Paysign, Inc.

Previous wording

This Annual Report on Form 10-K includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), 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 cannot predict how future regulations might affect us; complying with future regulation could be expensive or require us to change the way we operate our business; our belief that our in-house customer service center provides the highest customer service experience for our clients as training is performed on-site by Paysign staff; we may utilize independent contractors who make direct sales and are paid on a commission basis only; our belief that nearly ever state would require us to obtain a money transmitter license to operate a money transfer business; our anticipation that we will not pay any cash dividends in the foreseeable future; our intention to retain any earnings to finance the operation and expansion of our business; our intention to continue to make significant investments to maintain the security of our data and cybersecurity infrastructure; our expectation that the trading price for our common stock will be affected by any research or reports that securities analysts publish about us or our business; our belief that our editing processes are consistent with applicable reimbursement rules and industry practice, a court, enforcement agency or whistleblower could challenge these practices; our belief that all independent contractor and employment agreement relationships are satisfactory; our belief that we have taken appropriate actions to remediate previously reported control deficiencies that we have identified and to strengthen our internal control over financial reporting; our belief that we have utilized proven systems designed for robust data security and integrity in electronic transactions, we may introduce products in the future that would be subject to such regulations; our belief that a data security breach at one of the banks that issue our cards or our third-party service providers could result in significant reputational harm to us and cause the use and acceptance of our cards to decline, either of which could have a significant adverse impact on our operating results and future growth prospects; our belief that our existing competitors have longer operating histories, are substantially larger than we are, may already have or could develop substantially greate…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Annual Report on Form 10-K includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), 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 cannot predict how future regulations might affect us; our belief that complying with future regulation could be expensive or require us to change the way we operate our business; our belief that our in-house customer service center provides the highest customer service experience for our clients as training is performed on-site by Paysign staff; we may utilize independent contractors who make direct sales and are paid on a commission basis only; our belief that nearly every state would require us to obtain a money transmitter license to operate a money transfer business; our anticipation that we will not pay any cash dividends in the foreseeable future; our intention to retain any earnings to finance the operation and expansion of our business; our intention to continue to make significant investments to maintain the security of our data and cybersecurity infrastructure; our expectation that the trading price for our common stock will be affected by any research or reports that securities analysts publish about us or our business; our belief that our editing processes are consistent with applicable reimbursement rules and industry practice; our belief that all independent contractor and employment agreement relationships are satisfactory; our belief that we have taken appropriate actions to remediate previously reported control deficiencies that we have identified and to strengthen our internal control over financial reporting; our belief that we have utilized proven systems designed for robust data security and integrity in electronic transactions; we may introduce products in the future that would be subject to money transfer and payment instrument licensing regulations; our belief that a data security breach at one of the banks that issue our cards or our third-party service providers could result in significant reputational harm to us and cause the use and acceptance of our cards to decline, either of which could have a significant adverse impact on our operating results and future growth prospects; our belief that our existing competitors have longer operating histories, are substantially larger than we are, may already have or could develop substantially greater financial and ot…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Paysign, Inc. (the “Company,” “Paysign,” “we” or “our”), headquartered in Nevada, was incorporated on August 24, 1995, and trades under the symbol PAYS on The Nasdaq Stock Market LLC. We are a vertically integrated provider of prepaid card products and processing services for corporate, consumer and government applications. Our payment solutions are utilized by our corporate customers as a means to increase customer loyalty, increase patient adherence rates, reduce administration costs and streamline operations. Public sector organizations can utilize our payment solutions to disburse public benefits or for internal payments. We market our prepaid card solutions under our Paysign® brand. As we are a payment processor and prepaid card program manager, we derive our revenue from all stages of the prepaid card lifecycle.

Current wording

Paysign, Inc. (the “Company,” “Paysign,” “we” or “our”), headquartered in Nevada, was incorporated on August 24, 1995, and trades under the symbol PAYS on The Nasdaq Stock Market LLC. We are a vertically integrated provider of prepaid card products and processing services for corporate, consumer and government entities. Our payment solutions are utilized by our corporate customers as a means to increase customer loyalty, increase patient adherence rates, reduce administration costs and streamline operations. Public sector organizations can utilize our payment solutions to disburse public benefits or for internal payments. We market our prepaid card solutions under our Paysign® brand. As we are a payment processor and prepaid card program manager, we derive our revenue from all stages of the prepaid card lifecycle.

Previous wording

We operate on a powerful, high-availability payments platform with cutting-edge fintech capabilities that can be seamlessly integrated with our clients’ systems. This 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 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.

Current wording

We operate on a powerful, high-availability payment solutions platform with cutting-edge fintech capabilities that can be seamlessly integrated with our clients’ systems. This 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 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.

Previous wording

Our suite of product offerings includes solutions for corporate rewards, prepaid gift cards, general purpose reloadable debit cards, employee incentives, consumer rebates, donor compensation, clinical trials, healthcare reimbursement payments and pharmaceutical payment assistance, and demand deposit accounts accessible with a debit card. Our cards are sponsored by our issuing bank partners.

Current wording

Our suite of product offerings includes solutions for corporate rewards, prepaid gift cards, general purpose reloadable debit cards, employee incentives, consumer rebates, donor compensation, clinical trials, healthcare reimbursement payments and pharmaceutical payment assistance, demand deposit accounts accessible with a debit card and software solutions targeting blood and plasma collection organizations. Our cards are sponsored by our issuing bank partners.

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 or card program and relates predominantly to our pharma prepaid business which ended in 2022.

Current 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 or card program and relates primarily to our corporate incentive programs.

Previous wording

We have two categories for our prepaid debit cards: (1) corporate and consumer reloadable cards, and (2) non-reloadable cards.

Current wording

The industry generally has two categories for our prepaid debit cards: (1) corporate and consumer reloadable cards and (2) non-reloadable cards.

Previous wording

The increase in total revenues of $11,110,390 for the year ended December 31, 2024 compared to the same period in the prior year consisted primarily of a $1,927,849 increase in plasma revenue, a $8,601,375 increase in pharma revenue, and a $581,166 increase in other revenue. The increase in plasma revenue was primarily due to the addition of 16 net new plasma centers since December 31, 2023 and rise in the number of donations at existing plasma centers, and, consequently, dollars loaded to cards, cardholder fees, and interchange, as there continues to be stable demand for plasma used in plasma protein therapies. The increase in pharma revenue was primarily due a full year financial benefit of programs launched in 2023, the launch of 33 net new pharma patient affordability programs since December 31, 2023 and the subsequent growth in monthly management and setup fees, claim processing fees, and other billable services such as call center support. The number of claims processed increased over 270% in 2024 compared to 2023. 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 $23,643,624 for the year ended December 31, 2025 compared to the same period in the prior year consisted primarily of a $1,736,132 increase in plasma revenue, a $21,236,219 increase in pharma revenue, and a $671,273 increase in other revenue. The increase in plasma revenue was primarily due to 115 net plasma centers added during the past 12 months offset by a decline in plasma donations and dollars loaded to cards as plasma inventory levels were elevated throughout much of 2025, 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 55 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 year ended December 31, 2025 the number of claims processed increased 79% 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 year ended December 31, 2024 increased $3,049,221 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 network fees of approximately $1,026,000, which was driven predominantly by increased ATM network usage associated with growth in our card programs and increases in transaction fees related to inflationary pressures; (ii) increased customer care expense of approximately $838,000 associated primarily with the growth in our pharma patient affordability programs, wage inflation pressures, a tight labor market, and increased benefit costs; (iii) increased third-party program management of approximately $651,000 associated with our pharma patient affordability programs; (iv) increased sales commission expense of approximately $368,000 related to the increase in overall revenue for programs in which we pay commission expenses; and (v) increased fraud charges of approximately $527,000. These increases were offset by a decline in plastics and collateral of approximately $326,000 and a decline in other costs of approximately $35,000.

Current wording

Cost of revenues for the year ended December 31, 2025 increased $7,124,005 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, call center support, application integration setup and sales and commission expense. The increase in cost of revenues consisted primarily of (i) increased call center support expense of approximately $2,089,000 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 $852,000 related to the increase in overall revenue for programs in which we pay commission expenses; (iii) increased network and network related fees of approximately $2,845,000 associated to the addition of 115 net plasma centers; (iv) increased third-party variable costs of approximately $1,063,000 associated with our pharma patient affordability programs; and (v) increased plastics, collateral and postage of approximately $320,000. These increases were offset by a decrease in other costs of approximately $45,000.

Previous wording

Gross profit for the year ended December 31, 2024 increased $8,061,169 compared to the same period in the prior year, resulting primarily from the increase in the number of pharma patient affordability programs, a full year financial benefit of programs launched in 2023, and a corresponding increase in setup fees, monthly management fees, claim processing fees, and other billable fees associated with our 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 increased costs from third-party service providers, sales commission expense, customer service costs and fraud expenses 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 year ended December 31, 2025 increased $16,519,619 compared to the same period in the prior year resulting primarily from the launch of an additional 55 net pharma patient affordability programs during the prior 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 115 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 year ended December 31, 2024 increased $4,903,998 compared to the same period in the prior year and consisted primarily of an increase in (i) compensation and benefits of approximately $5,388,000 due to continued hiring to support the Company’s growth primarily from our pharma patient affordability business, a tight labor market, and increased benefit costs; (ii) technologies and telecom of approximately $1,320,000 primarily related to ongoing platform security investments; and (iii) travel and entertainment of approximately $207,000. This increase was offset by a decrease in stock compensation of approximately $249,000, an increase of $1,738,000 in the amount of capitalized platform development costs, and a decrease in other cost of approximately $23,000.

Current wording

Selling, general and administrative expenses for the year ended December 31, 2025 increased $7,854,477 compared to the same period in the prior year and consisted primarily of an increase in (i) compensation and benefits of approximately $3,766,000 due to continued hiring to support our growth, a tight labor market, and increased benefit costs; (ii) stock-based compensation of approximately $1,657,000 related to the issuance of restricted stock units for new hires and employee retention; (iii) technologies and telecom expense of approximately $833,000 primarily related to ongoing platform security investments; (iv) general expenses of approximately $241,000 primarily related to conferences, deliveries, and employee education; (v) acquisition costs of approximately $121,000 associated with the Gamma Innovation LLC (“Gamma”) acquisition that closed on March 19, 2025 (see “Note 3- ACQUISITION” in the notes to the accompanying consolidated financial statements) ; (vi) travel and entertainment of approximately $272,000; and (vii) a decrease in capitalized platform development costs of approximately $1,056,000. The rise in costs was offset by a reduction in other operating expenses of approximately $92,000.

Previous wording

Depreciation and amortization expense for the year ended December 31, 2024 increased $1,968,408 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 year ended December 31, 2025 increased $2,323,811 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, equipment purchases related to continued enhancements to our processing platform and employment growth and the amortization of intangible assets from our Gamma acquisition.

Previous wording

For the year ended December 31, 2024, we recorded income from operations of $1,021,508 representing an improvement of $1,188,763 compared to a loss from operations of $167,255 during the same period in the prior year, related to the aforementioned factors.

Current wording

For the year ended December 31, 2025, we recorded income from operations of $7,362,839 representing an improvement of $6,341,311 compared to income from operations of $1,021,508 during the same period in the prior year related to the aforementioned factors.

Previous wording

At December 31, 2024, our income tax provision was $322,290, which equates to an effective tax rate of 7.8%primarily as a result of federal taxes offset by net operating loss true-up on our state taxes, tax benefits related to our stock-based compensation and changes to the Company’s tax credits. We recorded an income tax benefit of $4,094,911 for the year ended December 31, 2023, which equates to an effective tax rate of (173.2)%, primarily as a result of the release of our valuation allowance of $4,588,781 on our federal and state deferred tax assets.

Current wording

At December 31, 2025, our income tax expense totaled $2,481,641, representing an effective tax rate of 24.7%. This rate was primarily driven by higher book earnings and adjustments to our provision estimate related to Section 174 changes under the One Big Beautiful Bill Act, offset by tax benefits associated with stock-based compensation and tax credits. At December 31, 2024, our income tax provision was $322,290, which equates to an effective tax rate of 7.8% primarily as a result of federal taxes offset by net operating loss true-up on our state taxes, tax benefits related to our stock-based compensation and changes to our tax credits.

Previous wording

The net income for the year ended December 31, 2024 was $3,815,907, a decline of $2,642,820 compared to the net income of $6,458,727 for the year ended December 31, 2023. The overall change in net income relates to the aforementioned factors.

Current wording

The net income for the year ended December 31, 2025 was $7,551,613, an improvement of $3,735,706 compared to the net income of $3,815,907 for the year ended December 31, 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 of our prepaid card programs. Our gross dollar volume loaded on cards was $1,783 million and $1,706 million for the year ended December 31, 2024 and 2023, respectively. We use this metric to analyze the total amount of money moving into our prepaid card programs.

Current wording

Gross Dollar Volume Loaded on Cards: Represents the total dollar volume of funds loaded to all of our prepaid card programs. Our gross dollar volume loaded on cards was $1,935 million and $1,783 million for the years ended December 31, 2025 and 2024, respectively. We use this metric to analyze the total amount of money moving into our prepaid card programs.

Previous wording

Conversion Rates on Gross Dollar Volume Loaded on Cards: Represents revenues, gross profit or net income conversion rates of gross dollar volume loaded on cards which are calculated by taking our total revenues, gross profit or net income, 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. Our total revenue conversion rates for the years ended December 31, 2024 and 2023 were 3.27% or 327 basis points (“bps”), and 2.77% or 277 bps, respectively, of gross dollar volume loaded on cards. Our total gross profit conversion rates for the year ended December 31, 2024 and 2023 were 1.81% or 181 bps, and 1.41% or 141 bps, respectively, of gross dollar volume loaded on cards. Our net income conversion rates for the year ended December 31, 2024 and 2023 were 0.21% or 21 bps, and 0.38% or 38 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 conversion rates of gross dollar volume loaded on cards which are calculated by taking our total revenues, gross profit or net income, 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. Our total revenue conversion rates for the years ended December 31, 2025 and 2024 were 4.24% or 424 basis points (“bps”), and 3.27% or 327 bps, respectively, of gross dollar volume loaded on cards. Our total gross profit conversion rates for the years ended December 31, 2025 and 2024 were 2.52% or 252 bps, and 1.81% or 181 bps, respectively, of gross dollar volume loaded on cards. Our net income conversion rates for the years ended December 31, 2025 and 2024 were 0.39% or 39 bps, and 0.21% or 21 bps, respectively, of gross dollar volume loaded on cards.

Previous wording

Operating activities provided $22,947,120 of cash in 2024, a decrease of $4,673,504 compared to 2023. This change in cash flow compared to the prior period is primarily due to net decreases in operating assets and liabilities and net income. The changes in accounts receivable, accounts payable, and customer card funding are primarily related to the growth in our pharma patient affordability business and timing of 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. Changes in net income in 2024 when compared to 2023 are also driven by a net decrease in our deferred tax asset valuation. The decrease in cash flows from operating activities and net income was offset by non-cash adjustments for deferred income taxes, depreciation and amortization, stock-based compensation, and lease expense.

Current wording

Operating activities provided $52,450,867 of cash as of December 31, 2025, an increase of $29,503,747 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 increase in operating assets and liabilities. The changes in accounts receivable, accounts payable and customer card funding, a net increase of $18,475,867, 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 increase in cash flows from operating activities was also attributed to an increase in net income, reduced prepaid expenses, collection of tax credits and non-cash adjustments for depreciation and amortization, deferred income tax, and stock-based compensation.

Previous wording

We used net cash in investing activities during the years ended December 31, 2024 and 2023 of $9,488,702 and $7,048,678, respectively. Cash used for investing activities was primarily attributed to an increase in the capitalization of internally developed software as we continue to invest in our technology platform.

Current wording

We used net cash in investing activities during the year ended December 31, 2025 and 2024 of $10,094,210 and $9,488,702, respectively. For the year ended December 31, 2025, $8,094,210 of cash was used for investing activities primarily attributable to an increase in software licenses, fixed assets, 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. For the year ended December 31, 2024, $9,488,702 of cash was used for investing activities primarily attributable to an increase in software licenses, fixed assets and capitalization of internally developed software as we continue to invest in our technology platform.

Previous wording

Cash used in financing activities of $466,245 and $1,118,284 for the years ended December 31, 2024 and 2023, respectively, was primarily attributed to the repurchase of 136,700 shares of the Company’s common stock at a weighted average price of $3.62 per share during the year ended December 31, 2024 offset by proceeds received of $28,800 for the exercise of stock options. For the year ended December 31, 2023, the repurchase of 394,558 shares of the Company’s common stock at a weighted average price of $2.86 per share offset by proceeds received of $9,600 for the exercise of stock options.

Current wording

Cash provided by financing activities of $284,868 for the year ended December 31, 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 year ended December 31, 2024 used $466,245 in cash, attributable to the repurchase of 136,700 shares of the Company’s common stock at a weighted average price of $3.62 per share offset by proceeds of $28,800 for the exercise of stock options.

Previous wording

Unrestricted cash was $10,766,982 as of December 31, 2024, a decrease of $6,227,723 compared to the same period in the prior year. The decrease resulted primarily from payment timing on pass-through claim reimbursement receivables and related payables associated with our patient affordability business, in the amount of $7,018,053 offset by the improvement in our operating results. We believe that our available cash on hand, excluding restricted cash, at December 31, 2024 of $10,766,982, along with our forecast for revenues and cash flows for 2025 and through 2027, will be sufficient to sustain our operations for the next 24 months. In light of the elevated interest rates and increased refinancing risks related to commercial real estate holdings on bank balance sheets, we continue to monitor the health and soundness of our bank relationships through publicly available information. In particular, we are closely following FDIC publicly announced developments, but those developments have not caused us to alter our bank relationships in any material respect at this time.

Current wording

Unrestricted cash was $21,067,651 as of December 31, 2025, an increase of $10,300,669 compared to the same period in the prior year. The increase resulted primarily from the improvement in our operating results. We believe that our available cash on hand, excluding restricted cash, at December 31, 2025 of $21,067,651, along with our forecast for revenues and cash flows for the remainder of 2026 and through 2028, 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.

Previous wording

Intangible Assets – For intangible assets, the Company recognizes an impairment loss if the carrying amount of the intangible asset is not recoverable and exceeds fair value. The carrying amount of the intangible asset is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset.

Current wording

Intangible Assets – For intangible assets, the Company recognizes an impairment loss if the carrying amount of the intangible asset is not recoverable and exceeds its fair value. The carrying amount of the intangible asset is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset.

Previous wording

Intangible assets with a finite life are amortized on a straight-line basis over its estimated useful life, which is generally 3 to 15 years.

Current wording

Intangible assets with an indefinite-life are not amortized. Intangible assets with a finite life are amortized on a straight-line basis over their estimated useful lives, which are generally 3 to 10 years.

Previous wording

For computer software developed or obtained for internal use, costs that are incurred in the preliminary project and post implementation stages of software development are expensed as incurred. Costs incurred during the application and development stage are capitalized, as the Platform asset. Capitalized costs are amortized using the straight-line method over a three-year estimated useful life, beginning in the period in which the software is available for use.

Current wording

For computer software developed or obtained for internal use, costs that are incurred in the preliminary project and post implementation stages of software development are expensed as incurred. Costs incurred during the application and development stage are capitalized. Capitalized costs are amortized using the straight-line method over a three year estimated useful life, beginning in the period in which the software is available for use.

Previous wording

The Company generates revenues from plasma card programs through fees generated from cardholder fees and interchange fees. Revenues from pharma card programs are generated through card program management fees, transaction claims processing fees, interchange fees, and settlement income. Other revenues are generated through cardholder fees, interchange fees, program management fees, load fees and breakage.

Current wording

The Company generates revenues from plasma card programs through fees generated from cardholders and interchange fees. Revenues from pharma card programs are generated through card program management fees, transaction claim processing fees, interchange fees, customer service fees, other billable service fees and settlement income. Other revenues are generated through cardholder fees, interchange fees, program management fees, load fees and breakage.

Previous wording

Plasma and pharma card program revenues include both fixed and variable components. Cardholder fees represent an obligation to the cardholder based on a per transaction basis and are recognized at a point in time when the performance obligation is fulfilled. Card program management fees and transaction claims processing fees include an obligation to our card program sponsors and are generally recognized when earned on a monthly basis and are typically due within 30 days pursuant to the contract terms which are generally multi-year contracts. The Company uses the output method to recognize card program management fee revenue at the amount of consideration to which an entity has a right to invoice. The performance obligation is satisfied when the services are transferred to the customer which the Company determined to be monthly, as the customer simultaneously receives and consumes the benefit from the Company’s performance. Interchange fees are earned when customer-issued cards are processed through card payment networks as the nature of our promise to the customer is that we stand ready to process transactions at the customer’s requests on a daily basis over the contract term. Since the timing and quantity of transactions to be processed by us are not determinable, we view interchange fees to comprise an obligation to stand ready to process as many transactions as the customer requests. Accordingly, the promise to stand ready is accounted for as a single series performance obligation. The Company uses the right to invoice practical expedient and recognizes interchange fee revenue concurrent with the processing of card transactions. Interchange fees are settled in accordance with the card payment network terms and conditions, which is typically within a few days.

Current wording

Plasma and pharma program revenues include both fixed and variable components. Cardholder fees represent an obligation to the cardholder based on a per transaction basis and are recognized at a point in time when the performance obligation is fulfilled. Card program management fees and transaction claims processing fees represent obligations to our program sponsors. These fees are generally recognized as revenue when earned on a monthly basis and are typically payable according to the terms outlined in the contract. The Company uses the output method to recognize card program management fee revenue at the amount of consideration to which an entity has a right to invoice. The performance obligation is satisfied when the services are transferred to the customer which the Company determined to be monthly, as the customer simultaneously receives and consumes the benefit from the Company’s performance. Interchange fees are earned when customer-issued cards are processed through card payment networks as the nature of our promise to the customer is that we stand ready to process transactions at the customer’s requests on a daily basis over the contract term. Since the timing and quantity of transactions to be processed by us are not determinable, we view interchange fees to comprise an obligation to stand ready to process as many transactions as the customer requests. Accordingly, the promise to stand ready is accounted for as a single series performance obligation. The Company uses the right to invoice practical expedient and recognizes interchange fee revenue concurrent with the processing of card transactions. Interchange fees are settled in accordance with the card payment network terms and conditions, which is typically within a few days.

Previous wording

The portion of the dollar value of prepaid-stored value cards that consumers do not ultimately redeem are referred to as breakage. In certain card programs where we hold the cardholder funds and expect to be entitled to a breakage amount, we recognize revenue using estimated breakage rates ratably over the estimated card life; provided that a significant reversal of the amount of breakage revenue recognized is not probable, and record adjustments to such estimates when redemption is remote or we are legally defeased of the obligation, if applicable. For each program, we utilize a third party to estimate breakage rates based on historical redemption patterns, market-specific trends, escheatment rules and existing economic conditions. The Company accounts for breakage in accordance with Accounting Standards Update (“ASU”) 2016-04,Liabilities—Extinguishment of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Cardsfor the recognition of such revenue.

Current wording

The portion of the dollar value of prepaid-stored value cards that consumers do not ultimately redeem are referred to as breakage. In certain card programs where we hold the cardholder funds and expect to be entitled to a breakage amount, we recognize revenue using estimated breakage rates ratably over the estimated card life; provided that a significant reversal of the amount of breakage revenue recognized is not probable, and record adjustments to such estimates when redemption is remote or we are legally defeased of the obligation, if applicable. For each program, we utilize a third party to estimate breakage rates based on historical redemption patterns, market-specific trends, escheatment rules and existing economic conditions. The Company accounts for breakage in accordance with Accounting Standards Update (“ASU”) 2016-04, Liabilities—Extinguishment of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Cards for the recognition of such revenue.

Previous wording

The Company utilizes the remote method of revenue recognition for settlement income whereby the unspent balances will be recognized as revenue at the expiration of the cards or the respective card program. This has primarily been associated with the pharma prepaid business which ended in 2022. The Company records all revenue on a gross basis since it is the primary obligor and establishes the price in the contract arrangement with its customers. The Company is currently under no obligation to refund any fees, and the Company does not currently have any obligations for disputed claim settlements

Current wording

The Company utilizes the remote method of revenue recognition for settlement income whereby the unspent card balances will be recognized as revenue at the expiration of the cards or the respective card program. The Company records all revenue on a gross basis since it is the primary obligor and establishes the price in the contract arrangement with its customers. The Company is currently under no obligation to refund any fees, and the Company does not currently have any obligations for disputed claim settlements. Given the nature of the Company’s services and contracts, generally it has no contract assets as it pertains to services rendered but not invoiced.