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What changed in Paysign, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Paysign, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+174 added−165 removedSource: 10-K (2025-03-26) vs 10-K (2024-03-27)

Top changes in Paysign, Inc.'s 2024 10-K

174 paragraphs added · 165 removed · 137 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

44 edited+5 added−12 removed73 unchanged
Biggest changeIf we are unable to properly protect the privacy and security of health information entrusted to us, we could be subject to substantial penalties, damages and injunctive relief. 9 In addition to HIPAA, numerous other state and federal laws govern the collection, dissemination, use, access to and confidentiality of individually identifiable health information and healthcare provider information.
Biggest changeIn addition to HIPAA, numerous other state and federal laws govern the collection, dissemination, use, access to and confidentiality of individually identifiable health information and healthcare provider information. In addition, some states are considering new laws and regulations that further protect the confidentiality, privacy and security of medical records or other types of medical information.
Javelin predicts 8% annual growth from 2024 through 2027 with total open-loop loads projected to reach $836 billion by 2027. 1 Consumers, both banked and unbanked, use prepaid cards such as general purpose reloadable (“GPR”) cards, to conduct their day-to-day financial transactions such as paying bills, depositing checks, and receiving direct deposits.
Javelin predicts 8% annual growth from 2024 through 2027 with total open-loop loads projected to reach $836 billion by 2027. Consumers, both banked and unbanked, use prepaid cards such as general purpose reloadable (“GPR”) cards, to conduct their day-to-day financial transactions such as paying bills, depositing checks, and receiving direct deposits.
These issues include utilization of debit-based products to combat copay accumulators and maximizers, currently one of the largest threats in the marketplace for pharmaceutical manufacturers. Source Plasma Donor Payments Plasma derived therapies are lifesaving treatments used to treat various rare conditions.
These issues include utilization of debit-based products to combat copay accumulators and maximizers, currently one of the largest threats in the marketplace for pharmaceutical manufacturers. 4 Source Plasma Donor Payments Plasma derived therapies are lifesaving treatments used to treat various rare conditions.
Unbanked households, an estimated 4.5 percent of U.S. households, were twice as likely to use prepaid cards or nonbank online payment services to conduct four or more types of transactions compared with banked households. Common Examples of Prepaid Cards The prepaid card market is divided into three macro categories based on who funds the card account.
Unbanked households, an estimated 4.2 percent of U.S. households, were twice as likely to use prepaid cards or nonbank online payment services to conduct four or more types of transactions compared with banked households. Common Examples of Prepaid Cards The prepaid card market is divided into three macro categories based on who funds the card account.
The card networks set the standards with which we and the card issuing banks must comply. 8 Environmental Sustainability Climate-related events, including extreme weather events and natural disasters and their effect on critical infrastructure in the U.S. could have similar adverse effects on our operations, customers or third-party suppliers.
The card networks set the standards with which we and the card issuing banks must comply. 9 Environmental Sustainability Climate-related events, including extreme weather events and natural disasters and their effect on critical infrastructure in the U.S. could have similar adverse effects on our operations, customers or third-party suppliers.
Settlement income is recorded at the expiration of the card program and relates solely to our pharma prepaid business which ended in 2022. What Are Prepaid Cards? A prepaid card is a payment product that is pre-funded and not directly linked to an individual bank account.
Settlement income is recorded at the expiration of the card program and relates predominantly to our pharma prepaid business which ended in 2022. What Are Prepaid Cards? A prepaid card is a payment product that is pre-funded and not directly linked to an individual bank account.
To provide these insights, Paysign has data scientist and a team of analytic professionals dedicated to these products and clients. Pharmacy Based Voucher and Patient Affordability Programs: Voucher and patient affordability programs have become an industry standard offering for pharmaceutical brands entering a market or seeking to increase market share.
To provide these insights, Paysign has data scientists and a team of analytic professionals dedicated to these products and clients. Pharmacy Based Voucher and Patient Affordability Programs: Voucher and patient affordability programs have become an industry standard offering for pharmaceutical brands entering a market or seeking to increase market share.
Complying with future regulation could be expensive or require us to change the way we operate our business. 7 Money Transfer and Payment Instrument Licensing Regulations We are not currently subject to money transfer and payment instrument licensing regulations; however, we have plans to introduce products in the future that would be subject to such regulations.
Complying with future regulation could be expensive or require us to change the way we operate our business. Money Transfer and Payment Instrument Licensing Regulations We are not currently subject to money transfer and payment instrument licensing regulations; however, we may introduce products in the future that would be subject to such regulations.
The Company’s plasma solution also provides cardholders with a point-of-sale cash back rewards program, a pharmacy prescription discount card and a digital bank account which are all used to assist our pharma clients in their efforts to maximize the donor experience. The solution offers customized reporting and provides a level of business analytics previously unavailable.
The Company’s plasma solution also provides cardholders with a point-of-sale cash back rewards program, a pharmacy prescription discount card and a digital bank account which are all used to assist plasma donation centers in their efforts to maximize the donor experience. The solution offers customized reporting and provides a level of business analytics previously unavailable.
Employees and Independent Contractors As of December 31, 2023, we had approximately one hundred twenty-three employees and independent contractors. We have no collective bargaining agreements with our employees, and believe all independent contractor and employment agreement relationships are satisfactory.
Employees and Independent Contractors As of December 31, 2024, we had approximately one hundred seventy-three employees and independent contractors. We have no collective bargaining agreements with our employees, and believe all independent contractor and employment agreement relationships are satisfactory.
Our suite of product offerings includes solutions for corporate rewards, prepaid gift cards, general purpose reloadable debit cards, employee incentives, consumer rebates, donor compensation, clinical trials, healthcare reimbursement payments and pharmaceutical payment assistance, and demand deposit accounts accessible with a debit card.
Our suite of product offerings includes solutions for corporate rewards, prepaid gift cards, general purpose reloadable debit cards, employee incentives, consumer rebates, donor compensation, clinical trials, healthcare reimbursement payments and pharmaceutical payment assistance, and demand deposit accounts accessible with a debit card. Our cards are sponsored by our issuing bank partners.
To date, we have issued millions of prepaid cards under programs implemented for Fortune 500 companies, multinationals, as well as top pharmaceutical manufacturers, universities and social media companies. As of December 31, 2023, we had approximately 6.4 million cardholders participating in approximately 600 card programs.
To date, we have issued millions of prepaid cards under programs implemented for Fortune 500 companies, multinationals, as well as top pharmaceutical manufacturers, universities and social media companies. As of December 31, 2024, we had approximately 7.3 million cardholders participating in approximately 600 card programs.
According to the 2021 Federal Deposit Insurance Corporation (FDIC) National Survey of Unbanked and Underbanked Households, 6.9 percent of all households were using general purpose reloadable prepaid cards in 2021. Use of prepaid cards was much higher among unbanked households (32.8 percent) than among banked households (5.7 percent).
According to the 2023 Federal Deposit Insurance Corporation (FDIC) National Survey of Unbanked and Underbanked Households, 5.9 percent of all households were using general purpose reloadable prepaid cards in 2023. Use of prepaid cards was much higher among unbanked households (21.6 percent) than among banked households (5.2 percent).
We hire independent contractors on an as-needed basis, and we may retain additional employees and consultants during the next twelve months, including additional patient affordability, information technology, product and project management, fraud, and customer care personnel to support our growing businesses. Available Information Our internet address is www.paysign.com. Information on our website does not constitute part of this Annual Report.
We hire independent contractors on an as-needed basis, and we may retain additional employees and consultants during the next twelve months, including additional patient affordability, information technology, product and project management, fraud, and customer care personnel to support our growing businesses. 11 Available Information Our internet address is www.paysign.com.
Even an unsuccessful challenge of our practices could cause adverse publicity and cause us to incur significant legal and related costs. Privacy and Security Standards under HIPAA or Other Laws. The Health Insurance Portability and Accountability Act of 1996 contains privacy regulations and the security regulations that apply to some of our operations.
Even an unsuccessful challenge of our practices could cause adverse publicity and cause us to incur significant legal and related costs. 10 Privacy and Security Standards under HIPAA or Other Laws. HIPAA contains privacy regulations and security regulations that apply to some of our operations.
Javelin Advisory Services 20 th Annual U.S. Open-Loop Prepaid Card Market Forecast, 2023-2027, shows that Open-loop prepaid growth in the short-term is strong and forecasted to remain strong in the long-term. This forecast is led by strong anticipated growth in the cash access market, the largest open-loop market.
Open-Loop Prepaid Card Market Forecast, 2023-2027, shows that open-loop prepaid growth in the short-term is strong and forecasted to remain strong in the long-term. This forecast is led by strong anticipated growth in the cash access market, the largest open-loop market.
Open-loop prepaid cards provide consumers, businesses and governments with the efficiency, security and flexibility of digital payments reducing costs associated with handling cash, checks and other paper-based payment processes, and provides the end user a payment product that is accessible and with global utility, convenient, safer than cash, can be used as a budgeting tool and contains protections against fraud and theft.
Open-loop prepaid cards provide consumers, businesses and governments with the efficiency, security and flexibility of digital payments reducing costs associated with handling cash, checks and other paper-based payment processes, and provides the end user a payment product that is accessible and with global utility, convenient, safer than cash, can be used as a budgeting tool and contains protections against fraud and theft. 1 The prepaid market continues to experience significant growth due to consumers, corporations and governments embracing improved technology, greater convenience, more product choices and greater flexibility.
More recently, having built the necessary infrastructure and added essential staff, we have increased our focus and sales efforts on disbursement programs, corporate incentive and expense card programs, as well as retargeting the pharmaceutical industry with patient affordability solutions such as co-pay assistance, buy and bill and other prepaid programs designed to maximize patient enrollment, adherence and retention. 2 The Paysign ® Brand In order to leverage the capabilities of the Paysign platform and successfully expand our product offerings, we established the Paysign brand of prepaid cards and solutions.
More recently, having built the necessary infrastructure and added essential staff, we have increased our focus and sales efforts on disbursement programs, corporate incentive and expense card programs, as well as retargeting the pharmaceutical industry with patient affordability solutions such as co-pay assistance, buy and bill and other prepaid programs designed to maximize patient enrollment, adherence and retention.
Revenue from cardholder fees, interchange, card program management fees, and transaction claims processing fees is recorded when the performance obligation is fulfilled. Breakage is recorded ratably over the estimated card life based on historical redemption patterns, market-specific trends, escheatment rules and existing economic conditions and relates solely to our open-loop gift card business which began at the end of 2022.
Breakage is recorded ratably over the estimated card life based on historical redemption patterns, market-specific trends, escheatment rules and existing economic conditions and relates solely to our open-loop gift card business which began at the end of 2022.
Our products are specifically designed to work within the established workflow of the specific healthcare provider. These products can be used to cover all or a portion of the patient’s financial responsibility. We continue to build out additional products as industry concerns continue to emerge presenting new business opportunities.
These products can be used to cover all or a portion of the patient’s financial responsibility. We continue to build out additional products as industry concerns continue to emerge presenting new business opportunities.
Privacy and Data Protection Regulation In the ordinary course of our business, we or our third-party service providers collect certain types of data, which subjects us to certain privacy and information security laws in the United States, including, for example, the Gramm-Leach-Bliley Act of 1999, and other laws or rules designed to regulate consumer information and mitigate identity theft.
Analysis of facts and circumstances of each card program under state unclaimed property laws determines whether funds under such programs are escheatable. 8 Privacy and Data Protection Regulation In the ordinary course of our business, we or our third-party service providers collect certain types of data, which subjects us to certain privacy and information security laws in the United States, including, for example, the Gramm-Leach-Bliley Act of 1999, and other laws or rules designed to regulate consumer information and mitigate identity theft.
The Paysign Communications Suite To help maximize the cardholder experience, cardholders can access their card balances and transaction history, as well as other information as dictated by the program, such as an ATM locator, a loyalty point counter, and geo-specific messaging through a number of touchpoints such as the Paysign kiosk, the Paysign Mobile App, two-way SMS, text alerts and the Paysign cardholder web portal.
The Paysign Communications Suite To help maximize the cardholder experience, cardholders can access their card balances and transaction history, as well as other information as dictated by the program, such as an ATM locator, a loyalty point counter, and geo-specific messaging through a number of touchpoints such as the Paysign kiosk, the Paysign Mobile App, two-way SMS, text alerts and the Paysign cardholder web portal. 5 Technology Our technology platform employs a standard enterprise services bus in a service-oriented architecture, configured for 24/7/365 transaction processing and operations.
Our products and services are generally subject to federal, state and local laws and regulations, including: · anti-money laundering and anti-bribery laws; · money transfer and payment instrument licensing regulations; · escheatment laws; · privacy and information safeguard laws; · data and personal information protection; · bank regulations; 6 · consumer protection laws; · tax; · environmental sustainability (including climate change); · false claims laws and other fraud and abuse restrictions; and · privacy and security standards under the Health Insurance Portability and Accountability Act (“HIPAA”) or other laws.
Any change in such regulation and oversight, whether in the form of restrictions on activities, regulatory policy, regulations, or legislation, including but not limited to changes in the regulations governing banks, could have a material impact on our operations. 6 Our products and services are generally subject to federal, state and local laws and regulations, including: · anti-money laundering and anti-bribery laws; · money transfer and payment instrument licensing regulations; · escheatment laws; · privacy and information safeguard laws; · data and personal information protection; · bank regulations; · consumer protection laws; · tax; · environmental sustainability (including climate change); · false claims laws and other fraud and abuse restrictions; and · privacy and security standards under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) or other laws.
In addition, some states are considering new laws and regulations that further protect the confidentiality, privacy and security of medical records or other types of medical information. In many cases, these state laws are not preempted by the HIPAA privacy regulations and may be subject to interpretation by various courts and other governmental authorities. Further, the U.S.
In many cases, these state laws are not preempted by the HIPAA privacy regulations and may be subject to interpretation by various courts and other governmental authorities. Further, the U.S.
The Company markets this product to a targeted portion of its existing cardholder base through existing communication points and to customers and employees of new clients. 4 Other Services Customer Service Center In order to provide a full range of services to our customers, we offer a fully staffed, in-house Customer Service Center which is operational 24 hours a day, 7 days per week consisting of live bilingual customer care representatives.
Other Services Customer Service Center In order to provide a full range of services to our customers, we offer a fully staffed, in-house Customer Service Center which is operational 24 hours a day, 7 days per week consisting of live bilingual customer care representatives.
Certain segments of the financial services and healthcare industries tend to be highly fragmented, with numerous companies competing for market share. Highly fragmented segments currently include financial account processing, customer relationship management solutions, electronic funds transfer and prepaid solutions. Many of our existing and potential competitors have longer operating histories, greater financial strength and more recognized brands in the industry.
Highly fragmented segments currently include financial account processing, customer relationship management solutions, electronic funds transfer and prepaid solutions. Many of our existing and potential competitors have longer operating histories, greater financial strength and more recognized brands in the industry. These competitors may be able to attract customers more easily because of their financial resources and awareness in the market.
These competitors may be able to attract customers more easily because of their financial resources and awareness in the market. Our larger competitors can also devote substantially more resources to business development and may adopt more aggressive pricing policies. To compete with these companies, we rely primarily on direct marketing strategies including strategic marketing partners.
Our larger competitors can also devote substantially more resources to business development and may adopt more aggressive pricing policies. To compete with these companies, we rely primarily on direct marketing strategies including strategic marketing partners. Sales and Marketing We market our Paysign payment solutions through direct marketing by the Company’s sales team.
We also continue to implement policies and programs and to adapt our business practices and strategies to help us comply with current legal standards, as well as with new and changing legal requirements affecting particular services or the conduct of our business generally.
We also continue to implement policies and programs and to adapt our business practices and strategies to help us comply with current legal standards, as well as with new and changing legal requirements affecting particular services or the conduct of our business generally. 7 Anti-Money Laundering and Anti-Bribery Laws Our products and services are generally subject to federal anti-money laundering laws, including the Bank Secrecy Act, as amended by the USA PATRIOT Act, and similar state laws.
As an end-to-end payment processor and prepaid card program manager, we derive our revenue from all stages of the card lifecycle. These revenues can include fees from program set-up; customization and development; data processing and report generation; card production and fulfillment; transaction fees derived from card usage; inactivity fees; card replacement fees; program administration fees; breakage; and settlement income.
These revenues can include fees from program set-up; customization and development; data processing and report generation; card production and fulfillment; transaction fees derived from card usage; inactivity fees; card replacement fees; program administration fees; breakage; and settlement income.
If customer funds are unclaimed at the end of an applicable statutory abandonment period, the proceeds of the unclaimed property must be remitted to the appropriate state. Analysis of facts and circumstances of each card program under state unclaimed property laws determines whether funds under such programs are escheatable.
If customer funds are unclaimed at the end of an applicable statutory abandonment period, the proceeds of the unclaimed property must be remitted to the appropriate state.
Our offerings also allow clients to directly manage more of their pharmacy benefits and include pharmacy claims adjudication, network and payment administration, client call center service and support, reporting, rebate management, as well as implementation, training and account management. 3 Patient Affordability Products and Services Paysign provides targeted products and services designed to address financial barriers related to patients starting and remaining on brand name and biosimilar drug therapies.
Our offerings also allow clients to directly manage more of their pharmacy benefits and include pharmacy claims adjudication, network and payment administration, client call center service and support, reporting, rebate management, as well as implementation, training and account management.
Markets and Major Customers We have no major customers and are not reliant on any individual card program. We manage multiple programs at any given time.
Markets and Major Customers We have no major customers and are not reliant on any individual card program. We manage multiple card programs at any given time. As of December 31, 2024, we managed approximately 600 card programs with approximately 7.3 million participating cardholders.
Sales and Marketing We market our Paysign payment solutions through direct marketing by the Company’s sales team. Our primary market focus is on companies and municipalities that require a streamlined payment solution for rewards, rebates, payment assistance, and other payments to their customers, employees, agents and others.
Our primary market focus is on companies that require a streamlined payment solution for rewards, rebates, payment assistance, and other payments to their customers, employees, agents and others. To reach these markets, we focus our sales efforts on direct contact with our target market and attendance at various industry specific conferences.
These DDA Debit Cards offer many of the features and functionalities of a traditional debit card associated with a standard bank account, including overdraft protection. The Company began marketing its DDA Debit Card, branded Paysign Premier Digital Bank Account, in the third quarter of 2019.
These DDA Debit Cards offer many of the features and functionalities of a traditional debit card associated with a standard bank account, including overdraft protection. The Company markets this product, branded Paysign Premier Digital Bank Account, to a targeted portion of its existing cardholder base through existing communication points and to customers and employees of new clients.
Our clients can receive customized reports, track card usage and attach surveys to the activation process to gain market intelligence. · Speed to Market: Our clients can get rewards and incentives to the intended recipients in a much quicker manner than traditional methods using our corporate incentive card products.
Our clients can receive customized reports, track card usage and attach surveys to the activation process to gain market intelligence. · Speed to Market: Our clients can get rewards and incentives to the intended recipients in a much quicker manner than traditional methods using our corporate incentive card products. 3 Per Diem/ Corporate Expense Payments Per Diem, Corporate Expense and Business Travel Cards are reloadable prepaid cards that allows businesses, non–profits and government agencies the ability to control employee spending while reducing administration costs by eliminating the need for traditional expense reports.
To reach these markets, we focus our sales efforts on direct contact with our target market and attendance at various industry specific conferences. We may, at times, utilize independent contractors who make direct sales and are paid on a commission basis only.
We may, at times, utilize independent contractors who make direct sales and are paid on a commission basis only.
We employ a fully staffed, in-house customer service department which utilizes bilingual customer service representatives, interactive voice response (“IVR”), and two-way short message service (“SMS”) messaging and text alerts. As we do not have our own banking license to issue open-loop prepaid cards, our cards are offered to end users through our relationships with bank issuers.
We employ a fully staffed, in-house customer service department which utilizes bilingual customer service representatives, interactive voice response (“IVR”), and two-way short message service (“SMS”) messaging and text alerts.
The prepaid market continues to experience significant growth due to consumers, corporations and governments embracing improved technology, greater convenience, more product choices and greater flexibility. Prepaid cards have also proven to be an attractive alternative to traditional bank accounts for certain segments of the population, particularly those without, or who could not qualify for, a checking or savings account.
Prepaid cards have also proven to be an attractive alternative to traditional bank accounts for certain segments of the population, particularly those without, or who could not qualify for, a checking or savings account. Javelin Advisory Services 20 th Annual U.S.
Our pharmaceutical solutions provide payment claims processing and other administrative services for clients according to client benefit plan designs.
Funds are provided by the sponsoring pharmaceutical company for use at retail pharmacies, specialty pharmacies, hospitals, doctors’ offices and clinics nationwide. Our pharmaceutical solutions provide payment claims processing and other administrative services for clients according to client benefit plan designs.
Pharmaceutical Market Our Paysign solutions for the pharmaceutical industry are a specialized, adjudicated solution that pays all or a portion of a patient’s out-of-pocket costs associated with a prescription drug purchase. Funds are provided by the sponsoring pharmaceutical company for use at retail pharmacies, specialty pharmacies, hospitals, doctors’ offices and clinics nationwide.
We are currently focusing on marketing these card products to large corporations. Pharmaceutical Market Our Paysign solutions for the pharmaceutical industry are a specialized, adjudicated solution that pays all or a portion of a patient’s out-of-pocket costs associated with a prescription drug purchase.
Competition The markets for financial products and services, including prepaid cards and services related thereto, are intensely competitive. We compete with a variety of companies in our markets and our competitors vary in size, scope and breadth of products and services offered.
We compete with a variety of companies in our markets and our competitors vary in size, scope and breadth of products and services offered. Certain segments of the financial services and healthcare industries tend to be highly fragmented, with numerous companies competing for market share.
We use a variety of proprietary and licensed standards-based technologies to implement our platforms, including those which provide for orchestration, interoperability and process control. The platforms also integrate a data infrastructure to support both transaction processing and data warehousing for operational support and data analytics.
We utilize two secure, interconnected, environmentally-controlled data centers, with emergency power generation capabilities, and fully redundant capabilities, and cloud hosting. We use a variety of proprietary and licensed standards-based technologies to implement our platforms, including those which provide for orchestration, interoperability and process control.
We cannot provide assurance regarding how these standards will be interpreted, enforced or applied to our operations.
We cannot provide assurance regarding how these standards will be interpreted, enforced or applied to our operations. If we are unable to properly protect the privacy and security of health information entrusted to us, we could be subject to substantial penalties, damages and injunctive relief.
In the future, we expect to further expand our product into other prepaid card offerings such as travel cards and expense reimbursement cards. Our cards are sponsored by our issuing bank partners. Our revenues include fees generated from cardholder fees, interchange, card program management fees, transaction claims processing fees, breakage, and settlement income.
Our revenues include fees generated from cardholder fees, interchange, card program management fees, transaction claims processing fees, breakage, and settlement income. Revenue from cardholder fees, interchange, card program management fees, and transaction claims processing fees is recorded when the performance obligation is fulfilled.
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Per Diem/ Corporate Expense Payments Per Diem, Corporate Expense and Business Travel Cards are reloadable prepaid card that allows businesses, non–profits and government agencies the ability to control employee spending while reducing administration costs by eliminating the need for traditional expense reports. We are currently focusing on marketing these card products to large corporations.
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As we do not have our own banking license to issue open-loop prepaid cards, our cards are offered to end users through our relationships with bank issuers. 2 As an end-to-end payment processor and prepaid card program manager, we derive our revenue from all stages of the card lifecycle.
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Technology Our technology platform employs a standard enterprise services bus in a service-oriented architecture, configured for 24/7/365 transaction processing and operations. We utilize two secure, interconnected, environmentally-controlled data centers, with emergency power generation capabilities, and fully redundant capabilities.
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The Paysign ® Brand In order to leverage the capabilities of the Paysign platform and successfully expand our product offerings, we established the Paysign brand of prepaid cards and solutions.
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As of December 31, 2023, we managed approximately 600 card programs with approximately 6.4 million participating cardholders. 5 Implications of Being an Emerging Growth Company Paysign qualifies as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.
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Patient Affordability Products and Services Paysign provides targeted products and services designed to address financial barriers related to patients starting and remaining on brand name and biosimilar drug therapies. Our products are specifically designed to work within the established workflow of the specific healthcare provider.
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An emerging growth company may take advantage of reduced reporting requirements that are otherwise applicable to public companies.
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The platforms also integrate a data infrastructure to support both transaction processing and data warehousing for operational support and data analytics. Competition The markets for financial products and services, including prepaid cards and services related thereto, are intensely competitive.
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These provisions include, but are not limited to: · the option to present only two years of audited financial statements and two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Annual Report on Form 10-K; · reduced disclosure obligations regarding executive compensation in periodic reports, proxy statements and registration statements; and · exemptions from the requirements of holding nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
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Information on our website does not constitute part of this Annual Report.
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We have elected to take advantage of certain reduced disclosure obligations in this Annual Report on Form 10-K and may elect to take advantage of other reduced reporting requirements in future filings.
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As a result, the information that we provide to our stockholders may be different from what you might receive from other public reporting companies in which you hold equity interests. In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies.
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We have elected to avail ourselves of this exemption and, as a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies.
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Section 107 of the JOBS Act provides that we can elect to opt out of the extended transition period at any time, which election is irrevocable.
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We will remain an emerging growth company until the earliest to occur of: (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.235 billion; (ii) the last day of 2024; (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange, which would occur if the market value of our common equity held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter; or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during any three-year period.
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Any change in such regulation and oversight, whether in the form of restrictions on activities, regulatory policy, regulations, or legislation, including but not limited to changes in the regulations governing banks, could have a material impact on our operations.
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Anti-Money Laundering and Anti-Bribery Laws Our products and services are generally subject to federal anti-money laundering laws, including the Bank Secrecy Act, as amended by the USA PATRIOT Act, and similar state laws.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

26 edited+8 added−6 removed75 unchanged
Biggest changeIf securities analysts do not publish research or reports about our business or if they publish negative evaluations of our common stock, the trading price of our common stock could decline. We expect that the trading price for our common stock will be affected by any research or reports that securities analysts publish about us or our business.
Biggest changeWe expect that the trading price for our common stock will be affected by any research or reports that securities analysts publish about us or our business. If one or more of the analysts who may elect to cover us or our business downgrade their evaluations of our common stock, the price of our common stock would likely decline.
Although we believe we have taken appropriate actions to remediate previously reported control deficiencies that we have identified and to strengthen our internal control over financial reporting, we cannot assure you that we will not discover other deficiencies or weaknesses in the future. Security and privacy breaches of our electronic transactions may damage customer relations and inhibit our growth.
Although we believe we have taken appropriate actions to remediate previously reported control deficiencies that we have identified and to strengthen our internal control over financial reporting, we cannot assure you that we will not discover other deficiencies or weaknesses in the future. 13 Security and privacy breaches of our electronic transactions may damage customer relations and inhibit our growth.
If our operating revenue growth rates slow materially or decline, our business, operating results and financial condition could be adversely affected. 10 We operate in a highly regulated environment, and failure by us or business partners to comply with applicable laws and regulations could have an adverse effect on our business, financial position and results of operations.
If our operating revenue growth rates slow materially or decline, our business, operating results and financial condition could be adversely affected. We operate in a highly regulated environment, and failure by us or business partners to comply with applicable laws and regulations could have an adverse effect on our business, financial position and results of operations.
As of the date of this filing, we had not received any notice or claim of infringement from any party. The market for electronic commerce services is evolving and may not continue to develop or grow rapidly enough for us to maintain profitability.
As of the date of this filing, we had not received any notice or claim of infringement from any party. 15 The market for electronic commerce services is evolving and may not continue to develop or grow rapidly enough for us to maintain profitability.
Fluctuations in our quarterly or annual results of operations may be due to a number of factors, including, but not limited to: · the timing and volume of purchases, use and reloads of our prepaid cards and related products and services; · the timing and success of new product or service introductions by us or our competitors; · seasonality in the purchase or use of our products and services; · reductions in the level of interchange rates that can be charged; · fluctuations in customer retention rates; 16 · changes in the mix of products and services that we sell; · changes in the mix of retail distributors through which we sell our products and services; · the timing of commencement, renegotiation or termination of relationships with significant third-party service providers; · changes in our or our competitors’ pricing policies or sales terms; · the timing of commencement and termination of major advertising campaigns; · the timing of costs related to the development or acquisition of complementary businesses; · the timing of costs of any major litigation to which we are a party; · the amount and timing of operating costs related to the maintenance and expansion of our business, operations and infrastructure; · our ability to control costs, including third-party service provider costs; · volatility in the trading price of our common stock, which may lead to higher stock-based compensation expenses or fluctuations in the valuations of vesting equity; and · changes in the regulatory environment affecting the banking or electronic payments industries generally or prepaid financial services specifically.
Fluctuations in our quarterly or annual results of operations may be due to a number of factors, including, but not limited to: · the timing and volume of purchases, use and reloads of our prepaid cards and related products and services; · the timing and success of new product or service introductions by us or our competitors; · seasonality in the purchase or use of our products and services; · reductions in the level of interchange rates that can be charged; · fluctuations in customer retention rates; · changes in the mix of products and services that we sell; · changes in the mix of retail distributors through which we sell our products and services; · the timing of commencement, renegotiation or termination of relationships with significant third-party service providers; · changes in our or our competitors’ pricing policies or sales terms; · the timing of commencement and termination of major advertising campaigns; · the timing of costs related to the development or acquisition of complementary businesses; · the timing of costs of any major litigation to which we are a party; · the amount and timing of operating costs related to the maintenance and expansion of our business, operations and infrastructure; · our ability to control costs, including third-party service provider costs; · volatility in the trading price of our common stock, which may lead to higher stock-based compensation expenses or fluctuations in the valuations of vesting equity; and · changes in the regulatory environment affecting the banking or electronic payments industries generally or prepaid financial services specifically. 20 ITEM 1B.
In addition, we may be unable to maintain adequate banking relationships or renew our agreements with the banks that currently issue our cards under terms at least as favorable to us as those existing before renewal. 12 We receive important services from third-party vendors, and replacing them could entail unexpected integration costs.
In addition, we may be unable to maintain adequate banking relationships or renew our agreements with the banks that currently issue our cards under terms at least as favorable to us as those existing before renewal. 14 We receive important services from third-party vendors, and replacing them could entail unexpected integration costs.
If we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary to relinquish valuable rights to our technologies and products or grant unfavorable license terms. 14 Global and regional economic conditions could harm our business.
If we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary to relinquish valuable rights to our technologies and products or grant unfavorable license terms. 17 Global and regional economic conditions could harm our business.
If we are not able to comply with the requirements of Sarbanes-Oxley Act, or if we or our independent registered public accounting firm identify additional deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline and we could be subject to sanctions or investigations by the SEC and other regulatory authorities.
Legal Proceedings” for additional information. 19 If we are not able to comply with the requirements of Sarbanes-Oxley Act, or if we or our independent registered public accounting firm identify additional deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline and we could be subject to sanctions or investigations by the SEC and other regulatory authorities.
Management is also responsible for reporting on the effectiveness of internal control over financial reporting. 11 Deficiencies or weaknesses in our internal control over financial reporting that are not promptly identified and remediated may adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, decrease investor confidence in our Company, and reduce the value of our common stock.
Deficiencies or weaknesses in our internal control over financial reporting that are not promptly identified and remediated may adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, decrease investor confidence in our Company, and reduce the value of our common stock.
Management believes future growth in the electronic commerce market will be driven by the cost, convenience, ease of use and quality of products and services offered to consumers and businesses.
Management believes future growth in the electronic commerce market will be driven by the cost, convenience, ease of use and quality of products and services offered to consumers and businesses. In order to maintain our profitability, consumers and businesses must continue to adopt our products and services.
Failure by us or those businesses to comply with the laws and regulations to which we are subject could result in fines, penalties or limitations on our ability to conduct our business, or federal or state actions, any of which could significantly harm our reputation with consumers and other network participants, banks that issue our cards and regulators, and could materially and adversely affect our business, operating results and financial condition.
Failure by us or those businesses to comply with the laws and regulations to which we are subject could result in fines, penalties or limitations on our ability to conduct our business, or federal or state actions, any of which could significantly harm our reputation with consumers and other network participants, banks that issue our cards and regulators, and could materially and adversely affect our business, operating results and financial condition. 12 Changes in the laws, regulations, credit card association rules or other industry standards affecting our business may impose costly compliance burdens and negatively impact our business.
Our stock price could decline due to the large number of outstanding shares of our common stock eligible for future sale. We have 52,968,374 shares of common stock outstanding as of March 22, 2023, assuming no exercise of outstanding options or unvested restricted stock awards.
Our stock price could decline due to the large number of outstanding shares of our common stock eligible for future sale. We have 53,747,674 shares of common stock outstanding as of March 19, 2025, assuming no exercise of outstanding options or unvested restricted stock awards.
The trading price of our common stock could be subject to wide fluctuations in response to, among other things, quarterly variations in operating and financial results, announcements of technological innovations or new products by our competitors or us, changes in prices of our products and services or our competitors’ products and services, changes in product mix, or changes in our revenue and revenue growth rates.
The trading price of our common stock could be subject to wide fluctuations in response to, among other things, quarterly variations in operating and financial results, announcements of technological innovations or new products by our competitors or us, changes in prices of our products and services or our competitors’ products and services, changes in product mix, or changes in our revenue and revenue growth rates. 18 If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our common stock, the trading price of our common stock could decline.
Our future success depends, to a significant extent, on our ability to attract, develop, incentivize and retain key personnel, namely our management team and experienced sales, marketing and program and technology personnel. We must motivate and retain existing personnel and also attract, source, hire, develop and retain highly-qualified employees.
Our future success depends on our ability to attract, develop, incentivize and retain key personnel. Our future success depends, to a significant extent, on our ability to attract, develop, incentivize and retain key personnel, namely our management team and experienced sales, marketing and program and technology personnel.
Our success will depend to a significant degree upon our ability to attract, train, and retain highly skilled directors, officers, management, business, financial, legal, marketing, sales, and technical personnel and upon the continued contributions of such people. In addition, we may not be able to retain our current key employees.
Competition for highly qualified employees in the financial services and healthcare industry is intense. Our success will depend to a significant degree upon our ability to attract, train, and retain highly skilled directors, officers, management, business, financial, legal, marketing, sales, and technical personnel and upon the continued contributions of such people.
The loss of the services of one or more of our key personnel and our failure to attract additional highly qualified personnel could impair our ability to expand our operations and provide service to our customers. Our future success depends on our ability to attract, develop, incentivize and retain key personnel.
In addition, we may not be able to retain our current key employees. The loss of the services of one or more of our key personnel and our failure to attract additional highly qualified personnel could impair our ability to expand our operations and provide service to our customers.
If competitors introduce new products and services, or if new industry standards and practices emerge, our existing product and service offerings, technology and systems may become obsolete.
If we do not respond to rapid technological change or changes in industry standards, our products and services could become obsolete and we could lose our customers. If competitors introduce new products and services, or if new industry standards and practices emerge, our existing product and service offerings, technology and systems may become obsolete.
Because of our small size, we require the continued service and performance of our management team, sales and technology employees, all of whom we consider to be key employees. Competition for highly qualified employees in the financial services and healthcare industry is intense.
We depend on key personnel and could be harmed by the loss of their services because of the limited number of qualified people in our industry. Because of our small size, we require the continued service and performance of our management team, sales and technology employees, all of whom we consider to be key employees.
We may experience difficulty fully integrating our newly-hired personnel, which may adversely affect our business. Competition for qualified management, sales, marketing and program and technology personnel can be intense. Competitors have in the past and may in the future attempt to recruit our top management and employees.
We must motivate and retain existing personnel and also attract, source, hire, develop and retain highly-qualified employees. We may experience difficulty fully integrating our newly-hired personnel, which may adversely affect our business. Competition for qualified management, sales, marketing and program and technology personnel can be intense.
We intend to retain any earnings to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future.
We intend to retain any earnings to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future. As a result, you will likely receive a return on your investment in our common stock only if the market price of our common stock increases.
Changes in the laws, regulations, credit card association rules or other industry standards affecting our business may impose costly compliance burdens and negatively impact our business. There may be changes in the laws, regulations, card association rules or other industry standards that affect our operating environment in substantial and unpredictable ways.
There may be changes in the laws, regulations, card association rules or other industry standards that affect our operating environment in substantial and unpredictable ways. Changes to statutes, regulations or industry standards, including interpretation and implementation of statutes, regulations or standards, could increase the cost of doing business or affect the competitive balance.
Our directors, executive officers, and holders of more than 5% of our total shares of common stock outstanding and their respective affiliates, in the aggregate, beneficially own, as of March 22, 2023, approximately 52% of our outstanding common stock.
Concentration of ownership among our existing directors, executive officers and principal stockholders may prevent new investors from influencing significant corporate decisions. Our directors, executive officers, and holders of more than 5% of our total shares of common stock outstanding and their respective affiliates, in the aggregate, beneficially own, as of March 19, 2025, approximately 48% of our outstanding common stock.
Regulation of the payments industry has increased significantly in recent years. Additional regulatory changes may require us to incur significant expenses to redevelop our products.
For example, more stringent anti-money laundering regulations could require the collection and verification of more information from our customers, which could have a material adverse effect on our operations. Regulation of the payments industry has increased significantly in recent years. Additional regulatory changes may require us to incur significant expenses to redevelop our products.
If we fail to attract, integrate, incentivize and retain key personnel, our ability to manage and grow our business could be harmed. Risks Related to Ownership of Our Common Stock Our stock price is volatile and you may not be able to sell your shares at a price higher than what was paid.
Risks Related to Ownership of Our Common Stock Our stock price is volatile and you may not be able to sell your shares at a price higher than what was paid. The market for our common stock is highly volatile. In 2024, our stock price fluctuated between $2.50 and $5.48.
Additionally, an inability to access the capital markets when needed due to volatility or illiquidity in the markets or increased regulatory liquidity and capital requirements may strain our liquidity position. We depend on key personnel and could be harmed by the loss of their services because of the limited number of qualified people in our industry.
Additionally, an inability to access the capital markets when needed due to volatility or illiquidity in the markets or increased regulatory liquidity and capital requirements may strain our liquidity position. Such conditions may also expose us to fluctuations in foreign exchange rates or interest rates that could materially and adversely affect our financial results.
To remain competitive, we must continue to enhance and improve the functionality and features of our products, services and technologies. Changes in the Bank Secrecy Act and/or the USA PATRIOT Act could impede our ability to circulate cards that can be easily loaded or issued.
To remain competitive, we must continue to enhance and improve the functionality and features of our products, services and technologies. Our ability to adapt our existing products and services to use artificial intelligence (“AI”) could adversely impact our business.
Removed
Changes to statutes, regulations or industry standards, including interpretation and implementation of statutes, regulations or standards, could increase the cost of doing business or affect the competitive balance. For example, more stringent anti-money laundering regulations could require the collection and verification of more information from our customers, which could have a material adverse effect on our operations.
Added
Management is also responsible for reporting on the effectiveness of internal control over financial reporting.
Removed
In order to maintain our profitability, consumers and businesses must continue to adopt our products and services. 13 If we do not respond to rapid technological change or changes in industry standards, our products and services could become obsolete and we could lose our customers.
Added
The legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain, including in the areas of consumer protection, intellectual property, cybersecurity, and privacy and data protection. In addition, there is uncertainty around the validity and enforceability of intellectual property rights related to the use, development, and deployment of AI-generated outputs.
Removed
The market for our common stock is highly volatile. In 2023, our stock price fluctuated between $1.69 and $3.98.
Added
Compliance with new and emerging laws, regulations or industry standards relating to AI in the U.S. and internationally, such as U.S. state regulations and the Artificial Intelligence Act in the EU, may impose significant operational costs and may limit our ability to develop, deploy or use existing or future AI technologies.
Removed
If one or more of the analysts who may elect to cover us or our business downgrade their evaluations of our common stock, the price of our common stock would likely decline.
Added
As a result, our ability to adapt our existing products and services or develop future and new products and services using AI may be limited or restricted, which could adversely impact our business. Acquisitions and the integration of new businesses create risks and may affect operating results.
Removed
As a result, you will likely receive a return on your investment in our common stock only if the market price of our common stock increases. 15 Concentration of ownership among our existing directors, executive officers and principal stockholders may prevent new investors from influencing significant corporate decisions.
Added
Failure to successfully complete, manage or integrate strategic transactions can adversely affect our business, financial condition and results of operations. We regularly review our businesses strategy and evaluate potential acquisitions, joint ventures, divestitures, and other strategic transactions.
Removed
See “Item 3. Legal Proceedings” for additional information.
Added
The success of these transactions is dependent upon, among other things, our ability to realize the full extent of the expected returns, benefits, cost savings or synergies as a result of a transaction within the anticipated time frame, or at all.
Added
Acquisitions often involve additional or increased risks including, for example: · managing the complex process of integrating the acquired company’s employees, products and services, technology and other assets in an effort to realize the projected value of the acquired company and the projected synergies of the acquisition; · realizing the anticipated financial benefits from these acquisitions and where necessary, improving controls of these acquired businesses (including internal control over financial reporting and disclosure controls and procedures); · retaining existing customers and attracting new customers; · integrating personnel with diverse business backgrounds and organizational cultures; · integrating the acquired systems and technologies into our Company; · complying with regulatory requirements, including those particular to the industry and jurisdiction of the acquired business, and the need to improve regulatory compliance systems and controls; and · entering new markets with the services of the acquired businesses. 16 Changes in the Bank Secrecy Act and/or the USA PATRIOT Act could impede our ability to circulate cards that can be easily loaded or issued.
Added
Competitors have in the past and may in the future attempt to recruit our top management and employees. If we fail to attract, integrate, incentivize and retain key personnel, our ability to manage and grow our business could be harmed.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Security Committee also considers and makes recommendations on security policies and procedures, security service requirements, and risk mitigation strategies.
Biggest changeThe Security Committee also considers and makes recommendations on security policies and procedures, security service requirements, and risk mitigation strategies. The Security Committee is responsible for a cybersecurity risk report which is presented to the Board at each quarterly meeting, ensuring continuous oversight of cybersecurity risks and mitigation efforts at the highest levels of governance
We maintain controls and procedures that are designed to ensure prompt escalation of certain cybersecurity incidents so that decisions regarding public disclosure and reporting of such incidents can be made by management and the Board in a timely manner. Risk Assessment We continuously monitor our information technology environment to detect and respond to threats in real-time.
We maintain controls and procedures that are designed to ensure prompt escalation of certain cybersecurity incidents so that decisions regarding public disclosure and reporting of such incidents can be made by management and the Board in a timely manner. 21 Risk Assessment We continuously monitor our information technology environment to detect and respond to threats in real-time.
The Audit Committee receives regular updates from management on cybersecurity risk resulting from risk assessments, progress of risk reduction initiatives, external auditor feedback, control maturity assessments, and relevant internal and industry cybersecurity incidents. 18 Management’s Role Our Chief Technology Officer, Information Security Officer, and General Counsel have primary responsibility for assessing and managing material cybersecurity risks and are members of our management’s Information Technology Steering Committee (the “Security Committee”), which is a governing body that drives alignment on security decisions across the Company.
The Audit Committee receives regular updates from management on cybersecurity risk resulting from risk assessments, progress of risk reduction initiatives, external auditor feedback, control maturity assessments, and relevant internal and industry cybersecurity incidents. 22 Management’s Role Our Chief Technology Officer, Information Security Officer, and General Counsel have primary responsibility for assessing and managing material cybersecurity risks and are members of our management’s Information Technology Steering Committee (the “Security Committee”), which is a governing body that drives alignment on security decisions across the Company.
ITEM 1C. CYBERSECURITY. Cyber criminals are becoming more sophisticated and effective every day, and they are increasingly targeting software companies. All companies utilizing technology are subject to threats of breaches of their cybersecurity programs.
ITEM 1C. CYBERSECURITY. Risk Management and Strategy Cyber criminals are becoming more sophisticated and effective every day, and they are increasingly targeting software companies. All companies utilizing technology are subject to threats of breaches of their cybersecurity programs.
We actively engage with cybersecurity communities, industry groups, and regulatory bodies to stay ahead of evolving cyber risks. By sharing knowledge and best practices, we enhance our defenses and contribute to the broader effort of securing the digital ecosystem.
Partnerships and Collaboration We believe in the strength of collaboration in combating cyber threats. We actively engage with cybersecurity communities, industry groups, and regulatory bodies to stay ahead of evolving cyber risks. By sharing knowledge and best practices, we enhance our defenses and contribute to the broader effort of securing the digital ecosystem.
While we can provide no assurance against unauthorized access and breaches, our information technology infrastructure is designed with security at its core, with all data, whether at rest or in transit, being protected against unauthorized access and breaches. 17 Partnerships and Collaboration We believe in the strength of collaboration in combating cyber threats.
While we can provide no assurance against unauthorized access and breaches, our information technology infrastructure is designed with security at its core, with all data, whether at rest or in transit, being protected against unauthorized access and breaches.
Added
As part of our risk assessment framework, we have a Vendor Risk Management Program to monitor cybersecurity risks posed by third-party vendors and service providers.
Added
This program includes: · Vendor Onboarding and Due Diligence: New vendors undergo security assessments to evaluate their data protection measures, regulatory compliance, and cybersecurity policies. · Ongoing Monitoring and Risk Assessments: We conduct periodic reviews of vendor security practices which may include security questionnaires, risk scoring, and audits for high-risk vendors. · Contractual Security Obligations: Vendor agreements include strict data security clauses, incident notification requirements, and audit rights. · Incident Reporting and Escalation: We have clear protocols for reporting vendor-related cybersecurity incidents, ensuring timely response and mitigation.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMark R. Newcomer, et al. That complaint makes substantially the same allegations as made in the consolidated Toczek and Gray actions and the Blanchette action discussed above, and alleges breach of fiduciary duty and unjust enrichment. If the derivative cases do not settle, it is the Company’s intention to file motions to dismiss.
Biggest changeThat complaint makes substantially the same allegations as made in the consolidated Toczek and Gray actions and the Blanchette action discussed above, and alleges breach of fiduciary duty and unjust enrichment. On January 23, 2025, the parties in Jeewa filed a stipulation to relate the case to the Toczek, Gray, and Blanchette actions, which is currently pending before the Court.
The Company has been named as a defendant in three securities class action complaints filed in the United States District Court for the District of Nevada: Yilan Shi v. Paysign, Inc. et al., filed on March 19, 2020 (“Shi”), Lorna Chase v. Paysign, Inc. et al., filed on March 25, 2020 (“Chase”), and Smith & Duvall v.
The Company was named as a defendant in three securities class action complaints filed in the United States District Court for the District of Nevada: Yilan Shi v. Paysign, Inc. et al., filed on March 19, 2020 (“Shi”), Lorna Chase v. Paysign, Inc. et al., filed on March 25, 2020 (“Chase”), and Smith & Duvall v.
On December 7, 2023, the parties requested that the action be stayed for sixty days due to the settlement negotiations in the consolidated Toczek and Gray actions, and the Court granted the sixty-day stay on December 11, 2023.
On December 7, 2023, the parties requested that the action be stayed for sixty days due to the settlement negotiations in the consolidated Toczek and Gray actions, and the Court granted the sixty-day stay on December 11, 2023. Subsequently, the Court extended that deadline to March 29, 2024 and then to May 29, 2024 based upon the parties’ stipulations.
The Company has also been named as a nominal defendant in four stockholder derivative actions currently pending in the United States District Court for the District of Nevada. The first-filed derivative action is entitled Andrzej Toczek, derivatively on behalf of Paysign, Inc. v. Mark R. Newcomer, et al. and was filed on September 17, 2020.
The Company has also been named as a nominal defendant in a fourth stockholder derivative action in the United States District Court for the District of Nevada, filed on December 27, 2023, entitled Mo Jeewa, derivatively on behalf of Paysign, Inc. v. Mark R. Newcomer, et al.
Removed
On January 29, 2024, the parties agreed to an additional sixty-day extension, to March 29, 2024, and the Court entered an Order thereon on February 2, 2024.
Added
On April 17, 2024, the Court conducted the final approval hearing and approved the settlement and, on April 18, 2024, issued an order and final judgment thereon. 23 The Company has also been named as a nominal defendant in four stockholder derivative actions currently pending in the United States District Court for the District of Nevada.
Removed
On or before the end of that period, the parties are to provide the Court with an updated joint status report or inform the Court if the settlement of the consolidated derivative action does not proceed. 19 The Company has also been named as a nominal defendant in a fourth stockholder derivative action in the United States District Court for the District of Nevada, filed on December 27, 2023, entitled Mo Jeewa, derivatively on behalf of Paysign, Inc. v.
Added
The first-filed derivative action is entitled Andrzej Toczek, derivatively on behalf of Paysign, Inc. v. Mark R. Newcomer, et al. and was filed on September 17, 2020.
Removed
As of the date of this filing, the Company cannot give any meaningful estimate of likely outcome or damages. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 20 PART II
Added
On July 26, 2024, the parties in Blanchette submitted a Joint Status Report which suggested a proposed briefing schedule on a motion to dismiss, but that schedule was not ruled upon by the Court.
Added
On October 4, 2024, the parties to the four stockholder derivative actions agreed in principle to a proposed settlement of all pending claims asserted in the Toczek, Gray, Blanchette, and Jeewa actions. On December 6, 2024, Plaintiffs in the Toczek and Gray actions filed a Motion for Preliminary Approval of Derivative Settlement, which is currently pending before the Court.
Added
ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 24 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table summarizes the low and high closing prices for our common stock for each of the calendar quarters of 2023 and 2022. 2023 2022 High Low High Low First Quarter $ 3.98 $ 2.48 $ 2.50 $ 1.80 Second Quarter 3.78 2.39 2.04 1.24 Third Quarter 2.47 1.78 3.20 1.53 Fourth Quarter 2.80 1.69 3.01 2.11 There were approximately 9,380 shareholders of record of the common stock as of December 31, 2023.
Biggest changeThe following table summarizes the low and high closing prices for our common stock for each of the calendar quarters of 2024 and 2023. 2024 2023 High Low High Low First Quarter $ 4.00 $ 2.50 $ 3.98 $ 2.48 Second Quarter 5.02 3.85 3.78 2.39 Third Quarter 5.48 3.67 2.47 1.78 Fourth Quarter 4.08 2.93 2.80 1.69 There were approximately 8,915 shareholders of record of the common stock as of December 31, 2024.
The shares were issued pursuant to an exemption from registration provided by Section 4(2) of the Securities Act of 1933. Dividend Policy We have not declared any cash dividends on our common stock during our fiscal years ended on December 31, 2023 or 2022.
The shares were issued pursuant to an exemption from registration provided by Section 4(2) of the Securities Act of 1933. Dividend Policy We have not declared any cash dividends on our common stock during our fiscal years ended on December 31, 2024 or 2023.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Share repurchases of our common stock for the three months ended December 31, 2023 were as follows: Period Total Number of Shares Purchased Weighted Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1, 2023 – October 31, 2023 – – – $ 3,872,116 November 1, 2023 - November 30, 2023 – – – 3,872,116 December 1, 2023 - December 31, 2023 – – – 3,872,116 Total – – – $ 3,872,116 (1) On March 21, 2023, our Board authorized a stock repurchase program to repurchase up to $5 million of our common stock, subject to certain conditions, in the open market, in privately negotiated transactions, or by other means in compliance with Rule 10b-18 under the Exchange Act.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Share repurchases of our common stock for the three months ended December 31, 2024 were as follows: Period Total Number of Shares Purchased Weighted Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1, 2024 – October 31, 2024 36,700 $ 3.67 – $ 3,377,071 November 1, 2024 - November 30, 2024 – – – 3,377,071 December 1, 2024 - December 31, 2024 – – – 3,377,071 Total 36,700 $ 3.67 – $ 3,377,071 25 (1) On March 21, 2023, our Board authorized a stock repurchase program to repurchase up to $5 million of our common stock, subject to certain conditions, in the open market, in privately negotiated transactions, or by other means in compliance with Rule 10b-18 under the Exchange Act.
The program is expected to be completed within 36 months from the commencement date. As of December 31, 2023 the Company repurchased 394,558 shares of common stock for $1,127,884 at a weighted average price of $2.86 per share. ITEM 6. [RESERVED]
The program is expected to be completed within 36 months from the commencement date. As of December 31, 2024 the Company repurchased 531,258 shares of common stock for $1,622,929 at a weighted average price of $3.05 per share.
Added
On February 7, 2025, under our Board authorized stock repurchase program, we closed on the repurchase of 100,000 shares of common stock for $375,786 at a weighted average price of $3.76 per share. After the purchase, the approximate dollar value of shares that may yet be purchased under the program is $3,001,285. ITEM 6. [RESERVED]

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeOTHER INFORMATION 30 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 30 PART III 31 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 31 ITEM 11. EXECUTIVE COMPENSATION 31 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 31 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 31 ITEM 14.
Biggest changeOTHER INFORMATION 37 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 37 PART III 38 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 38 ITEM 11. EXECUTIVE COMPENSATION 38 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 38 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 38 ITEM 14.
ITEM 6. [RESERVED] 21 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 21 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 29 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 29 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 29 ITEM 9A. CONTROLS AND PROCEDURES 29 ITEM 9B.
ITEM 6. [RESERVED] 26 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 26 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 35 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 35 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 35 ITEM 9A. CONTROLS AND PROCEDURES 36 ITEM 9B.
PRINCIPAL ACCOUNTANT FEES AND SERVICES 31 PART IV 32 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 32 ITEM 16 FORM 10-K SUMMARY 33 SIGNATURES 34 Cautionary Note Regarding Forward Looking Statements This Annual Report on Form 10-K contains “forward-looking statements.” These forward-looking statements are based on our current expectations, assumptions, estimates and projections about our business and our industry.
PRINCIPAL ACCOUNTANT FEES AND SERVICES 38 PART IV 39 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 39 ITEM 16 FORM 10-K SUMMARY 40 SIGNATURES 41 Cautionary Note Regarding Forward Looking Statements This Annual Report on Form 10-K contains “forward-looking statements.” These forward-looking statements are based on our current expectations, assumptions, estimates and projections about our business and our industry.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIf we do not raise new capital, we believe that we will still be able to support our existing business and expand into new vertical markets using internally generated funds. 2023 Year Milestones · Grew to approximately 6.4 million cardholders and approximately 600 card programs as of December 31, 2023. · Year over year revenue increased 24.3%. · Added 20 net new Plasma programs, launched 24 net new Pharma programs, and added 1 net new Other prepaid program. 23 Results of Operations Comparison of Year Ended December 31, 2023 to Year Ended December 31, 2022 The following table summarizes our consolidated financial results for year ended December 31, 2023 in comparison to year ended December 31, 2022: Year ended December 31, Variance 2023 2022 $ % Revenues Plasma industry $ 41,951,659 $ 34,737,640 $ 7,214,019 20.8% Pharma industry 4,051,037 3,007,140 1,043,897 34.7% Other 1,271,466 288,887 982,579 340.1% Total revenues 47,274,162 38,033,667 9,240,495 24.3% Cost of revenues 23,137,997 17,079,069 6,058,928 35.5% Gross profit 24,136,165 20,954,598 3,181,567 15.2% Gross margin % 51.1% 55.1% Operating expenses Selling, general and administrative 20,276,842 17,700,651 2,576,191 14.6% Depreciation and amortization 4,026,578 2,909,612 1,116,966 38.4% Total operating expenses 24,303,420 20,610,263 3,693,157 17.9% (Loss) income from operations $ (167,255 ) $ 344,335 $ (511,590 ) (148.6% ) Net income $ 6,458,727 $ 1,027,775 $ 5,430,952 528.4% Net margin % 13.7% 2.7% The increase in total revenues of $9,240,495 for the year ended December 31, 2023 compared to the same period in the prior year consisted primarily of a $7,214,019 increase in Plasma revenue, a $1,043,897 increase in Pharma revenue, and a $982,579 increase in Other revenue.
Biggest changeIf we do not raise new capital, we believe that we will still be able to support our existing business and expand into new vertical markets using internally generated funds. 2024 Year Milestones · Grew to approximately 7.3 million cardholders and approximately 600 card programs as of December 31, 2024. · Year over year revenue increased 23.5%. · Added 16 net new plasma programs, launched 33 net new pharma programs, and added 1 net new other prepaid program. 28 Results of Operations Comparison of Year Ended December 31, 2024 to Year Ended December 31, 2023 The following table summarizes our consolidated financial results for year ended December 31, 2024 in comparison to year ended December 31, 2023: Year ended December 31, Variance 2024 2023 $ % Revenues Plasma industry $ 43,879,508 $ 41,951,659 $ 1,927,849 4.6% Pharma industry 12,652,412 4,051,037 8,601,375 212.3% Other 1,852,632 1,271,466 581,166 45.7% Total revenues 58,384,552 47,274,162 11,110,390 23.5% Cost of revenues 26,187,218 23,137,997 3,049,221 13.2% Gross profit 32,197,334 24,136,165 8,061,169 33.4% Gross margin % 55.1% 51.1% Operating expenses Selling, general and administrative 25,180,840 20,276,842 4,903,998 24.2% Depreciation and amortization 5,994,986 4,026,578 1,968,408 48.9% Total operating expenses 31,175,826 24,303,420 6,872,406 28.3% Income (loss) from operations $ 1,021,508 $ (167,255 ) $ 1,188,763 NM Other income $ 3,116,689 $ 2,531,071 $ 585,618 23.1% Income tax provision (benefit) $ 322,290 $ (4,094,911 ) $ 4,417,201 NM Net income $ 3,815,907 $ 6,458,727 $ (2,642,820 ) (40.9% ) Net margin % 6.5% 13.7% The increase in total revenues of $11,110,390 for the year ended December 31, 2024 compared to the same period in the prior year consisted primarily of a $1,927,849 increase in plasma revenue, a $8,601,375 increase in pharma revenue, and a $581,166 increase in other revenue.
In certain card programs where we hold the cardholder funds where we expect to be entitled to a breakage amount, we recognize revenue using estimated breakage rates ratably over the estimated card life, provided that a significant reversal of the amount of breakage revenue recognized is not probable and record adjustments to such estimates when redemption is remote or we are legally defeased of the obligation, if applicable.
In certain card programs where we hold the cardholder funds and expect to be entitled to a breakage amount, we recognize revenue using estimated breakage rates ratably over the estimated card life; provided that a significant reversal of the amount of breakage revenue recognized is not probable, and record adjustments to such estimates when redemption is remote or we are legally defeased of the obligation, if applicable.
We consider the following non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, to be key performance indicators: 25 “EBITDA” is defined as earnings before interest, income taxes, depreciation and amortization expense and “Adjusted EBITDA” reflects the adjustment to EBITDA to exclude stock-based compensation expense.
We consider the following non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, to be key performance indicators: “EBITDA” is defined as earnings before interest, income taxes, depreciation and amortization expense and “Adjusted EBITDA” reflects the adjustment to EBITDA to exclude stock-based compensation expense.
Capitalized costs are amortized using the straight-line method over a three-year estimated useful life, beginning in the period in which the software is available for use. Income Taxes – Income tax expense is comprised of current and deferred income tax expense. Current income tax expense approximates taxes to be paid or refunded for the current period.
Capitalized costs are amortized using the straight-line method over a three-year estimated useful life, beginning in the period in which the software is available for use. 33 Income Taxes – Income tax expense is comprised of current and deferred income tax expense. Current income tax expense approximates taxes to be paid or refunded for the current period.
In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contracts with customers; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
Revenue and Expense Recognition – In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contracts with customers; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
Leases with an initial term of 12 months or less are not recorded on the balance sheet, with lease expenses for these leases recognized on a straight-line basis over the lease term. 28 Stock-Based Compensation – The Company recognizes compensation expense for all restricted stock awards and stock options.
Leases with an initial term of 12 months or less are not recorded on the balance sheet, with lease expenses for these leases recognized on a straight-line basis over the lease term. Stock-Based Compensation – The Company recognizes compensation expense for all restricted stock awards and stock options.
These metrics, however, are not measures of financial performance under GAAP and should not be considered a substitute for revenue, operating income, net income (loss), earnings (loss) per share (basic and diluted) or net cash from operating activities as determined in accordance with GAAP.
These metrics, however, are not measures of financial performance under GAAP and should not be considered a substitute for revenue, operating income, net income, earnings per share (basic and diluted) or net cash from operating activities as determined in accordance with GAAP.
Risk Factors.” All prior and subsequent written and oral Forward-Looking Statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the Important Factors described below that could cause actual results to differ materially from our expectations as set forth in any Forward-Looking Statement made by or on behalf of us.
All prior and subsequent written and oral Forward-Looking Statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the Important Factors described below that could cause actual results to differ materially from our expectations as set forth in any Forward-Looking Statement made by or on behalf of us.
This has historically been associated with the pharma prepaid business which ended in 2022. The Company records all revenue on a gross basis since it is the primary obligor and establishes the price in the contract arrangement with its customers.
This has primarily been associated with the pharma prepaid business which ended in 2022. The Company records all revenue on a gross basis since it is the primary obligor and establishes the price in the contract arrangement with its customers.
The increase in depreciation and amortization expense was primarily due to continued capitalization of new software development costs and equipment purchases related to continued enhancements to our processing platform.
The increase in depreciation and amortization expense was primarily due to continued capitalization of new software development costs and equipment purchases related to continued enhancements to our processing platform and employment growth.
In 2024, we plan to continue to invest additional funds in technology improvements, sales and marketing, fraud, customer service, and regulatory compliance. From time to time, we evaluate raising capital to enable us to diversify into new market verticals.
In 2025, we plan to continue to invest additional funds in technology improvements, sales and marketing, cybersecurity, fraud, customer service, and regulatory compliance. From time to time, we evaluate raising capital to enable us to diversify into new market verticals.
We believe the following measures are the primary indicators of our quarterly and annual revenues: Gross Dollar Volume Loaded on Cards: Represents the total dollar volume of funds loaded to all of our prepaid card programs. Our gross dollar volume loaded on cards was $1,706 million and $1,595 million for the year ended December 31, 2023 and 2022, respectively.
We believe the following measures are the primary indicators of our quarterly and annual revenues: Gross Dollar Volume Loaded on Cards: Represents the total dollar volume of funds loaded to all of our prepaid card programs. Our gross dollar volume loaded on cards was $1,783 million and $1,706 million for the year ended December 31, 2024 and 2023, respectively.
Restricted-loop cards can be used at several merchants, or a defined group of merchants, such as all merchants at a specific shopping mall. The prepaid card market in the U.S. has experienced significant growth in recent years due to consumers and merchants embracing improved technology, greater convenience, more product choices and greater flexibility.
Restricted-loop cards can be used at several merchants, or a defined group of merchants, such as all merchants at a specific shopping mall. 27 The prepaid card market in the United States has experienced significant growth in recent years due to consumers and merchants embracing improved technology, greater convenience, more product choices and greater flexibility.
You should refer to and carefully review the information in future documents we file with the Securities and Exchange Commission. Overview Paysign, Inc. (the “Company,” “Paysign,” “we” or “our”), headquartered in Nevada, was incorporated on August 24, 1995, and trades under the symbol PAYS on The Nasdaq Stock Market LLC.
You should refer to and carefully review the information in future documents we file with the SEC. 26 Overview Paysign, Inc. (the “Company,” “Paysign,” “we” or “our”), headquartered in Nevada, was incorporated on August 24, 1995, and trades under the symbol PAYS on The Nasdaq Stock Market LLC.
We recorded an income tax benefit of $4,094,911 for the year ended December 31, 2023, which equates to an effective tax rate of (173.2)%, primarily as a result of the release of our valuation allowance of $4,588,781 on our federal and state deferred tax assets. The valuation release offset tax expense of $493,870 on our pre-tax book income.
We recorded an income tax benefit of $4,094,911 for the year ended December 31, 2023, which equates to an effective tax rate of (173.2)%, primarily as a result of the release of our valuation allowance of $4,588,781 on our federal and state deferred tax assets.
Our suite of product offerings includes solutions for corporate rewards, prepaid gift cards, general purpose reloadable debit cards, employee incentives, consumer rebates, donor compensation, clinical trials, healthcare reimbursement payments and pharmaceutical payment assistance, and demand deposit accounts accessible with a debit card.
Our suite of product offerings includes solutions for corporate rewards, prepaid gift cards, general purpose reloadable debit cards, employee incentives, consumer rebates, donor compensation, clinical trials, healthcare reimbursement payments and pharmaceutical payment assistance, and demand deposit accounts accessible with a debit card. Our cards are sponsored by our issuing bank partners.
Open-loop cards can be used to receive cash at ATM locations by PIN; or purchase goods or services by PIN or signature at retail locations virtually anywhere that the network brand (American Express, Discover, Mastercard, Visa, etc.) is accepted. Closed-loop cards can only be used at a specific merchant.
Both reloadable and non-reloadable cards may be open-loop, closed-loop, or restricted-loop. Open-loop cards can be used to receive cash at ATM locations by PIN; or purchase goods or services by PIN or signature at retail locations virtually anywhere that the network brand (American Express, Discover, Mastercard, Visa, etc.) is accepted. Closed-loop cards can only be used at a specific merchant.
Our net income conversion rates for the year ended December 31, 2023 and 2022 were 0.13% or 13 bps, and 0.06% or 6 bps, respectively, of gross dollar volume loaded on cards. Management also reviews key performance indicators, such as revenues, gross profit, operational expenses as a percent of revenues, and cardholder participation.
Our net income conversion rates for the year ended December 31, 2024 and 2023 were 0.21% or 21 bps, and 0.38% or 38 bps, respectively, of gross dollar volume loaded on cards. Management also reviews key performance indicators, such as revenues, gross profit, operational expenses as a percent of revenues, and cardholder participation.
Our total gross profit conversion rates for the year ended December 31, 2023 and 2022 were 1.41% or 141 bps, and 1.31% or 131 bps, respectively, of gross dollar volume loaded on cards.
Our total gross profit conversion rates for the year ended December 31, 2024 and 2023 were 1.81% or 181 bps, and 1.41% or 141 bps, respectively, of gross dollar volume loaded on cards.
Our total revenue conversion rates for the years ended December 31, 2023 and 2022 were 2.77% or 277 basis points (“bps”), and 2.38% or 238 bps, respectively, of gross dollar volume loaded on cards.
Our total revenue conversion rates for the years ended December 31, 2024 and 2023 were 3.27% or 327 basis points (“bps”), and 2.77% or 277 bps, respectively, of gross dollar volume loaded on cards.
We refer to the portion of the dollar value of prepaid-stored value cards that consumers do not ultimately redeem as breakage.
The portion of the dollar value of prepaid-stored value cards that consumers do not ultimately redeem are referred to as breakage.
Revenue from cardholder fees, interchange, card program management fees, and transaction claims processing fees is recorded when the performance obligation is fulfilled. Breakage is recorded ratably over the estimated card life based on historical redemption patterns, market-specific trends, escheatment rules and existing economic conditions and relates solely to our open-loop gift card business which began at the end of 2022.
Breakage is recorded ratably over the estimated card life based on historical redemption patterns, market-specific trends, escheatment rules, and existing economic conditions and relates solely to our open-loop gift card business which began at the end of 2022.
Key Metrics, Performance Indicators and Non-GAAP Measures Management reviews a number of metrics to help us monitor the performance of and identify trends affecting our business.
The overall change in net income relates to the aforementioned factors. 30 Key Metrics, Performance Indicators and Non-GAAP Measures Management reviews a number of metrics to help us monitor the performance of and identify trends affecting our business.
Other income for the year ended December 31, 2023, increased $1,740,154 primarily related to an increase in interest rates and the associated interest income received on higher average bank account balances at our sponsor bank.
Other income for the year ended December 31, 2024 increased $585,618 primarily related to steady interest rates and the associated interest income received on higher average bank account balances at our sponsor bank.
The difference between the benefit recognized for a position and the tax benefit claimed on a tax return is referred to as an unrecognized tax benefit.
The difference between the benefit recognized for a position and the tax benefit claimed on a tax return is referred to as an unrecognized tax benefit. Income tax related interest and penalties, if applicable, are accrued within income tax expense.
Gross profit for the year ended December 31, 2023 increased $3,181,567 compared to the same period in the prior year resulting primarily from the increase in Plasma revenue and the beneficial impact of a variable cost structure as many of the plasma transaction costs are variable in nature which are provided by third parties who charge us based on the number of active cards outstanding and the number of transactions that occurred during the period.
Gross profit also benefited from our plasma revenue and the beneficial impact of a variable cost structure, as many of the plasma transaction costs are variable in nature and are provided by third-parties who charge us based on the number of active cards outstanding and transactions that occurred during the period.
Cash used in financing activities of $1,118,284 for the year ended December 31, 2023 was primarily attributed to the repurchase of 394,558 shares of the Company’s common stock at a weighted average price of $2.86 per share. Our significant contractual cash requirements also include ongoing payments for lease liabilities.
For the year ended December 31, 2023, the repurchase of 394,558 shares of the Company’s common stock at a weighted average price of $2.86 per share offset by proceeds received of $9,600 for the exercise of stock options. Our significant contractual cash requirements also include ongoing payments for lease liabilities.
This increase was offset by a $1,564,000 increase in the amount of capitalized platform development costs. Depreciation and amortization expense for the year ended December 31, 2023 increased $1,116,966 compared to the same period in the prior year.
This increase was offset by a decrease in stock compensation of approximately $249,000, an increase of $1,738,000 in the amount of capitalized platform development costs, and a decrease in other cost of approximately $23,000. Depreciation and amortization expense for the year ended December 31, 2024 increased $1,968,408 compared to the same period in the prior year.
The increase in Pharma revenue was primarily due to the launch of new pharma patient affordability programs. The increase in Other revenue was primarily due to the growth of our payroll, retail, and corporate incentive programs. Cost of revenues for the year ended December 31, 2023 increased $6,058,928 compared to the same period in the prior year.
The increase in other revenue was primarily due to the growth and usage in the number of cardholders of our payroll, retail, and corporate incentive programs. 29 Cost of revenues for the year ended December 31, 2024 increased $3,049,221 compared to the same period in the prior year.
Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, and sales and commission expense.
The Company is currently under no obligation to refund any fees, and the Company does not currently have any obligations for disputed claim settlements Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, fraud charges, and sales and commission expense.
For the year ended December 31, 2023, we recorded a loss from operations of $167,255 representing a decline of $511,590 compared to income from operations of $344,335 during the same period last year related to the aforementioned factors.
For the year ended December 31, 2024, we recorded income from operations of $1,021,508 representing an improvement of $1,188,763 compared to a loss from operations of $167,255 during the same period in the prior year, related to the aforementioned factors.
The increase in Plasma revenue was primarily due to a rise in the number of plasma centers and donations, and, consequently, dollars loaded to cards, cardholder fees, and interchange, as there continues to be an increase in demand for plasma which has been driven by global increases in plasma protein therapies.
The increase in plasma revenue was primarily due to the addition of 16 net new plasma centers since December 31, 2023 and rise in the number of donations at existing plasma centers, and, consequently, dollars loaded to cards, cardholder fees, and interchange, as there continues to be stable demand for plasma used in plasma protein therapies.
Year ended December 31, 2023 2022 Reconciliation of adjusted EBITDA to net income: Net income $ 6,458,727 $ 1,027,775 Income tax (benefit) provision (4,094,911 ) 107,477 Interest income, net (2,531,071 ) (790,917 ) Depreciation and amortization 4,026,578 2,909,612 EBITDA 3,859,323 3,253,947 Stock-based compensation 2,853,643 2,277,717 Adjusted EBITDA $ 6,712,966 $ 5,531,664 Liquidity and Capital Resources The following table sets forth the major sources and uses of cash for our last two fiscal years ended December 31, 2023 and 2022: Year ended December 31, 2023 2022 Net cash provided by operating activities $ 27,620,624 $ 25,317,964 Net cash used in investing activities (7,048,678 ) (4,091,683 ) Net cash used in financing activities (1,118,284 ) – Net increase in cash and restricted cash $ 19,453,662 $ 21,226,281 Comparison of Fiscal 2023 and 2022 During the years ended December 31, 2023 and 2022, we financed our operations through internally generated funds.
Year ended December 31, (As a percentage of revenue) 2024 2023 Reconciliation of adjusted EBITDA margin to net income margin: Net income margin 6.5% 13.7% Income tax provision (benefit) 0.6% (8.7% ) Interest income, net (5.3% ) (5.4% ) Depreciation and amortization 10.3% 8.5% EBITDA margin 12.0% 8.2% Stock-based compensation 4.5% 6.0% Adjusted EBITDA margin 16.5% 14.2% Liquidity and Capital Resources The following table sets forth the major sources and uses of cash for our last two fiscal years ended December 31, 2024 and 2023: Year ended December 31, 2024 2023 Net cash provided by operating activities $ 22,947,120 $ 27,620,624 Net cash used in investing activities (9,488,702 ) (7,048,678 ) Net cash used in financing activities (466,245 ) (1,118,284 ) Net increase in cash and restricted cash $ 12,992,173 $ 19,453,662 Comparison of Fiscal 2024 and 2023 During the years ended December 31, 2024 and 2023, we financed our operations through internally generated funds.
These types of cards are generally used as gift or incentive cards. Normally these types of cards are used for the purchase of goods or services at retail locations and cannot be used to receive cash. Both reloadable and non-reloadable cards may be open-loop, closed-loop, or restricted-loop.
Non-Reloadable Cards: These are generally one-time use cards that are only active until the funds initially loaded to the card are spent. These types of cards are generally used as gift or incentive cards. Typically, these types of cards are used for the purchase of goods or services at retail locations and cannot be used to receive cash.
GPR cards can be reloaded multiple times with a consumer’s payroll, government benefit, a federal or state tax refund or through cash reload networks located at retail locations. Reloadable cards are generally open-loop cards as described below. Non-Reloadable Cards: These are generally one-time use cards that are only active until the funds initially loaded to the card are spent.
GPR cards can also be issued to a consumer at a retail location or mailed to a consumer after completing an on-line application. GPR cards can be reloaded multiple times with a consumer’s payroll, government benefit, a federal or state tax refund or through cash reload networks located at retail locations. Reloadable cards are generally open-loop cards as described below.
Settlement income is recorded at the expiration of the card program and relates solely to our pharma prepaid business which ended in 2022.
Settlement income is recorded at the expiration of the card or card program and relates predominantly to our pharma prepaid business which ended in 2022. We have two categories for our prepaid debit cards: (1) corporate and consumer reloadable cards, and (2) non-reloadable cards.
We utilize a third party to estimate breakage rates based on historical redemption patterns, market-specific trends, escheatment rules and existing economic conditions for each program. We have adopted ASU 2016-04 Liabilities—Extinguishment of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Cards for the recognition of such breakage revenue.
For each program, we utilize a third party to estimate breakage rates based on historical redemption patterns, market-specific trends, escheatment rules and existing economic conditions.
Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in “Risk Factors” included elsewhere in this Form 10-K. 21 Disclosure Regarding Forward-Looking Statements This Annual Report on Form 10-K includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (“Forward-Looking Statements”).
Disclosure Regarding Forward-Looking Statements This Annual Report on Form 10-K includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (“Forward-Looking Statements”).
We believe that our unrestricted cash on hand at December 31, 2023 of $16,994,705, along with anticipated revenues, operating profits and free cash flow anticipated for 2024 and 2025, will be sufficient to sustain our operations for the next twenty-one months.
We believe that our available cash on hand, excluding restricted cash, at December 31, 2024 of $10,766,982, along with our forecast for revenues and cash flows for 2025 and through 2027, will be sufficient to sustain our operations for the next 24 months.
Gross profit also benefited from the growth in our pharma patient affordability business. The increase in gross profit was offset by the termination of our pharma prepaid business in 2022, price increases by many of our third-party service providers, and an increase in customer service expenses mentioned above.
The increase in gross profit was offset by increased costs from third-party service providers, sales commission expense, customer service costs and fraud expenses mentioned above, primarily driven by the overall growth in our business.
The decrease in gross margin resulted from the aforementioned factors. 24 Selling, general and administrative expenses for the year ended December 31, 2023 increased $2,576,191 compared to the same period in the prior year and consisted primarily of an increase in (i) compensation and benefits of approximately $3,017,000 due to continued hiring to support the Company’s growth, a tight labor market and increased benefit costs, (ii) an increase in stock-based compensation expense of approximately $576,000, (iii) an increase in technologies and telecom of approximately $345,000, (iv) an increase in non-IT professional services of approximately $140,000, and (v) an increase in all other operating expenses of approximately $62,000.
Selling, general and administrative expenses for the year ended December 31, 2024 increased $4,903,998 compared to the same period in the prior year and consisted primarily of an increase in (i) compensation and benefits of approximately $5,388,000 due to continued hiring to support the Company’s growth primarily from our pharma patient affordability business, a tight labor market, and increased benefit costs; (ii) technologies and telecom of approximately $1,320,000 primarily related to ongoing platform security investments; and (iii) travel and entertainment of approximately $207,000.
Payroll cards are issued by an employer to an employee in order to allow the employee to access payroll amounts that are deposited into an account linked to their card. GPR cards can also be issued to a consumer at a retail location or mailed to a consumer after completing an on-line application.
Reloadable Cards: These types of cards are generally classified as payroll or considered general purpose reloadable (“GPR”) cards. Payroll cards are issued by an employer to an employee in order to allow the employee to access payroll amounts that are deposited into an account linked to their card.
The increase in cash flows from operating activities was also impacted by net income, as well as non-cash adjustments for deferred income taxes, depreciation and amortization, stock-based compensation, and lease expense. We used net cash in investing activities during the years ended December 31, 2023 and 2022 of $7,048,678 and $4,091,683, respectively.
Changes in net income in 2024 when compared to 2023 are also driven by a net decrease in our deferred tax asset valuation. The decrease in cash flows from operating activities and net income was offset by non-cash adjustments for deferred income taxes, depreciation and amortization, stock-based compensation, and lease expense.
Operating activities provided $27,620,624 of cash in 2023, an increase of $2,302,660 compared to 2022. This change in cash flow is primarily due to increases in operating assets and liabilities.
Operating activities provided $22,947,120 of cash in 2024, a decrease of $4,673,504 compared to 2023. This change in cash flow compared to the prior period is primarily due to net decreases in operating assets and liabilities and net income.
For additional information regarding our cash commitments and contractual obligations, see “Note 5 – LEASE” in the notes to the accompanying consolidated financial statements. 26 Liquidity and Sources of Financing Unrestricted cash increased $7,286,467 to $16,994,705, due to the improvement in our operating results throughout 2023 and timing of payments and receivables related to our patient affordability business.
For additional information regarding our cash commitments and contractual obligations, see “Note 5 – LEASE” in the notes to the accompanying consolidated financial statements. Liquidity and Sources of Financing Unrestricted cash was $10,766,982 as of December 31, 2024, a decrease of $6,227,723 compared to the same period in the prior year.
The net income for the year ended December 31, 2023 was $6,458,727, an improvement of $5,430,952 compared to the net income of $1,027,775 for the year ended December 31, 2022. The overall change in net income relates to the aforementioned factors.
The net income for the year ended December 31, 2024 was $3,815,907, a decline of $2,642,820 compared to the net income of $6,458,727 for the year ended December 31, 2023.
Breakage revenue is recorded in other revenue on the consolidated statements of operations and was $74 thousand and $0 in fiscal year 2023 and fiscal year 2022, respectively. The Company utilizes the remote method of revenue recognition for settlement income whereby the unspent balances will be recognized as revenue at the expiration of the cards and the respective program.
The Company accounts for breakage in accordance with Accounting Standards Update (“ASU”) 2016-04, Liabilities—Extinguishment of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Cards for the recognition of such revenue. 34 The Company utilizes the remote method of revenue recognition for settlement income whereby the unspent balances will be recognized as revenue at the expiration of the cards or the respective card program.
In the future, we expect to further expand our product into other prepaid card offerings such as travel cards and expense reimbursement cards. Our cards are sponsored by our issuing bank partners. Our revenues include fees generated from cardholder fees, interchange, card program management fees, transaction claims processing fees, breakage, and settlement income.
Our revenues include fees generated from cardholder fees, interchange, card program management fees, transaction claims processing fees, breakage, and settlement income. Revenue from cardholder fees, interchange, card program management fees, and transaction claims processing fees is recorded when the performance obligation is fulfilled.
We recorded an income tax expense of $107,477 for the year ended December 31, 2022, which equates to an effective tax rate of 9.5% primarily as a result of the full valuation on our deferred tax asset and timing differences for stock-based compensation during the period offset by current year tax credits and adjustments.
At December 31, 2024, our income tax provision was $322,290, which equates to an effective tax rate of 7.8% primarily as a result of federal taxes offset by net operating loss true-up on our state taxes, tax benefits related to our stock-based compensation and changes to the Company’s tax credits.
Cash used for investing activities was primarily attributed to an increase in the capitalization of internally developed software as we continue to invest in our technology platform.
Cash used for investing activities was primarily attributed to an increase in the capitalization of internally developed software as we continue to invest in our technology platform. 32 Cash used in financing activities of $466,245 and $1,118,284 for the years ended December 31, 2024 and 2023, respectively, was primarily attributed to the repurchase of 136,700 shares of the Company’s common stock at a weighted average price of $3.62 per share during the year ended December 31, 2024 offset by proceeds received of $28,800 for the exercise of stock options.
Removed
Our actual results could differ materially from those discussed below.
Added
Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in “Risk Factors” included elsewhere in this Form 10-K.
Removed
We have two categories for our prepaid debit cards: (1) corporate and consumer reloadable cards, and (2) non-reloadable cards. 22 Reloadable Cards: These types of cards are generally classified as payroll or considered general purpose reloadable (“GPR”) cards.
Added
Specific forward-looking statements made herein include: our belief that we cannot predict how future regulations might affect us; complying with future regulation could be expensive or require us to change the way we operate our business; our belief that our in-house customer service center provides the highest customer service experience for our clients as training is performed on-site by Paysign staff; we may utilize independent contractors who make direct sales and are paid on a commission basis only; our belief that nearly ever state would require us to obtain a money transmitter license to operate a money transfer business; our anticipation that we will not pay any cash dividends in the foreseeable future; our intention to retain any earnings to finance the operation and expansion of our business; our intention to continue to make significant investments to maintain the security of our data and cybersecurity infrastructure; our expectation that the trading price for our common stock will be affected by any research or reports that securities analysts publish about us or our business; our belief that our editing processes are consistent with applicable reimbursement rules and industry practice, a court, enforcement agency or whistleblower could challenge these practices; our belief that all independent contractor and employment agreement relationships are satisfactory; our belief that we have taken appropriate actions to remediate previously reported control deficiencies that we have identified and to strengthen our internal control over financial reporting; our belief that we have utilized proven systems designed for robust data security and integrity in electronic transactions, we may introduce products in the future that would be subject to such regulations; our belief that a data security breach at one of the banks that issue our cards or our third-party service providers could result in significant reputational harm to us and cause the use and acceptance of our cards to decline, either of which could have a significant adverse impact on our operating results and future growth prospects; our belief that our existing competitors have longer operating histories, are substantially larger than we are, may already have or could develop substantially greater financial and other resources than we have, may offer, develop or introduce a wider range of programs and services than we offer or may use more effective advertising and marketing strategies than we do to achieve broader brand recognition, customer awareness and retail penetration; our expectation that we may also face price competition that results in decreases in the purchase and use of our products and services; our expectation that we may have to increase the incentives that we offer to our marketing partners and decrease the prices of our products and services, which could adversely affect our operating results; we may receive a stockholder proposal relating to a variety of ESG issues to public companies in the future; we may be subject to, or contractually required to comply with, state and federal laws that govern various aspects of the submission of healthcare claims for reimbursement and the receipt of payments for healthcare items or services; we may use and disclose individually identifiable health information to perform our services and for other limited purposes, such as creating de-identified information; we may not be able to detect unauthorized use of our intellectual property or proprietary information, or to take enforcement action; we may retain additional employees and consultants during the next twelve months, including additional patient affordability, information technology, product and project management, fraud, and customer care personnel to support our growing businesses; we may be unable to grow our business in future periods, and if our revenue growth slows, or our revenues decline further, our business and financial conditions could be adversely affected; we may experience a decline in margins; we may have deficiencies or weaknesses in our internal control over financial reporting which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, decrease investor confidence in our Company, and reduce the value of our common stock; we may face price competition that results in decreases in the purchase and use of our products and services; we may have to increase the incentives that we offer to our marketing partners and decrease the prices of our products and services, which could adversely affect our operating results; we may be unable to maintain adequate banking relationships or renew our agreements with the banks that currently issue our cards under terms at least as favorable to us as those existing before renewal; we may not be able to successfully manage our intellectual property or may be subject to infringement claims; we may have to litigate to enforce and protect our intellectual property rights, trade secrets and know-how or to determine their scope, validity or enforceability, which is expensive and could cause a diversion of resources and may not prove successful; we may also be subject to costly litigation in the event our products and technology infringe upon another party’s proprietary rights; we may also be subject to claims by third parties for breach of copyright, trademark or license usage rights; we may lose current and future customers, which could have a material adverse effect on our business, financial condition and results of operations.
Removed
Cost of revenues increased during 2023 primarily due to an increase in cardholder usage activity and associated network expenses such as interchange and ATM costs, an increase in plastics and collateral related to an increase in the number of unique card loads, an increase in network expenses and sales commissions related to the growth in our pharma patient affordability business, and an increase in customer service expenses associated with wage inflation pressures and the overall growth in our business, offset by a decline in postage.
Added
The electronic commerce industry is changing rapidly; we may experience other problems unrelated to system failures; we may also experience software defects, development delays and installation difficulties, any of which could harm our business and reputation and expose us to potential liability and increased operating expenses; we may raise capital in order to provide working capital for our expansion into other products and services using our payments platform; we may not be able to retain our current key employees; we may experience difficulty fully integrating our newly-hired personnel, which may adversely affect our business; we may not have sufficient personnel for our financial reporting responsibilities, which may result in the untimely close of our books and records and delays in the preparation of financial statements and related disclosures; our belief that future growth in the electronic commerce market will be driven by the cost, convenience, ease of use and quality of products and services offered to consumers and businesses; our belief that risks from prior cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected our business to date; our belief that our properties are adequate and suitable for us to conduct business in the future; our belief that if we do not raise new capital, we will still be able to support our existing business and expand into new vertical markets using internally generated funds; our plan for 2025 to continue to invest additional funds in technology improvements, sales and marketing, cybersecurity, fraud, customer service, and regulatory compliance; our belief that the following measures are the primary indicators of our quarterly and annual revenues: gross dollar volume loaded on cards and conversion rates on gross dollar volume loaded on cards; our belief that the following are also key performance indicators: revenues, gross profit, operational expenses as a percent of revenues, cardholder participation, and EBITDA; our belief that our available cash on hand, excluding restricted cash, along with our forecast for revenues and cash flows for 2025 and through 2027, will be sufficient to sustain our operations for the next 24 months. our belief that we do not anticipate any losses with respect to accounts with balances exceeding federally insured limits; our expectation that the repurchase program will be completed within 36 months from the commencement dated; our expectation that we are entitled to a breakage amount in certain card programs where we hold the cardholder funds; our belief that our platform can be seamlessly integrated with our clients’ systems; we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business; if a financial institution were to be placed into receivership, we may be unable to access the cash we have on deposit; our belief that our distinctive positioning allows us to provide end-to end technologies that securely manage transaction processing, cardholder enrollment, value loading, account management, data and analytics, and customer service; our belief that our architecture is known for its cross-platform compatibility, flexibility, and scalability – allowing our clients and partners to leverage these advantages for cost savings and revenue opportunities; our belief that if we do not raise new capital, then we will still be able to support our existing business and expand into new vertical markets using internally generated funds; our expectation that IRC Sections 382 and 383 will significantly impact the utilization of its net operating losses and other tax carryforwards.
Removed
Restricted cash of $92,356,308 are funds used for customer card funding with a corresponding offset under current liabilities. The increase of $12,167,195 in 2023 versus 2022 was predominately related to increases in funds on card, increased plasma deposits, and new plasma and pharma customers, offset by declines from a pharma customer whose contract terminated during the year.
Added
Risk Factors” and in other reports filed with the Securities and Exchange Commission (the “SEC”) from time to time.
Removed
We experienced large increases in accounts receivable and accounts payable primarily due to the launch of 24 net new pharma programs during the year whereby Paysign invoices its customers for reimbursement to pharmacy networks, pharmacies, or individuals for their out-of-pocket costs and remits those funds to cover the accounts payable liability.
Added
The increase in pharma revenue was primarily due a full year financial benefit of programs launched in 2023, the launch of 33 net new pharma patient affordability programs since December 31, 2023 and the subsequent growth in monthly management and setup fees, claim processing fees, and other billable services such as call center support.
Removed
Income tax related interest and penalties, if applicable, are accrued within income tax expense. 27 Revenue and Expense Recognition –The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services.
Added
The number of claims processed increased over 270% in 2024 compared to 2023.
Removed
The Company is currently under no obligation to refund any fees, and the Company does not currently have any obligations for disputed claim settlements. Given the nature of the Company’s services and contracts, generally it has no contract assets.
Added
The increase in cost of revenues consisted primarily of (i) increased network fees of approximately $1,026,000, which was driven predominantly by increased ATM network usage associated with growth in our card programs and increases in transaction fees related to inflationary pressures; (ii) increased customer care expense of approximately $838,000 associated primarily with the growth in our pharma patient affordability programs, wage inflation pressures, a tight labor market, and increased benefit costs; (iii) increased third-party program management of approximately $651,000 associated with our pharma patient affordability programs; (iv) increased sales commission expense of approximately $368,000 related to the increase in overall revenue for programs in which we pay commission expenses; and (v) increased fraud charges of approximately $527,000.
Added
These increases were offset by a decline in plastics and collateral of approximately $326,000 and a decline in other costs of approximately $35,000.
Added
Gross profit for the year ended December 31, 2024 increased $8,061,169 compared to the same period in the prior year, resulting primarily from the increase in the number of pharma patient affordability programs, a full year financial benefit of programs launched in 2023, and a corresponding increase in setup fees, monthly management fees, claim processing fees, and other billable fees associated with our patient affordability programs.
Added
The increase in gross margin resulted primarily from a greater contribution of total revenue from our pharma patient affordability business which has higher gross profit margins than our other businesses.
Added
Year ended December 31, 2024 2023 Reconciliation of adjusted EBITDA to net income: Net income $ 3,815,907 $ 6,458,727 Income tax provision (benefit) 322,290 (4,094,911 ) Interest income, net (3,116,689 ) (2,531,071 ) Depreciation and amortization 5,994,986 4,026,578 EBITDA 7,016,494 3,859,323 Stock-based compensation 2,604,589 2,853,643 Adjusted EBITDA $ 9,621,083 $ 6,712,966 31 “EBITDA margin” is defined as earnings before interest, income taxes, depreciation and amortization expense as a percentage of the Company’s revenue and “Adjusted EBITDA margin” reflects the adjustment to EBITDA margin to exclude stock-based compensation expense as a percentage of revenue.
Added
A reconciliation of net income margin to Adjusted EBITDA margin is provided in the table below.
Added
We used net cash in investing activities during the years ended December 31, 2024 and 2023 of $9,488,702 and $7,048,678, respectively.
Added
The decrease resulted primarily from payment timing on pass-through claim reimbursement receivables and related payables associated with our patient affordability business, in the amount of $7,018,053 offset by the improvement in our operating results.
Added
In light of the elevated interest rates and increased refinancing risks related to commercial real estate holdings on bank balance sheets, we continue to monitor the health and soundness of our bank relationships through publicly available information.
Added
In particular, we are closely following FDIC publicly announced developments, but those developments have not caused us to alter our bank relationships in any material respect at this time.

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