The Company recorded income tax expense of approximately $0.01 million and $0.00 million for the six months ended June 30, 2026 and 2025, respectively. The Company’s effective income tax rate was approximately (0.12%) and 0.00% for the corresponding periods, respectively. The Company’s effective income tax rate differs from the U.S. federal statutory income tax rate primarily as a result of the valuation allowance maintained against the Company’s net deferred tax assets, as well as state income taxes and other permanent differences.

The Company evaluates the realizability of its deferred tax assets on a quarterly basis and records a valuation allowance when, based on the weight of available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. In making this assessment, the Company considers, among other factors, its historical operating results, cumulative losses in recent years, forecasts of future taxable income, the expected reversal of existing temporary differences, and available tax-planning strategies.

As of June 30, 2026, the Company continued to maintain a full valuation allowance against its net deferred tax assets. The Company has incurred cumulative losses and currently does not have sufficient objective positive evidence to conclude that realization of its net deferred tax assets is more likely than not. Accordingly, the Company did not recognize a material income tax benefit associated with its current-period losses or other increases in deferred tax assets. The Company will continue to evaluate the realizability of its deferred tax assets in future reporting periods, and the valuation allowance may be adjusted if sufficient positive evidence becomes available to support realization.

Merger with Ryvyl Inc. and Acquired Tax Attributes

On May 12, 2026, the Company completed its merger transaction pursuant to which RTB merged with a wholly owned merger subsidiary of Ryvyl Inc., with RTB surviving the merger as a wholly owned subsidiary of Ryvyl Inc. Following completion of the transaction, Ryvyl Inc. changed its name to RTB Digital, Inc. For financial reporting purposes, the transaction was accounted for as a reverse acquisition, with RTB treated as the accounting acquirer. For Federal Income Tax purposes, the acquirer in the transaction is Ryvyl Inc. and it is continuing tax reporting entity following the merger.

In connection with the merger and the related preliminary purchase accounting, the Company recognized deferred tax assets and liabilities associated with the differences between the financial reporting and tax bases of the acquired assets and liabilities, as applicable. Significant deferred tax assets include amounts associated with federal and state net operating loss carryforwards, intangible assets and goodwill, capitalized research and development expenditures, interest expense carryforwards, unrealized losses on digital assets and investments, and other deductible temporary differences.

As of June 30, 2026, the Company estimates that Ryvyl and RTB had approximately $128.0 million and $7.7 million, respectively, of federal net operating loss carryforwards, before consideration of any applicable limitations on their utilization. The availability and ultimate utilization of these net operating loss carryforwards and certain other tax attributes are subject to the requirements and limitations of the Internal Revenue Code and applicable state tax laws.

The merger resulted in, or is expected to result in, an ownership change for purposes of Section 382 of the Internal Revenue Code. Accordingly, the utilization of certain pre-merger net operating loss carryforwards and other tax attributes may be subject to significant annual limitations. The Company has not yet completed a formal Section 382 analysis to determine the amount of the annual limitation or whether any portion of its tax attributes may expire before they can be utilized. If the Company determines that certain tax attributes will not be available as a result of these limitations and the related deferred tax assets may be reduced in a future period. Because the Company currently maintains a full valuation allowance against its net deferred tax assets, such an adjustment is not presently expected to have a material impact on the Company's income tax expense, although the ultimate impact will depend on the results of the Company's analysis.

The income tax accounting associated with the merger remains subject to further analysis, including the determination of the tax bases of certain acquired assets and liabilities, the availability and limitation of acquired tax attributes, and the completion of the Company's Section 382 analysis. Accordingly, the amounts recorded as of June 30, 2026 may be adjusted as additional information becomes available and the Company's analysis is completed.

Uncertain Tax Positions

The Company evaluates uncertain tax positions in accordance with applicable accounting guidance. As of June 30, 2026, the Company had no material unrecognized tax benefits. The Company does not currently anticipate that its unrecognized tax benefits will change materially during the next twelve months.