{"url_path":"/sec/rtb/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 LEGAL PROCEEDINGS**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-14","source_url":"https://www.sec.gov/Archives/edgar/data/1419275/0001185185-26-001861-index.html","accession_number":"0001185185-26-001861","cik":"0001419275","ticker":"RTB","issuer_name":"RTB Digital, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1419275/0001185185-26-001861-index.html","primary_entity_key":"0001419275","primary_entity_name":"RYVYL Inc."},"word_count":1579,"has_tables":true,"body_markdown":"**ITEM\n1. LEGAL PROCEEDINGS**\n\n \n\nFrom\ntime-to-time, the Company is involved in legal proceedings. The following is a summary of our current outstanding litigation. Note that\nreferences to GreenBox POS are for historical purposes. GreenBox POS changed its name to RYVYL Inc. on October 13, 2022.\n\n \n\n \n●\nOn December 12, 2022, Jacqueline Dollar (a/k/a Jacqueline Reynolds), former Chief Marketing Officer of the Company, filed a complaint against the Company, Fredi Nisan, and Does 1-20 in San Diego Superior Court. Ms. Dollar is alleging she was undercompensated compared to her male counterparts and retaliated against after raising concerns to management resulting in sex discrimination in violation of the California Fair Employment and Housing Act (“FEHA”) and failure to prevent discrimination in violation of FEHA. Ms. Dollar is also claiming intentional infliction of emotional distress. Ms. Dollar is seeking an unspecified amount of damages related to, among other things, payment of past and future lost wages, stock issuances, bonuses and benefits, compensatory damages, and general, economic, non-economic, and special damages. On January 21, 2026, Ms. Dollar filed a notice of conditional settlement of entire case with the Court. The parties have since entered into a confidential settlement agreement, pursuant to which all claims are to be dismissed upon satisfaction of all settlement terms..\n\n \n\n \n●\nAs previously disclosed in the Company’s 10-Q for the period ending March 31, 2025, as filed on May 20, 2025, since December 2022, the Company has been cooperating with an ongoing investigation by the SEC regarding possible violations of the federal securities laws. Following discussions with the Staff of the SEC, the Company made certain disclosures addressing the concerns regarding the Company’s 2020 Registration Statement on Form S-1 filed on December 23, 2020 and subsequent reporting, which are contained in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2025 under Part I, Note 14, *Commitments and Contingencies*, and Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments, and under the Part II section titled “Legal Proceedings.”\n\nOn April 27, 2026, the SEC filed a settled action against the Company and its founders, memorializing the previously disclosed settlement. *SEC v. RYVYL Inc., et al*., Case No. 3:26-cv-02672-WQH-MMP (S.D. Cal.). The proposed final judgment, approved by the Court on May 11, 2026, does not require the Company to pay any monetary penalty and, fully resolves all claims regarding the Company.\n\n \n\n \n●\nOn June\n22, 2023, a shareholder derivative complaint was filed in the United States District Court for the Southern District of California\nagainst certain of the Company’s current and/or former officers and directors (the “Hertel Defendants”), Christy\nHertel, derivatively on behalf of RYVYL Inc., f/k/a GreenBox POS v. Ben Errez et al., Case No. 3:23-CV-01165-GPC-SBC. On August 4,\n2023, a second shareholder derivative complaint was filed in the United States District Court for the Southern District of California\nagainst the Hertel Defendants, Marcus Gazaway, derivatively on behalf of RYVYL Inc., f/k/a GreenBox POS v. Ben Errez et al., Case\nNo. 3:23-CV-01425-LAB-BLM. Both derivative complaints generally allege that the Hertel Defendants failed to implement adequate internal\ncontrols that would prevent false and misleading financial information from being published by the Company and that controlling shareholders\nparticipated in overpayment misconduct resulting in violations of Sections 10(b), 14(a) and 20 of the Exchange Act and breached their\nfiduciary duties and, purportedly on behalf of the Company. On April 2, 2024, the Court granted the parties’ joint motion for\nan order consolidating the Hertel and Gazaway cases under the caption In re RYVYL Inc. Derivative Litigation, Lead Case No. 3:23-CV-01165-GPC-SBC\n(S.D. Cal.). On May 6, 2024, the Court issued an order staying the action until after the final resolution of any motion to dismiss\nthe securities class action detailed above. On May 1, 2024, a third nearly identical shareholder derivative complaint was filed in\nClark County, Nevada by plaintiff Christina Brown, derivatively on behalf of RYVYL, Inc., v. Ben Errez et al., Case No. A-24-892382-C.\n\nThe Complaints seeks damages and contribution from the Hertel Defendants and a direction that the Company and the Hertel Defendants\ntake actions to reform and improve corporate governance and internal procedures to comply with applicable laws. The Hertel Defendants\ndeny all allegations of liability and intend to vigorously defend against all claims. On May 8, 2025, all parties reached an agreement\nin principle to fully resolve and settle all claims alleged in the lawsuits, and on September 30, 2025 they filed a Stipulation and\nAgreement of Settlement. On November 14, 2025, the Court granted the parties’ Joint Motion for Preliminary Approval of Settlement.\nOn December 12, 2025, the parties filed a Joint Motion for Final Approval of Settlement, which was set for hearing on January 9,\n2026. On January 13, 2026, the Court granted the Motion for Final Approval of the Settlement.\n\n \n\n \n●\nOn June 25, 2024, J. Drew Byelick, a former Chief Financial Officer\nof the Company, filed a complaint against the Company in the United States District Court for the Southern District of California, Case\nNo. ’24CV1096 JLS MSB. Mr. Byelick alleged breach of contract, fraudulent inducement of employment, along with intentional misrepresentation\nand concealment. The Company moved to dismiss the complaint for failure to state a claim and for other violations of the federal rules\nof civil procedure. The Court granted that motion on December 20, 2024, but permitted Mr. Byelick to file an amended complaint. Mr. Byelick\nfiled his first amended complaint on January 19, 2025, asserting the same core claims. The Company moved to dismiss the first amended\ncomplaint for similar reasons as its motion to dismiss the original complaint. The Court granted that motion, in part, on April 18, 2025,\nruling that Mr. Byelick was incapable of pleading certain claims (and dismissing those claims) but adequately pled others for purposes\nof a motion to dismiss only. Mr. Byelick subsequently filed a motion for partial summary judgment, which the Court denied in full as premature.\nDiscovery is closed, but trial date has not yet been set. Given the uncertainty of litigation, and the legal standards that must be met\nfor success on the merits, the Company cannot predict the outcome at this time or estimate a reasonably possible loss or range of loss\nthat may result from this action.\n\n \n\n31\n\n[Table of Contents](#TableOfContents)\n\n \n\n \n●\nOn July 2, 2025, Plaintiff Kapcharge USA Inc. commenced a lawsuit against Defendants Ryvyl Inc., FFS Data Corporation, CML Management, LLC and Cynthia Lambert in San Diego Superior Court, Case No. 25CU035045C. This lawsuit stems from a dispute between Kapcharge on the one hand and FFS Data Corporation (“FFS”), and CML Management, LLC on the other hand, related to a payment processor agreement between Kapcharge and FFS. Kapcharge alleges causes of action for Conversion, Money Had and Received, Violation of Penal Code § 496, Restitution, Breach of Contract (against FFS, CML, and Lambert), and Unfair Competition in Violation of California Business and Professions Code § 17200 et seq. The Company denies all allegations of liability and intends to vigorously defend against all claims.  Kapcharge filed a demurrer on August 28, 2025 related to the causes of action for Conversion and Violation of Penal Code § 496. On April 8, 2026, Kapcharge and Ryvyl filed a stipulation for stay of the proceedings and to continue the demurrer hearing. On May 12, 2026, the parties entered into a confidential settlement agreement, pursuant to which all claims are to be dismissed.\n\n \n\n \n●\nOn July\n15, 2025, Plaintiff Rachael Mora filed a complaint against the Company, Fredi Nisan, and Does 1-20 in San Diego Superior Court. Ms.\nMora is alleging sex discrimination and sexual favoritism in violation of the California Fair Employment and Housing Act (“FEHA”),\nand failure to prevent discrimination in violation of FEHA. Ms. Mora is also claiming retaliation and negligent supervision/negligent\nretention. Ms. Mora is seeking an unspecified amount of damages related to, among other things, payment of past and future lost wages,\nstock issuances, bonuses and benefits, compensatory damages, and general, economic, non-economic, and special damages. As the Company\ncannot predict the outcome of the matter, the probability of an outcome cannot be determined. The Company intends to vigorously defend\nagainst all claims.\n\n \n \n \n\n \n●\nOn December\n29, 2025, Plaintiff Ellenoff, Grossman & Schole LLP (“EGS”), filed a complaint against the Company in the Supreme\nCourt of the State of New York County of New York. EGS is alleging breach of contract, account stated, and quantum meriut. The Company\ndenies liability and intends to vigorously defend against all claims. Given the stage of the lawsuit, the uncertainty of litigation,\nand the legal standards that must be met for success on the merits, the Company cannot predict the outcome at this time or estimate\na reasonably possible loss or range of loss that may result from this action.\n\n \n\n \n●\nOn March\n16, 2026, Plaintiff Ideyalabs, LLC (“Ideyalabs”), filed a complaint against the Company and two of its wholly owned subsidiaries\nin San Diego Superior Court, Case No. 26CU014745C. Ideyalabs alleged breach of contract, breach of the implied covenant of good faith\nand fair dealing, and unjust enrichment. The Company denies liability and intends to vigorously defend against all claims. Given\nthe stage of the lawsuit, the uncertainty of litigation, and the legal standards that must be met for success on the merits, the\nCompany cannot predict the outcome at this time or estimate a reasonably possible loss or range of loss that may result from this\naction."}