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 (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.

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 and assumptions used to calculate the fair value of our business from year to year could materially affect the determination of fair value and the assessment of goodwill impairment; our conclusion that goodwill impairment for the three and six months ended June 30, 2026 was more likely than not that goodwill was 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 evaluation of the potential effects of ASU 2024-03 and ASU 2025-06 on our consolidated financial statements and related disclosures; our evaluation of the impact that ASU 2025-05 will have on our consolidated financial statements and related disclosures; 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 principal target markets for processing services, including prepaid card issuers, retail and private-label issuers, small third-party processors and small and mid-size financial institutions in the United States and Mexico; 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 plac…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

In addition to our payment solutions, we also offer life science technology solutions targeting blood and plasma collection organizations. These software solutions are marketed under the Apherion™ brand, and we derive our revenue from licensing, hosting and consulting fees.

Current wording

In addition to our payment solutions, we also offer life science technology solutions targeting blood and plasma collection organizations. These software solutions are marketed under the Apherion™ brand, and we derive our revenue from licensing, hosting, and professional service fees.

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 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.

Current wording

Our revenues include fees generated from cardholder fees, interchange, card program management fees, transaction claims processing fees, software license 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. Software license fees are recorded ratably over the license period. 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

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.

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 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 online 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

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.

Current wording

The increase in total revenues of $9,173,718 for the three months ended June 30, 2026 compared to the same period in the prior year consisted primarily of a $2,296,616 increase in plasma revenue, a $6,895,227 increase in pharma revenue and a $18,125 decrease in other revenue. The increase in plasma revenue was primarily due to 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, offset by the reduction of 46 net plasma centers during the prior twelve-month period as existing customers closed underperforming plasma centers and one customer sold their plasma centers to a company utilizing another payment provider. The increase in pharma revenue was primarily due to the financial benefit of 51 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 June 30, 2026 the number of claims processed increased approximately 54% compared to the same period in the prior year.

Previous 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.

Current wording

Cost of revenues for the three months ended June 30, 2026 increased $3,031,860 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 $784,000 associated primarily with the growth in our plasma and pharma patient affordability businesses, a new customer service contact center that opened in the fourth quarter of 2025, wage inflation pressures, a tight labor market and increased benefit costs; (ii) increased sales and commission expense of approximately $249,000 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 $2,241,000 associated with an increase in plasma donations and dollars loaded to cards and 51 net pharma patient affordability programs. These increases were offset by a decrease in plastics, collateral and postage of approximately $158,000 and other costs of approximately $85,000.

Previous 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.

Current wording

Gross profit for the three months ended June 30, 2026 increased $6,141,858 compared to the same period in the prior year resulting primarily from the launch of an additional 51 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 an increase in plasma donations and dollars loaded to cards over 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

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.

Current wording

Depreciation and amortization expense for the three months ended June 30, 2026 increased $219,732 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 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.

Current wording

For the three months ended June 30, 2026, we recorded income from operations of $7,010,916 representing an improvement of $5,573,309 compared to income from operations of $1,437,607 during the same period in the prior year related to the aforementioned factors.

Previous 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.

Current wording

Other income for the three months ended June 30, 2026 increased $289,043 primarily due to higher average bank account balances offset by the implied interest expense related to future cash payments for the Gamma acquisition of $100,523 and slightly lower interest rates.

Previous 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.

Current wording

At June 30, 2026, our income tax expense for federal, state and local taxes totaled $1,148,582, representing an effective tax rate of 14.5%. At June 30, 2025, our income tax provision was $655,006, representing an effective tax rate of 32.1%. 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 June 30, 2026 when compared to the same period in the prior year.

Previous 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.

Current wording

The net income for the three months ended June 30, 2026 was $6,756,537, an improvement of $5,368,776 compared to the net income of $1,387,761 for the three months ended June 30, 2025. The overall change in net income relates to the aforementioned factors.

Previous 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).

Current wording

Selling, general and administrative expenses for the six months ended June 30, 2026 increased $1,862,712 compared to the same period in the prior year and consisted primarily of an increase in (i) compensation and benefits of approximately $753,000 due to continued hiring to support our growth, a tight labor market and increased benefit costs; (ii) stock-based compensation of approximately $910,000 related to the issuance of restricted stock units for new hires and employee retention; (iii) technologies and telecom expense of approximately $255,000 primarily related to ongoing platform security investments; (iv) general expenses of approximately $130,000 primarily related to rent, conferences, deliveries, merger and acquisition costs and employee education; (v) other expenses of approximately $256,000 primarily related to insurance and outside professional services associated with the company’s SOX 404(b) readiness; (vi) travel and entertainment of approximately $75,000; and (vii) a decrease in capitalized platform development costs of approximately $475,000. The rise in costs was offset by a one-time gain on the fair value of our contingent consideration (earn-out) of approximately $990,000 associated with the Gamma Innovation LLC (“Gamma”) acquisition that closed on March 19, 2025 (see “Note 1 –Fair Value of Financial Instruments” in the notes to the accompanying condensed consolidated financial statements).

Previous wording

Management reviews a number of metrics to help us monitor the performance of and identify trends affecting our business. We believe the following measures are the primary indicators of our quarterly and annual revenues:

Current wording

Management reviews several metrics to help us monitor the performance of and identify trends affecting our business. We believe the following measures are the primary indicators of our quarterly and annual revenues:

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 $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.

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 $546 million and $440 million for the three months ended June 30, 2026 and 2025, respectively. Our gross dollar volume loaded on cards was $1,071 million and $847 million for the six months ended June 30, 2026 and 2025, respectively. We use this metric to analyze the total amount of money moving into our prepaid card programs. The year over year increase reflects an increase in loads we are experiencing in our plasma programs as the market appears to have returned to normalized growth following elevated plasma inventory levels experienced throughout much of 2025, in addition to growth in our pharma patient affordability program and other prepaid 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 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.

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 June 30, 2026 and 2025 were 5.17 % or 517 basis points (“bps”), and 4.34% or 434 basis points, respectively, of gross dollar volume loaded on cards. Our total gross profit conversion rates for the three months ended June 30, 2026 and 2025 were 3.28% or 328 bps, and 2.67% or 267 bps, respectively, of gross dollar volume loaded on cards. Our net income conversion rates for the three months ended June 30, 2026 and 2025 were 1.24% or 124 bps, and 0.32% or 32 bps, respectively, of gross dollar volume loaded on cards.

Previous wording

“EBITDA” is defined as earnings before interest, income taxes, depreciation and amortization expense and “Adjusted EBITDA” reflects the adjustment to EBITDA to exclude stock-based compensation expense. A reconciliation of net income to Adjusted EBITDA is provided in the table below.

Current wording

“EBITDA” is defined as earnings before interest, income taxes, depreciation and amortization expense and “Adjusted EBITDA” reflects the adjustment to EBITDA to exclude stock-based compensation expense and change in fair value of contingent consideration. A reconciliation of net income to Adjusted EBITDA is provided in the table below.

Previous wording

“EBITDA margin” is defined as earnings before interest, income taxes, depreciation and amortization expense as a percentage of the Company’s revenue and “Adjusted EBITDA margin” reflects the adjustment to EBITDA margin to exclude stock-based compensation expense as a percentage of revenue. A reconciliation of net income margin to Adjusted EBITDA margin is provided in the table below.

Current wording

“EBITDA margin” is defined as earnings before interest, income taxes, depreciation and amortization expense as a percentage of the Company’s revenue and “Adjusted EBITDA margin” reflects the adjustment to EBITDA margin to exclude stock-based compensation expense and change in fair value of contingent consideration as a percentage of revenue. A reconciliation of net income margin to Adjusted EBITDA margin is provided in the table below.

Previous wording

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

Current wording

During the six months ended June 30, 2026 and 2025, we financed our operations through internally generated funds.

Previous 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.

Current wording

Operating activities provided $20,081,074 of cash as of June 30, 2026, an increase of $22,473,350 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 $14,390,693, 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 gain in fair value of contingent consideration and prepaid expenses and other current assets.

Previous 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.

Current wording

We used net cash in investing activities during the six months ended June 30, 2026 and 2025 of $3,518,107 and $6,253,535, respectively. For the six months ended June 30, 2026, cash used for investing activities was 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 six months ended June 30, 2025, $4,253,535 in 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. The remaining amount of $2,000,000 was used for the initial purchase consideration payment related to the Company’s Gamma acquisition.

Previous wording

For the three months ended March 31, 2026, financing activities resulted in a net cash outflow of $2,199,677, driven primarily by a $2,000,000 contract liability payment related to the Company’s acquisition of Gamma. The remainder reflects taxes paid in connection with the net settlement of vested equity awards, for which 56,247 shares of common stock were withheld at a weighted average price of $3.55 per share. For the comparable prior-year period ended March 31, 2025, financing activities resulted in a net cash outflow of $375,786, attributable solely to the repurchase of 100,000 shares of common stock at a weighted average price of $3.76 per share.

Current wording

For the six months ended June 30, 2026, financing activities resulted in a net cash outflow of $5,065,139, driven primarily by a $2,000,000 contract liability payment related to the Company’s acquisition of Gamma. The remainder reflects taxes paid in connection with the net settlement of vested equity awards, for which 524,981 shares of common stock were withheld at a weighted average price of $6.08 per share, offset by $125,400 in stock option proceeds. For the comparable prior-year period ended June 30, 2025, financing activities resulted in a net cash inflow of $215,748, attributable to $591,534 of stock option proceeds, offset by the repurchase of 100,000 shares of common stock at a weighted average price of $3.76 per share.

Previous 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.

Current wording

At June 30, 2026, our available cash on hand, excluding restricted cash was $27,372,858, an increase of $15,619,674 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 second 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.