Paymentus Holdings, Inc.

Our business is subject to numerous risks and uncertainties, including those highlighted in the section of this report titled "Risk Factors." The following is a summary of the principal risks we face, any of which could adversely affect our business, operating results, financial condition or prospects:

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Our historical growth rate may not be sustainable or indicative of future growth, and a failure to attract and retain billers and financial institutions could materially harm our business.

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We rely on partnerships for a portion of our revenue; if we fail to establish, grow or maintain them, our ability to compete and our operating results will be impaired.

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If we cannot manage our infrastructure to support future growth and effectively manage our expanding operations, our business and reputation could be harmed.

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Our ability to maintain profitability is uncertain due to expected increases in costs that may not be offset by revenue growth or expected benefits from investments.

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Our sales efforts to large enterprises are complex, costly and unpredictable, which could cause our results to fluctuate.

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Economic risks and inflationary pressures could negatively affect our financial performance, and we may not be able to adjust our pricing accordingly.

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The market in which we operate is competitive, and if we cannot compete effectively, our business, operating results and financial condition could be harmed.

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Fluctuations in our operating results and shifts in payment mix make forecasting difficult; inability to accurately meet our forecasts could cause our stock price to decline.

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We depend on third-party payment processors, sponsor banks and printers; service interruptions from these providers could harm our business.

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Our use of artificial intelligence and machine learning presents specific risks that could harm our business and reputation.

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We operate in an innovative industry and slow or unexpected development by us could negatively impact our revenue.

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Our risk management efforts may be ineffective against fraudulent activities, exposing us to material financial losses, liability and reputational harm.

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If we lose our founder and chief executive officer or other key management, or cannot attract and retain qualified executives and employees, our business may be harmed.

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Failure to provide high-quality customer support could damage our reputation and business, or negatively impact our profitability.

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Failure to comply with extensive and evolving financial services, anti-corruption and other laws or applicable requirements could materially harm our business.

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Adverse developments in the financial services industry, including events involving liquidity, defaults or non-performance by parties we deal with, could adversely affect our business.

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Widespread health issues or pandemics, natural disasters or man-made problems could materially harm our business operations.

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Future litigation, investigations or similar matters could adversely affect our business and result in substantial costs.

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Although remediated, we have previously identified and resolved material weaknesses in internal control over financial reporting; any future failure to maintain effective internal controls could harm our business and stock price.

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Software defects, undetected errors or performance problems in our technology, including open source software, could damage client relations, harm our reputation and expose us to liability.

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Failure to obtain, maintain, protect or enforce our intellectual property rights could impair our competitive position and harm our business.

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Any material cybersecurity incident, real or perceived improper or unauthorized use, disclosure or access to the sensitive and personal data we process could harm our reputation and materially affect our business and financial condition.

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The dual class structure of our common stock and our stockholders agreement have the effect of concentrating significant voting control with Accel-KKR (AKKR), and our founder and chief executive officer, which limits or precludes your ability to influence corporate matters for the foreseeable future and may depress the market price of our Class A common stock.

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The market price of our Class A common stock may be volatile, or decline steeply, and we may not be able to meet investor or analyst expectations, likely resulting in a material decline of our Class A common stock price.

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AKKR controls us, and its interests may conflict with ours or yours in the future.

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Our certificate of incorporation contains provisions renouncing our interest and expectation to participate in certain corporate opportunities identified by, or presented to, AKKR or its affiliates, which could create conflicts of interest and have a material adverse effect on our business, results of operations, financial condition and prospects if attractive corporate opportunities are allocated by AKKR to itself, its affiliates or third parties instead of to us.

Our Risk Factors are not guarantees that no such conditions exist as of the date of this report and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part.

Special Note Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of the federal securities laws, such as those under the heading "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations", which statements involve substantial risks and uncertainties. Forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from historical results or from any future results or projections expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expect," "plan," "anticipate," "could," "intend," "target," "project," "contemplate," "believe," "estimate," "predict," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this report include statements about:

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our ability to effectively manage our growth and expand our operations;

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our ability to further attract, retain and expand our biller, financial institutions, partner and consumer base;

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our ability to timely implement and recognize revenue from new customers;

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our expectations regarding our revenue, expenses and other operating results;

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the impact of any material cybersecurity incident on our reputation as a trusted brand or on our business, operating results and financial condition;

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our market opportunity and anticipated trends in our business and industry;

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our ability to remain competitive as we continue to scale our business;

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our ability to develop new product features and enhance our platform;

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our ability to hire and retain experienced and talented employees as we grow our business;

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general economic conditions, including inflation, and their impact on us, consumer demand, average bill amounts and interchange fees;

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the impact of disruptions or instability in the financial services industry, or perceived or actual liquidity constraints at financial institutions, on our ability or the ability of our customers and vendors to meet operating expense requirements or to satisfy financial or other obligations;

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our ability to realize the anticipated benefits of past or future acquisitions or strategic investments in complementary companies, products or technologies and our ability to manage the potential business disruption and diversion of management attention caused by such acquisitions;

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our ability to maintain and enhance our brand;

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our plan to expand into new channels and industry verticals across different markets;

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the impact of widespread health issues on our operating results, liquidity and financial condition and on our employees, billers, financial institutions, partners, consumers and other key stakeholders;

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our ability to effectively integrate and leverage artificial intelligence and machine learning technologies;

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our international expansion plans and ability to expand internationally; and

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the risk factors discussed under the heading "Risk Factors" in Item 1A herein.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this report.

You should not place undue reliance on our forward-looking statements as predictions of future events. We have based the forward-looking statements primarily on our current expectations and projections about future events and trends that we believe may affect our business, operating results, financial condition and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in the section titled "Risk Factors" and elsewhere in this report. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this report. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

Neither we nor any other person assumes responsibility for the ultimate outcome of any of these forward-looking statements. Moreover, the forward-looking statements made in this report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this report to reflect events or circumstances after the date of this report or to reflect new information or the occurrence of unanticipated events, except as required by law. You should not place undue reliance on our forward-looking statements.

In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

Certain Definitions

In this report, unless the context requires otherwise, all references to "we," "our," "us," "Paymentus," and the "Company" refer to Paymentus Holdings, Inc. and, where appropriate, its consolidated subsidiaries.

Part I