What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-08-12 compared with 2026-05-13 · 227 added, 87 removed, 479 unchanged (40% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

March 31, 2026

June 30, 2026

December 31, 2025

8 unchanged sentences

2,355,284 2,281,220

Merchant reserves

4,568,537 4,795,537

Accounts receivable, net

3 unchanged sentences

1,824,140 1,359,382

Merchant reserves

4,617,537 4,795,537

Total current assets

4 unchanged sentences

Intangibles, net

Deferred tax asset, net

Operating lease right-of-use assets, net

3,185,438 2,423,231

Operating lease right-of-use assets

362,949 362,949

Deferred tax asset, net

4,404,425 4,526,228

23 unchanged sentences

Non-current liabilities:

Equipment loan, net of current portion

987,996 1,074,711

Operating lease liabilities, net of current portion

2,610,444 1,885,983

Equipment loan, net of current portion

910,310 1,074,711

Total liabilities

3 unchanged sentences

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

- 0 - shares outstanding at March 31, 2026 (unaudited) and December 31, 2025

- 0 - shares outstanding at June 30, 2026 (unaudited) and December 31, 2025

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

31,667,305 and 31,562,178 issued, and 27,672,168 and 27,729,704 outstanding at March 31, 2026 (unaudited) and December 31, 2025, respectively

32,607,392 and 31,562,178 issued, and 28,513,915 and 27,729,704 outstanding at June 30, 2026 (unaudited) and December 31, 2025, respectively

32,607 31,562

2 unchanged sentences

Treasury stock, at cost;

3,995,137 and 3,832,474 shares at March 31, 2026 (unaudited) and December 31, 2025, respectively

4,093,477 and 3,832,474 shares at June 30, 2026 (unaudited) and December 31, 2025, respectively

( 7,208,113 ) ( 6,837,181 )

9 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

$ 23,678,636 $ 19,960,990 $ 49,144,410 $ 41,970,040

Cost of services

17,952,649 14,820,921 38,281,540 32,020,828

5,725,987 5,140,069 10,862,870 9,949,212

Selling, general and administrative expenses:

Stock-based compensation

482,508 434,255 811,792 844,317

4,580,548 4,638,185 8,936,690 8,781,080

Depreciation and amortization

286,018 464,599 511,763 960,369

Total selling, general and administrative

5,349,074 5,537,039 10,260,245 10,585,766

Operating income (loss)

376,913 ( 396,970 ) 602,625 ( 636,554 )

Other income (expense):

Interest income

96,198 110,908 187,689 189,919

Interest expense

( 22,934 ) ( 11,735 ) ( 45,760 ) ( 23,578 )

Other income, net

73,264 99,173 141,929 166,341

Income (loss) before income taxes

450,177 ( 297,797 ) 744,554 ( 470,213 )

Federal income tax expense

54,719 — 121,803 —

State income tax expense

115,378 68,857 220,168 131,411

Income tax expense

170,097 68,857 341,971 131,411

Net income (loss)

$ 280,080 $ ( 366,654 ) $ 402,583 $ ( 601,624 )

Basic income (loss) per common share:

$ 0.01 $ ( 0.01 ) $ 0.01 $ ( 0.02 )

Diluted income (loss) per common share:

$ 0.01 $ ( 0.01 ) $ 0.01 $ ( 0.02 )

Weighted average common shares outstanding

27,819,834 26,456,411 27,764,064 26,577,052

See the accompanying notes to the interim consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities:

Net income (loss)

$ 402,583 $ ( 601,624 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

511,763 960,369

Deferred federal income tax

Employee stock-based compensation

811,792 844,317

Allowance for expected credit losses

( 223,096 ) —

Reserve for processing losses

( 155,100 ) ( 171,525 )

Changes in current assets and current liabilities:

Accounts receivable

( 1,027,939 ) 162,045

Accounts receivable, tax credit

Prepaid expenses and other

( 464,758 ) ( 520,027 )

Operating lease right-of-use assets

444,063 310,086

69,567 23,339

Accounts payable and accrued expenses

286,463 ( 1,255,292 )

Operating lease liabilities

( 371,601 ) ( 310,483 )

Merchant reserves

( 227,000 ) 105,000

Customer deposits

74,064 69,509

Net cash provided by operating activities

252,604 1,110,326

Investing activities:

Purchases of property and equipment

( 532,124 ) ( 73,925 )

Capitalized labor for internal use software

( 476,791 ) ( 673,242 )

Net cash used in investing activities

( 1,008,915 ) ( 747,167 )

Financing activities:

Payments on equipment loan

Payments on equipment loan, net

( 110,379 ) ( 72,328 )

Proceeds from issuance of common stock

36,601 41,496

Purchases of treasury stock

( 370,932 ) ( 708,298 )

Assets held for customers

( 12,685,977 ) 3,202,631

Net cash provided by (used in) financing activities

( 13,130,687 ) 2,463,501

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

( 13,886,998 ) 2,826,660

Cash, cash equivalents, settlement processing assets, prepaid card load assets, customer deposits and merchant reserves, beginning of period

116,315,011 87,618,491

Cash, Cash Equivalents, Settlement Processing Assets, Prepaid Card Load Assets, Customer Deposits and Merchant Reserves, End of Period

$ 102,428,013 $ 90,445,151

Supplemental disclosure of cash flow information:

Cash paid during the period for:

$ 45,760 $ 23,578

Non-cash investing and financing activities:

Issuance of deferred stock compensation

$ 1,350,900 $ —

Right-of-use assets obtained in exchange for operating lease liabilities

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

Three Months Ended March 31,

Six Months Ended June 30,

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

11 unchanged sentences

See the accompanying notes to the interim consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Additional Paid- In

7 unchanged sentences

Balance at March 31, 2026

Issuance of common stock under equity incentive plan

Issuance of common stock under employee stock purchase plan

Deferred compensation amortization

Purchase of treasury stock, at costs

Net income for the period

Balance at June 30, 2026

Balance at December 31, 2024

6 unchanged sentences

Balance at March 31, 2025

Issuance of common stock under equity incentive plan

Issuance of common stock under employee stock purchase plan

Deferred compensation amortization

Purchase of treasury stock, at costs

Net loss for the period

Balance at June 30, 2025

See the accompanying notes to the interim consolidated financial statements.

7 unchanged sentences

Results of operations for interim periods are not necessarily indicative of results that may be expected for any other interim periods or the full fiscal year.

References in this quarterly report to "the quarter" or the "first quarter" mean the three month period ended March 31, 2026 or 2025 , as applicable, unless otherwise noted.

References in this quarterly report to "the quarter" or the "second quarter" mean the three month period ended June 30, 2026 or 2025 , as applicable, unless otherwise noted.

Use of Estimates:

2 unchanged sentences

Cash and Cash Equivalents:

Cash and cash equivalents includes cash and other money market instruments.

Cash and cash equivalents include cash and other money market instruments.

The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents.

4 unchanged sentences

The Company maintains pre-funding accounts for its customers to facilitate prepaid card loads as initiated by our customer.

These prepaid card load assets are carried on the Company's balance sheet with a corresponding liability.

These prepaid card load assets are carried on the Company's consolidated balance sheet with a corresponding liability.

The Company earns interest on these prepaid card load assets and obligations, which is recognized as revenue in the prepaid card services business line.

1 unchanged sentence

The Company holds customer deposits primarily for postage expenses to ensure the Company is not out of pocket for amounts billed daily by the United States Postal Service.

These customer deposits are carried on the Company's balance sheet with a corresponding liability.

These customer deposits are carried on the Company's consolidated balance sheet with a corresponding liability.

The Company earns interest on these customer deposits, which is recognized as revenue in the Output Solutions business line.

1 unchanged sentence

The Company has merchant reserve requirements associated with ACH transactions.

The merchant reserve assets are carried on the Company's balance sheet with a corresponding liability.

The merchant reserve assets are carried on the Company's consolidated balance sheet with a corresponding liability.

Merchant reserves are set for each merchant.

3 unchanged sentences

Accounts Receivable/Allowance for Estimated Credit Losses:

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

Accounts receivable are reported as outstanding principal net of an allowance for estimated credit losses of $ 181,036 and $ 404,132 at June 30, 2026 and December 31, 2025 , respectively.

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.

5 unchanged sentences

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

At March 31, 2026 and December 31, 2025 , inventory consisted primarily of printing and paper supplies used for Usio Output Solutions, Inc., or Output Solutions.

At June 30, 2026 and December 31, 2025 , inventory consisted primarily of printing and paper supplies used for Usio Output Solutions, Inc., or Output Solutions.

Property and Equipment:

7 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.

During the three months ended March 31, 2026 and 2025 , the Company capitalized software costs of $ 215,532 and $ 290,650 , respectively.

During the six months ended June 30, 2026 and 2025 , the Company capitalized software costs of $ 476,791 and $ 673,242 , respectively.

Concentration of Credit Risk:

6 unchanged sentences

Recent credit losses have been within management's expectations.

No single customer accounted for more than 10% of revenues in 2026 or 2025 .

No single customer accounted for more than 10% of revenues during six months ended June 30, 2025 or the six months ended June 30, 2026 .

Valuation and Impairment of Long-Lived and Intangible Assets:

5 unchanged sentences

When management determines that the carrying value of long-lived and intangible assets may not be recoverable, an impairment loss is recognized, which is measured as the excess of the assets’ carrying value over the estimated fair value (with the estimated fair value determined based upon the estimated future cash inflows attributable to the asset, less estimated future cash outflows).

No impairment losses were recorded in 2025 or during the three months ended March 31, 2026 .

No impairment losses were recorded during 2025 or the six months ended June 30, 2026 .

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

15 unchanged sentences

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

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

At June 30, 2026 and December 31, 2025 , the Company’s reserve for processing losses was $ 629,837 and $ 784,937 , respectively, which is recorded on the Company's consolidated balance sheet as an accrued expense, and in the consolidated statements of cash flows as a change in the reserve for processing losses.

Revenue Recognition:

13 unchanged sentences

Interest earned on assets directly related to our core business line operations are recorded in the revenue source underlying the associated customer balances.

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

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

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

ACH and complementary services

15 unchanged sentences

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

Litigation is subject to inherent uncertainties, and an adverse result in the legal proceedings disclosed in this quarterly report or other matters that may arise from time to time may harm our business.

Litigation is subject to inherent uncertainties, and an adverse result in legal proceedings or other matters that may arise from time to time may harm our business.

Accounting for Income Taxes:

16 unchanged sentences

Securities and Exchange Commission ("SEC") or other standard setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company's consolidated financial statements upon adoption.

In October 2023, FASB issued ASU 2023 - 06, Disclosure Improvements:

In October 2023, FASB issued Accounting Standards Update ("ASU") 2023 - 06, Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.

4 unchanged sentences

For all other entities, the amendments will be effective two years later.

The Company is evaluating the effect that ASU 2023 - 06 will have on its financial statements and related disclosures.

The Company is evaluating the effect that ASU 2023 - 06 will have on its consolidated financial statements and related disclosures.

In January 2025, the FASB issued ASU 2025 - 01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

3 unchanged sentences

The effective dates of ASU 2025 - 01 align with ASU 2024 - 03:

annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027.

The Company is currently evaluating the impact of adopting this new accounting guidance on its financial statements and related disclosures, but does not expect adoption of this new standard to be material.

within annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027.

The Company is currently evaluating the impact of adopting this new accounting guidance on its consolidated financial statements and related disclosures, but does not expect adoption of this new standard to be material.

In May 2025, the FASB issued ASU No.

5 unchanged sentences

Early adoption is permitted.

In May 2025, the FASB issued ASU No.

6 unchanged sentences

Early adoption is permitted.

In July 2025, the FASB issued ASU 2025 - 05, Financial Instruments — Credit Losses (Topic 326 ):

2 unchanged sentences

We adopted this guidance effective January 1, 2026 on a prospective basis.

Our financial statements were not materially impacted upon adoption.

Our consolidated financial statements were not materially impacted upon adoption.

In September 2025, the FASB issued ASU 2025 - 06, "Targeted Improvements to the Accounting for Internal-Use Software," which simplifies the capitalization guidance by removing all references to software development project stages, so that the guidance is neutral to different software development methods.

8 unchanged sentences

The ASU is effective for annual periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods, with early adoption permitted.

In December 2025, the FASB issued ASU 2025 - 11, “Interim Reporting ( Topic 270 ):

8 unchanged sentences

Early adoption is permitted, and the amendments may be applied either prospectively or retrospectively.

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

For each of the three months ended March 31, 2026 and 2025 , operating lease expenses totaled $ 190,901 and $ 150,688 , respectively.

For the three months ended June 30, 2026 and 2025 , operating lease expenses totaled $ 193,613 and $ 151,568 , respectively.

For the six months ended June 30, 2026 and 2025 , operating lease expenses totaled $ 384,514 and $ 302,256 , respectively.

Accrued Expenses

Accrued expenses consisted of the following balances:

March 31, 2026

June 30, 2026

December 31, 2025

Accrued commissions

$ 943,297 $ 837,193

Reserve for processing losses

629,837 784,937

Other accrued expenses

1,103,476 1,254,205

Accrued taxes

251,558 326,586

Accrued salaries

442,871 123,524

Total accrued expenses

$ 3,371,039 $ 3,326,445

Equipment Loans

1 unchanged sentence

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 2025 .

Monthly principal and interest payments are required in the amount of $ 16,017 .

Total interest and principal payments on this folder and inserter equipment loan were $ 50,188 and $ 47,953 for the three months ended June 30, 2026 and 2025 , respectively.

Total interest and principal payments on this folder and inserter equipment loan were $ 98,141 and $ 95,906 for the six months ended June 30, 2026 and 2025 , respectively.

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 during 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.

Line of Credit

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 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.

Letter of Credit

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 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.

Future principal payments on current debt arrangements are as follows at March 31, 2026 :

Monthly principal and interest payments are required in the amount of $ 20,088 .

Through the end of 2025, only $ 791,742 in proceeds were drawn from the loan and reflected on the Company's consolidated balance sheets at December 31, 2025, with the remaining commitment of $ 226,212 still available as of June 30, 2026 .

Total payments on the printer loan during the three months ended June 30, 2026 were $ 44,636 .

Total payments on the printer loan during the six months ended June 30, 2026 were $ 57,997 .

Future principal payments on current debt arrangements are as follows at June 30, 2026 :

Year ending December 31,

14 unchanged sentences

The fair value of the warrants at the time of issuance amounted to $ 552,283 and was recorded as an increase in the customer list asset and a corresponding amount to additional paid in capital.

The amortization of these warrants, which is included in the total amortization expense of the customer list intangible asset, totaled $ 0 and $ 27,615 in the three months ended March 31, 2026 and 2025 , respectively.

The amortization of these warrants, which is included in the total amortization expense of the customer list intangible asset, totaled $ 0 and $ 27,615 in the three months ended June 30, 2026 and 2025 , respectively.

The amortization of these warrants totaled $ 0 and $ 55,228 in the six months ended June 30, 2026 and 2025 , respectively.

Net Income (Loss) Per Share

3 unchanged sentences

therefore, unvested restricted stock is considered a participating security for the purpose of calculating EPS.

The following is a reconciliation of the numerators and the denominators of the basic and diluted per share computations for net income (loss) for the three months ended March 31, 2026 and 2025 .

Three Months Ended March 31,

The following is a reconciliation of the numerators and the denominators of the basic and diluted per share computations for net income (loss) for the three and six months ended June 30, 2026 and 2025 :

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

$ 280,080 $ ( 366,654 ) $ 402,583 $ ( 601,624 )

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

27,819,834 26,456,411 27,764,064 26,577,052

Effect of dilutive securities

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

27,819,834 26,456,411 27,764,064 26,577,052

Basic income (loss) per common share

$ 0.01 $ ( 0.01 ) $ 0.01 $ ( 0.02 )

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

The warrants to purchase shares of common stock that were outstanding at March 31, 2026 and 2025 which were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive, were as follows:

$ 0.01 $ ( 0.01 ) $ 0.01 $ ( 0.02 )

The warrants to purchase shares of common stock that were outstanding at June 30, 2026 and 2025 which were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive, were as follows:

Anti-dilutive warrants

945,599 945,599

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.

3 unchanged sentences

Income tax benefits that meet the “more likely than not” recognition threshold are recognized.

At March 31, 2026 and December 31, 2025 , the Company had a deferred tax asset of approximately $ 4.5 million net of a valuation allowance of approximately $ 2.7 million.

At June 30, 2026 and December 31, 2025 , the Company had a deferred tax asset of approximately $ 4.4 million and $ 4.5 million, respectively, net of a valuation allowance of approximately $ 2.7 million.

Management considered the realizability of this asset in light of historical operating results and forecasted results, and determined that it was more likely than not that the Company will have taxable income in the future sufficient to utilize the deferred tax asset.

1 unchanged sentence

If applicable, the Company will recognize interest expense and penalties related to uncertain tax positions in interest expense.

As of March 31, 2026 , the Company had no accrued interest or penalties related to uncertain tax provisions.

At March 31, 2026 , the Company had available net operating loss carryforwards ("NOLs") of approximately $ 21.6 million.

As of June 30, 2026 , the Company had no accrued interest or penalties related to uncertain tax provisions.

At June 30, 2026 , the Company had available net operating loss carryforwards ("NOLs") of approximately $ 21.6 million.

NOLs generated during or prior to 2017 ("Pre- 2018 NOLs") are available to offset taxable income of future periods and expire 20 years after the loss was generated.

7 unchanged sentences

The schedule below outlines when the Company's Pre- 2018 NOLs were generated and the year they may expire.

As of March 31, 2026 , there were NOLs totaling approximately $ 14.0 million that have been generated since the beginning of 2018 that do not expire, and can be carried forward to future years to offset taxable income.

$ 1,350,961 2026

1,740,724 2027

1,267,336 2037

As of June 30, 2026 , there were NOLs totaling approximately $ 14.0 million that have been generated since the beginning of 2018 that do not expire, and can be carried forward to future years to offset taxable income.

The schedule below outlines when the Company's NOLs for 2018 and later years were generated.

Total loss carryforwards

The tax provision for federal and state income tax is as follows for the three months ended March 31, 2026 and 2025 .

Three Months Ended March 31, 2026

Three Months Ended March 31, 2025

The tax provision for federal and state income tax is as follows for the six months ended June 30, 2026 and 2025 :

Six Months Ended June 30, 2026

Six Months Ended June 30, 2025

Current provision:

220,168 131,411

Deferred provision:

1 unchanged sentence

Income tax expense

$ 341,971 $ 131,411

The reconciliation of federal income tax expense (benefit) computed at the U.S.

federal statutory tax rates to total income tax expense (benefit) is as follows for the three months ended March 31, 2026 and 2025 .

Three Months Ended March 31, 2026

Three Months Ended March 31, 2025

federal statutory tax rates to total income tax expense (benefit) is as follows for the six months ended June 30, 2026 and 2025 :

Six Months Ended June 30, 2026

Six Months Ended June 30, 2025

Income tax (benefit) at 21%

$ 156,356 21.0 % $ ( 98,745 ) 21.0 %

Change in valuation allowance

Permanent and other differences

( 34,553 ) ( 4.6 )% 98,745 ( 21.0 )%

220,168 29.6 % 131,411 ( 27.9 )%

Income tax expense

$ 341,971 45.9 % $ 131,411 ( 27.9 )%

Related Party Transactions

During the three months ended March 31, 2026 and 2025 , the Company purchased a total of $ 2,831 and $ 2,003 , respectively, of corporate imprinted sportswear, promotional items, and caps from Angry Pug Sportswear LLC.

During the six months ended June 30, 2026 and 2025 , the Company purchased a total of $ 18,959 and $ 4,756 , respectively, of corporate imprinted sportswear, promotional items, and caps from Angry Pug Sportswear LLC.

The Company’s Chairman of the Board, President, Chief Executive Officer and Chief Operating Officer, is a 50 % owner of Angry Pug Sportswear LLC.

Stock-Based Compensation

In the three months ended March 31, 2026 , we withheld 20,263 shares of our common stock for $ 27,111 in private transactions based on an average purchase price of $ 1.34 per share from officers, directors and employees to cover their share of taxes in connection with equity grants.

In the three months ended March 31, 2025 , we withheld 83,854 shares of our common stock for $ 152,997 in private transactions based on an average purchase price of $ 1.82 per share from officers, directors and employees to cover their share of taxes in connection with equity grants.

On August 21, 2025, the Company granted 920,000 shares of restricted common stock with a 10 -year vesting period and 457,800 restricted stock units ("RSUs") with a 3 -year vesting period to officers and employees as a performance bonus at an issue price of $ 1.44 per share.

In the six months ended June 30, 2026 , we withheld 44,430 shares of our common stock for $ 70,033 in private transactions based on an average purchase price of $ 1.58 per share from officers, directors and employees to cover their share of taxes in connection with equity grants.

In the six months ended June 30, 2025 , we withheld 123,817 shares of our common stock for $ 210,672 in private transactions based on an average purchase price of $ 1.70 per share from officers, directors and employees to cover their share of taxes in connection with equity grants.

On June 11, 2026, the Company granted 790,000 shares of restricted common stock with a 10 -year vesting period and 411,000 restricted stock units ("RSUs") with a 3 -year vesting period to officers and employees as a performance bonus at an issue price of $ 1.71 per share.

RSUs vest in equal tranches over their 3 -year vesting period, while 10 -year grants are cliff vesting, and vest in full at the conclusion of their 10 -year vesting period.

2 unchanged sentences

Executive officers included in the RSU grant were Louis Hoch ( 21,000 RSUs), Michael White ( 15,000 RSUs), Greg Carter ( 15,000 RSUs), and Houston Frost ( 15,000 RSUs).

On June 11, 2026, the Company granted 96,000 RSUs with a 3 -year vesting period to Non-employee Directors as a performance bonus at an issue price of $ 1.71 per share.

Directors included in the RSU grant were Blaise Bender ( 24,000 RSUs), Brad Rollins ( 24,000 RSUs), Ernesto Beyer ( 24,000 RSUs) and Michelle Miller ( 24,000 RSUs).

On August 21, 2025, the Company granted 920,000 shares of restricted common stock with a 10 -year vesting period and 457,800 RSUs with a 3 -year vesting period to officers and employees as a performance bonus at an issue price of $ 1.44 per share.

RSUs vest in equal tranches over their 3 -year vesting period, while 10 -year grants are cliff vesting, and vest in full at the conclusion of their 10 -year vesting period.

Upon vesting, officers and employees will receive issued shares of common stock.

Executive officers included in the 10 -year restricted stock grant were Louis Hoch ( 300,000 shares), Michael White ( 50,000 shares), Greg Carter ( 50,000 shares), and Houston Frost ( 50,000 shares).

Executive officers included in the RSU grant were Louis Hoch ( 21,000 RSUs), Michael White ( 18,000 RSUs), Greg Carter ( 18,000 RSUs), and Houston Frost ( 18,000 RSUs).

On August 21, 2025, the Company granted 84,000 RSUs with a 3 -year vesting period to Non-employee Directors as a performance bonus at an issue price of $ 1.44 per share.

7 unchanged sentences

Output Solutions

This segment, which was created in connection with the acquisition of substantially all of the assets of IMS, offers 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.

The Output Solutions segment, which was created in connection with the acquisition of substantially all of the assets of IMS, offers 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.

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.

Merchant Services

This segment offers integrated electronic payment processing services to merchants and businesses, including credit and debit card-based processing services and electronic funds transfer via the ACH network.

The Merchant Services segment offers integrated electronic payment processing services to merchants and businesses, including credit and debit card-based processing services and electronic funds transfer via the ACH network.

Additionally, as part of our Prepaid card-based processing services, we develop and manage a variety of Mastercard-branded prepaid card program types, including consumer reloadable, consumer gift, incentive, promotional, general and government disbursement and corporate expense cards.

The following tables set forth certain financial information with respect to Usio’s reportable segments for the three months ended March 31, 2026 and 2025 :

For the Three Months Ended March 31, 2026

The following tables set forth certain financial information with respect to Usio’s reportable segments for the three months ended June 30, 2026 and 2025 :

For the Three Months Ended June 30, 2026

Output Solutions

17 unchanged sentences

$ 4,742,853 $ 10,024,618 $ 14,767,471

For the Three Months Ended March 31, 2025

For the Three Months Ended June 30, 2025

Output Solutions

22 unchanged sentences

and intangibles, net.

The following table reconciles segment profit reported above to the loss from operations reported in the consolidated statements of operations for the three months ended March 31, 2026 and 2025 :

Three Months Ended March 31,

Segment Profit

The following tables set forth certain financial information with respect to Usio’s reportable segments for the six months ended June 30, 2026 and 2025 :

For the Six Months Ended June 30, 2026

Output Solutions

Merchant Services

$ 12,564,982 $ 36,579,428 $ 49,144,410

Cost of services

Processing expense

— 28,074,400 28,074,400

Services expense

1,542,154 — 1,542,154

Postage expense

8,664,986 — 8,664,986

Cost of services

10,207,140 28,074,400 38,281,540

$ 2,357,842 $ 8,505,028 $ 10,862,870

Depreciation and amortization

$ 45,452 $ 466,311 $ 511,763

Capital expenditures

$ 386,591 $ 145,533 $ 532,124

Identifiable assets 1

$ 4,742,853 $ 10,024,618 $ 14,767,471

For the Six Months Ended June 30, 2025

Output Solutions

Merchant Services

$ 10,457,583 $ 31,512,457 $ 41,970,040

Cost of services

Processing expense

— 23,648,164 23,648,164

Services expense

1,699,602 — 1,699,602

Postage expense

6,673,062 — 6,673,062

Cost of services

8,372,664 23,648,164 32,020,828

$ 2,084,919 $ 7,864,293 $ 9,949,212

Depreciation and amortization

$ 478,175 $ 482,194 $ 960,369

Capital expenditures

$ 61,859 $ 12,066 $ 73,925

Identifiable assets 1

$ 3,816,153 $ 8,046,699 $ 11,862,852

Note to tables:

Identifiable assets is calculated by summing the balances of accounts receivable, net;

property and equipment, net;

operating lease right-of-use lease assets;

and intangibles, net.

The following tables reconcile total gross profit reported above to the income (loss) from operations reported in the consolidated statements of operations for the three and six months ended June 30, 2026 and 2025 :

Three Months Ended June 30,

Total Gross Profit

$ 5,725,987 $ 5,140,069

Stock-based compensation

5 unchanged sentences

$ 376,913 $ ( 396,970 )

Six Months Ended June 30,

Total Gross Profit

$ 10,862,870 $ 9,949,212

Stock-based compensation

( 811,792 ) ( 844,317 )

( 8,936,690 ) ( 8,781,080 )

Depreciation and amortization

( 511,763 ) ( 960,369 )

Operating income (loss)

$ 602,625 $ ( 636,554 )

Commitments and Contingencies

Legal Proceedings

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

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

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

While we are not party to any legal proceedings as of the date of the filing of this report, we could become involved in litigation or other legal proceedings that may have a material adverse effect on our business, financial condition, or results of operations.

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