What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-13 compared with 2025-11-12 · 169 added, 175 removed, 188 unchanged (65% of the section changed)

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We do not intend to update any of the forward-looking statements after the date of this report to conform these statements to actual results or to changes in our expectations, except as required by law.

This discussion and analysis should be read in conjunction with the unaudited interim condensed consolidated financial statements and the notes thereto included in this report, and the 2024 Annual Report, including the audited consolidated financial statements and the notes contained therein.

This discussion and analysis should be read in conjunction with the unaudited interim consolidated financial statements and the notes thereto included in this report, and the 2025 Annual Report, including the audited consolidated financial statements and the notes contained therein.

As a cloud-based, Fintech payment processor, we serve multiple industry verticals with technology that facilitates payment acceptance and funds disbursement in a single, full-stack ecosystem.

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We will continue to look for opportunities (both internally and externally) to enhance our offerings to meet customer demands as they arise.

Since 1998, through our merchant services business lines, which now consist of ACH and complementary services, credit card processing and prepaid cards, Usio has entered a number of market verticals within the payments industry in order to satisfy the growing payment needs of consumers and merchants across the United States.

Since 1998, through our merchant services business lines, which now consist of Automated Clearing House, or ACH, and complementary services, credit card processing and prepaid cards, Usio has entered a number of market verticals within the payments industry in order to satisfy the growing payment needs of consumers and merchants across the United States.

Beginning with our Electronic Bill Presentment and Payment, or EBPP, product that launched the Company, we entered into the electronic funds transfer space through the ACH network, developing ancillary and complementary products such as PINless debit in 2016, and Remotely Created Checks, or RCC, account validation, and account inquiry in 2019.

These supplementary product options offer customers access to faster and more convenient payment options and tools to improve operating efficiencies.

Further, our credit card payment offering was expanded in 2017 with the development of Payment Facilitation, or PayFac, which utilizes our unique technology that allows for instant enrollment of merchants and combines our suite of payment options into an integrated platform for merchants and customers.

With the growing need for faster payment methods, we continue to invest in technology that can help us further expand our suite of payment technology to complement our merchant services offerings.

Further, our credit card payment offering was expanded in 2017 with the development of Payment Facilitation, or PayFac, which utilizes our unique technology that allows for instant enrollment of merchants and combined our suite of payment options into an integrated platform for merchants and customers to utilize.

Through our innovative Prepaid Debit Card platform, we offer a variety of prepaid card products such as reloadable, incentive, promotional and corporate card programs.

Combined with our printing and mailing services, we can satisfy the diverse requirements of customer needs with physical and virtual document creation and distribution, including traditional paper checks.

Our Consumer Choice product, developed and introduced in 2022, provides flexible ways to initiate a variety of payment distributions through a multitude of payment methods including physical prepaid and virtual cards, ACH, paper checks, real-time PINless debit and others.

This offering allows us a superior opportunity to increase our cross-selling efforts through all of our payment methods.

Throughout 2025, we enhanced our Consumer Choice product to accommodate additional methods of disbursement, such as issuing funds through PayPal and Venmo, alongside integration with the PIN4 network to allow cardless ATM withdrawals.

With the growing need for faster payment methods, we continue to invest in technology that can help us further expand our suite of payment technology.

With the rise of Real Time Payments, or RTP, we began expansion into this market vertical in 2023, which serves as an alternative to ACH payments.

We also continue to enhance our existing product offerings, with improvements in reporting, data management, fraud and risk monitoring, ease of access, and accelerations in client onboarding and implementation times.

With our transition to a cloud-based platform, our speed, security, and scalability in payment processing is further expanded, allowing us to seamlessly grow as the market demands.

In the first half of 2025, we began, and completed, development of a new EBPP.

This offering allows merchants to create and distribute bills to their customers that can be viewed, and paid, online through our platform and payment processing services.

Through our innovative Prepaid Debit Card platform, we offer a variety of prepaid card products such as reloadable, incentive, promotional and corporate card programs for our merchant services business line.

Combined with Output Solutions' printing and mailing services, we can satisfy the diverse requirements of customer needs with physical and virtual document creation and distribution, including traditional paper checks, to supplement and complement our merchant services offerings.

Our Consumer Choice product, which was developed and debuted in 2022, provides flexible ways to initiate a variety of payment distributions through a multitude of payment methods, including physical prepaid and virtual cards, ACH, paper checks, real-time PINless debit and others.

This offering provides us with a superior opportunity to increase our cross-selling efforts through all of our payment methods.

The Company recently adopted its "One Usio" strategy, designed to unify our brand, sales approach, and payments offerings.

Through this strategy, we are developing enhanced client onboarding features, superior customer management, improved reporting and fraud monitoring, alongside a consolidated sales and marketing team to better cross-sell our various payment methods and ancillary services.

With our transition to a cloud-based platform, our speed, security, and scalability in payment processing have been further expanded, allowing us to seamlessly grow as the market demands.

In our over 25 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, TransPecos Bank and others.

Payment Acceptance.

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E-checks are processed using the ACH network.

We are one of nine companies that hold the prestigious NACHA certification for Third-Party Senders and were the second company to receive the certification and are the most tenured to hold the certification.

We are one of nine companies that hold the prestigious NACHA certification for Third-Party Senders and were the second company to receive the certification.

Our payment acceptance services are delivered in a variety of forms and situations.

For example, our capabilities allow merchants to convert a paper check to an e-check or receive card authorization at the point-of-sale, allow our merchants’ respective customer service representatives to take e-check or card payments from their consumers by telephone, and enable their consumers to make e-check or card payments directly through the use of a website or by calling an interactive voice response telephone system.

Similarly, our PINless debit product allows merchants to debit and credit accounts in real-time utilizing the debit card networks.

Similarly, our PINless debit product allows merchants to debit and credit accounts in real-time.

In the first half of 2025, we began, and completed, development of a new EBPP product.

This offering allows merchants to create and distribute bills to their customers that can be viewed, and paid, online through our platform and payment processing services, increasing the opportunities for cross-selling between our various business lines.

Card-Based Services.

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Through our December 2014 acquisition of the assets of Akimbo Financial, Inc., we added a highly talented technical staff of industry subject matter experts and an innovative cardholder service platform including cardholder web and mobile applications and launched what is now our UsioCard business.

As a result of this acquisition, through our subsidiary, FiCentive, Inc., or FiCentive, we offer customizable prepaid cards which customers use for expense management, incentives, refunds, claims and disbursements, as well as unique forms of compensation such as per diem payments, government disbursements, and similar payments.

As a result of this acquisition, through our subsidiary, FiCentive, Inc., we offer customizable prepaid cards which companies use for expense management, incentives, refunds, claims and disbursements, as well as unique forms of compensation such as per diem payments, government disbursements, and similar payments.

This comprehensive money disbursement platform allows businesses to pay their contractors, employees, or other recipients by choosing among a prepaid debit Mastercard, real-time deposit to a checking account, traditional ACH, direct deposit or paper check.

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We also offer prepaid cards to consumers for use as a tool to stay on budget, manage allowances and share money with family and friends.

Our UsioCard platform supports Apple Pay®, Samsung Pay™ and Google Pay™.

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, TransPecos and others.

Electronic Billing.

On December 15, 2020, we entered into the business of electronic bill presentment, document composition, document decomposition and printing and mailing services serving hundreds of customers representing a wide range of industry verticals, including utilities and financial institutions, through the acquisition of substantially all of the assets of IMS.

This product offering, through Output Solutions, provides an outsourced solution for document design, print, and electronic delivery to potential customers and entities looking to reduce postage costs and increase efficiencies.

Our UsioCard platform supports Apple Pay®, Samsung Pay™ and Google Pay™ with full mobile wallet provisioning.

In 2025 we also launched a new distribution strategy for our Prepaid card services, with a wearable device program.

Our prepaid cards can now be successfully loaded onto items such as watches, wristbands, belt buckles, or nearly any wearable product through the use of embedded chips.

We first demonstrated this new product in October 2025, and continue to refine the product, anticipating it will assist in enhancing our prepaid card program's marketability and diversity in the overall payment ecosystem.

Electronic and Paper Billing.

This product offering provides an outsourced solution for document design, print, and electronic delivery to potential customers and entities looking to reduce postage costs and increase efficiencies.

This acquisition increased our ability to grow new revenue streams and allowed us to reenter the electronic bill presentment and payment revenue stream.

Output Solutions offers a unique, and complementary payment related solution to our merchant services products of ACH, credit card, and prepaid card processing, with an opportunity for enhanced cross-selling efforts.

The success of this new business line depends on our ability to realize the anticipated growth opportunities, although we cannot provide any assurance that we will be able to realize these opportunities.

Usio Output Solutions, Inc., or Output Solutions, offers a unique, and complementary payment related solution to our merchant services products of ACH, credit card, and prepaid card processing, with an opportunity for enhanced cross-selling efforts.

The success of this business line depends on our ability to realize the anticipated growth opportunities, although we cannot provide any assurance that we will be able to realize these opportunities.

Since the acquisition of substantially all of the assets of IMS, we have invested in new equipment to enhance the capacity and speed of the business unit, such as a new inserter and folder, on October 1, 2023, that was implemented over the course of 2024, and a new printer in September 2025 that will be installed and operational in the first half of 2026.

Further, in December 2024, we partnered with an outsourced presorting company to further automate our print and mail systems.

Despite challenges in growing revenues from Output Solutions in 2025, we have significantly reduced labor costs related to print and mail processing.

We believe this reduction has better positioned the business line to pursue and successfully generate much larger opportunities than we previously were able to through the increase in capacity and automation.

Results have already been realized, as the quantity of mail we printed and delivered in the first quarter of 2026 was higher than in any other fiscal quarter in the history of the Company, while simultaneously requiring fewer working hours to achieve, compared to each fiscal quarter of 2025.

Throughout 2025, we adopted and began implementing our "Usio One" strategy, designed to unify our brand, sales approach, and payments offerings.

We believe this strategy will help better position our merchant services and Output Solutions business segments to customers and the broader payments related market as a more cohesive service offering.

In turn, we anticipate being able to better leverage our resources, reduce friction in new customer acquisition, and drive more meaningful cross-selling opportunities, which we anticipate will help increase our products' stickiness and customer retention.

Success from this strategy has already been realized by our sales and client management staff through the generation of new integrations between our existing customers and our ancillary business lines.

The consolidation of our various technologies into a more seamless product offering continues to progress, and we anticipate that it will ultimately result in a client and customer onboarding process that enables all of our customers to automatically be enrolled in, and have access to, each of our payment acceptance and issuing products.

In turn, through the continued development of our back end technology infrastructure, we anticipate the ability to eliminate the need for distinct contracts, dashboards, funding accounts, and support teams per product.

PostCredit Acquisition.

In November of 2025, we acquired substantially all of the assets of PostCredit, allowing an entry point into the expense management space.

PostCredit had been developing technology that would cater to companies looking for fund management and expense tracking that integrated with various Enterprise Resource Planning, or ERP, systems.

The Company anticipates continuing to develop this technology, while simultaneously integrating it into our existing products, opening a new sales channel to the broader market already utilizing ERPs such as Microsoft Business Dynamics and Business Central.

We intend to combine this technology seamlessly with our EBPP product launched in 2025, allowing clients to send invoices, payments, manage funds, and reconcile with their various ERP platforms utilizing our payment channels.

In combination with the other efforts of our Usio One strategy, we believe we will be able to develop a central Usio Hub that further encourages and incentivizes the utilization of our products, cross-sells our corporate expense solution, and assists in retaining the deposits we hold for our customers to help maintain or grow our interest revenues.

We believe we will be able to implement phased portions of this strategy, and other PostCredit related projects, by the end of 2026.

In the first quarter of 2026, we were able to demonstrate our early stage development to both existing clients and prospective customers as an upcoming feature, and believe we have been able to generate significant interest in PostCredit as both a standalone product and as a value-added service to our existing suite of technology.

Summary of Results

We believe that our success will continue to depend in large part on our ability to (a) grow revenues, (b) manage our selling, general, and administrative expenses, (c) add quality customers to our client base, (d) meet evolving customer requirements, (e) adapt to technological changes in an emerging market, and (f) assimilate current and future acquisitions of companies and customer portfolios.

We believe that our success will continue to depend in large part on our ability to (a) scale recurring revenues and deepen partner relationships, (b) expand our product offerings, (c) pursue disciplined, accretive opportunities, (d) enhance shareholder value via operational execution and capital allocation, and (e) assimilate current and future acquisitions of companies and customer portfolios.

We will continue to invest in our sales force and technology platforms to drive revenue growth.

In particular, we are focused on growing our ACH merchants, adding new software integrators, and growing our electronic bill presentment, document composition, document decomposition, printing and mailing services business while providing incremental services to existing merchants.

In addition to our near-term growth opportunities, we are focused on leveraging and optimizing the infrastructure of our business allowing expansion of our payment processing and mail and printing capabilities without significantly increasing our operating costs.

In addition to our near-term growth opportunities, we are focused on leveraging and optimizing the infrastructure of our business to enable expansion of our payment processing and mail and printing capabilities without significantly increasing our operating costs.

We continue to seek ways to grow revenue, and net new client implementations and onboards occur regularly due to our ability to address the needs of our market.

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This growth assists us in maintaining our diversified offerings and remaining relevant in the payments ecosystem by developing payment platforms that address the current needs of our marketplace.

In the third quarter of 2025, our revenues declined 1% to $21.2 million, as compared to $21.3 million in the same quarter of 2024, due primarily to declines in our prepaid card services and our Output Solutions line of business.

The decrease in our prepaid card services revenues was due to declines from one our key prepaid card programs, as its business was impacted by the loss of key customers that made significant contributions to Usio revenues in 2024.

Declines in Output Solutions were due to certain one-time revenues that occurred in the third quarter of 2024, being absent in the third quarter of 2025.

Additional declines in revenues came from lower interest revenues, as interest rates and interest bearing deposits declined versus the prior year period.

These revenue declines were partially offset, however, by strong growth in our ACH and complementary services line of business, alongside nominal growth in our credit card line of business as they have already replaced the loss of a meaningful customer in the second quarter of 2025.

Both of these business lines grew due to organic growth from existing customers and net new client implementations and onboarding.

In the nine months ended September 30, 2025, our revenues increased 1% to $63.2 million, as compared to $62.4 million for the nine months ended September 30, 2024, due primarily to growth in our ACH and complementary services line of business.

This growth, however, was partially offset by the aforementioned declines in revenue that occurred during 2025.

Managing Selling, General and Administrative Expenses.

In the first quarter of 2026, our revenues increased 16% to $25.5 million, as compared to $22.0 million in the same quarter of 2025, due primarily to strong growth in our ACH and complementary services, credit card, and Output Solutions lines of business, though offset slightly by declines in our prepaid card services line of business and interest revenues.

The strong growth in each of our ACH and complementary services, and credit card lines of business was due to organic growth from existing customers and net new client implementations and onboarding.

Growth in our Output Solutions line of business was driven by a combination of organic growth and net new customer acquisitions, but also from the presence of some cyclical business related to voter registration cards and tax statements, that are almost entirely printed and mailed in the first quarter each year in the case of tax statements, or every other year in the case of voter registration cards.

The decrease in our prepaid card services revenues was due to declines from one of our key prepaid card programs, as its business was impacted by the loss of a key customer in the second quarter of 2025 that made meaningful contributions to Usio revenues in the first quarter of 2025.

Lower interest revenues were driven by interest rates and interest bearing deposits declining versus the prior year.

Expand our product offerings.

We maintain a committed focus on the ever changing technological landscape within the payments ecosystem.

We believe that regularly attending payments focused conferences, webinars, and training sessions, alongside our consistent communication with customers and clients, enables us to be informed of the most current, and future, applications and evolutions of financial technologies.

We believe that this allows us to implement new feature functionality to existing products and introduce new payment methods.

In the digital marketplace, it is especially crucial to match the need for diversified payment options in an increasingly ecommerce driven world.

Pursue disciplined, accretive opportunities.

Acquisitions have been a key element in our growth-focused strategy, both by adding net new customers and by enhancing our suite of payment technologies.

This is evident through our acquisitions of Akimbo Financial, Inc., Singular Payments, and IMS, which allowed us to introduce new offerings such as prepaid card issuance, PayFac, and electronic bill presentment, all of which represent significant portions of our current revenues.

The Company continually evaluates the markets for opportunities to acquire or partner with accretive opportunities that align with our core competencies.

In 2025, we acquired the assets of PostCredit, which we believe once again represents an opportunity to enhance our existing products and to introduce us as a new competitor in the expense management market vertical.

We cannot assure you that we will be able to complete any acquisitions in the future.

Enhancing shareholder value via operational execution and capital allocation.

By appropriately managing our expenses (which are discussed under "- Results of Operations - Selling, General and Administrative Expenses" below), we believe we can achieve better economies of scale, and drive revenue growth.

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For more information, see "Results of Operations - Selling, General and Administrative Expenses" below.

Adding Quality Customers and Meeting Their Evolving Requirements.

The addition of new, quality customers, represents one of our largest opportunities to grow revenues and stay relevant in the payments ecosystem.

We believe a large and quality client base allows us to stay in touch with the broader needs of the changing payment landscape, while providing a reliable book of business to help fund current and future operations.

Our focus on addressing customer needs has allowed us to maintain a consistent presence and build a strong reputation in niche markets such as the lending, legal, government, and healthcare fields amongst others.

Adapt to Technological Changes.

We maintain a committed focus on the ever changing technological landscape within the payments ecosystem.

We believe that this allows us to implement new feature functionality to existing products and introduce new payment methods.

This has led to our evolution from being an EBPP provider at the Company's founding, to the diverse payment provider we are today, with offerings such as ACH processing, PINless debit, RTP, prepaid card issuance, and credit card processing, especially in the digital marketplace, to match the need for diversified payment options in an increasingly ecommerce driven world.

Assimilating Current and Future Acquisitions.

Acquisitions have been a key element in our growth-focused strategy, both to add net new customers, and enhance our suite of payment technologies.

The assimilation of those acquisitions was critical in both the retention of purchased assets, and their growth, through cross-selling and implementation into our broader infrastructure that allows for increased diversity of offerings and support.

We cannot assure you that we will be able to complete any acquisitions in the future.

The assimilation of our previous acquisitions has been critical in both the retention of purchased assets and their growth, through cross-selling and implementation into our broader infrastructure, which allows for increased diversity of offerings and support.

Successfully assimilating acquisitions remains a crucial priority for the success of the Company.

The recent acquisition of PostCredit represents an especially critical component of this strategy, and may require significant time investment and capital expenditure to fully implement.

We cannot assure you that we will be able to successfully assimilate new and future acquisitions.

In addition to the factors discussed above, we believe that processing volume and transaction counts are vital measures that indicate our addition and implementation of net new customers, and growth from existing customers, which we believe correlate to both current and future revenues.

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While there are many components to the revenues of our business units that could impact revenue growth or decline, these processing metrics offer an indication to the current health of our overall company and success in our strategies to grow the business.

During the third quarter of 2025, the number of credit card transactions processed by us increased by 75% versus the third quarter of 2024.

The volume of credit card dollars processed during the third quarter of 2025 increased by 12% compared to the same period in 2024.

During the first quarter of 2026, the number of credit card transactions processed by us increased by 22% versus the first quarter of 2025.

The volume of credit card dollars processed during the first quarter of 2026 increased by 16% compared to the same period in 2025.

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

The significant increases in transaction and processing volume growth were offset by the more competitive landscape in credit card processing, resulting in lower than expected revenue growth as the pricing rates for credit card processing were driven down by market competition.

This was compounded by continued attrition in the legacy customer base, who were typically onboarded at higher prices, reducing the impact of the transaction count and processing volume growth we experienced.

ACH (eCheck) transaction counts during the third quarter of 2025 increased by 26% compared to the third quarter of 2024.

Returned check transactions processed during the third quarter of 2025 increased by 35% compared to the third quarter of 2024.

Electronic check dollars processed during the third quarter of 2025 increased by 8% compared to the third quarter of 2024.

The increases in eCheck transactions, returns, and electronic check dollar volumes processed were primarily attributable to traction in our ACH sales efforts driving new merchant onboarding and processing, alongside organic growth from existing customers.

Prepaid card load volumes during the third quarter of 2025 decreased by 46% compared to the third quarter of 2024.

Prepaid card transaction counts processed during the third quarter of 2025 decreased by 33% compared to the third quarter of 2024.

Prepaid card purchase volume during the third quarter of 2025 decreased by 21% compared to the third quarter of 2024.

ACH (eCheck) transaction counts during the first quarter of 2026 increased by 34% compared to the first quarter of 2025.

Returned check transactions processed during the first quarter of 2026 increased by 54% compared to the first quarter of 2025.

Electronic check dollars processed during the first quarter of 2026 increased by 31% compared to the first quarter of 2025.

Prepaid card load volumes during the first quarter of 2026 decreased by 19% compared to the first quarter of 2025.

Prepaid card transaction counts processed during the first quarter of 2026 decreased by 16% compared to the first quarter of 2025.

These declines were primarily due to processing reductions from one of our key clients, who lost its own downstream customers during the second quarter of 2025.

This client contributed significant card load, purchase volume, and purchase transactions during the prior year period.

We continue to invest time and resources in the development of additional net new customers and clients that are at various stages of the implementation process.

Output Solutions total mail pieces processed and delivered exceeded 5.4 million for the third quarter of 2025 but was down 6% compared to the third quarter of 2024, and electronic only documents delivered exceeded 19.9 million in the third quarter of 2025.

This strong processing activity is not reflected in revenues as the ongoing transition to a more electronic only document delivery model has the effect of reducing the price per unit processed compared to print and mail while at the same time improving profitability.

Total dollar volumes processed across all business lines in the third quarter of 2025 were $2.18 billion compared to $2.02 billion processed in the third quarter of 2024, up 8% over the prior year quarter, attributable to processing volume growth in our credit card, and ACH and complementary services business lines, countering the decline of prepaid card processing volume.

Prepaid card purchase volume during the first quarter of 2026 increased by 7% compared to the first quarter of 2025.

Despite the growth in prepaid card purchase volume driving increase revenues related to spend, it was not enough to overcome the more meaningful client and cardholder fee revenues derived from the aforementioned declines in one of our key clients.

We continue to invest time and resources in the development of additional net new customers and clients that are at various stages of the implementation process, and we believe have the potential to drive meaningful revenue growth in the third and fourth quarters of 2026.

Output Solutions total mail pieces processed and delivered were 8.9 million for the first quarter of 2026, an increase of 31% compared to 6.8 million in the first quarter of 2025, while electronic only documents delivered were 29 million, up 41% in the first quarter of 2026 compared to 20.5 million in the first quarter of 2025.

This strong processing activity was driven by increased organic growth, new customer acquisitions, and the presence of increased traffic related to tax forms and voter registration cards being printed and mailed in the first quarter of 2026.

Total dollar volumes processed across all business lines in the first quarter of 2026 were $2.50 billion compared to $1.96 billion processed in the first quarter of 2025, up 28% over the prior year quarter, attributable to processing volume growth in our credit card, and ACH and complementary services business lines, countering the decline of prepaid card processing volume.

For more information, see "Results of Operations - Revenues."

Material Trends and Uncertainties

On August 16, 2022, former President Biden signed the Inflation Reduction Act, or IRA, which implemented a 1% excise tax on certain corporate stock repurchases.

On May 13, 2022, and again on March 24, 2025, our Board of Directors authorized a renewal of the Company's stock buyback program (the "buyback program"), with a repurchase limit equal to $4 million of the Company's common stock and a three-year duration.

On August 16, 2022, former President Biden signed the Inflation Reduction Act, or IRA, which implemented a 1% excise tax on certain corporate stock repurchases, when repurchases of stock on an established securities market exceed $1 million in a tax year.

On May 13, 2022, and again on March 24, 2025, the Board authorized a renewal of the buy-back program, with a limit up to $4 million of the Company's common stock with a three year duration.

As of December 31, 2025, the Company had repurchased approximately $1.1 million of stock as part of the buyback program for which the Company may be required to pay approximately $11,000 in excise tax.

Should the Company continue the repurchase of its securities on the open market, and the IRA remains in effect, we may be subject to this tax in 2026 and future years.

During the nine months ended September 30, 2025, the Company repurchased $765,887 of stock as part of the buyback program, which may become subject to the IRA's 1% excise tax if the Company meets or exceeds the IRA's 1% excise tax repurchase minimum of $1 million in stock buybacks.

As the Federal Reserve worked to fight economic inflation, the federal funds rate experienced rapid growth from the beginning of 2022 into the third quarter of 2023, and remained flat until September 2024 when the federal funds rate was lowered.

This resulted in the Company's receiving more favorable interest rates on its current cash balances, amounting to $1.5 million in interest earnings in the nine months ended September 30, 2025.

Of this interest, $1.1 million was recognized as revenue in the respective business lines for which the cash balances are held, and $314,368 as interest income.

In 2024, the Federal Reserve lowered the federal funds rate four times by a cumulative 1%, and by 0.25% twice in 2025 during September and October 2025, which has resulted in lower interest earnings on our interest-bearing cash accounts.

Should the Federal Reserve continue lowering the federal funds rate in the future, this incremental source of income would decline.

We continue to work closely with our bank partners, to ensure we effectively manage our cash balances, and monitor the Federal Reserve's monetary policy decisions.

During the first nine months of 2025, global economic activity continued to be impacted by inflation and ongoing geopolitical concerns including the Russia – Ukraine and Hamas – Israel conflicts.

Additionally, the uncertainty resulting from changes in international trade policies (including the potential for new or increased tariffs) created market volatility.

While the economy in the U.S.

remained resilient, concerns about the prospect of a recession in the future increased.

In addition, markets have been focused on the timing and amount of policy interest rate cuts by central banks globally.

Uncertainty and concerns about geopolitical risks, global central bank policies, inflation and trade policies, including tariffs, escalated over the course of the first nine months of the year.

During the three months ended March 31, 2026, the Company repurchased $233,459 of stock as part of the buyback program, which may become subject to the IRA's 1% excise tax if the Company meets or exceeds the IRA's 1% excise tax repurchase minimum of $1 million in stock buybacks.

The broader implications of the macroeconomic environment, including uncertainty around recent international conflicts such as the Russia and Ukraine conflict and the military actions in Iran by the U.S.

and Israel, supply chain shortages, a recession globally or in markets in which we operate, higher inflation rates, higher interest rates, and other related global economic conditions, remain unknown.

In April 2025, developments relating to tariffs intensified concerns over the global macroeconomic environment.

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and global economies.

A deterioration in macroeconomic conditions could continue to increase the risk of lower consumer spending, merchant and consumer bankruptcy, insolvency, business failure, higher credit losses, or other business interruption, which may adversely impact our business.

A deterioration in macroeconomic conditions as well as ongoing uncertainty regarding tariffs or trade disputes could continue to increase the risk of lower consumer spending, merchant and consumer bankruptcy, insolvency, business failure, higher credit losses, or other business interruption, which may adversely impact our business.

If these conditions continue or worsen, they could adversely impact our future financial and operating results.

As the Federal Reserve has worked to fight economic inflation, the federal funds rate experienced rapid growth from the beginning of 2022 into the third quarter of 2023, and remained flat until September 2024 when the federal funds rate was lowered.

This resulted in the Company's receiving more favorable interest rates on its current cash balances, amounting to $0.4 million in interest earnings in the three months ended March 31, 2026.

Of this interest, $0.3 million was recognized as revenue in the respective business lines for which the cash balances are held, and $91,491 as interest income.

In 2024, the Federal Reserve lowered the federal funds rate three times by a cumulative 1%, and by 0.25% three times in 2025 during September, October, and December 2025, which has resulted in lower interest earnings on our interest-bearing cash accounts.

Should the Federal Reserve continue lowering the federal funds rate in the future, this incremental source of income would decline.

We continue to work closely with our bank partners, to ensure we effectively manage our cash balances, and monitor the Federal Reserve's monetary policy decisions.

Changes in these factors are difficult to predict, and a change in one factor could affect other factors, which could result in adverse effects to our business, results of operations, financial condition, and cash flows.

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We consider these accounting policies to be critical because the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for such highly uncertain matters or due to the susceptibility of such matters to change or because the impact of the estimates and assumptions on financial condition or operating performance is material.

For a summary of Critical Accounting Policies and Estimates, please refer to the Notes to Interim Condensed Consolidated Financial Statements, Note 1, Basis of Presentation.

For a summary of Critical Accounting Policies and Estimates, please refer to the Notes to Interim Consolidated Financial Statements, Note 1, Basis of Presentation.

Reserve for Processing Losses

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

At September 30, 2025 and December 31, 2024, the Company’s reserve for processing losses was $751,937 and $897,116, respectively, and carried on the Company's balance sheet as an accrued expense, and in the statement of cash flows as a change in accrued expenses.

At March 31, 2026 and December 31, 2025, the Company’s reserve for processing losses was $802,937 and $784,937, respectively, and carried on the Company's balance sheet as an accrued expense, and in the statement of cash flows as a change in accrued expenses.

Accounts Receivable/Allowance for Estimated Credit Losses

Accounts receivable are reported as outstanding principal net of an allowance for estimated credit losses, which was $324,000 at September 30, 2025 and December 31, 2024.

Accounts receivable are reported as outstanding principal net of an allowance for estimated credit losses, which was $404,132 at March 31, 2026 and December 31, 2025.

The Company maintains an allowance for estimated credit losses representing estimated losses expected to result from the inability or failure of its customers to make required payments.

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The Company’s federal returns for the past four years remain open to examination.

The Company is subject to the Texas franchise tax and Tennessee franchise tax.

The Company is subject to the Texas franchise tax.

Management is not aware of any tax positions that would have a significant impact on its financial position.

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Management believes that EBITDA, Adjusted EBITDA, and Adjusted EBITDA margins are helpful to investors in evaluating the Company's operating performance because non-cash costs and other items that management believes are not indicative of its results of operations are excluded.

We reported Adjusted EBITDA of $0.4 million for the quarter ended September 30, 2025, as compared to Adjusted EBITDA of $0.8 million for the same period in the prior year.

The decrease in Adjusted EBITDA in the 2025 quarter was attributable to increased SG&A expenses in the period.

Adjusted EBITDA margins were 1.7% in the quarter ended September 30, 2025, as compared to Adjusted EBITDA margins of 3.6% for the same period in the prior year.

The decrease in Adjusted EBITDA margins was due primarily to higher SG&A expenses versus the prior year period, alongside lower interest revenues in the period, a high margin revenue source.

We reported Adjusted EBITDA of $1.5 million for the nine months ended September 30, 2025, as compared to Adjusted EBITDA of $2.4 million for the same period in the prior year.

The decrease in Adjusted EBITDA in the 2025 period was attributable to increased SG&A expenses in the period.

Adjusted EBITDA margins were 2.4% in the nine months ended September 30, 2025, as compared to Adjusted EBITDA margins of 3.8% for the same period in the prior year.

The decrease in Adjusted EBITDA margins was due primarily to higher SG&A expenses versus the prior year period, alongside lower interest revenues in the period, a high margin revenue source.

We reported Adjusted EBITDA of $0.8 million for the quarter ended March 31, 2026, as compared to Adjusted EBITDA of $0.7 million for the same period in the prior year.

The increase in Adjusted EBITDA in the 2026 quarter was attributable to increased gross profit in the period.

Adjusted EBITDA margins were 3.1% in the quarter ended March 31, 2026, as compared to Adjusted EBITDA margins of 3.0% for the same period in the prior year.

The increase in Adjusted EBITDA margins was due primarily to increased gross profit versus the prior year period, alongside SG&A expenses representing a smaller percentage portion of revenues driving improved bottom line results.

The following tables set forth reconciliations of Operating (Loss) to EBITDA;

EBITDA to Adjusted EBITDA;

and Revenues to Adjusted EBITDA margins for the three and nine months ended September 30, 2025 and 2024.

Three Months Ended September 30,

Nine Months Ended September 30,

Reconciliation from Operating loss to Adjusted EBITDA:

Operating loss

and Revenues to Adjusted EBITDA margins for the three months ended March 31, 2026 and 2025.

Three Months Ended March 31,

Reconciliation from Operating income (loss) to Adjusted EBITDA:

Operating income (loss)

Depreciation and amortization

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Customer balances on which the Company earns interest revenue include balances from our ACH and complementary services, prepaid card services, and Output Solutions business lines.

Three Months Ended September 30,

ACH and complementary services

Prepaid card services

Output Solutions

Interest - ACH and complementary services

Interest - Prepaid card services

Interest - Output Solutions

Total Revenue

Nine Months Ended September 30,

Three Months Ended March 31,

ACH and complementary services

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Total Revenue

Consolidated revenues for the quarter ended September 30, 2025 was down 1%, at $21.2 million, as compared to $21.3 million for the quarter ended September 30, 2024, due primarily to the 30% decline in our prepaid card services business line.

This decrease in prepaid card services revenues was attributable to one of our key clients losing a portion of its downstream customer base during the second quarter of 2025, which contributed significant revenues in the prior year period.

Output Solutions revenue was also down 8% for the quarter ended September 30, 2025 compared to the same period of 2024, due primarily to the presence of some non-recurring revenues during the prior year period.

Further declines in revenues were attributable to lower interest revenue, associated with lower interest rates and interest bearing deposits versus the prior year period.

Much of this decline, however, was almost entirely offset by the 36% growth in our ACH and complementary services business line.

ACH and complementary services revenue growth was primarily attributable to an increase in ACH check dollar volume of 8%, an increase in transactions of 26%, and an increase in returned check transactions of 35%, in each case, for the quarter ended September 30, 2025 compared to the same period of 2024.

Consolidated revenues for the quarter ended March 31, 2026 were up 16%, at $25.5 million, as compared to $22.0 million for the quarter ended March 31, 2025, due to the 25% growth in ACH and complementary services revenue, 23% growth in credit card revenue, and 19% growth in Output Solutions revenue.

This growth completely offset an 18% revenue decline in our prepaid card services business line, alongside a net 36% decline in total interest revenues from all three interest revenue sources.

ACH and complementary services revenue growth of 25% was primarily attributable to an increase in ACH check dollar volume of 31%, an increase in transactions of 34%, and an increase in returned check transactions of 54%, in each case, for the quarter ended March 31, 2026 compared to the same period in 2025.

This growth was a result of organic growth within our existing customer base, alongside net new client implementations that began processing at the end of the second quarter of 2025.

Our ACH business also benefited from an increase in revenue from ancillary product offerings, such as RCC and PINless debit.

Nominal increases in revenue were attributable to the 2% increase in our credit card business unit, which benefited from the implementation and onboarding of net new clients, including a new enterprise customer that we believe has the potential to consistently generate $100 million in annual processing volume.

This growth helped offset the loss of a key customer during the second quarter of 2025, alongside attrition in our legacy credit card portfolios.

For more information, see "- Summary of Results."

Consolidated revenues for the nine months ended September 30, 2025 increased by 1% to $63.2 million, as compared to $62.4 million for the nine months ended September 30, 2024, due primarily to the 33% growth in our ACH and complementary services business line.

This growth was a result of organic growth within our existing customer base, alongside net new client implementations that began processing during the first nine months of 2025.

Our ACH business also benefited from an increase in revenue from ancillary product offerings, such as RCC and PINless debit.

Further growth was attributable to the 1% revenue increase in our credit card business unit for the nine months ended September 30, 2025 compared to the same period of 2024, despite the loss of a key customer during the second quarter of 2025, and attrition in our legacy credit card portfolios.

Revenue growth was offset by a 24% decline in our prepaid card services business line for the nine months ended September 30, 2025 compared to the same period of 2024.

This decrease in prepaid revenues was attributable to one of our key clients losing a portion of its downstream customer base during the second quarter of 2025, which contributed significant revenues in the prior year period.

Our ACH business also benefited from an increase in revenue from ancillary product offerings, such as PINless debit, RCC, and RTP.

The 23% increase in our credit card business unit was partially the result of several key implementations of new independent software vendors and enterprise customers throughout 2025, who began processing at the end of the fourth quarter of 2025, and continued to increase their volumes in the first quarter of 2026.

This new business was in addition to the organic growth from our existing customer base, who have continued to increase their processing volumes over time.

Output Solutions revenue was up 19% for the quarter ended March 31, 2026 compared to the same period of 2025, due to strong organic growth, and net new customers.

Compounding this was the presence of increased business related to the printing and mailing of tax statements and voter registration cards that occurred, a recurring source of revenue, but one that occurs only once each year in the case of tax statements, and once every other year with respect to voter registration cards.

The 18% decrease in prepaid card services revenues was attributable to one of our key clients losing a portion of its downstream customer base during the second quarter of 2025, which contributed significant revenues in the prior year period.

We have already signed several contracts throughout the second half of 2025, and into 2026, that we believe will have the ability drive meaningful revenue growth in the second half of 2026, as we fully implement and onboard their business.

Further declines in revenues were attributable to lower interest revenue, associated with lower interest rates and interest bearing deposits versus the prior year period.

Output Solutions revenue was also down 2% for the nine months ended September 30, 2025 compared to the same period of 2024 as the business unit continues to work towards replacing some one-time revenues generated in the prior year period by attracting new customers through use of its enhanced capacity and efficiency related to the purchase and integration of new equipment in 2024.

For more information, see "- Summary of Results."

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We pay volume-based fees for debit, credit, ACH and prepaid transactions initiated through these processors or sponsoring banks, and pay fees for other transactions such as returns, notices of change to bank accounts and file transmission.

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

Cost of services decreased by $0.1 million, or 1%, to $16.3 million for the quarter ended September 30, 2025, as compared to $16.4 million for the same period in the prior year, due to increased revenue contribution from higher margin business lines such as ACH and complementary services, and declines in our other, lower margin business units, driving similar decreases in our processing, banking and transactional expenses.

Cost of services increased by $0.5 million, or 1%, to $48.3 million for the nine months ended September 30, 2025, as compared to $47.8 million for the same period in the prior year, due to increased total revenues driving similar increases in our processing, banking and transactional expenses.

Additional costs include commissions paid to referral agents and partners.

Cost of service fees also include fees related to our Output Solutions business line related to items such as paper, ink, and postage for the printing and mailing of paper statements.

Cost of services increased by $3.1 million, or 18%, to $20.3 million for the quarter ended March 31, 2026, as compared to $17.2 million for the same period in the prior year, due to increased revenues of 16%.

Revenue contribution from lower margin business lines such as PINless debit and RCC within ACH and complementary services, and credit card.

Declines in our higher margin prepaid and interest revenues further compounded this, resulting in cost of services growth slightly outpacing revenue growth.

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

Gross profit decreased by 1% to $4.87 million for the quarter ended September 30, 2025, as compared to $4.90 million for the same period in the prior year.

Gross profit percentage of revenue was 23.0% for the quarter ended September 30, 2025, flat versus 23.0% in the prior year period.

The decrease in gross profit in the quarter ended September 30, 2025, as compared to the same period during the prior year, was primarily attributable to nominally lower revenue.

Gross profit increased by 2% to $14.8 million for the nine months ended September 30, 2025, as compared to $14.5 million for the same period in the prior year.

Gross profit percentage of revenue was 23.5% for the nine months ended September 30, 2025, up from 23.3% in the prior year period, an increase of approximately 0.2%.

The increase in gross profit in the nine months ended September 30, 2025, as compared to the same period during the prior year, was primarily attributable to higher total revenue with an increase in gross profit percentage of revenue, both of which were related to growth in our ACH and complementary services line of business.

Gross profit increased by 7% to $5.1 million for the quarter ended March 31, 2026, as compared to $4.8 million for the same period in the prior year.

Gross profit percentage of revenue was 20.2% for the quarter ended March 31, 2026, down versus 21.9% in the prior year period.

The increase in gross profit in the quarter ended March 31, 2026, as compared to the same period during the prior year, was primarily attributable to the 16% increase in revenue.

However, as a result of revenue mix favoring lower margin business lines such as PINless debit and RCC within ACH and complementary services, and credit card, alongside declines in our higher margin prepaid business and in interest revenues, gross profit percentages declined compared to the prior year period.

Stock-based Compensation

Stock-based compensation expenses were $0.4 million for the quarter ended September 30, 2025 as compared to $0.6 million for the quarter ended September 30, 2024, with the decrease from the prior year quarter due to completed amortization of previously issued stock based awards.

Stock-based compensation expenses were $1.2 million for the nine months ended September 30, 2025 as compared to $1.5 million for the nine months ended September 30, 2024, with the decrease from the prior year period due to completed amortization of previously issued stock based awards.

Stock-based compensation expenses were $0.3 million for the quarter ended March 31, 2026 as compared to $0.4 million for the quarter ended March 31, 2025, with the decrease from the prior year quarter due to completed amortization of previously issued stock based awards.

Selling, General and Administrative Expenses

SG&A expenses were $4.5 million for the quarter ended September 30, 2025 as compared to $4.1 million in the prior year quarter.

The increase in SG&A for the quarter ended September 30, 2025 was driven primarily by increases in salary alongside increases in network infrastructure, travel expenditures, professional fees, and other various general expenses.

We anticipate SG&A expenses will remain relatively flat sequentially in the near term future, though increased versus prior year periods.

SG&A expenses were $13.3 million for the nine months ended September 30, 2025 as compared to $12.2 million in the prior year period.

The increase in SG&A for the nine months ended September 30, 2025 was driven primarily due to increases in salary alongside increases in network infrastructure, travel expenditures, professional fees, and other various general expenses.

We anticipate SG&A expenses will remain relatively flat sequentially in the near term future, though increased versus prior year periods.

SG&A expenses were $4.4 million for the quarter ended March 31, 2026 as compared to $4.1 million in the prior year quarter.

The increase in SG&A for the quarter ended March 31, 2026 was driven primarily by increases in salary alongside increases in network infrastructure, travel expenditures, professional fees, and other various general expenses.

Depreciation and Amortization

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These assets include property, plant, and equipment, along with intangible assets acquired through acquisitions, or developed as internal use software.

Depreciation and amortization expense totaled $0.4 million and $0.6 in the quarter ended September 30, 2025 and 2024, respectively.

The decrease in depreciation and amortization expense for the quarter ended September 30, 2025 compared to the prior year quarter was due to the completed amortization of intangible assets, specifically related to capitalized labor for our internal use software, decreasing overall depreciation and amortization expense versus the same period a year ago.

Depreciation and amortization expense totaled $1.4 million and $1.7 million for the nine months ended September 30, 2025 and 2024, respectively.

The decrease in depreciation and amortization expense was due to the completed amortization of intangible assets, specifically related to capitalized labor for our internal use software, decreasing overall depreciation and amortization expense versus the same period a year ago.

Depreciation and amortization expense totaled $0.2 million and $0.5 million in the quarter ended March 31, 2026 and 2025, respectively.

The decrease in depreciation and amortization expense for the quarter ended March 31, 2026 compared to the prior year quarter was due to the completed amortization of intangible assets, specifically related to the completed amortization of our acquisition of Output Solutions, alongside capitalized labor for our internal use software, decreasing overall depreciation and amortization expense versus the same period a year ago.

Other Income, Net

Other income, net was $0.1 million for the quarter ended September 30, 2025, flat compared to $0.1 million for the quarter ended September 30, 2024.

Other income, net was $0.3 million for the nine months ended September 30, 2025 compared to $0.6 million for the nine months ended September 30, 2024.

This decrease in the 2025 period compared to the corresponding 2024 period was driven primarily by the receipt of an employee retention tax credit issued under the CARES Act in the prior year period.

State income tax expense in the three months ended September 30, 2025 and 2024 was $69,036 and $70,000, respectively, remaining relatively flat.

State income tax expense in the nine months ended September 30, 2025 and 2024 was $200,447 and $210,000, respectively, remaining relatively flat.

Other income, net was $0.1 million for the quarter ended March 31, 2026, flat compared to $0.1 million for the quarter ended March 31, 2025.

State income tax expense in the three months ended March 31, 2026 and 2025 was $104,790 and $62,554, respectively, up slightly versus the prior year period as a result of increased taxable income.

Net Income (Loss)

We reported a net loss of ($0.4) million for the quarter ended September 30, 2025, as compared to net income of $2.9 million for the same period in the prior year.

The decrease from net income to a net loss was driven primarily by the recognition of a federal income tax benefit in the prior year period and receipt of an employee retention tax credit issued under the CARES Act in the prior year period, alongside increases in SG&A in the quarter ended September 30, 2025.

We reported a net loss of ($1.0) million for the nine months ended September 30, 2025, as compared to a net income of $2.7 million for the same period in the prior year.

We reported net income of $0.1 million for the quarter ended March 31, 2026, as compared to a net loss of $0.2 million for the same period in the prior year.

The increase from a net loss to net income was driven primarily by the increased revenues, and corresponding gross profits alongside lower stock-based compensation and depreciation and amortization expense in the quarter ended March 31, 2026 as compared to the same period in the prior year.

We may incur future operating losses.

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Our primary sources of liquidity are available cash and cash equivalents and cash flows provided by operations.

As of September 30, 2025, we had cash and cash equivalents of $7.7 million.

For the nine months ended September 30, 2025, cash provided by operations was $1.4 million.

As of March 31, 2026, we had cash and cash equivalents of $7.7 million.

For the three months ended March 31, 2026, cash provided by operations was $0.9 million.

We expect available cash and cash equivalents and internally generated funds to be sufficient to support working capital needs, capital expenditures (including acquisitions), and our debt service obligations.

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These assets and liabilities include our accounts receivable, prepaid expenses, operating lease right-of-use assets, inventory, other assets, accounts payable and accrued expenses, operating lease liabilities, merchant reserves, customer deposits, and deferred revenues.

We reported a net loss of ($1.0) million for the nine months ended September 30, 2025 compared to net income of $2.7 million for the nine months ended September 30, 2024.

We had an accumulated deficit of $69.0 million and $68.0 million at September 30, 2025 and December 31, 2024, respectively.

Additionally, we had working capital of $10.0 million and $10.2 million at September 30, 2025 and December 31, 2024, respectively.

From time to time we have sold shares of our common stock in order to provide liquidity.

For example, on November 19, 2021, Voyager Digital purchased 142,857 unregistered shares of common stock at a price of $7.00 per share in a private offering.

The gross proceeds from the private offering were $1,000,000.

On May 9, 2023, Voyager Digital returned 142,857 shares of common stock, valued at a price of $1.09 per share, in a non-cash transaction to satisfy payment obligations related to the wind down of their payment disbursement needs following its bankruptcy.

This transaction was recognized as revenue for services rendered and as shares returned to treasury stock in the quarter ended June 30, 2023.

We have also sold securities in public offerings from time to time.

For example, in September 2020, we sold 4,705,883 shares of our common stock and received net proceeds of approximately $8 million.

We cannot assure you that we will be able to sell shares of our equity securities on terms acceptable to us or at all in the future.

On occasion, we have entered into debt arrangements in order to fund capital expenditures.

For example, on September 19, 2025 , the Company entered into a debt arrangement to finance $1,017,954 for the purchase of an Output Solutions printer.

We reported net income of $0.1 million for the three months ended March 31, 2026 compared to a net loss of $0.2 million for the three months ended March 31, 2025.

We had an accumulated deficit of $70.4 million and $70.5 million at March 31, 2026 and December 31, 2025, respectively.

Additionally, we had working capital of $9.0 million and $9.4 million at March 31, 2026 and December 31, 2025, respectively.

We have in the past, and may in the future, utilize equipment loans in order to finance the cost of particular pieces of equipment.

On October 1, 2023 , the Company entered into a debt arrangement to finance $811,819 for the purchase of an Output Solutions folder and inserter.

The loan is for a period of 66 months with a maturity date of April 5, 2029 and annual interest of 6.75%.

Monthly principal and interest payments are required in the amount of $16,017, with monthly interest only payments in the amount of $4,744 required for the first six months of the loan term.

Total interest and principal payments on this folder and inserter equipment loan were $47,953 for each of the three months ended March 31, 2026 and March 31, 2025.

On September 19, 2025 , the Company entered into a debt arrangement to finance $1,017,954 for the purchase of an Output Solutions printer.

The loan is for a period of 66 months with a maturity date of March 19, 2031 and annual interest of 6.75%.

Monthly principal and interest payments are required in the amount of $20,088, with monthly interest only payments in the amount of $5,758 required for the first six months of the loan term beginning in October 2025.

As of March 31, 2026, $791,742 in proceeds have been drawn from the loan and presented on the Company's balance sheet with the remaining commitment of $226,212 still available.

Total payments on the printer loan in the three months ended March 31, 2026 were $13,361.

As of March 31, 2026, the Company maintains an undrawn line of credit and an outstanding letter of credit, both of which were established in connection with a bond required for the Company's appeal of the court’s decision in a prior lawsuit that has since been settled in the Company's favor.

The Company has an unsecured revolving line of credit with a maximum borrowing capacity of $475,000.

The facility was established on May 29, 2024, and matures on June 5, 2026.

As of September 30, 2025, no amounts had been drawn under this line of credit since its origination.

This line of credit was obtained to support the bond requirement in the KDHM lawsuit appeal but remains fully available.

As of March 31, 2026, no amounts had been drawn under this line of credit since its origination.

This line of credit was secured to support the bond requirement in a lawsuit appeal that has since been settled but remains fully available.

The Company has an irrevocable letter of credit in the amount of $474,229, issued on June 3, 2024, with a maturity date of June 3, 2026.

This letter of credit was obtained as part of the bonding requirement for the KDHM lawsuit appeal and has not been drawn upon since its issuance.

These credit facilities were arranged to comply with legal requirements related to the Company’s KDHM lawsuit appeal and provide additional liquidity resources if needed.

Management continues to monitor the Company's financial position and believes that existing cash balances, along with these credit facilities, are sufficient to meet operational needs and legal obligations.

Net cash provided by operating activities for the nine months ended September 30, 2025 was $1.4 million, as compared to net cash provided by operating activities of $1.9 million for the nine months ended September 30, 2024.

The decrease in net cash provided by operating activities was due primarily to a net loss as compared to net income in the prior year period, combined with higher levels of prepaid expenses in the nine months ended September 30, 2025.

This letter of credit was obtained as part of the bonding requirement for a lawsuit appeal that has since been settled and has not been drawn upon since its issuance.

These credit facilities were arranged to comply with legal requirements related to the Company’s appeal and provide additional liquidity resources if needed.

Management continues to monitor its financial position and believes that existing cash balances, along with these credit facilities, are sufficient to meet operational needs and legal obligations.

As a result of the lawsuit settlement, the Company will not renew the line of credit or letter of credit upon their maturity.

There are no ongoing costs associated with the maintenance of either of these credit facilities.

From time to time, we have sold shares of our common stock in order to provide us liquidity.

For example, on November 19, 2021, Voyager Digital purchased 142,857 unregistered shares of common stock at an offering price of $7.00 per share in a private offering.

The gross proceeds to us from the private offering were $1,000,000.

We have also sold securities in public offerings from time to time.

For example, in September 2020, we sold 4,705,883 shares of our common stock and received net proceeds of approximately $8 million.

We cannot assure you that in the future we will be able to sell shares of our equity securities on terms acceptable to us or at all.

Net cash provided by operating activities for the three months ended March 31, 2026 was $0.9 million, as compared to net cash provided by operating activities of $1.4 million for the three months ended March 31, 2025.

The decrease in net cash provided by operating activities was due primarily to increases in accounts receivable, alongside higher levels of prepaid expenses in the three months ended March 31, 2026.

We continue to invest resources in the infrastructure of our business such as the retention and acquisition of employees, sales-related travel, and marketing efforts to achieve scale across all business lines.

Net cash used in investing activities was $1.1 million for the nine months ended September 30, 2025 as compared to net cash used in investing activities of $0.7 million for the nine months ended September 30, 2024.

Net cash used in investing activities was $0.6 million for the three months ended March 31, 2026 as compared to net cash used in investing activities of $0.3 million for the three months ended March 31, 2025.

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

The increase in net cash used in investing activities was primarily attributable to the increased amount of fixed asset purchases and capitalization of internal use software relative to the same period a year ago.

Net cash used in financing activities for the nine months ended September 30, 2025 was $6.5 million and net cash provided by financing activities for the nine months ended September 30, 2024 was $4.7 million.

Net cash used in financing activities for the three months ended March 31, 2026 was $17.1 million and net cash provided by financing activities for the three months ended March 31, 2025 was $3.6 million.

The decrease in cash provided by financing activities was primarily attributable to the decrease in assets held for customers, which include settlement processing and prepaid card load assets, relative to the same period a year ago.

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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 2. Management’s Discussion and Analysis