What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-11 compared with 2022-05-11 · 175 added, 76 removed, 506 unchanged (33% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2022

June 30, 2022

December 31, 2021

95 unchanged sentences

Preferred stock, $ 0.01 par value, 10,000,000 shares authorized;

- 0 - shares outstanding at March 31, 2022 (unaudited) and December 31, 2021, respectively

- 0 - shares outstanding at June 30, 2022 (unaudited) and December 31, 2021, respectively

Common stock, $ 0.001 par value, 200,000,000 shares authorized;

26,868,745 and 26,807,145 issued, and 25,517,835 and 25,473,453 outstanding at March 31, 2022 (unaudited) and December 31, 2021, respectively

26,837,978 and 26,807,145 issued, and 25,295,875 and 25,473,453 outstanding at June 30, 2022 (unaudited) and December 31, 2021, respectively

195,250  

4 unchanged sentences

Treasury stock, at cost;

1,350,910 and 1,333,692 shares at March 31, 2022 (unaudited) and December 31, 2021, respectively

1,542,103 and 1,333,692 shares at June 30, 2022 (unaudited) and December 31, 2021, respectively

( 2,951,047 )  

14 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of services

4 unchanged sentences

Total selling, general and administrative expenses

Operating (loss)

Operating income (loss)

Other income and (expense):

2 unchanged sentences

Other income and (expense), net

(Loss) before income taxes

Income (Loss) before income taxes

Income tax expense

Basic (loss) per common share:

Diluted (loss) per common share:

Net income (Loss)

Income (Loss) Per Share

Basic income (loss) per common share:

Diluted income (loss) per common share:

Weighted average common shares outstanding

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities:

20 unchanged sentences

Purchases of treasury stock

Net cash (used) provided by financing activities

Net cash provided (used) by financing activities

Change in cash, cash equivalents, prepaid card load assets, customer deposits and merchant reserves

16 unchanged sentences

Balance at March 31, 2022

Issuance of common stock under equity incentive plan

Warrant compensation costs

Reversal of deferred compensation amortization that did not vest

Deferred compensation amortization

Purchase of treasury stock costs

Net (loss) for the period

Balance at June 30, 2022

Balance at December 31, 2020

7 unchanged sentences

Balance at March 31, 2021

Issuance of common stock under equity incentive plan

Warrant compensation costs

Reversal of deferred compensation amortization that did not vest

Deferred compensation amortization

Purchase of treasury stock costs

Net income for the period

Balance at June 30, 2021

The accompanying notes are an integral part of these consolidated financial statements.

33 unchanged sentences

The following table presents the Company's revenues by source:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

ACH and complementary service revenue

1 unchanged sentence

$ 4,001,897  

$ 7,742,928  

$ 7,080,353  

Credit card revenue

1 unchanged sentence

6,558,076  

13,653,919  

12,281,785  

Prepaid card services revenue

1 unchanged sentence

1,077,531  

4,156,557  

1,964,107  

Output solutions revenue

1 unchanged sentence

3,595,637  

8,773,625  

7,368,446  

Total revenue

1 unchanged sentence

$ 15,233,141  

$ 34,327,029  

$ 28,694,691  

Deferred Revenues:

1 unchanged sentence

The advance consideration received from a customer is deferred until the Company provides the customer that product or service.

The deferred revenues totaled $ 4,412  and $ 17,647  at March 31, 2022 and December 31, 2021 , respectively.

The deferred revenues totaled $ 0  and $ 17,647  at June 30, 2022 and December 31, 2021 , respectively.

Cash and Cash Equivalents:

16 unchanged sentences

The reconciliation of cash and cash equivalents to cash, cash equivalents, prepaid card load assets, customer deposits and merchant reserves is as follows for each period presented:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Beginning cash, cash equivalents, prepaid card load assets, customer deposits and merchant reserves:

2 unchanged sentences

$ 4,284,360  

$ 7,255,321  

$ 5,011,132  

Prepaid card load assets

1 unchanged sentence

18,555,474  

36,590,893  

7,610,242  

Customer deposits

1 unchanged sentence

1,357,242  

1,364,193  

1,305,296  

Merchant reserves

3 unchanged sentences

8,265,555  

$ 44,215,549  

$ 32,514,538  

$ 51,591,560  

$ 22,192,225  

Ending cash, cash equivalents, prepaid card load assets, customer deposits and merchant reserves:

2 unchanged sentences

$ 5,614,702  

$ 5,102,061  

$ 5,614,702  

Prepaid card load assets

1 unchanged sentence

9,157,519  

15,104,808  

9,157,519  

Customer deposits

1 unchanged sentence

1,410,607  

1,471,214  

1,410,607  

Merchant reserves

3 unchanged sentences

8,101,153  

$ 28,493,156  

$ 24,283,981  

$ 28,493,156  

$ 24,283,981  

Allowance for Estimated Losses:

4 unchanged sentences

Estimates for doubtful account losses are variable based on the volume of transactions processed and could increase or decrease accordingly.

The allowance for estimated doubtful accounts was $ 319,000  at March 31, 2022 and December 31, 2021 .

The allowance for estimated doubtful accounts was $ 319,000  at June 30, 2022 and December 31, 2021 .

Inventory is stated at the lower of cost or net realizable value.

At March 31, 2022  and December 31, 2021, inventory consisted primarily of printing and paper supplies used for Output solutions.

At June 30, 2022  and December 31, 2021, inventory consisted primarily of printing and paper supplies used for Output solutions.

Accounting for Internal Use Software:

2 unchanged sentences

The Company ceases capitalization of such costs no later than the point at which the project is substantially complete and ready for its intended purpose.

In the three  months ended March 31, 2022 and March 31, 2021 , the Company capitalized $ 136,864 and $ 187,914 , respectively.

In the six  months ended June 30, 2022 and June 30, 2021 , the Company capitalized $ 246,210 and $ 388,349 , respectively.

Valuation of Long-Lived and Intangible Assets:

7 unchanged sentences

No impairment losses were recorded in 2021  or during the 

three months ended March 31, 2022 .

six months ended June 30, 2022 .

Management is not aware of any impairment changes that may currently be required;

8 unchanged sentences

Estimates for processing losses are variable based on the volume of transactions processed and could increase or decrease accordingly.

At March 31, 2022 and December 31, 2021 , the Company’s reserve for processing losses was $ 656,494  and $ 623,494  respectively.

At June 30, 2022 and December 31, 2021 , the Company’s reserve for processing losses was $ 689,494  and $ 623,494  respectively.

Legal Proceedings:

T he Company may be involved in legal matters arising in the ordinary course of business from time to time.

The Company may be involved in legal matters arising in the ordinary course of business from time to time.

While the Company believes that such matters are currently not material, there can be no assurance that matters arising in the ordinary course of business for which the Company is or could become involved in litigation will not have a material adverse effect on its business, financial condition or results of operations.

8 unchanged sentences

The Company leases facilities and office equipment under various operating leases, which generally are expected to be renewed or replaced by other leases.

For the quarters ended March 31, 2022  and 2021 , operating lease expenses totaled $ 120,151  and $ 104,131 , respectively.

For the quarters ended June 30, 2022  and 2021 , operating lease expenses totaled $ 239,105  and $ 123,134 , respectively.

Accrued Expenses

Accrued expenses consisted of the following balances:

March 31, 2022

June 30, 2022

December 31, 2021

27 unchanged sentences

The fair value of the warrants was $ 135,764 which will be amortized over the life of the warrants as a reduction of revenues.

The reduction of revenues recorded for the three months ended March 31, 2022 and 2021 was $ 8,985 .

The reduction of revenues recorded for the six months ended June 30, 2022 and 2021 was $ 17,970 .

On August 12, 2020, the Company issued 27,051 shares of common stock to University FanCards, LLC in a cashless exercise at $ 3.46 per common share in exchange for 60,000 warrants exercised by FanCards, LLC.

18 unchanged sentences

The following is a reconciliation of the numerators and the denominators of the basic and diluted per share computations for net (loss) for the 

three months ended March 31, 2022 and March 31, 2021 .

Three Months Ended March 31,

Numerator for basic and diluted (loss) per share, net (loss) available to common shareholders

Denominator for basic (loss) per share, weighted average shares outstanding

three and six months ended June 30, 2022 and June 30, 2021 .

Three Months Ended June 30,

Six Months Ended June 30,

Numerator for basic and diluted income (loss) per share, net income (loss) available to common shareholders

$ ( 1,940,345 )  

$ 218,483  

$ ( 3,562,615 )  

$ ( 501,769 )

Denominator for basic income (loss) per share, weighted average shares outstanding

20,316,572  

19,993,387  

20,298,573  

19,962,661  

Effect of dilutive securities

4,969,002  

Denominator for diluted earnings per share, adjust weighted average shares and assumed conversion

Basic (loss) per common share

Diluted (loss) per common share and common share equivalent

The awards and options to purchase shares of common stock that were outstanding at March 31, 2022 and March 31, 2021 that were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive, are as follows:

Three Months Ended March 31,

20,316,572  

24,962,389  

20,298,573  

19,962,661  

Basic income (loss) per common share

$ ( 0.10 )  

$ 0.01  

$ ( 0.18 )  

Diluted income (loss) per common share and common share equivalent

$ ( 0.10 )  

$ 0.01  

$ ( 0.18 )  

The awards and options to purchase shares of common stock that were outstanding at June 30, 2022 and June 30, 2021 that were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive, are as follows:

Six Months Ended June 30,

Anti-dilutive awards and options

5,159,902  

4,969,002  

Deferred tax assets and liabilities are recorded based on the difference between financial reporting and tax basis of assets and liabilities and are measured by the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.

10 unchanged sentences

The schedule below outlines when the Company's pre- 2017  net operating losses were generated and the year they 

$ 9,109,774  

1,621,096  

1,788,157  

1,350,961  

1,740,724  

918,960  

835,322  

429,827  

504,862  

474,465  

1,267,336  

$ 20,041,484  

Effective for tax years ending in 2018, net operating losses can be carried forward to future years indefinitely. Net operating losses generated in 

2 unchanged sentences

2018  and after.

$ 4,410,916  

2,730,461  

2,272,315  

$ 9,413,692  

Total loss carryforwards

$ 29,455,176  

Management is not aware of any tax positions that would have a significant impact on the Company’s financial position.

Related Party Transactions

During the three months ended March 31, 2022 and the year ended December 31, 2021 , the Company purchased a total of $ 19,929 and $ 4,009 , respectively, of corporate imprinted sportswear and caps from Angry Pug Sportswear.

During the six months ended June 30, 2022 and the year ended December 31, 2021 , the Company purchased a total of $ 19,929 and $ 4,009 , respectively, of corporate imprinted sportswear and caps from Angry Pug Sportswear.

Louis Hoch, the Company’s President and Chief Executive Officer, is a 50 % owner of Angry Pug Sportswear.

39 unchanged sentences

Subsequent Events

October 19, 2021 ,  the Company entered into a lease amendment to the existing lease in San Antonio, Texas commencing on April 1, 2022 

and expiring on 

September 24, 2024 

running concurrently with the existing lease. 

The incremental space lease is 

6,628  square feet. 

 The incremental annual rent during the lease term ranges from $ 135,874  to $ 145,816 .

In early July, 2022, the Company's largest ACH customer filed chapter 11 bankruptcy and stopped processing transactions.

The customer represented 49 % of our total ACH transaction volume in 2021 and 8 % of revenue for the Company.

The Company's revenue and cash flows will be impacted if the customer does not resume full operations.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

16 unchanged sentences

In our over 20-year history, we have created a loyal customer base that relies on us for our convenient, secure, innovative and adaptive services and technology, and we have built long-standing and valuable relationships with premier banking institutions such as Fifth-Third Bank, Sunrise Bank, and Wells Fargo Bank.

During the first quarter of 2022, the amount of credit card transactions processed increased by 48% versus the first quarter of 2021. 

The volume of credit card dollars processed during the first quarter of 2022 increased by 21% compared to the same time period in 2021.

During the second quarter of 2022, the amount of credit card transactions processed increased by 35% versus the second quarter of 2021. 

The volume of credit card dollars processed during the second quarter of 2022 increased by 9% compared to the same time period in 2021.

Both credit card transactions processed and dollars processed were the highest in our history. 

The continued growth in credit card metrics was primarily attributable to our PayFac growth initiatives driving increased penetration across multiple industries including healthcare and legal. 

ACH (eCheck) transaction counts during the first quarter of 2022 increased by 21% compared to the first quarter of 2021.

Returned check transactions processed during the first quarter of 2022 increased by 32% compared to the first quarter of 2021. 

Electronic check dollars processed during the first quarter of 2022 increased by 32% compared to the first quarter of 2021.

The increases in eCheck transactions, returned check transactions and electronic check dollar volumes processed were primarily attributable to higher activity levels primarily in the cryptocurrency and FinTech lending industries. 

Prepaid card load volumes processed during the first quarter of 2022 increased by 134% compared to the first quarter of 2021.

Prepaid card transaction counts processed during the first quarter of 2022 increased by 270% compared to the first quarter of 2021.

Prepaid card purchase volume during the first quarter of 2022 increased by 139% compared to the first quarter of 2021. These increases occurred primarily due to the continued associations with many government assistance programs including organizations such as New York City Economic Development Corporation, City of Houston, Harris County, TX, Open Society International (City of Baltimore), and Greater Washington Community Foundation (Washington DC) with their vaccine incentive and cash disbursement programs. 

ACH (eCheck) transaction counts during the second quarter of 2022 decreased by 8% compared to the second quarter of 2021.

Returned check transactions processed during the second quarter of 2022 increased by 39% compared to the second quarter of 2021. 

Electronic check dollars processed during the second quarter of 2022 decreased by 16% compared to the second quarter of 2021.

The decreases in eCheck transactions and electronic check dollar volumes processed were primarily attributable to significant higher cryptocurrency activity levels in the prior year period versus the current year period.

Increases in returned check transactions was primarily attributable to the continued recovery of the consumer lending market following its decline due to COVID-19.

Prepaid card load volumes processed during the second quarter of 2022 increased by 81% compared to the second quarter of 2021.

Prepaid card transaction counts processed during the second quarter of 2022 increased by 190% compared to the second quarter of 2021.

Prepaid card purchase volume during the second quarter of 2022 increased by 139% compared to the second quarter of 2021. These increases occurred primarily due to the continued associations with many government assistance programs including organizations such as New York City Economic Development Corporation, City of Houston, Harris County, TX, Open Society International (City of Baltimore), and Greater Washington Community Foundation (Washington DC) with their vaccine incentive and cash disbursement programs. 

We also continue to support numerous guaranteed income programs including the Arlington Community Foundation, E.A.T (Equity and Transformation) Chicago, and Hudson UP, the City of Denver's Basic Income Project.

Total dollar volumes processed for the first quarter of 2022 were $2.2 billion compared to $1,860 million processed in the first quarter of 2021.

Revenues for the quarter ended March 31, 2022 increased by 35% to $18.1 million, as compared to $13.5 million for the quarter ended March 31, 2021 due to continued traction and growth in our prepaid and PayFac lines of business.

Accordingly, cost of services increased by $4.0 million, or 38% to $14.6 million for the quarter ended March 31, 2022, as compared to $10.6 million for the same period in the prior year. Gross profits increased by 21% to $3.5 million for the quarter ended March 31, 2022, as compared to $2.9 million for the same period in the prior year, however the gross margin percentage was 19.4% for the quarter ended March 31, 2022 as compared to 21.6% in the prior year period.

The decrease in gross margin percentage in the quarter ended March 31, 2022, as compared to the same period a prior year ago, is attributable to increased revenue growth from business lines with lower profit margins.

We reported a net loss of $1.6 million for the quarter ended March 31, 2022, as compared to a net loss of $0.7 million for the same period in the prior year. The increase reflects continued investments in our ACH, PayFac, Prepaid and Output Solutions business lines, a substantial portion of which represents an investment in strengthening our infrastructure to not only support our current growth, but specifically to assure we can provide the service levels in customer support for the anticipated new cardholders.

Included in first quarter selling, general and administrative expenses include approximately $200,000 of one-time non-recurring items.

Total dollar volumes processed across all business lines in the second quarter of 2022 were $2.4 billion compared to $2.7 billion processed in the second quarter of 2021.

Critical Accounting Policies

9 unchanged sentences

Our revenues are principally derived from providing integrated electronic payment services to merchants and businesses, including credit and debit card-based processing services and transaction processing via the Automated Clearing House, or ACH, network and the program management and processing of prepaid debit cards.  With the acquisition of the assets of IMS in December 2020, we now offer additional services relating to electronic bill presentment, document composition, document decomposition and printing and mailing services through our Output Solutions entity.

Three Months Ended March 31,

Three Months Ended June 30,

ACH and complementary service revenue

3 unchanged sentences

Total Revenue

Revenues for the quarter ended March 31, 2022 increased by 35% to $18.1 million, as compared to $13.5 million for the quarter ended March 31, 2021.

During the first quarter we saw continued growth in our ACH and complementary service category from strong transaction growth in our cryptocurrency and FinTech lending businesses. 

Six Months Ended June 30,

ACH and complementary service revenue

Credit card revenue

Prepaid card services revenue

Output solutions revenue

Total Revenue

Revenues for the quarter ended June 30, 2022 increased by 6% to $16.2 million, as compared to $15.2 million for the quarter ended June 30, 2021 due to continued traction and growth in our prepaid and PayFac lines of business, despite a minor decline in our ACH and complimentary services business sector.

This decline was a result of 

ACH competing against an outsized year ago quarter when cryptocurrency activity was at its peak.

During the second quarter we saw continued growth in our prepaid card services category due to strong relationships with government and municipality card programs. 

Revenues for the six months ended June 30, 2022 increased by 20% to $34.3 million, as compared to $28.7 million for the six months ended June 30, 2021. 

Cost of Services

3 unchanged sentences

Cost of service fees also include fees paid to referral agents and partners.

Cost of services increased by $4.0 million, or 38%, to $14.6 million for the quarter ended March 31, 2022, as compared to $10.6 million for the same period in the prior year. 

Cost of services increased by $1.9 million, or 17%, to $13.0 million for the quarter ended June 30, 2022, as compared to $11.1 million for the same period in the prior year. 

Cost of services increased by $5.9 million, or 27%, to $27.6 million for the six months ended June 30, 2022, as compared to $21.7 million for the same period in the prior year. 

Increases in cost of services are due to growing revenues and their associated costs, compounded by more significant revenue growth in lower margin lines of business, versus ACH, which is our most profitable business line.

Gross profit is the net profit existing after the cost of services.

Gross profits increased by 21% to $3.5 million for the quarter ended March 31, 2022, as compared to $2.9 million for the same period in the prior year.

The increase in gross profit for the quarter ended March 31, 2022, as compared to the same period in the prior year, was primarily a result of incremental profits from our existing business lines.  The gross margin percentage was 19.4% for the quarter ended March 31, 2022 as compared to 21.6% in the prior year period.

Gross profits decreased by 21% to $3.3 million for the quarter ended June 30, 2022, as compared to $4.1 million for the same period in the prior year.

Similarly, the gross margin percentage was 20.1% for the quarter ended June 30, 2022 as compared to 27.1% in the prior year period.

The decrease in gross profits and margin percentage in the quarter ended June 30, 2022, as compared to the same period a prior year ago, is attributable to increased revenue contribution from business lines with lower profit margins, as well as decreased ACH and complementary service revenues, a high margin business.

Gross profits decreased by 4% to $6.8 million for the six months ended June 30, 2022, as compared to $7.0 million for the same period in the prior year.

Similarly, the gross margin percentage was 19.7% for the six months ended June 30, 2022 as compared to 24.5% in the prior year period.

The decrease in gross profits and margin percentage in the six months ended June 30, 2022, as compared to the same period a prior year ago, is attributable to increased revenue contribution from business lines with lower profit margins.

Stock-based Compensation

Stock-based compensation expenses were $550,682 for the quarter ended March 31, 2022 as compared to $327,715 for the quarter ended March 31, 2021, an increase of 68.0%. 

Stock-based compensation expenses were $0.5 million for the quarter ended June 30, 2022 as compared to $0.3 million for the quarter ended June 30, 2021, an increase of 49.3%. 

Stock-based compensation expenses were $1.0 million for the six months ended June 30, 2022 as compared to $0.6 million for the six months ended June 30, 2021, an increase of 58.8%. 

Other Selling, General and Administrative Expenses

Other selling, general and administrative expenses (other SG&A) were $3.8 million for the quarter ended March 31, 2022 as compared to $2.7 million in the prior year, a 43% increase versus the prior year period. The increase in other SG&A for the quarter ended March 31, 2022 reflects the incremental costs associated with our continued investment in our prepaid and PayFac growth initiatives.  

Other selling, general and administrative expenses (other SG&A) were $3.8 million for the quarter ended June 30, 2022 as compared to $2.8 million in the prior year, a 35% increase versus the prior year period. The increase in other SG&A for the quarter ended June 30, 2022 reflects continued investments in our ACH, PayFac, Prepaid and Output Solutions business lines, a substantial portion of which represents an investment in strengthening our infrastructure to support our current growth.

These investments include preparation for increased service requirements for growing card holders in our prepaid line of business, security and IT infrastructure, as well as staffing and employee retention. Beginning in the third quarter, we believe expenses should start to decrease due to a reduction in customer service and other prepaid services expenses attributable to the loss of any existing or anticipated Voyager card programs.

Other selling, general and administrative expenses (other SG&A) were $7.6 million for the six months ended June 30, 2022 as compared to $5.5 million in the prior year, a 39% increase versus the prior year period. The increase in other SG&A for the six months ended June 30, 2022 reflects continued investments in our ACH, PayFac, Prepaid and Output Solutions business lines, a substantial portion of which represents an investment in strengthening our infrastructure to support our current growth.

Depreciation and Amortization  

Depreciation and amortization totaled $0.7 million and $0.6 million for the quarters ended March 31, 2022 and March 31, 2021, respectively. 

Depreciation and amortization totaled $0.8 million and $0.6 million for the quarters ended June 30, 2022 and June 30, 2021, respectively. 

Depreciation and amortization totaled $1.5 million and $1.2 million for the six months ended June 30, 2022 and June 30, 2021, respectively. 

Other Income (Expense)

Other income and expense, net was ($636) for the quarter ended March 31, 2022 compared to $2,467 for the quarter ended March 31, 2021. Lower interest-bearing merchant reserves and lower interest rates drove the lower interest income as well as interest expense associated with our equipment loan.

Other income and expense, net was $82 for the quarter ended June 30, 2022 compared to $685 for the quarter ended June 30, 2021. Lower interest-bearing merchant reserves and lower interest rates drove the lower interest income as well as interest expense associated with our equipment loan.

Other income and expense, net was ($554) for the six months ended June 30, 2022 compared to $3,152 for the six months ended June 30, 2021. Lower interest-bearing merchant reserves and lower interest rates drove the lower interest income as well as interest expense associated with our equipment loan.

Net Income (Loss)

We reported a net loss of $1.6 million for the quarter ended March 31, 2022, as compared to a net loss of $0.7 million for the same period in the prior year. The increase in net loss in the current quarter was attributable to increases in SG&A combined with reduced profit margins.

We reported a net loss of $1.9 million for the quarter ended June 30, 2022, as compared to a net income of $0.2 million for the same period in the prior year. The increase in net loss in the current quarter was attributable to increases in SG&A combined with reduced profit margins.

We reported a net loss of $3.6 million for the six months ended June 30, 2022, as compared to a net loss of $0.5 million for the same period in the prior year. The increase in net loss in the current quarter was attributable to increases in SG&A combined with reduced profit margins.

We may incur future operating losses.

5 unchanged sentences

Liquidity and Capital Resources

At March 31, 2022, we had $7.6 million of cash and cash equivalents, as compared to $7.3 million of cash and cash equivalents at December 31, 2021.

We reported a net loss of $1.6 million for the quarter ended March 31, 2022.

At March 31, 2022, we had an accumulated deficit of $67.0 million.

Additionally, we had working capital of $8.3 million and $8.8 million at March 31, 2022 and December 31, 2021, respectively.

Net cash used by operating activities, including merchant reserve funds, prepaid card load assets, customer deposits and net operating lease assets for the three months ended March 31, 2022 was $7.2 million, and net cash provided for the three months ended March 31, 2021 was $10.5 million.

Excluding merchant reserves, prepaid card load assets, customer deposits and lease right-of-use assets and liabilities, our cash provided by operating activities was $0.5 million and cash used by operating activities was $0.6 million for the three months ended March 31, 2022 and March 31, 2021, respectively.

At June 30, 2022, we had $5.1 million of cash and cash equivalents, as compared to $7.3 million of cash and cash equivalents at December 31, 2021.

We reported a net loss of $1.9 million for the quarter ended June 30, 2022.

At June 30, 2022, we had an accumulated deficit of $68.9 million.

Additionally, we had working capital of $6.8 million and $8.8 million at June 30, 2022 and December 31, 2021, respectively.

Net cash used by operating activities, including merchant reserve funds, prepaid card load assets, customer deposits and net operating lease assets for the six months ended June 30, 2022 was $22.1 million, and net cash provided for the six months ended June 30, 2021 was $2.6 million.

Excluding merchant reserves, prepaid card load assets, customer deposits and lease right-of-use assets and liabilities, our cash used by operating activities was $1.2 million and cash provided by operating activities was $1.1 million for the six months ended June 30, 2022 and June 30, 2021, respectively.

We continue to invest resources and infrastructure in our business to achieve scale across all business lines.

Net cash used by investing activities was $72,069 and $274,467 for the three months ended March 31, 2022 and March 31, 2021, respectively.

Net cash used by investing activities was $411,818 and $533,854 for the six months ended June 30, 2022 and June 30, 2021, respectively.

The primary drivers of our investing activities were capital expenditures associated with capitalized software development costs and other capital investments associated with growing our business lines and associated employee counts.

Net cash used by financing activities for the three months ended March 31, 2022 

was $79,982 and net cash provided by financing activities for the three months ended March 31, 2021 was $116,542, respectively. 

Net cash used by financing activities for the six months ended June 30, 2022 was $573,699 and net cash provided by financing activities for the three months ended June 30, 2021 was $73,511, respectively. 

The 2021 cash provided by financing activities was from net proceeds from our equipment loan offset by treasury stock transactions. 

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements