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 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.

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 (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 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 changes in the estimates used to calculate the fair value of our business from year to year could materially affect the determination of fair value; our conclusion that goodwill impairment for the three months ended March 31, 2026 was more likely than not impaired; 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 expectation that the adoption of ASU 2025-11 will not have a material effect on our consolidated financial statements; our focus of 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 patient affordability solutions, clinical trials and donor compensation, loyalty rewards and incentive cards; our plan for 2026 to continue to invest additional funds in technology improvements, sales and marketing, cybersecurity, fraud, customer service, and regulatory compliance; if a certain financial institution were to be placed into receivership, we may be unable to access the cash we have on deposit and if we are unable to access our cash and cash equivalents as needed, our financial position and ability to operate our business could be adversely affected; 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 …

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, 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.

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 and is recorded under other revenue on the condensed consolidated statements of operations. Settlement income is recorded at the expiration of the card or card program and relates primarily to our corporate incentive programs which is also recorded under other revenue on the condensed consolidated statements of operations.

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

Reloadable Cards: These types of cards are generally classified as payroll or general purpose reloadable (“GPR”) cards. Payroll cards are issued by an employer to an employee to allow the employee to access payroll amounts that are deposited into an account linked to their card. GPR cards can also be issued to a consumer at a retail location or mailed to a consumer after completing an on-line application. GPR cards can be reloaded multiple times with a consumer’s payroll, government benefit, a federal or state tax refund or through cash reload networks located at retail locations. Reloadable cards are generally open-loop cards as described below.

Current wording

Reloadable Cards: These types of cards are generally classified as payroll or considered general purpose reloadable (“GPR”) cards. Payroll cards are issued by an employer to an employee in order to allow the employee to access payroll amounts that are deposited into an account linked to their card. GPR cards can also be issued to a consumer at a retail location or mailed to a consumer after completing an on-line application. GPR cards can be reloaded multiple times with a consumer’s payroll, government benefit, a federal or state tax refund or through cash reload networks located at retail locations. Reloadable cards are generally open-loop cards as described below.

Previous wording

Both reloadable and non-reloadable cards may be open-loop, closed-loop, or restricted-loop. Open-loop cards can be used to receive cash at ATM locations utilizing a customer’s primary identification number (“PIN”); or purchase goods or services by PIN or signature at retail locations virtually anywhere that the network brand (American Express, Discover, Mastercard, Visa, etc.) is accepted. Closed-loop cards can only be used at a specific merchant. Restricted-loop cards can be used at several merchants, or a defined group of merchants, such as all merchants at a specific shopping mall.

Current wording

Both reloadable and non-reloadable cards may be open-loop, closed-loop or restricted-loop. Open-loop cards can be used to receive cash at ATM locations by PIN; or purchase goods or services by PIN or signature at retail locations virtually anywhere that the network brand (American Express, Discover, Mastercard, Visa, etc.) is accepted. Closed-loop cards can only be used at a specific merchant. Restricted-loop cards can be used at several merchants, or a defined group of merchants, such as all merchants at a specific shopping mall.

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, 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.

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 patient affordability solutions, clinical trials and donor compensation, loyalty rewards and incentive cards.

Previous wording

We have devoted more extensive resources to sales and marketing activities as we have added essential personnel to our marketing, sales and support teams. We market our Paysign payment and application solutions through direct marketing by the Company’s sales team. Our primary market focus is on companies that require a streamlined payment solution for rewards, rebates, payment assistance, and other payments to their customers, employees, agents and others. To reach these markets, we focus our sales efforts on direct contact with our target market and attendance at various industry-specific conferences. We may, at times, utilize independent contractors who make direct sales and are paid commissions and/or restricted stock awards. We market our Paysign premier product through existing communication channels to a targeted segment of our existing cardholders, as well as to a broad group of individuals, ranging from non-banked to fully banked consumers with a focus on long term users of our product.

Current wording

We have devoted more extensive resources to sales and marketing activities as we have added essential personnel to our marketing, sales and support teams. We market our Paysign payment solutions through direct marketing by the Company’s sales team. Our primary market focus is on companies that require a streamlined payment solution for rewards, rebates, payment assistance, and other payments to their customers, employees, agents and others. To reach these markets, we focus our sales efforts on direct contact with our target market and attendance at various industry-specific conferences. We may, at times, utilize independent contractors who make direct sales and are paid commissions and/or restricted stock awards. We market our Paysign premier product through existing communication channels to a targeted segment of our existing cardholders, as well as to a broad group of individuals, ranging from non-banked to fully banked consumers with a focus on long term users of our product.

Previous 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.

Current wording

During the remainder of 2026, 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 following table summarizes our consolidated financial results for the three months ended September 30, 2025 in comparison to the three months ended September 30, 2024:

Current wording

The following table summarizes our condensed consolidated financial results for the three months ended March 31, 2026 in comparison to the three months ended March 31, 2025:

Previous 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.

Current wording

The increase in total revenues of $9,440,275 for the three months ended March 31, 2026 compared to the same period in the prior year consisted primarily of a $2,338,731 increase in plasma revenue, a $7,060,799 increase in pharma revenue and a $40,745 increase in other revenue. The increase in plasma revenue was primarily due to 89 net plasma centers added during the prior twelve-month period and an increase in plasma donations and dollars loaded to cards as the market appears to have returned to normalized growth following elevated plasma inventory levels experienced throughout much of 2025. The increase in pharma revenue was primarily due to the financial benefit of 45 net pharma patient affordability programs launched during the prior twelve-month period, 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 three months ended March 31, 2026 the number of claims processed increased approximately 49% 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 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.

Current wording

Cost of revenues for the three months ended March 31, 2026 increased $2,912,158 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, program implementation and sales and commission expense. The increase in cost of revenues consisted primarily of (i) increased call center support expense of approximately $901,000 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 $266,000 related to the increase in overall revenue for programs in which we pay commission expenses; and (iii) increased network and network related fees of approximately $1,767,000 associated with the addition of 89 net plasma centers and 45 net pharma patient affordability programs. These increases were offset by a decrease in plastics, collateral and postage of approximately $14,000 and other costs of approximately $7,000.

Previous 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.

Current wording

Gross profit for the three months ended March 31, 2026 increased $6,528,117 compared to the same period in the prior year resulting primarily from the launch of an additional 45 net pharma patient affordability programs during the prior twelve-month period, 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 89 net plasma centers during the prior twelve month period, 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 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.

Current wording

Selling, general and administrative expenses for the three months ended March 31, 2026 increased $1,513,895 compared to the same period in the prior year and consisted primarily of an increase in (i) compensation and benefits of approximately $180,000 due to continued hiring to support our growth, a tight labor market and increased benefit costs; (ii) stock-based compensation of approximately $612,000 related to the issuance of restricted stock units for new hires and employee retention; (iii) technologies and telecom expense of approximately $81,000 primarily related to ongoing platform security investments; (iv) general expenses of approximately $177,000 primarily related to rent, conferences, deliveries and employee education; (v) other expenses of approximately $70,000 primarily related to insurance and outside professional services; (vi) travel and entertainment of approximately $97,000; and (vii) a decrease in capitalized platform development costs of approximately $406,000. The rise in costs was offset by a reduction in acquisition costs of approximately $108,000 associated with the Gamma Innovation LLC (“Gamma”) acquisition that closed on March 19, 2025 (see “Note 2 –ACQUISITION” in the notes to the accompanying condensed consolidated financial statements).

Previous 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.

Current wording

Depreciation and amortization expense for the three months ended March 31, 2026 increased $835,153 compared to the same period in the prior year. The increase in depreciation and amortization expense was primarily due to the amortization of intangible assets from our Gamma acquisition, 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 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.

Current wording

For the three months ended March 31, 2026, we recorded income from operations of $6,668,135 representing an improvement of $4,179,069 compared to income from operations of $2,489,066 during the same period in the prior year related to the aforementioned factors.

Previous 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.

Current wording

Other income for the three months ended March 31, 2026 increased $38,665 primarily due to higher average bank account balances offset by the implied interest expense related to future cash payments for the Gamma acquisition of $136,884 and slightly lower interest rates.

Previous wording

At September 30, 2025, our income tax provision was $30,482, which equates to an effective tax rate of 1.4% primarily resulting from the impact of our net operating income adjusted for discrete items that occurred within the quarter. At September 30, 2024, our income tax expense was $53,727, which equates to an effective tax rate of 3.6% 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.

Current wording

At March 31, 2026, our income tax expense for federal, state and local taxes totaled $2,030,080, representing an effective tax rate of 27.2%. At March 31, 2025, our income tax provision was $665,164, representing an effective tax rate of 20.5%. Both rates were based on our net operating income adjusted for discrete items that occurred within the quarter and tax benefits related to our stock-based compensation. The significant driver in the discrete item adjustment primarily related to the increase in stock price at March 31, 2026 when compared to the same period in the prior year.

Previous 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.

Current wording

The net income for the three months ended March 31, 2026 was $5,438,918, an improvement of $2,852,818 compared to the net income of $2,586,100 for the three months ended March 31, 2025. 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 $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.

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 $514 million and $407 million for the three months ended March 31, 2026 and 2025, 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 (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.

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 three months ended March 31, 2026 and 2025 were 5.45% or 545 basis points (“bps”), and 4.57% or 457 bps, respectively, of gross dollar volume loaded on cards. Our total gross profit conversion rates for the three months ended March 31, 2026 and 2025 were 3.54% or 354 bps, and 2.87% or 287 bps, respectively, of gross dollar volume loaded on cards. Our net income conversion rates for the three months ended March 31, 2026 and 2025 were 1.06% or 106 bps, and .64% or 64 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, 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:

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

Current wording

During the three months ended March 31, 2026 and 2025, we financed our operations through internally generated funds.

Previous 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.

Current wording

Operating activities provided $18,785,758 of cash as of March 31, 2026, an increase of $24,818,935 compared to the 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 increases in operating assets and liabilities. The changes in accounts receivable, accounts payable, and customer card funding, a net increase of $22,045,295, 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 flow from operating activities was also attributed to an increase in net income and non-cash adjustments for depreciation and amortization, deferred income tax, stock-based compensation and lease expense; offset by an increase in prepaid expenses and other current assets.

Previous 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.

Current wording

We used net cash in investing activities during the three months ended March 31, 2026 and 2025 of $2,075,341 and $4,443,855, respectively. For the three months ended March 31, 2026, cash was used for investing activities primarily attributable to an increase in licenses, fixed assets and capitalization of internally developed software as we continue to invest in our technology platform. For the three months ended March 31, 2025, $2,443,855 in 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.

Previous wording

Our significant contractual cash requirements also include ongoing payments for lease liabilities and acquisition. For additional information regarding our cash commitments and contractual obligations, see “Note 2 – ACQUISITION” and “Note 5 – LEASE” in the notes to the accompanying consolidated financial statements.

Current wording

Our significant contractual cash requirements also include ongoing payments for lease liabilities and acquisition. For additional information regarding our cash commitments and contractual obligations, see “Note 2 – ACQUISITION” and “Note 5 – LEASE” in the notes to the accompanying condensed consolidated financial statements.

Previous 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.

Current wording

At March 31, 2026, our available cash on hand, excluding restricted cash was $20,545,119, an increase of $13,698,098 compared to the same period in the prior year, driven primarily by improvements in our operating results. We believe this cash position, together with our forecast for revenues and cash flows for the remainder of 2026 and through the first quarter of 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.