring charges		1,510			1,636
Loss on sale of property and equipment		4			-
Changes in assets and liabilities:
Accounts receivable, net		237			70
Prepaid and other current assets		396			(460	)
Cash due from gateways, net		88			12,706
Other assets		(91	)		(318	)
Accounts payable		(1,687	)		1,166
Accrued and other current liabilities		(599	)		2,243
Payment processing liabilities, net		(1,728	)		10,770
Net cash (used in) provided by operating activities		(6,200	)		19,119
Cash flows from investing activities:
Proceeds from the sale of property and equipment		1			-
Purchases of property and equipment		(76	)		(34	)
Capitalized software development costs		(1,088	)		(1,100	)
Purchases of intangible assets		(234	)		(92	)
Cash transferred in connection with the sale of Ryvyl EU		(74,954	)		-
Net cash used in investing activities		(76,351	)		(1,226	)
Cash flows from financing activities:
Repayments on convertible debt		(13,000	)		-
Repayments on long-term debt		(3	)		(13	)
Proceeds from short-term note payable		15,000			-
Tax withholdings related to net settlements of equity awards		(24	)		(194	)
Proceeds from issuance of common stock in public offering, net of issuance costs		5,380			-
Net cash provided by (used in) financing activities		7,353			(207	)

Effect of exchange rate changes on cash and restricted cash		904			479

Net (decrease) increase in cash and restricted cash		(74,294	)		18,165
Cash and restricted cash – beginning of period		92,030			73,318
Cash and restricted cash – end of period	$	17,736		$	91,483

Supplemental cash flow disclosures
Cash paid during the period for:
Interest	$	154		$	-
Income taxes	$	761		$	759

Non-cash financing and investing activities:
Convertible debt conversion to common stock	$	4,000		$	200
Interest accrual from convertible debt converted to common stock	$	135		$	-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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RYVYL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Description of the Business and Basis of Presentation

Organization

RYVYL Inc. (“RYVYL”, the “Company”, “us”, “we” or “our”) is a financial technology company that develops software platforms and tools that are focused on providing global payment acceptance and disbursement capabilities. RYVYL’s strategy is rooted in our mission to transform the global payments landscape through technology-driven, customer-centric, and compliance-focused financial solutions. Our first-generation product, QuickCard, was originally developed to facilitate payment processing for predominantly cash-based businesses in certain niche high-risk business verticals. It was a comprehensive physical and virtual payment card processing management system that offered a cloud-based network interface, merchant management, and point-of-sale (POS) connectivity to facilitate noncash payment methods such as credit cards, debit cards and prepaid gift cards, and to subsequently disburse those funds electronically to merchants upon request. In early 2024, in response to evolving changes in the compliance environment and banking regulations, the Company began transitioning QuickCard to a fully virtual, app-based product. In mid-2024, the Company further transitioned its QuickCard product from a direct offering to a licensing model, whereby partners with more suitable compliance capabilities could license the platform from the Company and offer its payments processing capabilities in the same business verticals the Company previously served directly.

As the global fintech industry continues to evolve, it has become evident that there is a need for a fully integrated platform that can seamlessly support multiple types of offerings on a global scale. We believe our second-generation platform, NEMS Core, provides a compelling solution to fill that product void. As a dual-sided platform, NEMS Core is designed to support both acquiring and disbursement services within a unified infrastructure. This end-to-end platform enables businesses to seamlessly accept payments from customers while efficiently distributing funds to vendors, employees, and partners worldwide. Unlike traditional single-function payment systems that often face limitations in adapting to dynamic market demands, RYVYL’s dual-sided platform offers a flexible, agile, and robust architecture. It streamlines the entire transaction lifecycle, from payment initiation to settlement, providing businesses with a competitive advantage in an increasingly interconnected and digital financial environment.

Prior to the sale of the Company’s subsidiary, Ryvyl (EU) EAD (“Ryvyl EU”), which was effective June 1, 2025, the Company operated through two distinct business segments designed to meet the diverse and evolving needs of global markets. Our business was strategically structured around two primary geographic regions - Europe and North America - each offering complementary product and service portfolios that encompassed payment processing, treasury management, acquiring, issuing, and Electronic Money Institution services. This segmentation allowed RYVYL to deliver tailored, market-specific solutions while maintaining a cohesive global strategy that supports operational efficiency, regulatory compliance, and financial growth. As a result of the sale of Ryvyl EU, our operations are now solely conducted in North America.

In North America, the Company’s focus is on expanding treasury management services, Bank Identification Number (BIN) sponsorship for credit card processing, and comprehensive payment solutions such as ACH and wire transfers. By leveraging third-party sponsorship arrangements alongside our technology, we are positioned to capture growth opportunities in key sectors, including e-commerce, fintech, and B2B payments.

Name Change

On May 3, 2018, the Company formally changed its name to GreenBox POS LLC, then subsequently changed its name to GreenBox POS on December 13, 2018. On October 13, 2022, GreenBox POS changed its name to RYVYL Inc.

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2. Summary of Significant Accounting Policies

Going Concern

In February 2024, the Company stopped processing credit card payments on its QuickCard platform because our processing partner’s bank informed them that they no longer wished to process payments for cannabis merchants. QuickCard was our first-generation product and was designed to address the needs of previously all-cash businesses. Although not limited to the cannabis industry, prior to discontinuing QuickCard, cannabis merchants made up a substantial majority of the platform’s processing volume. In an effort to recover the loss of revenues, during the second quarter of 2024, the Company transitioned its QuickCard product from terminal-based to app-based processing. Subsequently, management determined that the app-based product was not a viable long-term solution for certain niche high-risk business verticals (including cannabis merchants) and made the decision to terminate the rollout of the app-based product in those specific business verticals.

In response to the discontinuation of QuickCard as a direct offering, during the third quarter of 2024, the Company began to offer a license of the platform, which it believed would enable it to serve the same customer base it previously served with the original product offering. However, to date, the Company has been unable to find a suitable licensing partner and it is no longer actively seeking to license the QuickCard product. As a result, the Company no longer anticipates being able to recover the loss of revenue that resulted from the discontinuation of its QuickCard product.

The decline in revenues resulting from the discontinuation of QuickCard has adversely impacted the Company’s liquidity. Also, until recently, 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 be able to do following the sale of Ryvyl EU, effective June 1, 2025. As a result, management has determined that its cash balance as of September 30, 2025, will not be sufficient to fund the Company’s operations and capital needs for the next 12 months from the date of this Quarterly Report on Form 10-Q of the Company for the fiscal year ended September 30, 2025 (the “Report”). These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s ability to continue as a going concern is contingent upon the successful execution of management’s intended plan over the next twelve months to improve its liquidity position, which includes, without limitation:

	●	raising additional capital through a variety of means, including private and public equity offerings and debt financings. The Company recently executed multiple successful capital raises in July 2025 and October 2025 (see Note 17, Subsequent Events), and continues to be actively engaged in discussions with multiple parties for additional funding opportunities;

	●	exploring strategic initiatives, including M&A opportunities; on September 28, 2025, the Company, Ryvyl Merger Sub Inc. (a Delaware corporation and wholly owned direct subsidiary of the Company (“Merger Sub”), and RTB Digital, Inc., a Delaware corporation (“RTB”), entered into an Agreement and Plan of Merger pursuant to which Merger Sub will merge with and into RTB (the “Merger”), with RTB surviving the Merger as a wholly-owned subsidiary of the Company (see Recent Developments subsection under Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this Report, for additional details);

	●	continued execution of its accelerated business development efforts to drive volumes in diversified business verticals with the Company’s other products; and

	●	continued implementation of cost control measures to more effectively manage spending and further right-sizing the organization, where appropriate;

Management has assessed that its intended plan described above, if successfully implemented, is appropriate and sufficient to address its liquidity shortfall and to provide funds to cover operations for the next 12 months from the date of the issuance of this Report. However, there can be no assurance that we will be successful in implementing our plan, that our projections of our future capital needs will prove accurate, or that any additional funding will be available on a timely manner, on favorable terms, or be sufficient to continue our operations. The unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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Basis of Presentation and Consolidation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany transactions and balances have been eliminated in the accompanying condensed consolidated financial statements.

Unaudited Interim Financial Information

Certain information and footnote disclosures normally included in the Company’s annual audited financial statements and accompanying notes have been condensed or omitted in this accompanying interim consolidated financial statements and footnotes. Accordingly, the accompanying interim condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 28, 2025 (the “2024 Annual Report”).

In the opinion of management, these unaudited interim condensed consolidated financial statements include all adjustments and accruals, consisting only of normal, recurring adjustments that are necessary for a fair statement of the results of all interim periods reported herein. The results of the interim periods are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period.

Use of Estimates

The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those 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 future performance, and other assumptions that the Company believes are reasonable under the circumstances. The Company evaluates these estimates on an ongoing basis.

Reclassification

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported financial position, results of operations or cash flows of the Company.

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Cash and Restricted Cash

Cash consists of cash on hand and cash on deposit with banks. Restricted cash primarily consists of funds received from banking services clients, which have yet to be distributed to those clients’ end customers at the end of the period.

Payment Processing Liabilities

Payment processing liabilities principally represent funds collected from banking services clients that have yet to be distributed to those clients’ customers at the end of the period. These liabilities are secured by funds held in restricted cash accounts and are presented as restricted cash in the condensed consolidated balance sheets.

Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

Historically, the Company generated the majority of its revenue from payment processing services. Payment processing services revenue was typically based on a percentage of the value of each transaction processed and/or upon fixed amounts specified for each transaction or service. The Company satisfied its performance obligations and, therefore, recognized the processing fees as revenue at a point in time, upon the authorization of a merchant sale transaction. Following the sale of the Company’s wholly owned subsidiary, Ryvyl EU, effective June 1, 2025, the Company primarily generates revenue from banking services, which primarily includes incoming and outgoing ACH and wire transfer transactions, and fees earned from payment processing transactions where the Company arranges for the delivery of those services to the merchant by a payment processor. For banking services transactions, the Company typically charges specified fees on a per transaction basis, which may vary from customer to customer. The Company satisfies its performance obligation related to these transactions at a point in time, upon the authorization of the transaction in the Company’s payments platform. 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. The Company satisfies the performance obligation related to these transactions at a point in time, upon the authorization of the transaction in the payment processor’s platform. Revenue from these transactions is recognized on a gross basis, as the Company has determined that it is the principal in the arrangements governing those transactions.

Research and Development Costs

Research and development costs primarily consist of salaries and benefits for research and development personnel and outsourced contracted services, as well as associated supplies and materials. These costs are expensed as incurred.

Internal-use Software Development Costs

Internal-use software development costs consist of the costs related to outsourced consultants who are directly associated with and who devote time to creating and enhancing internally developed software for the Company’s platforms. Internal-use software development activities generally consist of three stages: (i) the preliminary project stage, (ii) the application development stage, and (iii) the postimplementation-operation stage. In accordance with ASC 350-40, Internal Use Software, costs incurred in the preliminary and postimplementation-operation stages of software development are expensed as incurred. Costs incurred in the application development stage, including significant enhancements and upgrades, are capitalized. Capitalized internal-use software development costs are included within intangible assets, net on the unaudited condensed consolidated balance sheets, and are amortized on a straight-line basis over an estimated useful life of three years upon the software or additional features being ready for their intended use.

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Accounts Receivable, Net

Accounts receivable primarily consist of amounts recorded in connection with the sale of payment processing terminals and related accessories. Accounts receivable are recorded at invoiced amounts, net of an allowance for credit losses, and do not bear interest. In accordance with Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), the Company measures its allowance for credit losses using an expected credit loss model that reflects the Company’s current estimate of expected credit losses inherent in the enterprise and the accounts receivable balance. In determining the expected credit losses, the Company considers its historical loss experience, the aging of its accounts receivable balance, current economic and business conditions, and anticipated future economic events that may impact collectability. The Company reviews its allowance for credit losses periodically and, as needed, amounts are written-off when determined to be uncollectible. As of September 30, 2025 and December 31, 2024, the allowance for credit losses was immaterial.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets primarily consist of inventory, short term deposits, and prepaid property taxes required under existing lease arrangements.

Property and Equipment, Net

Property and equipment primarily consist of computer equipment and furniture and fixtures. Property and equipment are stated at historical cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from three to eight years. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in income or loss for the period.

Fair Value Measurements

The Company applies fair value accounting for assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis. Fair value is defined as the price received to sell an asset or paid to transfer a liability in the principal market for the asset or liability in an orderly transaction between market participants on the measurement date.

ASC Topic 820, Fair Value Measurements, establishes a three-level hierarchy priority for disclosure of assets and liabilities recorded at fair value. The ordering of priority reflects the degree to which objective prices in external active markets are available to measure fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The three levels in the hierarchy are as follows:

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Level 1 – Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

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Level 2 – Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

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Level 3 – Unobservable inputs that cannot be directly corroborated by observable market data and that typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

The applicability of this guidance was limited to the Note (as defined below) and related derivative liability, which were fully retired during the quarter ended June 30, 2025. As of December 31, 2024, the Company classified these liabilities as Level 3 of the fair value hierarchy, as fair values are estimated using models that use both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs.

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Goodwill and Intangible Assets

ASC 350-20, Intangibles—Goodwill and Other—Goodwill, requires companies to assess goodwill for impairment annually or more frequently if indicators of impairment exist. Testing goodwill for impairment is performed at the reporting unit level, using a two-step test, and requires companies to compare the fair value of a reporting unit with its carrying amount, including goodwill. Goodwill is considered impaired if the carrying value of a reporting unit exceeds its fair value. ASC 350-20 also provides for an optional qualitative assessment for testing goodwill for impairment that enables companies to skip the two-step test if it is determined that it is more likely than not (i.e., a likelihood of greater than 50%) that the fair value of a reporting unit is greater than its carrying amount. The Company performs a goodwill impairment test annually, on December 31, or more frequently if events and circumstances indicate that the asset might be impaired. Following the sale of the Company’s wholly owned subsidiary, Ryvyl EU, effective June 1, 2025, the Company no longer has any goodwill.

Intangible assets consist of acquired customer relationships and business intellectual properties. In accordance with ASC 350-30, Intangibles—Goodwill and Other—General Intangibles Other than Goodwill, the Company’s intangible assets are amortized over their estimated useful lives, ranging from two to five years, using the straight-line method. Intangible assets amortized under ASC 350-30 must be reviewed for impairment when indicators of impairment are present, in accordance with ASC 360-10. Through April 30, 2025, the Company capitalized internal-use software development costs incurred in connection with the development of the European instance of its dual-sided platform, NEMS Core. Following the sale of Ryvyl EU, effective June 1, 2025, the Company halted any further development of the new platform instance. Additionally, the Company determined that all previously capitalized software development costs related to the new platform instances were not recoverable and recorded an impairment charge of $1.1 million, or 100% of the previously capitalized amounts, during the quarter ended June 30, 2025.

Leases

The Company leases office space under non-cancellable operating leases with various expiration dates. The Company determines whether an arrangement is a lease for accounting purposes at contract inception. Operating leases are recorded as right-of-use (“ROU”) assets, which are included within noncurrent assets, and lease liabilities, which are included within current and noncurrent liabilities on our condensed consolidated balance sheets.

Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. ROU assets are based on the lease liability and are increased by prepaid lease payments and decreased by lease incentives received, where applicable. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate because the interest rate implicit in the Company’s leases is not readily determinable. The Company’s incremental borrowing rate is estimated to approximate the interest rate that the Company would pay to borrow on a collateralized basis with similar terms and payments as the lease, and in economic environments where the leased asset is located. Certain leases require the Company to pay taxes, maintenance, and other operating expenses associated with the leased asset. Such amounts are not included in the measurement of the ROU assets and lease liabilities. These lease costs are recognized as lease expenses when incurred.

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The Company evaluates ROU assets related to leases for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable. When a decision has been made to exit a lease prior to the contractual term or to sublease that space, the Company evaluates the asset for impairment and recognizes the associated impact to the ROU asset and related expense, if applicable. The evaluation is performed at the asset group level initially and when appropriate, at the lowest level of identifiable cash flows, which is at the individual lease level. Undiscounted cash flows expected to be generated by the related ROU asset are estimated over the ROU asset’s useful life. If the evaluation indicates that the carrying amount of the ROU asset may not be recoverable, any potential impairment is measured based upon the fair value of the related ROU asset or asset group as determined by appropriate valuation techniques. During the quarter ended June 30, 2025, the Company identified indicators of impairment for the ROU asset related to one of its operating leases, which indicated that the carrying value of the ROU asset may not be recoverable. Based on the Company’s impairment analysis, it recorded an impairment charge of $0.5 million as of June 30, 2025. Additionally, during the quarter ended September 30, 2025, the Company updated its impairment analysis based on new facts and circumstances, and recorded an additional impairment charge of $0.1 million.

Foreign Currency

Assets and liabilities of our foreign subsidiaries are translated into the reporting currency using the exchange rates in effect on the condensed consolidated balance sheet dates. Equity accounts are translated at historical rates, except for the change in retained earnings during the period, which is the result of the income statement translation process. Revenue and expense accounts are translated using the weighted average exchange rate during the period. The cumulative translation adjustments associated with the net assets of foreign subsidiaries are recorded in accumulated other comprehensive income in the accompanying consolidated statements of stockholders’ equity. Following the sale of the Company’s wholly owned foreign subsidiary, Ryvyl EU, effective June 1, 2025, the Company is no longer exposed to changes in exchange rates that would impact its condensed consolidated balance sheets on a go forward basis.

Stock Based Compensation

Stock-based compensation expense relates to restricted stock awards (“RSAs”), restricted stock units (“RSUs”), and stock options granted to employees and non-employee directors under the Company’s equity incentive plans, which are measured based on the grant-date fair value. The fair value of RSAs and RSUs is determined by the closing price of the Company’s common stock on the grant date. The fair value of stock options is estimated on the date of grant using the Black-Scholes-Merton option valuation model. Generally, stock-based compensation expense is recorded on a straight-line basis over the requisite service period. The Company accounts for forfeitures as they occur.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, net of operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than not that some portion of or all the deferred tax assets will not be realized. Judgment is required in determining and evaluating income tax provisions and valuation allowances for deferred income tax assets. We recognize an income tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by tax authorities, based on the technical merits of the position.

Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. As of September 30, 2025 and December 31, 2024, the Company has a full valuation allowance on its deferred tax assets.

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Net Loss Per Share

The Company’s basic net loss per share is computed by dividing the loss available to common shareholders by the weighted average number of common shares outstanding during the period without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss available to common shareholders by the weighted-average number of shares of common stock outstanding, adjusted for the dilutive effect of all potential shares of common stock.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). The amended guidance enhances income tax disclosures primarily related to the effective tax rate reconciliation and income taxes paid information. This guidance requires disclosure of specific categories in the effective tax rate reconciliation and further information on reconciling items meeting a quantitative threshold. In addition, the amended guidance requires disaggregating income taxes paid (net of refunds received) by federal, state, and foreign taxes. It also requires disaggregating individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). The amended guidance is effective for fiscal years beginning after December 15, 2024. The guidance can be applied either prospectively or retrospectively. The adoption of ASU 2023-09 will impact the Company’s annual disclosures only.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-08, Intangibles – Goodwill and Other – Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. This amended guidance requires fair value measurement of certain crypto assets each reporting period with the changes in fair value reflected in net income. The amendments also require disclosures of the name, fair value, units held, and cost bases for each significant crypto asset held and annual reconciliations of crypto asset holdings. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2024, with early adoption permitted. We are required to apply these amendments as a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year in which the guidance is adopted. The adoption of this guidance is not expected to have an impact on the Company’s consolidated financial statements, as we currently do not hold any crypto assets.

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024 03”), and in January 2025, the FASB issued ASU No. 2025-01, Clarifying the Effective Date (“ASU 2025-01”). The amendments are intended to enhance disclosures regarding an entity’s costs and expenses by requiring additional disaggregated information disclosures about certain income statement expense line items. The amendments, as clarified by ASU 2025-01, are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect of adopting the new disclosure requirements.

3. Discontinued Operations

Pursuant to a stock purchase agreement (the “SPA”) and a Termination Agreement (the “Termination Agreement”), both dated January 23, 2025, and entered into between the Company and a purchaser (the “Purchaser”), the Company and the Purchaser completed the sale of its wholly owned subsidiary Ryvyl EU, effective June 1, 2025, which comprised substantially all of the business previously reported under the Company’s International reporting segment. Domiciled in Sofia, Bulgaria, Ryvyl EU is a European Union regulated electronic money institution that provides complete payment solutions by offering acquiring, issuing, banking services across Europe. Pursuant to the terms of the SPA and Termination Agreement, the Company received total consideration of $16.5 million, comprised of $15.0 million of short-term secured debt and a related $1.5 million of accrued interest (or termination fee), which was forgiven by the Purchaser in exchange for the acquisition of Ryvyl EU. The net assets of Ryvyl EU immediately prior to the closing of the sale were approximately $23.0 million and the Company recognized a loss on sale of approximately $6.5 million during the quarter ended June 30, 2025.

In accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations, since the sale of Ryvyl EU met the held-for-sale criteria as of the second quarter of 2025 and the sale transaction was completed within the same quarter, historical assets and liabilities of Ryvyl EU have not been segregated and reported as discontinued operations in the condensed consolidated balance sheets for all historical periods presented. Pursuant to the same guidance, the income statement activity of Ryvyl EU has been segregated and reported as discontinued operations for all periods presented in the condensed consolidated income statements for all historical periods presented. Additionally, cash flows related to discontinued operations have not been segregated and are included in the unaudited condensed consolidated statement of cash flows for all periods presented.

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The results of operations from discontinued operations for the three and nine months ended September 30, 2025 and 2024, consist of the following (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2025		2024			2025			2024

Revenue	$	-	$	9,774		$	21,033		$	25,802
Cost of revenue		-		(5,984	)		(12,031	)		(15,511	)
Advertising and marketing		-		(12	)		(45	)		(13	)
General and administrative		-		(1,544	)		(744	)		(2,466	)
Payroll and payroll taxes		-		(959	)		(1,830	)		(2,305	)
Professional fees		-		(5	)

SEC Form 10-Q filed by Ryvyl Inc.