Usio, Inc.

Previous wording

Through our innovative Prepaid Debit Card platform, we offer a variety of prepaid card products such as reloadable, incentive, promotional and corporate card programs. Combined with our printing and mailing services, we can satisfy the diverse requirements of customer needs with physical and virtual document creation and distribution, including traditional paper checks. Our Consumer Choice product, developed and introduced in 2022, provides flexible ways to initiate a variety of payment distributions through a multitude of payment methods including physical prepaid and virtual cards, ACH, paper checks, real-time PINless debit and others. This offering allows us a superior opportunity to increase our cross-selling efforts through all of our payment methods. Throughout 2025, we enhanced our Consumer Choice product to accommodate additional methods of disbursement, such as issuing funds through PayPal and Venmo, alongside integration with the PIN4 network to allow cardless ATM withdrawals.

Current wording

Through our innovative Prepaid Debit Card platform, we offer a variety of prepaid card products such as reloadable, incentive, promotional and corporate card programs. Combined with our printing and mailing services, we can satisfy the diverse requirements of customer needs with physical and virtual document creation and distribution, including traditional paper checks. Our Consumer Choice product, developed and introduced in 2022, provides flexible ways to initiate a variety of payment distributions through a multitude of payment methods including physical prepaid and virtual cards, ACH, paper checks, real-time PINless debit and others. We believe that this offering provides us with a superior opportunity to increase our cross-selling efforts through all of our payment methods. Throughout 2025, we enhanced our Consumer Choice product to accommodate additional methods of disbursement, such as issuing funds through PayPal and Venmo, alongside integration with the PIN4 network to allow cardless ATM withdrawals.

Previous wording

With the growing need for faster payment methods, we continue to invest in technology that can help us further expand our suite of payment technology. With the rise of Real Time Payments, or RTP, we began expansion into this market vertical in 2023, which serves as an alternative to ACH payments. We also continue to enhance our existing product offerings, with improvements in reporting, data management, fraud and risk monitoring, ease of access, and accelerations in client onboarding and implementation times. With our transition to a cloud-based platform, our speed, security, and scalability in payment processing have been further expanded, allowing us to seamlessly grow as the market demands.

Current wording

With the growing need for faster payment methods, we continue to invest in technology that can help us further expand our suite of payment technology. With the rise of Real Time Payments, or RTP, we began expansion into this market vertical in 2023, which serves as an alternative to ACH and PINless debit payments. We also continue to enhance our existing product offerings, with improvements in reporting, data management, fraud and risk monitoring, ease of access, and accelerations in client onboarding and implementation times. With our transition to a cloud-based platform, our speed, security, and scalability in payment processing have been further expanded, better positioning us to seamlessly grow as the market demands.

Previous wording

In our over 25 year history, we have created a loyal customer base that relies on us for our convenient, secure, innovative and adaptive services and technology, and we have built long-standing and valuable relationships with premier banking institutions such as Fifth Third Bank, Sunrise Bank, TransPecos Bank and others.

Current wording

In our over 25-year history, we have created a loyal customer base that relies on us for our convenient, secure, innovative and adaptive services and technology, and we have built long-standing and valuable relationships with premier banking institutions such as North American Banking Company, First Premier Bank, Fifth Third Bank, Sunrise Bank, TransPecos Bank, Flagstar Bank, and others.

Previous wording

Payment Acceptance. We provide integrated electronic payment processing services to merchants and businesses, including credit, and debit card-based processing services and electronic funds transfer via the ACH network. The ACH network is a nationwide electronic funds transfer system that is regulated by the Federal Reserve and the National Automatic Clearing House Association, or NACHA, the electronic payments association, and provides for the clearing of electronic payments between participating financial institutions. Our ACH processing services enable merchants or businesses to both disburse and collect funds electronically using e-checks instead of traditional paper checks. An e-check is an electronic debit to a bank checking account that is initiated at the point-of-sale, on the Internet, over the telephone, or via a bill payment sent through the mail via a physical check. E-checks are processed using the ACH network. We are one of nine companies that hold the prestigious NACHA certification for Third-Party Senders and were the second company to receive the certification.

Current wording

Payment Acceptance. We provide integrated electronic payment processing services to merchants and businesses, including credit and debit card-based processing services and electronic funds transfer via the ACH network. The ACH network is a nationwide electronic funds transfer system that is regulated by the Federal Reserve and the National Automatic Clearing House Association, or NACHA, the electronic payments association, and provides for the clearing of electronic payments between participating financial institutions. Our ACH processing services enable merchants and businesses to both disburse and collect funds electronically using e-checks instead of traditional paper checks. An e-check is an electronic debit to a bank checking account that is initiated at the point-of-sale, on the Internet, over the telephone, or via a bill payment sent through the mail via a physical check. E-checks are processed using the ACH network. We are one of nine companies that hold the prestigious NACHA certification for Third-Party Senders and were the second company to receive the certification.

Previous wording

Electronic and Paper Billing. On December 15, 2020, we entered into the business of electronic bill presentment, document composition, document decomposition and printing and mailing services serving hundreds of customers representing a wide range of industry verticals, including utilities and financial institutions, through the acquisition of substantially all of the assets of Information Management Solutions, LLC, or IMS. This product offering provides an outsourced solution for document design, print, and electronic delivery to potential customers and entities looking to reduce postage costs and increase efficiencies. This acquisition increased our ability to grow new revenue streams and allowed us to reenter the electronic bill presentment and payment revenue stream. Usio Output Solutions, Inc., or Output Solutions, offers a unique, and complementary payment related solution to our merchant services products of ACH, credit card, and prepaid card processing, with an opportunity for enhanced cross-selling efforts. The success of this business line depends on our ability to realize the anticipated growth opportunities, although we cannot provide any assurance that we will be able to realize these opportunities. Since the acquisition of substantially all of the assets of IMS, we have invested in new equipment to enhance the capacity and speed of the business unit, such as a new inserter and folder, on October 1, 2023, that was implemented over the course of 2024, and a new printer in September 2025 that was installed and operational in the second quarter of 2026. Further, in December 2024, we partnered with an outsourced presorting company to further automate our print and mail systems. Despite challenges in growing revenues from Output Solutions in 2025, we have significantly reduced labor costs related to print and mail processing. We believe this reduction has better positioned the business line to pursue and successfully generate much larger opportunities than we previously were able to through the increase in capacity and automation. Results have already been realized, as the quantity of mail we printed and delivered in the first quarter of 2026 was higher than in any other fiscal quarter in the history of the Company, while simultaneously requiring fewer working hours to achieve, compared to each fiscal quarter of 2025. This performance continued into the second quarter of 2026, in which each month set a record for the highest number of pieces printed and mailed in the same month of any prior year.

Current wording

Electronic and Paper Billing. On December 15, 2020, we entered into the business of electronic bill presentment, document composition, document decomposition and printing and mailing services serving hundreds of customers representing a wide range of industry verticals, including utilities and financial institutions, through the acquisition of substantially all of the assets of Information Management Solutions, LLC, or IMS. This product offering provides an outsourced solution for document design, printing, and electronic delivery to potential customers and entities looking to reduce postage costs and increase efficiencies. This acquisition increased our ability to grow new revenue streams and allowed us to reenter the electronic bill presentment and payment revenue stream. Usio Output Solutions, Inc., or Output Solutions, offers a unique, and complementary payment-related solution to our merchant services products of ACH, credit card, and prepaid card processing, with an opportunity for enhanced cross-selling efforts. The success of this business line depends on our ability to realize the anticipated growth opportunities, although we cannot provide any assurance that we will be able to realize these opportunities. Since the acquisition of substantially all of the assets of IMS, we have invested in new equipment to enhance the capacity and speed of the business unit, such as a new inserter and folder on October 1, 2023, which was implemented over the course of 2024, and a new printer in September 2025 that was installed and operational in the second quarter of 2026. Despite challenges in growing revenues from Output Solutions in 2025, we have significantly reduced labor costs related to print and mail processing. We believe this reduction has better positioned the business line to pursue and successfully generate much larger opportunities than we previously were able to through the increase in capacity and automation. Results have already been realized, as the quantity of mail we printed and delivered in the first quarter of 2026 was higher than in any prior fiscal quarter in the history of the Company, while simultaneously requiring fewer working hours to achieve, compared to each fiscal quarter of 2025. This performance continued into the second and third quarter of 2026, in which each quarter set a record for the highest revenue compared to the corresponding quarter of any prior year. Following the abrupt closure of our outsourced presorting partner in August of 2026, we entered into an agreement at the close of September 2026 to acquire a new piece of presorting mail equipment. This new equipment, which was installed and operational as of November 2026, will allow for presorting operations at significant scale, eliminating the initial bottleneck that required outsourcing our presorting operations in the first place. We believe this new equipment may allow us to see some additional cost savings through enhanced postage rates and the eliminatio…

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Previous wording

"Usio One". Throughout 2025 and continuing in 2026, we adopted and began implementing our "Usio One" strategy, designed to unify our brand, sales approach, and payments offerings. Through this strategy, we are developing enhanced client onboarding features, superior customer management, improved reporting and fraud monitoring, alongside a consolidated sales and marketing team to better cross-sell our various payment methods and ancillary services. We believe this strategy will help better position our merchant services and Output Solutions business segments to customers and the broader payments related market as a more cohesive service offering. In turn, we anticipate being able to better leverage our resources, reduce friction in new customer acquisition, and drive more meaningful cross-selling opportunities, which we anticipate will help increase our products' stickiness and customer retention. Success from this strategy has already been realized by our sales and client management staff through the generation of new integrations between our existing customers and our ancillary business lines. The consolidation of our various technologies into a more seamless product offering continues to progress, and we anticipate that it will ultimately result in a client and customer onboarding process that enables all of our customers to automatically be enrolled in, and have access to, each of our payment acceptance and issuing products. In turn, through the continued development of our back end technology infrastructure, we anticipate the ability to eliminate the need for distinct contracts, dashboards, funding accounts, and support teams per product.

Current wording

"Usio One". Throughout 2025 and continuing in 2026, we adopted and began implementing our "Usio One" strategy, designed to unify our brand, sales approach, and payments offerings. Through this strategy, we are developing enhanced client onboarding features, superior customer management, improved reporting and fraud monitoring, alongside a consolidated sales and marketing team to better cross-sell our various payment methods and ancillary services. We believe this strategy will help better position our merchant services and Output Solutions business segments to customers and the broader payments related market as a more cohesive service offering. In turn, we anticipate being able to better leverage our resources, reduce friction in new customer acquisition, and drive more meaningful cross-selling opportunities, which we anticipate will help increase our products' stickiness and customer retention. Success from this strategy has already been realized by our sales and client management staff through the generation of new integrations between our existing customers and our ancillary business lines. The consolidation of our various technologies into a more seamless product offering continues to progress, and we anticipate that it will ultimately result in a client and customer onboarding process that enables all of our customers to automatically be enrolled in, and have access to, each of our payment acceptance and issuing products. In turn, through the continued development of our backend technology infrastructure, we anticipate the ability to eliminate the need for distinct contracts, dashboards, funding accounts, and support teams for each product.

Previous wording

PostCredit Acquisition. In November of 2025, we acquired substantially all of the assets of PostCredit, allowing an entry point into the expense management space. PostCredit had been developing technology that would cater to companies looking for fund management and expense tracking that integrated with various Enterprise Resource Planning, or ERP, systems. The Company anticipates continuing to develop this technology, while simultaneously integrating it into our existing products, opening a new sales channel to the broader market already utilizing ERPs such as Microsoft Business Dynamics and Business Central. We intend to combine this technology seamlessly with our EBPP product launched in 2025, allowing clients to send invoices, payments, manage funds, and reconcile with their various ERP platforms utilizing our payment channels. In combination with the other efforts of our Usio One strategy, we believe we will be able to develop a central Usio Business Hub that further encourages and incentivizes the utilization of our products, cross-sells our corporate expense solution, and assists in retaining the deposits we hold for our customers to help maintain or grow our interest revenues. We believe we will be able to implement phased portions of this strategy, and other PostCredit related projects, by the end of 2026. In the first half of 2026, we were able to demonstrate our early stage development to both existing clients and prospective customers as an upcoming feature, and believe we have been able to generate significant interest in PostCredit as both a standalone product and as a value-added service to our existing suite of technology. We continue to work towards releasing a live version of this platform to customers in the second half of 2026.

Current wording

PostCredit Acquisition. In November of 2025, we acquired substantially all of the assets of PostCredit, creating an entry point into the expense management space. PostCredit had been developing technology that would cater to companies looking for fund management and expense tracking that integrated with various Enterprise Resource Planning, or ERP, systems. The Company anticipates continuing to develop this technology, while simultaneously integrating it into our existing products, opening a new sales channel to the broader market already utilizing ERPs such as Microsoft Business Dynamics and Business Central. We intend to combine this technology seamlessly with our EBPP product launched in 2025, allowing clients to send invoices, payments, manage funds, and reconcile with their various ERP platforms utilizing our payment channels. In combination with the other efforts of our Usio One strategy, we believe we will be able to develop a central Usio Business Hub that further encourages and incentivizes the utilization of our products, cross-sells our corporate expense solution, and assists in retaining the deposits we hold for our customers to help maintain or grow our interest revenues. We believe we will be able to implement phased portions of this strategy, and other PostCredit related projects, by the end of 2026. In the first half of 2026, we were able to demonstrate our early stage development to both existing clients and prospective customers as an upcoming feature, and believe we have been able to generate significant interest in PostCredit as both a standalone product and as a value-added service to our existing suite of technologies. In the third quarter of 2026, we released a live version of PostCredit, rebranded as "Ion", to consumers that leverages our central Usio Business Hub. This version of the product allows customers to create new accounts with Usio in the form of quasi-bank accounts that leverage our corporate and expense management solution through our prepaid card products and integrate into an ERP. In the future, we anticipate Usio Ion will integrate with all of our payment acceptance and print and mail services, enabling our existing customers and business to utilize all of our various service offerings through a single, easy to use account.

Previous wording

We believe that our success will continue to depend in large part on our ability to (a) scale recurring revenues and deepen partner relationships, (b) expand our product offerings, (c) pursue disciplined, accretive opportunities, (d) enhance shareholder value via operational execution and capital allocation, and (e) assimilate current and future acquisitions of companies and customer portfolios. We will continue to invest in our sales force and technology platforms to drive revenue growth. In particular, we are focused on growing our ACH merchants, adding new software integrators, and growing our electronic bill presentment, document composition, document decomposition, printing and mailing services business while providing incremental services to existing merchants. In addition to our near-term growth opportunities, we are focused on leveraging and optimizing the infrastructure of our business to enable expansion of our payment processing and mail and printing capabilities without significantly increasing our operating costs. We continue to seek ways to grow revenue, and net new client implementations and onboards occur regularly due to our ability to address the needs of our market.

Current wording

We believe that our success will continue to depend in large part on our ability to (a) scale recurring revenues and deepen partner relationships, (b) expand our product offerings, (c) pursue disciplined, accretive opportunities, (d) enhance shareholder value via operational execution and capital allocation, and (e) assimilate current and future acquisitions of companies and customer portfolios. We will continue to invest in our sales force and technology platforms to drive revenue growth. In particular, we are focused on growing our ACH merchants, adding new software integrators, and growing our electronic bill presentment, document composition, document decomposition, printing and mailing services business while providing incremental services to existing merchants. In addition to our near-term growth opportunities, we are focused on leveraging and optimizing the infrastructure of our business to enable expansion of our payment processing and mail and printing capabilities without significantly increasing our operating costs. We continue to seek ways to grow revenue while also increasing new client implementations and onboards through addressing the needs of our market.

Previous wording

Growing Revenues. Revenue growth remains a consistent focus for the Company, as we strive to achieve expanded scale and establish a strong reputation within the financial technologies space. This growth assists us in maintaining our diversified offerings and remaining relevant in the payments ecosystem by developing payment platforms that address the current needs of our marketplace. In the second quarter of 2026, our revenues increased 19% to $23.7 million, as compared to $20.0 million in the same quarter of 2025, due primarily to strong growth in our ACH and complementary services, credit card, and Output Solutions lines of business, though offset slightly by declines in our prepaid card services line of business and interest revenues. The strong growth in each of our ACH and complementary services, and credit card lines of business was due to organic growth from existing customers and net new client implementations and onboarding. Similarly, growth in our Output Solutions line of business was driven by a combination of organic growth and net new customer acquisitions. Additionally, revenues were further enhanced due to the scalability and printing speed realized from our new printer that became operational in the second quarter of 2026, improving work flows and allowing us to drive increased sales. The decrease in our prepaid card services revenues was due to declines from one of our key prepaid card programs, as its business was impacted by the loss of a key customer in the second quarter of 2025 that made meaningful contributions to Usio revenues in the first and second quarter of 2025. Lower interest revenues were driven by interest rates and interest bearing deposits declining versus the prior year.

Current wording

Scale recurring revenues and deepen partner relationships. Revenue growth remains a consistent focus for the Company, as we strive to achieve expanded scale and establish a strong reputation within the financial technologies space. We seek to maintain and expand our diversified offerings and remain relevant in the payments ecosystem by developing payment platforms that address the current needs of our marketplace. In the third quarter of 2026, our revenues increased 12% to $23.8 million, as compared to $21.2 million in the same quarter of 2025, due to growth in all of our lines of business. The strong growth in each of our ACH and complementary services and credit card lines of business was due to organic growth from existing customers and new client implementations and onboarding. Similarly, growth in our Output Solutions line of business was driven by a combination of organic growth and new customer acquisitions. Additionally, Output Solutions revenues were further enhanced due to the scalability and printing speed realized from our new printer that became operational in the second quarter of 2026, improving workflows and allowing us to drive increased sales. The nominal increase in our prepaid card services revenues was due to organic growth from existing customers, alongside the onboarding and implementation of new clients during the quarter. Higher interest revenues were driven by increased interest bearing deposits versus the prior year.

Previous wording

Pursue disciplined, accretive opportunities. Acquisitions have been a key element in our growth-focused strategy, both by adding net new customers and by enhancing our suite of payment technologies. This is evident through our acquisitions of Akimbo Financial, Inc., Singular Payments, and IMS, which allowed us to introduce new offerings such as prepaid card issuance, PayFac, and electronic bill presentment, all of which represent significant portions of our current revenues. The Company continually evaluates the markets for opportunities to acquire or partner with accretive opportunities that align with our core competencies. In 2025, we acquired the assets of PostCredit, which we believe once again represents an opportunity to enhance our existing products and to introduce us as a new competitor in the expense management market vertical. We cannot assure you that we will be able to complete any acquisitions in the future.

Current wording

Pursue disciplined, accretive opportunities. Acquisitions have been a key element in our growth-focused strategy, both by adding new customers and by enhancing our suite of payment technologies. This is evident through our acquisitions of Akimbo Financial, Inc., Singular Payments, and IMS, which allowed us to introduce new offerings such as prepaid card issuance, PayFac, and electronic bill presentment, all of which represent significant portions of our current revenues. The Company continually evaluates the markets for opportunities to acquire or partner with accretive opportunities that align with our core competencies. In 2025, we acquired the assets of PostCredit, rebranded as "Ion", which we believe once again represents an opportunity to enhance our existing products and to introduce us as a new competitor in the expense management market vertical. Although acquisitions are a key element of our strategy, we cannot assure you that we will be able to continue to complete acquisitions in the future.

Previous wording

Enhancing shareholder value via operational execution and capital allocation. By appropriately managing our expenses (which are discussed under "- Results of Operations - Selling, General and Administrative Expenses" below), we believe we can achieve better economies of scale, and drive revenue growth. We believe that carefully evaluating our existing selling, general and administrative, or SG&A, expenses, and balancing them against the need for client implementation and support, together with our technology staff driving product innovation, will guide our operational strategies while maintaining a focus on efficiencies and profitability. SG&A expenses were flat in the second quarter of 2026 compared to the second quarter of 2025, at $4.6 million. For more information, see "Results of Operations - Selling, General and Administrative Expenses" below.

Current wording

Enhance shareholder value via operational execution and capital allocation. By appropriately managing our expenses (which are discussed under "Results of Operations - Selling, General and Administrative Expenses" below), we believe we can achieve better economies of scale while continuing to drive revenue growth. Our operational strategies are guided by carefully evaluating our existing selling, general and administrative, or SG&A, expenses and balancing them against the need for client implementation and support, while also utilizing our technology staff to drive product innovation. At the same time, we maintain a focus on efficiencies and profitability. SG&A expenses were $4.6 million, up 1% in the third quarter of 2026, compared to $4.5 million in the third quarter of 2025. This increase was due to nominal increases across salaries and network infrastructure expenses; however, SG&A expenses grew at a significantly lower rate than revenues and gross profit, as we remain committed to increasing profitability. For more information, see "Results of Operations - Selling, General and Administrative Expenses" below.

Previous wording

Assimilating Current and Future Acquisitions. The assimilation of our previous acquisitions has been critical in both the retention of purchased assets and their growth, through cross-selling and implementation into our broader infrastructure, which allows for increased diversity of offerings and support. Successfully assimilating acquisitions remains a crucial priority for the success of the Company. The recent acquisition of PostCredit represents an especially critical component of this strategy, and may require significant time investment and capital expenditure to fully implement. We cannot assure you that we will be able to successfully assimilate new and future acquisitions.

Current wording

Assimilate current and future acquisitions of companies and customer portfolios. The assimilation of our previous acquisitions has been critical in both the retention of purchased assets and their growth through cross-selling and implementation into our broader infrastructure, which allows for increased diversity of offerings and support. Successfully assimilating acquisitions remains a crucial priority for the success of the Company. The recent acquisition of PostCredit, rebranded as "Ion", represents an especially critical component of this strategy, and may require significant time investment and capital expenditure to fully implement. We cannot assure you that we will be able to successfully assimilate new and future acquisitions.

Previous wording

In addition to the factors discussed above, we believe that processing volume and transaction counts are vital measures that indicate our addition and implementation of net new customers, and growth from existing customers, which we believe correlate to both current and future revenues. The change in credit card processing volume, ACH transaction counts, and prepaid card purchase volume are the most direct metrics that drive revenues in their respective business lines, while prepaid card load volumes specifically, are an indicator of future revenue change within the prepaid card business line. While there are many components to the revenues of our business units that could impact revenue growth or decline, these processing metrics offer an indication to the current health of our overall company and success in our strategies to grow the business.

Current wording

In addition to the factors discussed above, we believe that processing volumes and transaction counts are vital measures that reflect our addition and implementation of new customers and growth from existing customers, which we believe correlate to both current and future revenues. The change in credit card processing volume, ACH transaction counts, and prepaid card purchase volume are the most direct metrics that drive revenues in their respective business lines, while prepaid card load volumes specifically are an indicator of future revenue change within the prepaid card business line. While there are many components to the revenues of our business units that could impact revenue growth or decline, these processing metrics offer an indication of the current health of our overall company and the success in our strategies to grow the business.

Previous wording

During the second quarter of 2026, the number of credit card transactions processed by us increased by 19% versus the second quarter of 2025. The volume of credit card dollars processed during the second quarter of 2026 increased by 13% compared to the same period in 2025. The continued growth in credit card metrics was primarily attributable to our PayFac strategy to drive increased penetration across multiple industries including healthcare and legal.

Current wording

During the third quarter of 2026, the number of credit card transactions we processed increased by 17% versus the third quarter of 2025. The volume of credit card dollars processed during the third quarter of 2026 increased by 7% compared to the same quarter in 2025. The continued growth in credit card metrics was primarily attributable to our PayFac strategy to drive increased penetration across multiple industries, including healthcare and legal.

Previous wording

ACH (eCheck) transaction counts during the second quarter of 2026 increased by 34% compared to the second quarter of 2025. Returned check transactions processed during the second quarter of 2026 increased by 35% compared to the second quarter of 2025. Electronic check dollars processed during the second quarter of 2026 increased by 28% compared to the second quarter of 2025. The increases in eCheck transactions, returns, and electronic check dollar volumes processed were primarily attributable to traction in our ACH sales efforts driving new merchant onboarding and processing, alongside organic growth from existing customers, and increased adoption of newer payment products, such as RTP.

Current wording

ACH (eCheck) transaction counts during the third quarter of 2026 increased by 39% compared to the third quarter of 2025. Returned check transactions (which result in fees we charge customers) processed during the third quarter of 2026 increased by 44% compared to the third quarter of 2025. Electronic check dollars processed during the third quarter of 2026 increased by 26% compared to the third quarter of 2025. The increases in eCheck transactions, returns, and electronic check dollar volumes processed were primarily attributable to traction in our ACH sales efforts driving new merchant onboarding and processing, alongside organic growth from existing customers.

Previous wording

Prepaid card load volumes during the second quarter of 2026 were flat at $65 million compared to the second quarter of 2025. Prepaid card transaction counts processed during the second quarter of 2026 decreased by 4% compared to the second quarter of 2025. These declines were primarily due to processing reductions from one of our key clients, who lost its own downstream customers during the second quarter of 2025. This client contributed significant card load, purchase volume, and purchase transactions during the prior year period. This loss, however, was partially offset by growth in our existing client base, alongside the implementation of several new customers. Prepaid card purchase volume during the second quarter of 2026 increased by 11% compared to the second quarter of 2025. Despite the growth in prepaid card purchase volume driving increase revenues related to spend, it was not enough to overcome the more meaningful client and cardholder fee revenues derived from the aforementioned declines in one of our key clients. We continue to invest time and resources in the development of additional net new customers and clients that are at various stages of the implementation process, and we believe have the potential to drive meaningful revenue growth in the third and fourth quarters of 2026.

Current wording

Prepaid card load volumes during the third quarter of 2026 increased by 6% compared to the third quarter of 2025 through organic growth from our existing customers. Prepaid card purchase volume during the third quarter of 2026 increased by 17% compared to the third quarter of 2025 as a result of the increased quantity of load volumes. However, due to an increase in the average dollar value of each transaction processed, reflecting a change in consumer spending habits, prepaid card transaction counts processed during the third quarter of 2026 decreased by 2% compared to the third quarter of 2025. We continue to invest time and resources in the development of additional new customers and clients that are at various stages of the implementation process, which we believe have the potential to drive meaningful revenue growth in 2027 as we fully implement and onboard their business through the remainder of 2026.

Previous wording

Output Solutions total mail pieces processed and delivered were 7.8 million for the second quarter of 2026, an increase of 43% compared to 5.4 million in the second quarter of 2025, while electronic only documents delivered were 29.8 million, up 49% in the second quarter of 2026 compared to 20 million in the second quarter of 2025. This strong processing activity was driven by increased organic growth, new customer acquisitions, and the implementation of our new printer, driving increased scale and printing speeds allowing for quicker job completion time.

Current wording

Output Solutions total mail pieces processed and delivered were 5.8 million for the third quarter of 2026, an increase of 7% compared to 5.5 million in the third quarter of 2025, while electronic documents delivered were 25.5 million, up 28% in the third quarter of 2026 compared to 20 million in the third quarter of 2025. This strong processing activity was driven by increased organic growth, new customer acquisitions, and the implementation of our new printer, which drove increased scale and printing speeds and allowed for quicker job completion times.

Previous wording

Total dollar volumes processed across all business lines in the second quarter of 2026 were $2.47 billion compared to $1.94 billion processed in the second quarter of 2025, up 27% over the prior year quarter, attributable to processing volume growth in our credit card, ACH and complementary services, and prepaid card business lines.

Current wording

Total dollar volumes processed across all business lines in the third quarter of 2026 were $2.73 billion compared to $2.18 billion processed in the third quarter of 2025, up 25% over the prior year quarter, attributable to processing volume growth in our credit card, ACH and complementary services, and prepaid card business lines.

Previous wording

On August 16, 2022, former President Biden signed the Inflation Reduction Act, or IRA, which implemented a 1% excise tax on certain corporate stock repurchases, when repurchases of stock on an established securities market exceed $1 million in a tax year. On May 13, 2022, and again on March 24, 2025, the Board authorized a renewal of the buy-back program, with a limit up to $4 million of the Company's common stock with a three year duration. As of December 31, 2025, the Company had repurchased approximately $1.1 million of stock as part of the buyback program for which the Company may be required to pay approximately $11,000 in excise tax. Should the Company continue the repurchase of its securities on the open market, and the IRA remains in effect, we may be subject to this tax in 2026 and future years. During the six months ended June 30, 2026, the Company repurchased $370,932 of stock as part of the buyback program, which may become subject to the IRA's 1% excise tax if the Company meets or exceeds the IRA's 1% excise tax repurchase minimum of $1 million in stock buybacks.

Current wording

On August 16, 2022, former President Biden signed the Inflation Reduction Act, or IRA, which implemented a 1% excise tax on certain corporate stock repurchases, when repurchases of stock on an established securities market exceed $1 million in a tax year. On May 13, 2022, and again on March 24, 2025, our Board of Directors authorized a renewal of the Company's stock buyback program, with a limit of $4 million of the Company's common stock and a three year duration. During 2025, the Company repurchased approximately $1.1 million of its common stock as part of the buyback program for which the Company may be required to pay approximately $11,000 in excise tax. Should the Company continue the repurchase of its securities on the open market, and the IRA remains in effect, we may be subject to this tax in 2026 and future years. During the nine months ended September 30, 2026, the Company repurchased $498,762 of its common stock as part of the buyback program, which may become subject to the IRA's 1% excise tax if, during 2026, the Company meets or exceeds the IRA's repurchase threshold of $1 million in stock buybacks.

Previous wording

The broader implications of the macroeconomic environment, including uncertainty around recent international conflicts such as the Russia and Ukraine conflict and the military actions in Iran by the U.S. and Israel, supply chain shortages, a recession globally or in markets in which we operate, higher inflation rates, higher interest rates, and other related global economic conditions, remain unknown. In April 2025, developments relating to tariffs intensified concerns over the global macroeconomic environment. Volatility across financial markets rose and the prospect of a U.S. recession increased further. Uncertainty around the path forward and concerns over the potentially escalating effects of a trade war have created risks for the U.S. and global economies. A deterioration in macroeconomic conditions as well as ongoing uncertainty regarding tariffs or trade disputes could continue to increase the risk of lower consumer spending, merchant and consumer bankruptcy, insolvency, business failure, higher credit losses, or other business interruption, which may adversely impact our business. If these conditions continue or worsen, they could adversely impact our future financial and operating results.

Current wording

The broader implications of the macroeconomic environment, including uncertainty around international turmoil such as the Russia and Ukraine conflict and the military actions in Iran by the U.S. and Israel, supply chain shortages, a recession globally or in markets in which we operate, higher inflation rates, higher interest rates, and other related global economic conditions, remain unknown. In April 2025, developments relating to tariffs intensified concerns over the global macroeconomic environment. Volatility across financial markets rose and the prospect of a U.S. recession increased further. Uncertainty around the path forward and concerns over the potentially escalating effects of a trade war have created risks for the U.S. and global economies. A deterioration in macroeconomic conditions as well as ongoing uncertainty regarding tariffs or trade disputes could continue to increase the risk of lower consumer spending, merchant and consumer bankruptcy, insolvency, business failure, higher credit losses, or other business interruption, which may adversely impact our business. If these conditions continue or worsen, they could adversely impact our future financial and operating results.

Previous wording

As the Federal Reserve has worked to fight economic inflation, the federal funds rate experienced rapid growth from the beginning of 2022 into the third quarter of 2023, and remained flat until September 2024 when the federal funds rate was lowered. This resulted in the Company's receiving more favorable interest rates on its current cash balances, amounting to $0.7 million in interest earnings in the six months ended June 30, 2026. Of this interest, $0.5 million was recognized as revenue in the respective business lines for which the cash balances are held, and $187,689 as interest income. In 2024, the Federal Reserve lowered the federal funds rate three times by a cumulative 1%, and by 0.25% three times in 2025 during September, October, and December 2025, which has resulted in lower interest earnings on our interest-bearing cash accounts. Should the Federal Reserve continue lowering the federal funds rate in the future, this incremental source of income would decline. We continue to work closely with our bank partners, to ensure we effectively manage our cash balances, and monitor the Federal Reserve's monetary policy decisions.

Current wording

As the Federal Reserve worked to fight economic inflation, the federal funds rate experienced rapid growth from the beginning of 2022 into the third quarter of 2023, and remained flat until September 2024 when the federal funds rate was lowered. The Federal Reserve lowered the federal funds rate three times in 2024 by a cumulative 1%, and by 0.25% three times in 2025 during September, October, and December 2025, followed by a 0.25% increase in September 2026, which, despite a recent slight increase, has resulted in lower interest earnings on our interest-bearing cash accounts. The Company received $1.2 million in interest earnings in the nine months ended September 30, 2026. Of this interest, $0.9 million was recognized as revenue in the respective business lines for which the cash balances are held, and $282,599 as interest income. Should the Federal Reserve decide to lower the federal funds rate in the future, this incremental source of income would decline. We continue to work closely with our bank partners to ensure we effectively manage our cash balances and monitor the Federal Reserve's monetary policy decisions.

Previous wording

If, due to insolvency or bankruptcy of any of the Company’s merchant customers, or for any other reason, the Company is not able to collect amounts from its credit card, ACH or prepaid customers that have been properly "charged back" by the customer, or if a prepaid cardholder incurs a negative balance, the Company must bear the credit risk for the full amount of the transaction. The Company may require cash deposits and other types of collateral from certain merchants to minimize any such risks. In addition, the Company utilizes multiple systems and procedures to manage merchant risk. ACH, prepaid and credit card merchant processing loss reserves are primarily determined by performing a historical analysis of the Company’s loss experience, considering other factors that could affect that experience in the future, such as the types of transactions processed and nature of the merchant relationship with its consumers and the Company’s relationship with the Company’s prepaid card holders. This reserve amount is subject to the risk that actual losses may be greater than the Company’s estimates. Estimates for processing losses are variable based on the volume of transactions processed and could increase or decrease accordingly. At June 30, 2026 and December 31, 2025, the Company’s reserve for processing losses was $629,837 and $784,937, respectively, and carried on the Company's balance sheet as an accrued expense, and in the statement of cash flows as a change in accrued expenses.

Current wording

If, due to insolvency or bankruptcy of any of the Company’s merchant customers, or for any other reason, the Company is not able to collect amounts from its credit card, ACH or prepaid customers that have been properly "charged back" by the customer, or if a prepaid cardholder incurs a negative balance, the Company must bear the credit risk for the full amount of the transaction. The Company may require cash deposits and other types of collateral from certain merchants to minimize any such risks. In addition, the Company utilizes multiple systems and procedures to manage merchant risk. ACH, prepaid and credit card merchant processing loss reserves are primarily determined by performing a historical analysis of the Company’s loss experience, considering other factors that could affect that experience in the future, such as the types of transactions processed and nature of the merchant relationship with its consumers and the Company’s relationship with the Company’s prepaid card holders. This reserve amount is subject to the risk that actual losses may be greater than the Company’s estimates. Estimates for processing losses are variable based on the volume of transactions processed and could increase or decrease accordingly. At September 30, 2026 and December 31, 2025, the Company’s reserve for processing losses was $684,835 and $784,937, respectively, and carried on the Company's balance sheet as an accrued expense, and in the statement of cash flows as a change in the reserve for processing losses.

Previous wording

Accounts receivable are reported as outstanding principal net of an allowance for estimated credit losses, which was $181,036 and $404,132 at June 30, 2026 and December 31, 2025, respectively.

Current wording

Accounts receivable are reported net of an allowance for estimated credit losses, which was $181,036 and $404,132 at September 30, 2026 and December 31, 2025, respectively.

Previous wording

This report includes the following non-GAAP financial measures as defined in Regulation G adopted by the Commission: EBITDA, Adjusted EBITDA, and Adjusted EBITDA margins. The Company reports its financial results in compliance with GAAP but believes that also discussing non-GAAP financial measures is useful to investors because it provides them with financial measures the Company uses in the management of its business.

Current wording

This report includes the following non-GAAP financial measures as defined in Regulation G adopted by the Commission: EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin. The Company reports its financial results in compliance with GAAP but believes that also discussing non-GAAP financial measures is useful to investors because it provides them with financial measures the Company uses in the management of its business.

Previous wording

Management believes that EBITDA, Adjusted EBITDA, and Adjusted EBITDA margins are helpful to investors in evaluating the Company's operating performance because non-cash costs and other items that management believes are not indicative of its results of operations are excluded.

Current wording

Management believes that EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin are helpful to investors in evaluating the Company's operating performance because non-cash costs and other items that management believes are not indicative of its results of operations are excluded.

Previous wording

We reported Adjusted EBITDA of $1.1 million for the quarter ended June 30, 2026, as compared to Adjusted EBITDA of $0.5 million for the same period in the prior year. The increase in Adjusted EBITDA in the 2026 quarter was attributable to increased gross profit in the period. Adjusted EBITDA margins were 4.8% in the quarter ended June 30, 2026, as compared to Adjusted EBITDA margins of 2.5% for the same period in the prior year. The increase in Adjusted EBITDA margins was due primarily to increased gross profit versus the prior year period, alongside SG&A expenses representing a smaller percentage of revenues, thereby driving improved bottom line results.

Current wording

We reported Adjusted EBITDA of $1.2 million for the quarter ended September 30, 2026, as compared to Adjusted EBITDA of $0.4 million for the same period in the prior year. The increase in Adjusted EBITDA in the 2026 quarter was attributable to increased gross profit in the period. Adjusted EBITDA margin were 5.0% in the quarter ended September 30, 2026, as compared to Adjusted EBITDA margin of 1.7% for the same period in the prior year. The increase in Adjusted EBITDA margin was due primarily to increased gross profit versus the prior year period, alongside SG&A expenses representing a smaller percentage of revenues, thereby driving improved bottom line results.

Previous wording

We reported Adjusted EBITDA of $1.9 million for the six months ended June 30, 2026, as compared to Adjusted EBITDA of $1.2 million for the same period in the prior year. The increase in Adjusted EBITDA in the 2026 period was attributable to increased gross profit in the period, driven by a 17% increase in revenues versus the prior year period. Adjusted EBITDA margins were 3.9% in the six months ended June 30, 2026, as compared to Adjusted EBITDA margins of 2.8% for the same period in the prior year. The increase in Adjusted EBITDA margins was due primarily to increased gross profit versus the prior year period, alongside SG&A expenses only increasing a nominal amount and representing a smaller percentage of revenues, thereby driving improved bottom line results.

Current wording

We reported Adjusted EBITDA of $3.1 million for the nine months ended September 30, 2026, as compared to Adjusted EBITDA of $1.5 million for the same period in the prior year. The increase in Adjusted EBITDA in the 2026 period was attributable to increased gross profit in the period, driven by a 15% increase in revenues versus the prior year period. Adjusted EBITDA margin were 4.3% in the nine months ended September 30, 2026, as compared to Adjusted EBITDA margin of 2.4% for the same period in the prior year. The increase in Adjusted EBITDA margin was due primarily to increased gross profit versus the prior year period, alongside SG&A expenses only increasing a nominal amount and representing a smaller percentage of revenues, thereby driving improved bottom line results.

Previous wording

The following tables set forth reconciliations of Operating Income (Loss) to EBITDA; EBITDA to Adjusted EBITDA; and Revenues to Adjusted EBITDA margins for the three and six months ended June 30, 2026 and 2025.

Current wording

The following tables set forth reconciliations of Net Income (Loss) to EBITDA; EBITDA to Adjusted EBITDA; and Revenues to Adjusted EBITDA margin for the three and nine months ended September 30, 2026 and 2025.

Previous wording

EBITDA, Adjusted EBITDA, and Adjusted EBITDA margins should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. They are not measurements of our financial performance under GAAP and should not be considered as alternatives to revenue, net income (loss), or cash provided by (used in) operating activities, as applicable, or any other performance measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other businesses. EBITDA, Adjusted EBITDA, and Adjusted EBITDA margins have limitations as analytical tools and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our operating results as reported under GAAP.

Current wording

EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. They are not measurements of our financial performance under GAAP and should not be considered as alternatives to revenue, net income (loss), or cash provided by (used in) operating activities, as applicable, or any other performance measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other businesses. EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin have limitations as analytical tools and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our operating results as reported under GAAP.

Previous wording

Consolidated revenues for the quarter ended June 30, 2026 were up 19%, at $23.7 million, as compared to $20.0 million for the quarter ended June 30, 2025, due to the 21% growth in ACH and complementary services revenue, 28% growth in credit card revenue, and 22% growth in Output Solutions revenue. This growth completely offset a 10% revenue decline in our prepaid card services business line, alongside a net 29% decline in total interest revenues from all three interest revenue sources.

Current wording

Consolidated revenues for the quarter ended September 30, 2026 were up 12%, at $23.8 million, as compared to $21.2 million for the quarter ended September 30, 2025, due to the 18% growth in credit card revenue, 14% growth in Output Solutions revenue, 9% growth in ACH and complementary services revenue, and 1% growth in our prepaid card services business line, alongside a net 4% increase in total interest revenues from all three interest revenue sources.

Previous wording

The 28% increase in our credit card business unit for the quarter ended June 30, 2026 was the result of several key implementations of new independent software vendors and enterprise customers throughout 2025, who began processing at the end of the fourth quarter of 2025, and continued to increase their volumes in the first half of 2026. This new business was in addition to the organic growth from our existing customer base, who have continued to increase their processing volumes over time.

Current wording

The 18% increase in our credit card business unit for the quarter ended September 30, 2026 was the result of several key implementations of new independent software vendors and enterprise customers throughout 2025, who began processing at the end of the fourth quarter of 2025, and continued to increase their volumes in the first three quarters of 2026. This new business was in addition to the organic growth from our existing customer base, who have continued to increase their processing volumes over time, as represented in the 7% growth in credit card processing volume, and 17% growth in credit card transaction volume.

Previous wording

Output Solutions revenue was up 22% for the quarter ended June 30, 2026 compared to the same period of 2025, due to strong organic growth, and net new customers. Further leverage in revenue driven by new customer acquisition was related to the implementation of our new printer in the second quarter of 2026, drastically increasing the quantity of mail we can print and deliver.

Current wording

Output Solutions revenue was up 14% for the quarter ended September 30, 2026 compared to the same period of 2025, due to strong organic growth, and new customers. Further leverage in revenue driven by new customer acquisition was related to the implementation of our new printer in the second quarter of 2026, drastically increasing the quantity of mail we can print and deliver.

Previous wording

ACH and complementary services revenue growth of 21% was primarily attributable to an increase in ACH check dollar volume of 28%, an increase in transactions of 34%, and an increase in returned check transactions of 35%, in each case, for the quarter ended June 30, 2026 compared to the same period in 2025. This growth was a result of organic growth within our existing customer base, alongside net new client implementations that began processing at the end of the second quarter of 2025. Our ACH business also benefited from an increase in revenue from ancillary product offerings, such as PINless debit, RCC, and RTP.

Current wording

ACH and complementary services revenue growth of 9% was primarily attributable to an increase in ACH check dollar volume of 26%, an increase in transactions of 39%, and an increase in returned check transactions of 44%, in each case, for the quarter ended September 30, 2026 compared to the same period in 2025. This growth was a result of organic growth within our existing customer base, alongside new client implementations. Our ACH business also benefited from an increase in revenue from ancillary product offerings, such as PINless debit and RTP.

Previous wording

The 10% decrease in prepaid card services revenues for the quarter ended June 30, 2026 was attributable to one of our key clients losing a portion of its downstream customer base during the second quarter of 2025, which contributed significant revenues in the prior year period. We have already signed several contracts beginning in the second half of 2025 and into 2026, that we believe will have the ability to drive meaningful revenue growth in the second half of 2026, as we fully implement and onboard their business.

Current wording

The 1% increase in prepaid card services revenues for the quarter ended September 30, 2026 was attributable to organic growth from existing customers, alongside the onboarding and implementation of new clients during the quarter. We signed several contracts beginning in the second half of 2025 and into 2026 that we believe will have the ability to drive meaningful revenue growth in 2027, as we continue to fully implement and onboard the business from these contracts throughout the remainder of 2026.

Previous wording

Consolidated revenues for the six months ended June 30, 2026 were up 17%, at $49.1 million, as compared to $42.0 million for the six months ended June 30, 2025, due to the 23% growth in ACH and complementary services revenue, 25% growth in credit card revenue, and 20% growth in Output Solutions revenue. This growth completely offset a 14% revenue decline in our prepaid card services business line, alongside a net 33% decline in total interest revenues from all three interest revenue sources.

Current wording

Consolidated revenues for the nine months ended September 30, 2026 were up 15%, at $72.9 million, as compared to $63.2 million for the nine months ended September 30, 2025, due to the 23% growth in credit card revenue, 18% growth in ACH and complementary services revenue, and 18% growth in Output Solutions revenue. This growth completely offset a 9% revenue decline in our prepaid card services business line, alongside a net 22% decline in total interest revenues from all three interest revenue sources.

Previous wording

The 25% increase in our credit card business unit for the six months ended June 30, 2026 was the result of several key implementations of new independent software vendors and enterprise customers throughout 2025, who began processing at the end of the fourth quarter of 2025, and continued to increase their volumes in the first half of 2026. This new business was in addition to the organic growth from our existing customer base, who have continued to increase their processing volumes over time.

Current wording

The 23% increase in our credit card business unit for the nine months ended September 30, 2026 was the result of several key implementations of new independent software vendors and enterprise customers throughout 2025, who began processing at the end of the fourth quarter of 2025, and continued to increase their volumes in the first three quarters of 2026. This new business was in addition to the organic growth from our existing customer base, who have continued to increase their processing volumes over time, as seen in the 12% growth in credit card processing volume and 19% growth in credit card transaction volume.

Previous wording

ACH and complementary services revenue growth of 23% was primarily attributable to an increase in ACH check dollar volume of 29%, an increase in transactions of 34%, and an increase in returned check transactions of 44%, in each case, for the six months ended June 30, 2026 compared to the same period in 2025. This growth was a result of organic growth within our existing customer base, alongside net new client implementations that began processing at the end of the second quarter of 2025. Our ACH business also benefited from an increase in revenue from ancillary product offerings, such as PINless debit, RCC, and RTP.

Current wording

ACH and complementary services revenue growth of 18% was primarily attributable to an increase in ACH check dollar volume of 28%, an increase in transactions of 36%, and an increase in returned check transactions of 44%, in each case, for the nine months ended September 30, 2026 compared to the same period in 2025. This growth was a result of organic growth within our existing customer base, alongside new client implementations that began processing at the end of the second quarter of 2025. Our ACH business also benefited from an increase in revenue from ancillary product offerings, such as PINless debit, RCC, and RTP.

Previous wording

Output Solutions revenue was up 20% for the six months ended June 30, 2026 compared to the same period of 2025, due to strong organic growth, and net new customers. Compounding this was the presence of increased business related to the printing and mailing of tax statements and voter registration cards that occurred in the first quarter of 2026, a recurring source of revenue, but one that occurs only once each year in the case of tax statements, and once every other year with respect to voter registration cards.

Current wording

Output Solutions revenue was up 18% for the nine months ended September 30, 2026 compared to the same period of 2025, due to strong organic growth and new customers. Compounding this was the presence of increased business related to the printing and mailing of tax statements and voter registration cards that occurred in the first quarter of 2026, a recurring source of revenue, but one that occurs only once each year in the case of tax statements, and once every other year with respect to voter registration cards.

Previous wording

The 14% decline in prepaid card services revenue for the six months ended June 30, 2026 was attributable to one of our key clients losing a portion of its downstream customer base during the second quarter of 2025, which contributed significant revenues in the prior year period. We have already signed several contracts throughout the second half of 2025, and into 2026, that we believe will have the ability drive meaningful revenue growth in the second half of 2026, as we fully implement and onboard their business.

Current wording

The 9% decline in prepaid card services revenue for the nine months ended September 30, 2026 was attributable to one of our key clients losing a portion of its downstream customer base during the second quarter of 2025, which contributed significant revenues in the prior year period. We have already signed several contracts throughout the second half of 2025 and into 2026 that we believe will have the ability drive meaningful revenue growth in 2027, as we continue to fully implement and onboard the business from these contracts throughout the remainder of 2026.

Previous wording

Further declines in revenues were attributable to lower interest revenue, associated with lower interest rates and interest bearing deposits versus the prior year three and six month periods. For more information, see "- Summary of Results."

Current wording

Interest revenues were also down 22%, associated with lower interest rates and interest bearing deposits versus the prior nine-month period. For more information, see "- Summary of Results."