RYVYL's Debt Restructuring: A Critical Financial Maneuver

RYVYL Inc. (NASDAQ: RVYL), a leading innovator in payment transaction solutions, has entered into a new non-binding Memorandum of Understanding (MOU) with a securityholder to retire debt instruments. The agreement includes a two-phase payment structure: an immediate payment of $13.0 million to redeem all Series B Convertible Preferred Stock and partially pay an 8% Senior Convertible Note, leaving a $4.0 million balance. The remaining balance will have an advanced maturity date of April 30, 2025. The company must execute definitive agreements and pay the first tranche by January 27, 2025, or the MOU expires. RYVYL can extend this deadline to February 3, 2025, for an additional $50,000. Upon payment, certain restrictive covenants will be waived, contingent on paying the remaining balance by April 30, 2025. Until the first payment, the securityholder retains conversion rights for both instruments.

This debt restructuring agreement represents a critical financial maneuver for RYVYL, with significant implications for its capital structure and future operations. The company is attempting to address $17 million in outstanding obligations through a two-phase approach: an immediate $13 million payment followed by a $4 million balance due by April 2025. The extremely tight execution timeline - just 5 days until January 27th - suggests urgency in securing funding, which raises questions about the company's current liquidity position. The fact that RYVYL included a short extension option for a relatively small $50,000 fee further indicates potential challenges in arranging immediate financing.

A critical aspect of this deal is the temporary waiver of restrictive covenants upon making the first payment. This could provide RYVYL with much-needed operational flexibility and the ability to pursue strategic initiatives that may have been previously restricted. However, the risk of these covenants snapping back into place if the April 2025 payment is missed creates a significant incentive to complete the full redemption.

For shareholders, there are mixed implications. While debt reduction is positive for the company's financial health, the securityholder's retained ability to convert both the note and preferred stock into common shares until the first payment creates near-term dilution risk. Given RYVYL's current market cap of about $10.5 million, any significant conversion could substantially impact the share price.

The success of this restructuring hinges entirely on RYVYL's ability to secure $13 million in financing within days - a substantial amount relative to its market capitalization. This suggests the company may need to pursue multiple funding sources or consider asset sales to meet these obligations.



RYVYL's debt restructuring agreement represents a critical financial maneuver with significant implications for its capital structure and future operations. The company's ability to successfully secure financing and complete the full redemption will be crucial in maintaining its financial health and pursuing strategic initiatives. Shareholders should closely monitor the situation and consider the potential risks and benefits of the restructuring.

SAN DIEGO, CA, Jan. 22, 2025 (GLOBE NEWSWIRE) -- RYVYL Inc. (NASDAQ: RVYL) ("RYVYL" or the "Company"), a leading innovator of payment transaction solutions leveraging proprietary blockchain ledger and electronic payment technology for diverse international markets, has entered into a new non-binding Memorandum of Understanding with a securityholder of the Company, replacing a previously announced Memorandum of Understanding, which expired on November 29, 2024 (the “New MOU”) for the full repayment and termination of an 8% Senior Convertible Note (the “Note) and the redemption of all shares of the Company’s Series B Convertible Preferred Stock (the “Preferred Stock”). The New MOU provides for:
The Company is required to execute definitive agreements with the Securityholder (the “Definitive Agreements”) and pay the first tranche payment of $13.0 million on or before January 27, 2025, or the New MOU will expire and the transactions contemplated under the New MOU will not be completed. The first tranche due date may be extended to February 3, 2025, at the sole option of the Company, in consideration for RYVYL’s payment of an additional $50,000.
This communication is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any security and does not constitute an offer, solicitation or sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About RYVYL
RYVYL Inc. (NASDAQ: RVYL) was born from a passion for empowering a new way to conduct business-to-business, consumer-to-business, and peer-to-peer payment transactions around the globe. By leveraging proprietary blockchain ledger and electronic payment technology for diverse international markets, RYVYL is a leading innovator of payment transaction solutions reinventing the future of financial transactions. Since its founding as GreenBox POS in 2017 in San Diego, RYVYL has developed applications enabling an end-to-end suite of turnkey financial products with enhanced security and data privacy, world-class identity theft protection, and rapid speed to settlement. As a result, the platform can log immense volumes of immutable transactional records at the speed of the internet for first-tier partners, merchants, and consumers around the globe.