Paysign, Inc.

Previous wording

This Quarterly Report on Form 10-Q includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (“Forward-Looking Statements”). All statements other than statements of historical fact included in this report are Forward-Looking Statements. These Forward-Looking Statements are based on our current expectations, assumptions, estimates and projections about our business and our industry. Words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “propose,” “may,” and other similar expressions identify Forward-Looking statements. Specific forward-looking statements made herein include our belief that we do not anticipate any losses with respect to accounts with balances exceeding federally insured limits; our expected lease obligations for subsequent years; our belief that our platform can be seamlessly integrated with our clients’ systems; our belief that our distinctive positioning allows us to provide end-to end technologies that securely manage transaction processing, cardholder enrollment, value loading, account management, data and analytics, and customer service; our belief that our architecture is known for its cross-platform compatibility, flexibility, and scalability - allowing our clients and partners to leverage these advantages for cost savings and revenue opportunities; our focus of our marketing efforts on corporate incentive and expense prepaid card products in various market verticals; our plan for 2025 to continue to invest additional funds in technology improvements, sales and marketing, cybersecurity, fraud, customer service, and regulatory compliance; our belief that from time to time we evaluate raising capital to enable us to diversify into new market verticals; our belief that if we do not raise new capital, that we will still be able to support our existing business and expand into new vertical markets using internally generated funds; our belief that the following measures are the primary indicators of our quarterly and annual revenues: gross dollar volume on loaded cards and conversion rates on gross dollar volume loaded on cards; our belief that the following are also key performance indicators: revenues, gross profit, operational expenses as a percent of revenues, cardholder participation, and EBITDA; and our belief that our available cash on hand, excluding restricted cash, along with our forecast for revenues and cash flows for the remainder of 2025 and through the second quarter of 2027, will be sufficient to sustain our operations for the next twenty-four months. In the normal course of our business, we, in an effort to help keep our stockholders and the public informed about our operations, may from time-to-time issue certain statements, either in writing or orally, that contain, or may contain, Forward-Looking Statements. Although we believe that the expectations reflect…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Quarterly Report on Form 10-Q includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (“Forward-Looking Statements”). All statements other than statements of historical fact included in this report are Forward-Looking Statements. These Forward-Looking Statements are based on our current expectations, assumptions, estimates and projections about our business and our industry. Words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “propose,” “may,” and other similar expressions identify Forward-Looking statements. Specific forward-looking statements made herein include our belief that we do not anticipate any losses with respect to accounts with balances exceeding federally insured limits; our expected lease obligations for subsequent years; our belief that our platform can be seamlessly integrated with our clients’ systems; our belief that our distinctive positioning allows us to provide end-to end technologies that securely manage transaction processing, cardholder enrollment, value loading, account management, data and analytics, and customer service; our belief that our architecture is known for its cross-platform compatibility, flexibility, and scalability - allowing our clients and partners to leverage these advantages for cost savings and revenue opportunities; our focus of our marketing efforts on corporate incentive and expense prepaid card products in various market verticals; our plan for 2025 to continue to invest additional funds in technology improvements, sales and marketing, cybersecurity, fraud, customer service, and regulatory compliance; our belief that from time to time we evaluate raising capital to enable us to diversify into new market verticals; our belief that if we do not raise new capital, that we will still be able to support our existing business and expand into new vertical markets using internally generated funds; our belief that the following measures are the primary indicators of our quarterly and annual revenues: gross dollar volume on loaded cards and conversion rates on gross dollar volume loaded on cards; our belief that the following are also key performance indicators: revenues, gross profit, operational expenses as a percent of revenues, cardholder participation, and EBITDA; and our belief that our available cash on hand, excluding restricted cash, along with our forecast for revenues and cash flows for the remainder of 2025 and through the third quarter of 2027, will be sufficient to sustain our operations for the next twenty-four months. In the normal course of our business, we, in an effort to help keep our stockholders and the public informed about our operations, may from time-to-time issue certain statements, either in writing or orally, that contain, or may contain, Forward-Looking Statements. Although we believe that the expectations reflecte…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Our revenues include fees generated from cardholder fees, interchange, card program management fees, transaction claims processing fees, breakage, and settlement income. Revenue from cardholder fees, interchange, card program management fees, and transaction claims processing fees is recorded when the performance obligation is fulfilled. Breakage is recorded ratably over the estimated card life based on historical redemption patterns, market-specific trends, escheatment rules, and existing economic conditions and relates solely to our open-loop gift card business which began at the end of 2022. Settlement income is recorded at the expiration of the card and card program.

Current wording

Our revenues include fees generated from cardholder fees, interchange, card program management fees, transaction claims processing fees, customer service, other billable services, breakage, and settlement income. Revenue from cardholder fees, interchange, card program management fees, transaction claims processing fees, customer service fees, and other service fees is recorded when the performance obligation is fulfilled. Breakage is recorded ratably over the estimated card life based on historical redemption patterns, market-specific trends, escheatment rules, and existing economic conditions and relates solely to our open-loop gift card business which began at the end of 2022. Settlement income is recorded at the expiration of the card and card program.

Previous wording

Currently, we are focusing our marketing efforts on corporate incentive and expense prepaid card products in various market verticals including but not limited to general corporate expense, healthcare related markets including pharma patient affordability solutions, clinical trials and donor compensation, loyalty rewards, and incentive cards. Following the acquisition of Gamma, we are now allocating some of our marketing efforts to selling our donor engagement application and customer resource management product into our existing markets.

Current wording

Currently, we are focusing our marketing efforts on corporate incentive and expense prepaid card products in various market verticals including but not limited to general corporate expense, healthcare related markets including pharma patient affordability solutions, clinical trials and donor compensation, loyalty rewards, incentive cards, and general disbursements. Following the acquisition of Gamma, we are now allocating some of our marketing efforts to selling our donor engagement application and customer resource management product into our existing markets.

Previous wording

In 2025, we plan to continue to invest additional funds in technology improvements, sales and marketing, cybersecurity, fraud, customer service, and regulatory compliance. From time to time, we evaluate raising capital to enable us to diversify into new market verticals. If we do not raise new capital, we believe that we will still be able to support our existing business and expand into new vertical markets using internally generated funds.

Current wording

For the remainder of 2025, we plan to continue to invest additional funds in technology improvements, sales and marketing, cybersecurity, fraud, customer service, and regulatory compliance. From time to time, we evaluate raising capital to enable us to diversify into new market verticals. If we do not raise new capital, we believe that we will still be able to support our existing business and expand into new vertical markets using internally generated funds.

Previous wording

The increase in total revenues of $4,746,754 for the three months ended June 30, 2025 compared to the same period in the prior year consisted primarily of a $529,338 decrease in plasma revenue, a $5,079,005 increase in pharma revenue, and a $197,087 increase in other revenue. The decrease in plasma revenue was primarily due to a decline in plasma donations and dollars loaded to cards as plasma inventory levels have normalized, which has reduced our average monthly revenue per center as compared to the same period in the prior year. This decline was offset by the addition of 123 net plasma centers during the second quarter of 2025, all of which went live June 16, 2025. The increase in pharma revenue was primarily due to the financial benefit of 33 net pharma patient affordability programs launched throughout 2024 and subsequent full year impact in the second quarter of 2025, the launch of seven (7) net pharma patient affordability programs in the second quarter of 2025, and a corresponding increase in monthly management fees, setup fees, claim processing fees, and other billable services such as dynamic business rules and call center support. The number of claims processed increased over 80% in the second quarter of 2025 compared to the same period in the prior year. The increase in other revenue was primarily due to the growth and usage in the number of cardholders of our payroll, retail, and corporate incentive programs.

Current wording

The increase in total revenues of $6,340,047 for the three months ended September 30, 2025 compared to the same period in the prior year consisted primarily of a $1,420,944 increase in plasma revenue, a $4,645,716 increase in pharma revenue, and a $273,387 increase in other revenue. The increase in plasma revenue was primarily due to the addition of 117 net plasma centers during the past 12 months offset by a decline in plasma donations and dollars loaded to cards as plasma inventory levels have normalized, which has reduced our average monthly revenue per center as compared to the same period in the prior year. The increase in pharma revenue was primarily due to the financial benefit of 39 net pharma patient affordability programs launched during the past 12 months, and a corresponding increase in monthly management fees, setup fees, claim processing fees, and other billable services such as dynamic business rules and call center support. The number of claims processed increased over 60% in the third quarter of 2025 compared to the same period in the prior year. The increase in other revenue was primarily due to the growth and usage in the number of cardholders of our payroll, retail, and corporate incentive programs.

Previous wording

Cost of revenues for the three months ended June 30, 2025 increased $577,352 compared to the same period in the prior year. Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, and sales and commission expense. The increase in cost of revenues consisted primarily of (i) increased customer care expense of approximately $355,000 associated primarily with the growth in our pharma patient affordability programs, wage inflation pressures, a tight labor market, and increased benefit costs; (ii) increased third-party program management fees of approximately $230,000 associated with our pharma patient affordability programs; (iii) increased plastics, collateral and postage of approximately $270,000 that was primarily associated with our plasma programs; and (iv) increased sales commission expense of approximately $211,000 related to the increase in overall revenue for programs in which we pay commission expenses. These increases were offset predominantly by decreased usage of our card programs and related fees of approximately $396,000 in network fees and approximately $93,000 of rebate costs due to lower plasma volumes.

Current wording

Cost of revenues for the three months ended September 30, 2025 increased $2,662,972 compared to the same period in the prior year. Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, application integration setup, and sales and commission expense. The increase in cost of revenues consisted primarily of (i) increased variable costs of approximately $1,724,000 related to the addition of 117 net plasma centers; (ii) increased customer care expense of approximately $546,000 associated with the overall growth in our plasma and pharma patient affordability businesses, a new customer service contact center, wage inflation pressures, a tight labor market, and increased benefit costs; (iii) increased third-party program network fees of approximately $196,000 associated with our pharma patient affordability programs; (iv) increased sales commission expense of approximately $187,000 related to the increase in overall revenue for programs in which we pay commission expenses; and (v) other increased expenses connected to fraud of approximately $10,000.

Previous wording

Gross profit for the three months ended June 30, 2025 increased $4,169,402 compared to the same period in the prior year, resulting primarily from the launch of an additional seven (7) net programs in the second quarter of 2025, a full year financial benefit of programs launched in 2024, and a corresponding increase in setup fees, monthly management fees, claim processing fees, and other billable fees associated with our pharma patient affordability programs. Gross profit also benefited from our plasma revenue and the beneficial impact of a variable cost structure, as many of the plasma transaction costs are variable in nature and are provided by third-parties who charge us based on the number of active cards outstanding and transactions that occurred during the period. The increase in gross profit was offset by one-time upfront costs associated with the 123 new plasma centers that went live on June 16, 2025, increased costs from third-party service providers, sales commission expense and customer service costs mentioned above, primarily driven by the overall growth in our business. The increase in gross margin resulted primarily from a greater contribution of total revenue from our pharma patient affordability business which has higher gross profit margins than our other businesses.

Current wording

Gross profit for the three months ended September 30, 2025 increased $3,677,075 compared to the same period in the prior year, resulting from the launch of an additional 39 net pharma patient affordability programs during the past 12 months, and a corresponding increase in setup fees, monthly management fees, claim processing fees, and other billable fees. Gross profit also benefited from the addition of 117 net plasma centers during the past 12 months, and corresponding revenue and beneficial impact of a variable cost structure, as many of the plasma transaction costs are variable in nature and are provided by third-parties who charge us based on the number of active cards outstanding and transactions that occurred during the period. The increase in gross profit was offset by increased costs from network fees, third-party service providers, sales commission expense and customer service costs mentioned above, primarily driven by the overall growth in our business. The increase in gross margin resulted primarily from a greater contribution of total revenue from our pharma patient affordability business which has higher gross profit margins than our other businesses.

Previous wording

Selling, general and administrative expenses for the three months ended June 30, 2025 increased $2,176,997 compared to the same period in the prior year and consisted primarily of an increase in (i) compensation and benefits of approximately $974,000 due to continued hiring to support our growth primarily from our pharma patient affordability business, a tight labor market, and increased benefit costs; (ii) technologies and telecom of approximately $299,000 primarily related to ongoing platform security investments; (iii) stock-based compensation costs of approximately $284,000; (iv) general expenses of approximately $141,000 primarily related to conferences, deliveries, and employee education; (v) outside professional services of approximately $61,000 for audit, tax, and human resources; and (vi) other expenses of approximately $49,000 as well as a $369,000 decrease in the amount of platform development costs that were capitalized.

Current wording

Selling, general and administrative expenses for the three months ended September 30, 2025 increased $2,160,174 compared to the same period in the prior year and consisted primarily of an increase in (i) compensation and benefits of approximately $847,000 due to continued hiring to support our growth primarily from our pharma patient affordability business, a tight labor market, and increased benefit costs; (ii) stock-based compensation costs of approximately $692,000 related to the issuance of additional restricted stock units for new hires and employee retention; (iii) technologies and telecom of approximately $163,000 primarily related to ongoing platform security investments; (iv) travel and entertainment costs approximately of $54,000; (v) general expenses of approximately $94,000 primarily related to conferences, deliveries, and employee education; (vi) outside professional services of approximately $78,000 for audit, tax, and human resources; (vii) other expenses of approximately $3,000; and (viii) a $230,000 decrease in the amount of platform development costs that were capitalized.

Previous wording

Depreciation and amortization expense for the three months ended June 30, 2025 increased $680,474 compared to the same period in the prior year. The increase in depreciation and amortization expense was primarily due to continued capitalization of new software development costs and equipment purchases related to continued enhancements to our processing platform and employment growth.

Current wording

Depreciation and amortization expense for the three months ended September 30, 2025 increased $624,799 compared to the same period in the prior year. The increase in depreciation and amortization expense was primarily due to the continued capitalization of new software development costs and equipment purchases related to continued enhancements to our processing platform and employment growth.

Previous wording

For the three months ended June 30, 2025, we recorded income from operations of $1,437,607 representing an improvement of $1,311,930 compared to income from operations of $125,677 during the same period in the prior year, related to the aforementioned factors.

Current wording

For the three months ended September 30, 2025, we recorded income from operations of $1,581,951 representing an improvement of $892,102 compared to income from operations of $689,849 during the same period in the prior year, related to the aforementioned factors.

Previous wording

Other income for the three months ended June 30, 2025 decreased $208,197 primarily related to the implied interest expense related to future cash payments for the Gamma acquisition of $129,173 and slightly lower interest rates and average bank account balances primarily from our plasma customers at our sponsor bank.

Current wording

Other income for the three months ended September 30, 2025 decreased $137,049 primarily related to the implied interest expense related to future cash payments for the Gamma acquisition of $131,694 and slightly lower interest rates.

Previous wording

The net income for the three months ended June 30, 2025 was $1,387,761, an increase of $690,659 compared to the net income of $697,102 for the three months ended June 30, 2024. The overall change in net income relates to the aforementioned factors.

Current wording

The net income for the three months ended September 30, 2025 was $2,215,135, an increase of $778,298 compared to the net income of $1,436,837 for the three months ended September 30, 2024. The overall change in net income relates to the aforementioned factors.

Previous wording

Comparison of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024

Current wording

Comparison of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024

Previous wording

The following table summarizes our consolidated financial results for the six months ended June 30, 2025 in comparison to the six months ended June 30, 2024:

Current wording

The following table summarizes our consolidated financial results for the nine months ended September 30, 2025 in comparison to the nine months ended September 30, 2024:

Previous wording

The increase in total revenues of $10,154,829 for the six months ended June 30, 2025 compared to the same period in the prior year consisted primarily of a $1,487,492 decrease in plasma revenue, an $11,309,014 increase in pharma revenue, and a $333,307 increase in other revenue. The decrease in plasma revenue was primarily due to a decline in plasma donations and dollars loaded to cards as plasma inventory levels have normalized, which has reduced our average monthly revenue per center as compared to the same period in the prior year. This decline was offset by the addition of 127 net plasma centers during the first two quarters of 2025, 123 of which went live June 16, 2025. The increase in pharma revenue was primarily due to the financial benefit of 33 net pharma patient affordability programs launched throughout 2024 and subsequent full year impact in the first half of 2025, the launch of 21 net pharma patient affordability programs in the first half of 2025, and a corresponding increase in monthly management fees, setup fees, claim processing fees, and other billable services such as dynamic business rules and call center support. The number of claims processed increased over 110% in the first half of 2025 compared to the same period in the prior year. The increase in other revenue was primarily due to the growth and usage in the number of cardholders of our payroll, retail, and corporate incentive programs.

Current wording

The increase in total revenues of $16,494,876 for the nine months ended September 30, 2025 compared to the same period in the prior year consisted primarily of a $66,548 decrease in plasma revenue, a $15,954,730 increase in pharma revenue, and a $606,694 increase in other revenue. The decrease in plasma revenue was primarily due to a decline in plasma donations and dollars loaded to cards as plasma inventory levels have normalized, which has reduced our average monthly revenue per center as compared to the same period in the prior year. This decline was offset by the addition of 117 net plasma centers during the past 12 months. The increase in pharma revenue was primarily due to the financial benefit of 39 net pharma patient affordability programs launched during the past 12 months, and a corresponding increase in monthly management fees, setup fees, claim processing fees, and other billable services such as dynamic business rules and call center support. For the nine months ending September 30, 2025 the number of claims processed increased over 90% compared to the same period in the prior year. The increase in other revenue was primarily due to the growth and usage in the number of cardholders of our payroll, retail, and corporate incentive programs.

Previous wording

Cost of revenues for the six months ended June 30, 2025 increased $1,233,850 compared to the same period in the prior year. Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, and sales and commission expense. The increase in cost of revenues consisted primarily of (i) increased customer care expense of approximately $734,000 associated primarily with the growth in our pharma patient affordability programs, wage inflation pressures, a tight labor market, and increased benefit costs; (ii) increased third-party program management fees of approximately $581,000 associated with our pharma patient affordability programs; (iii) increased plastics, collateral and postage of approximately $228,000; and (iv) increased sales and commission expense of approximately $467,000 related to the increase in overall revenue for programs in which we pay commission expenses. These increases were offset predominantly by decreased usage of our card programs and related fees of approximately $521,000 in network fees, reduced rebate fees of approximately $208,000 due to lower plasma volumes, and other costs of approximately $49,000.

Current wording

Cost of revenues for the nine months ended September 30, 2025 increased $3,896,822 compared to the same period in the prior year. Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, application integration setup, and sales and commission expense. The increase in cost of revenues consisted primarily of (i) increased customer care expense of approximately $1,280,000 associated primarily with the growth in our plasma and pharma patient affordability businesses, a new customer service contact center, wage inflation pressures, a tight labor market, and increased benefit costs; (ii) increased sales and commission expense of approximately $654,000 related to the increase in overall revenue for programs in which we pay commission expenses; (iii) increased variable costs of approximately $997,000 related to the addition of 117 net plasma centers; (iv) increased third-party program network fees of approximately $777,000 associated with our pharma patient affordability programs; and (v) increased plastics, collateral and postage of approximately $226,000. These increases were offset by a decrease in other costs of approximately $37,000.

Previous wording

Gross profit for the six months ended June 30, 2025 increased $8,920,979 compared to the same period in the prior year resulting primarily from the launch of an additional 21 net programs in the first two quarters of 2025, a full year financial benefit of programs launched in 2024, and a corresponding increase in setup fees, monthly management fees, claim processing fees, and other billable fees associated with our pharma patient affordability programs. Gross profit also benefited from our plasma revenue and the beneficial impact of a variable cost structure, as many of the plasma transaction costs are variable in nature and are provided by third parties who charge us based on the number of active cards outstanding and transactions that occurred during the period. The increase in gross profit was offset by one-time upfront costs associated with the 123 new plasma centers that went live on June 16, 2025, increased costs from third-party service providers, sales and commission expense, and customer service costs mentioned above, primarily driven by the overall growth in our business. The increase in gross margin resulted primarily from a greater contribution of total revenue from our pharma patient affordability business which has higher gross profit margins than our other businesses.

Current wording

Gross profit for the nine months ended September 30, 2025 increased $12,598,054 compared to the same period in the prior year resulting primarily from the launch of an additional 39 net pharma patient affordability programs during the past 12 months, and a corresponding increase in setup fees, monthly management fees, claim processing fees, and other billable fees. Gross profit also benefited from the addition of 117 net plasma centers during the past 12 months, and corresponding revenue and beneficial impact of a variable cost structure, as many of the plasma transaction costs are variable in nature and are provided by third parties who charge us based on the number of active cards outstanding and transactions that occurred during the period. The increase in gross profit was offset by increased costs from network fees, third-party service providers, sales commission expense and customer service costs mentioned above, primarily driven by the overall growth in our business. The increase in gross margin resulted primarily from a greater contribution of total revenue from our pharma patient affordability business which has higher gross profit margins than our other businesses.

Previous wording

Selling, general and administrative expenses for the six months ended June 30, 2025 increased $3,666,558 compared to the same period in the prior year and consisted primarily of an increase in (i) compensation and benefits of approximately $2,519,000 due to continued hiring to support our growth, a tight labor market, and increased benefit costs; (ii) technologies and telecom expense of approximately $631,000 primarily related to ongoing platform security investments; (iii) acquisition costs of approximately $129,000 associated with the Gamma asset purchase; (iv) stock-based compensation of approximately $293,000; (v) travel and entertainment of approximately $76,000; and (vi) all other operating expenses of approximately $19,000.

Current wording

Selling, general and administrative expenses for the nine months ended September 30, 2025 increased $5,826,732 compared to the same period in the prior year and consisted primarily of an increase in (i) compensation and benefits of approximately $3,366,000 due to continued hiring to support our growth, a tight labor market, and increased benefit costs; (ii) stock-based compensation of approximately $985,000 related to the issuance of restricted stock units for new hires and employee retention; (iii) technologies and telecom expense of approximately $793,000 primarily related to ongoing platform security investments; (iv) general expenses of approximately $219,000 primarily related to conferences, deliveries, and employee education; (v) acquisition costs of approximately $129,000 associated with the Gamma asset purchase; (vi) travel and entertainment of approximately $129,000; and (vii) a decrease in capitalized platform development costs of approximately $240,000. The rise in costs was offset by a reduction in other operating expenses of approximately $35,000.

Previous wording

Depreciation and amortization expense for the six months ended June 30, 2025 increased $1,195,073 compared to the same period in the prior year. The increase in depreciation and amortization expense was primarily due to continued capitalization of new software development costs and equipment purchases related to continued enhancements to our processing platform and employment growth.

Current wording

Depreciation and amortization expense for the nine months ended September 30, 2025 increased $1,819,872 compared to the same period in the prior year. The increase in depreciation and amortization expense was primarily due to continued capitalization of new software development costs and equipment purchases related to continued enhancements to our processing platform and employment growth.

Previous wording

For the six months ended June 30, 2025, we recorded income from operations of $3,926,673 representing an improvement of $4,059,348 compared to a loss from operations of $132,675 during the same period in the prior year related to the aforementioned factors.

Current wording

For the nine months ended September 30, 2025, we recorded income from operations of $5,508,624 representing an improvement of $4,951,450 compared to income from operations of $557,174 during the same period in the prior year related to the aforementioned factors.

Previous wording

Other income for the six months ended June 30, 2024 decreased $177,343 primarily related to the implied interest expense related to future cash payments for the Gamma acquisition of $129,173 and slightly lower interest rates and average bank account balances primarily from our plasma customers at our sponsor bank.

Current wording

Other income for the nine months ended September 30, 2024 decreased $314,392 primarily related to the implied interest expense related to future cash payments for the Gamma acquisition of $260,866 and slightly lower interest rates.

Previous wording

At June 30, 2025, our income tax expense was $1,320,170, which equates to an effective tax rate of 24.9%primarily as a result of tax benefits related to our stock-based compensation. At June 30, 2024, our income tax expense was $405,828, which equates to an effective tax rate of 28.7%primarily as a result of tax benefits related to our stock-based compensation and changes to our valuation allowance recorded on our net deferred tax assets.

Current wording

At September 30, 2025, our income tax expense was $1,350,652, which equates to an effective tax rate of 17.9% primarily resulting from improved book earnings and tax benefits related to our stock-based compensation. At September 30, 2024, our income tax expense was $459,555, which equates to an effective tax rate of 15.8% primarily resulting from tax benefits related to our stock-based compensation and changes to the Company’s valuation allowance recorded on its net deferred tax assets.

Previous wording

The net income for the six months ended June 30, 2025 was $3,973,861, an improvement of $2,967,663 compared to the net income of $1,006,198 for the six months ended June 30, 2024. The overall change in net income relates to the aforementioned factors.

Current wording

The net income for the nine months ended September 30, 2025 was $6,188,996, an improvement of $3,745,961 compared to the net income of $2,443,035 for the nine months ended September 30, 2024. The overall change in net income relates to the aforementioned factors.

Previous wording

Gross Dollar Volume Loaded on Cards: Represents the total dollar volume of funds loaded to all our prepaid card programs. Our gross dollar volume loaded on cards was $440 million and $456 million for the three months ended June 30, 2025 and 2024, respectively. Our gross dollar volume loaded on cards was $847 million and $882 million for the six months ended June 30, 2025 and 2024, respectively. We use this metric to analyze the total amount of money moving into our prepaid card programs. The year over year decline reflects the decline in loads we are experiencing in our plasma programs, partially offset by growth in our pharma patient affordability and other prepaid programs.

Current wording

Gross Dollar Volume Loaded on Cards: Represents the total dollar volume of funds loaded to all our prepaid card programs. Our gross dollar volume loaded on cards was $552 million and $456 million for the three months ended September 30, 2025 and 2024, respectively. Our gross dollar volume loaded on cards was $1.399 million and $1.339 million for the nine months ended September 30, 2025 and 2024, respectively. We use this metric to analyze the total amount of money moving into our prepaid card programs. The year over year increase reflects the number of new plasma centers added, the number of pharma patient affordability programs added, and growth in our other prepaid programs.

Previous wording

Conversion Rates on Gross Dollar Volume Loaded on Cards: Represents revenues, gross profit or net income (loss) conversion rates of gross dollar volume loaded on cards which are calculated by taking our total revenues, gross profit or net income (loss), respectively, as a numerator and dividing by the gross dollar volume loaded on cards as a denominator. As we derive a number of our financial results from cardholder fees, we utilize these metrics as an indication of the amount of money that is added to cards and will eventually be converted to revenues, gross profit and net income (loss). Our total revenue conversion rates for the three months ended June 30, 2025 and 2024 were 4.34% or 434 basis points (“bps”), and 3.14% or 314 basis points, respectively, of gross dollar volume loaded on cards. Our total gross profit conversion rates for the three months ended June 30, 2025and 2024 were 2.67% or 267 bps, and 1.66% or 166 bps, respectively, of gross dollar volume loaded on cards. Our net income (loss) conversion rates for the three months ended June 30, 2025 and 2024 were 0.32% or 32 bps, and 0.15% or 15 bps, respectively, of gross dollar volume loaded on cards. Our total revenue conversion rates for the six months ended June 30, 2025 and 2024 were 4.45% or 445 bps, and 3.12% or 312 bps, respectively, of gross dollar volume loaded on cards. Our total gross profit conversion rates for the six months ended June 30, 2025 and 2024 were 2.77% or 277 bps, and 1.65% or 165 bps, respectively, of gross dollar volume loaded on cards. Our net income (loss) conversion rates for the six months ended June 30, 2025 and 2024 were 0.47% or 47 bps, and 0.11% or 11 bps, respectively, of gross dollar volume loaded on cards.

Current wording

Conversion Rates on Gross Dollar Volume Loaded on Cards: Represents revenues, gross profit or net income (loss) conversion rates of gross dollar volume loaded on cards which are calculated by taking our total revenues, gross profit or net income (loss), respectively, as a numerator and dividing by the gross dollar volume loaded on cards as a denominator. As we derive a number of our financial results from cardholder fees, we utilize these metrics as an indication of the amount of money that is added to cards and will eventually be converted to revenues, gross profit and net income (loss). Our total revenue conversion rates for the three months ended September 30, 2025 and 2024 were 3.91% or 391 basis points (“bps”), and 3.34% or 334 basis points, respectively, of gross dollar volume loaded on cards. Our total gross profit conversion rates for the three months ended September 30, 2025 and 2024 were 2.20% or 220 bps, and 1.86% or 186 bps, respectively, of gross dollar volume loaded on cards. Our net income conversion rates for the three months ended September 30, 2025 and 2024 were 0.40% or 40 bps, and 0.31% or 31 bps, respectively, of gross dollar volume loaded on cards. Our total revenue conversion rates for the nine months ended September 30, 2025 and 2024 were 4.24% or424 bps, and 3.20% or 320 bps, respectively, of gross dollar volume loaded on cards. Our total gross profit conversion rates for the nine months ended September 30, 2025 and 2024 were 2.54% or 254 bps, and 1.72% or 172 bps, respectively, of gross dollar volume loaded on cards. Our net income conversion rates for the nine months ended September 30, 2025 and 2024 were 0.44% or 44 bps, and 0.18% or 18 bps, respectively, of gross dollar volume loaded on cards.

Previous wording

Management also reviews key performance indicators, such as revenues, gross profit, operational expenses as a percentage of revenues, and cardholder participation. In addition, we consider certain non-GAAP (or “adjusted”) measures to be useful to management and investors evaluating our operating performance for the periods presented and provide a financial tool for evaluating our ongoing operations, liquidity and management of assets. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment and investment in new card programs. These adjusted metrics are consistent with how management views our business and are used to make financial, operating and planning decisions. These metrics, however, are not measures of financial performance under GAAP and should not be considered a substitute for revenue, operating income, net income (loss), earnings (loss) per share (basic and diluted) or net cash from operating activities as determined in accordance with GAAP. We consider the following non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, to be key performance indicators:

Current wording

Management also reviews key performance indicators, such as revenues, gross profit, operational expenses as a percentage of revenues, and cardholder participation. In addition, we consider certain non-GAAP (or “adjusted”) measures to be useful to management and investors evaluating our operating performance for the periods presented and provide a financial tool for evaluating our ongoing operations, liquidity and management of assets. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment and investment in new card programs. These adjusted metrics are consistent with how management views our business and are used to make financial, operating and planning decisions. These metrics, however, are not measures of financial performance under GAAP and should not be considered a substitute for revenue, operating income, net income, earnings per share (basic and diluted) or net cash from operating activities as determined in accordance with GAAP. We consider the following non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, to be key performance indicators:

Previous wording

During the six months ended June 30, 2025 and 2024, we financed our operations through internally generated funds.

Current wording

During the nine months ended September 30, 2025 and 2024, we financed our operations through internally generated funds.

Previous wording

Operating activities used $8,430,063 of cash as of June 30, 2025, a decrease of $31,188,969 compared to same period in the prior year. This change in cash flow compared to the prior period is primarily due to net decreases in operating assets and liabilities. The changes in accounts receivable, accounts payable, and customer card funding, a net decrease of $37,251,978, are primarily related to the growth in our pharma patient affordability business and timing of pass-through payments as we are invoiced by third-party service providers at the end of the period and are due monies from our pharma patient affordability customers to cover these third-party payables. The decrease in cash flows from operating activities was offset by an increase in net income, reduced prepaid expenses, collection of tax credits and non-cash adjustments for depreciation and amortization, deferred income tax, stock-based compensation, loan expense and lease expense.

Current wording

Operating activities provided $4,360,171 of cash as of September 30, 2025, a decrease of $4,273,751 compared to same period in the prior year. This change in cash flow compared to the change in cash flow in the prior period is primarily due to net decreases in operating assets and liabilities. The changes in accounts receivable, accounts payable, and customer card funding, a net decrease of $12,667,611, are primarily related to the growth in our pharma patient affordability business and timing of pass-through payments as we are invoiced by third-party service providers at the end of the period and are due monies from our pharma patient affordability customers to cover these third-party payables. The decrease in cash flows from operating activities was offset by an increase in net income, reduced prepaid expenses, collection of tax credits and non-cash adjustments for depreciation and amortization, deferred income tax, stock-based compensation, and lease expense.

Previous wording

We used net cash in investing activities during the six months ended June 30, 2025 and 2024 of $6,253,535 and $4,640,045, respectively. For the six months ended June 30, 2025, $4,253,535 of the cash was used for investing activities primarily attributable to an increase in software licenses and the capitalization of internally developed software as we continue to invest in our technology platform. The remaining amount of $2,000,000 was used for the Gamma acquisition that closed on March 19, 2025 (see “Note 2- ACQUISITION” in the notes to the accompanying consolidated financial statements).

Current wording

We used net cash in investing activities during the nine months ended September 30, 2025 and 2024 of $8,436,339 and $7,087,867, respectively. For the nine months ended September 30, 2025, $6,436,339 of cash was used for investing activities primarily attributable to an increase in software licenses and capitalization of internally developed software as we continue to invest in our technology platform. The remaining amount of $2,000,000 was used for the Gamma acquisition that closed on March 19, 2025 (see “Note 2- ACQUISITION” in the notes to the accompanying consolidated financial statements). For the nine months ended September 30, 2024, $7,087,867 of cash was used for investing activities primarily attributable to an increase in software licenses and capitalization of internally developed software as we continue to invest in our technology platform.

Previous wording

Cash provided by financing activities of $215,748 for the six months ended June 30, 2025 was primarily attributed to proceeds from the exercise of options of $591,534, partially offset by the repurchase of 100,000 shares of the Company’s common stock at a weighted average price of $3.76 per share.

Current wording

Cash provided by financing activities of $284,868 for the nine months ended September 30, 2025 was primarily attributed to proceeds from the exercise of options of $660,654, partially offset by the repurchase of 100,000 shares of the Company’s common stock at a weighted average price of $3.76 per share. Finance activities during the nine months ended September 30, 2024 used $331,695 in cash, attributable to the repurchase of 100,000 shares of the Company’s common stock at a weighted average price of $3.60 per share offset by proceeds received of $28,800 for the exercise of stock options.

Previous wording

We believe that our available cash on hand, excluding restricted cash, at June 30, 2025 of $11,753,184, along with our forecast for revenues and cash flows for the remainder of 2025 and through the second quarter of 2027, will be sufficient to sustain our operations for the next twenty-four months. In light of the recent bank failures, we continue to monitor the health and soundness of our bank relationships through publicly available information. Based on recent SEC filings, we have not discovered any issues that would cause us to alter our bank relationships.

Current wording

Unrestricted cash was $7,529,047 as of September 30, 2025, a decrease of $2,764,160 compared to the same period in the prior year. The decrease resulted primarily in payment timing on passthrough claim reimbursement receivables and related payables associated with our patient affordability business in the amount of $9,364,030, offset from the improvement in our operating results. We believe that our available cash on hand, excluding restricted cash, at September 30, 2025 of $7,529,047, along with our forecast for revenues and cash flows for the remainder of 2025 and through the third quarter of 2027, will be sufficient to sustain our operations for the next twenty-four months. In light of the recent bank failures, we continue to monitor the health and soundness of our bank relationships through publicly available information. Based on recent SEC filings, we have not discovered any issues that would cause us to alter our bank relationships.