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What changed in CPI Card Group Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CPI Card Group Inc.'s 2024 and 2025 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 2025 report.

+324 added−337 removedSource: 10-K (2026-03-05) vs 10-K (2025-03-04)

Top changes in CPI Card Group Inc.'s 2025 10-K

324 paragraphs added · 337 removed · 256 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

72 edited+9 added−9 removed51 unchanged
Biggest changeSolutions for customer segments in our traditional markets include: ● Large card issuers (defined as the top 10 card issuers in the United States based on an average of cards issued during the past three years): secure debit and credit cards; ● Small to mid-sized financial institutions: secure debit and credit cards, card personalization services, instant card issuance, and other payment solutions including digital solutions.
Biggest changeWe primarily sell in the U.S. market and our diverse customer base includes some of the largest issuers of secure credit and debit cards, the largest prepaid program managers, major financial institution platform providers and card processor organizations, leading fintechs, thousands of small to mid-sized financial institutions, and others. ​ 8 Table of Contents Solutions for customer segments in our traditional markets include: ● Large card issuers (defined as the top 10 card issuers in the United States based on an average of cards issued during the past three years): secure debit and credit cards; ● Small to mid-sized financial institutions: secure debit and credit cards, card personalization, instant card issuance, and other payment solutions including digital solutions.
We define “Resellers” as financial institution platform providers and card processor organizations that assist financial institutions with their core banking operations, including management of their credit and debit card programs; ● Fintechs: secure debit and credit cards and card personalization services; ● Prepaid program managers: Prepaid Debit Cards, secure packaging solutions and other integrated prepaid card services.
We define “Resellers” as financial institution platform providers and card processor organizations that assist financial institutions with their core banking operations, including management of their credit and debit card programs; ● Fintechs: secure debit and credit cards and card personalization; ● Prepaid program managers: Prepaid Debit Cards, secure packaging solutions and other integrated prepaid card services.
However, as a provider of products and services to these financial institutions, our operations may be examined by various state and federal regulatory authorities and representatives of the Federal Financial Institutions Examination Council, which is a formal inter-agency body empowered to prescribe uniform principles, standards and report forms for the federal examination of financial institutions and to make recommendations to promote uniformity in the supervision of financial institutions.
However, as a provider of products and related services to these financial institutions, our operations may be examined by various state and federal regulatory authorities and representatives of the Federal Financial Institutions Examination Council, which is a formal inter-agency body empowered to prescribe uniform principles, standards and report forms for the federal examination of financial institutions and to make recommendations to promote uniformity in the supervision of financial institutions.
We have developed and continue to expand technology integrations with certain financial institution platform providers, card processors, core banking systems, and mobile banking app providers. We have been implementing these integrations for more than 10 years to support the reselling of personalization services through our digital SaaS-based instant issuance solution.
We have developed and continue to expand propritetary technology integrations with certain financial institution platform providers, card processors, core banking systems, and mobile banking app providers. We have been implementing these integrations for more than 10 years to support the reselling of card personalization services through our digital SaaS-based instant issuance solution.
Our sales and marketing strategy is focused on strengthening our relationships with existing customers through a consultative approach that includes cross-selling expanded services and sharing expertise to enhance customers’ card programs. Our marketing efforts focus on the needs of our specific types of customers and leverage the strength of our full-service offerings to attract new customers.
Our sales and marketing strategy is focused on strengthening our relationships with existing customers through a consultative approach that includes cross-selling expanded related services and sharing expertise to enhance customers’ card programs. Our marketing efforts focus on the needs of our specific types of customers and leverage the strength of our full-service offerings to attract new customers.
Our customers include some of the largest prepaid program managers in the U.S., with whom we have built joint processes over many years, utilizing technology in certain instances, to facilitate the exchange of critical data such as information used to print and encode card number, expiration, and security codes.
Our customers include the largest prepaid program managers in the U.S., with whom we have built joint processes over many years, utilizing technology in certain instances, to facilitate the exchange of critical data such as information used to print and encode card number, expiration, and security codes.
We continuously work to enhance our offerings and to create and deliver next-generation products and solutions that meet the demands of the marketplace and our customers. Our eco-focused cards, including Second Wave cards featuring a core made with recovered ocean-bound plastic and Earthwise cards made with upcycled plastic, address customer demands for more eco-focused card options.
We continuously work to enhance our offerings and to create and deliver next-generation products and solutions that meet the demands of the marketplace and our customers. Our eco-focused cards, including Second Wave cards featuring a core made with recovered ocean-bound plastic and Earthwise cards made with upcycled plastic, address customer demands for eco-focused card options.
Each of our high-security facilities is audited for compliance with the PCI Security Standards Council by one or more of the Payment Card Brands, forming a network of compliant facilities in the United States. The Payment Card Brands’ attestations of compliance allow us to produce cards bearing these brands and provide relevant card services for our customers.
Each of our high-security facilities is audited for compliance with the PCI Security Standards Council by one or more of the Payment Card Brands, forming a network of compliant facilities in the United States. The Payment Card Brands’ attestations of compliance allow us to produce cards bearing these brands and provide relevant and integrated card services for our customers.
We have sales representatives, customer relationships and partners that provide a wide geographic reach across the United States to sell and market our solutions. Our sales representatives offer complete end-to-end solutions that incorporate the full spectrum of our products and services from concept to delivery.
We have sales representatives, customer relationships and partners that provide a wide geographic reach across the United States to sell and market our solutions. Our sales representatives offer complete end-to-end solutions that incorporate the full spectrum of our products and related services from concept to delivery.
We are a leader in several areas of the U.S. payment card solutions market, including debit and credit card production, personalization, and Software-as-a-Service-based (“SaaS-based”) instant issuance services.
We are a leader in several areas of the U.S. payment card solutions market, including debit and credit card production, personalization, and Software-as-a-Service-based (“SaaS-based”) instant issuance solutions.
These prepaid program managers resell to their customer base which represents a significant number of U.S. distribution points, such as retail channels including national big box, grocery, and convenience/gas retailers, and others in various industries, and assist with the management and operations of their customers’ Prepaid Debit Cards programs; and ● Other: payment and non-payment cards for healthcare providers, entertainment venues, government disbursements, transit services and others.
These prepaid program managers resell to their customer base which represents a significant number of U.S. distribution points, such as retail channels including national big box, grocery, and convenience/gas retailers, and others in various industries, and assist with the management and operations of their customers’ Prepaid Debit Cards programs; and ● Other: payment and non-payment cards for healthcare providers, entertainment venues, government disbursements and others.
Our solutions provide a full suite of products and services required to produce, personalize and fulfill payment cards, while maintaining the security requirements of the Payment Card Brands.
Our solutions provide a full suite of products and related services required to produce, personalize and fulfill payment cards, while maintaining the security requirements of the Payment Card Brands.
Our technology-driven personalization services provide a wide range of customization options using advanced processes to encode, program, and emboss or print data, such as the cardholder’s name and account number. In addition, we provide data preparation services related to the embedded chips within payment cards. In certain cases, we prepare customized mailers to deliver cards to individual cardholders.
Our technology-driven personalization provides a wide range of customization options using advanced processes to encode, program, and emboss or print data, such as the cardholder’s name and account number. In addition, we provide data preparation related to the embedded chips within payment cards. In certain cases, we prepare customized mailers to deliver cards to individual cardholders.
We also produce contactless cards (also known as dual interface cards), which share the functionality of a contact card but also have a radio-frequency identification (“RFID”) antenna that utilizes near field communications (“NFC”) technology to allow transactions to process on a contactless basis when the card is brought within the requisite proximity to an NFC-enabled payment terminal.
Contactless cards (also known as dual interface cards), which share the functionality of a contact card but also have a radio-frequency identification (“RFID”) antenna that utilizes near field communications (“NFC”) technology to allow transactions to process on a contactless basis when the card is brought within the requisite proximity to an NFC-enabled payment terminal.
Although revenues for these additional digital solutions have been insignificant to date, we believe these solutions have the opportunity to grow in the future. In 2024, we expanded our digital solution offerings by entering into a strategic relationship with a third-party to resell credit and debit card fraud prevention services.
Although revenues for these additional digital solutions have been insignificant to date, we believe these solutions have the opportunity to grow in the future. We have expanded our digital solution offerings by entering into a strategic relationship with a third-party to resell credit and debit card fraud prevention.
Our website and the information contained on that site, or connected to that site, are not incorporated into and are not a part of this report. The SEC also maintains a website (www.sec.gov), which contains reports and information statements, and other information filed electronically with the SEC.
Our website and the information contained on that site, or connected to that site, are not incorporated into and are not a part of this report. The SEC also maintains a website (www.sec.gov), which contains reports and information statements, and other information filed electronically with the SEC by the Company.
These services are important to many of our customers not just for the payment cards themselves but as an essential element in utilizing them as part of their overall branding and marketing initiatives.
These offerings are important to many of our customers not just for the payment cards themselves but as an essential element in utilizing them as part of their overall branding and marketing initiatives.
Such services are important to many of our customers not just for the payment cards themselves but as an essential element in utilizing them as part of their overall branding and marketing initiatives.
Such offerings are important to many of our customers not just for the payment cards themselves but as an essential element in utilizing them as part of their overall branding and marketing initiatives.
We believe our breadth, quality, and speed of personalization solutions further differentiates us with our financial institution and prepaid program manager customers and enables us to access additional business-to-business and business-to-consumer verticals such as healthcare, gig economy payment, corporate incentives, government disbursement, benefits, insurance, tax refund, transit, payroll and others.
We believe our breadth, quality, and speed of personalization solutions further differentiates us with our financial institution and prepaid program manager customers and enables us to access additional business-to-business and business-to-consumer verticals such as healthcare, corporate incentives, government disbursement, benefits, insurance, tax refund, transit, payroll and others.
The U.S. payment card solutions market is characterized by users (primarily U.S. consumers) maintaining multiple payment cards and by historically stable and recurring revenue driven by the continuous reissuance of debit and credit cards due to card expiration, re-branding, and card replacement activity, and by U.S. consumers switching from one financial institution to another.
The U.S. payment card solutions market is characterized by users (primarily U.S. consumers) maintaining multiple payment cards both physically and digitally and by historically stable and recurring revenue driven by the continuous reissuance of debit and credit cards due to card expiration, re-branding, and card replacement activity, and by U.S. consumers switching from one financial institution to another.
As a result, our customers often view CPI as a partner they can trust and that can deliver the highest quality products and customer service. ● Comprehensive End-to-End Card Solutions. The foundation of our strong market position with our small to mid-sized financial institution and fintech customers is our comprehensive end-to-end payment card solutions.
As a result, our customers often view CPI as a partner they can trust and that can deliver the highest quality products and customer service. ​ 7 Table of Contents ● Comprehensive End-to-End Card Solutions. The foundation of our strong market position with our small to mid-sized financial institution and fintech customers is our comprehensive end-to-end payment card solutions.
We offer a variety of data personalization and mailing solutions for both daily and bulk mail programs. 5 Table of Contents Our customers provide us with data, in many cases through technology integrations, that we use to personalize payment cards to individual consumers. We provide data preparation and personalization solutions for debit, credit and Prepaid Debit Cards.
We offer a variety of data personalization and mailing solutions for both daily and bulk mail programs. Our customers provide us with data, in many cases through technology integrations, that we use to personalize payment cards to individual consumers. We provide data preparation and personalization solutions for debit, credit and Prepaid Debit Cards.
We are also a market leader in the production of “Prepaid Debit Cards,” which we define as debit cards issued on the networks of the “Payment Card Brands” (Visa, Mastercard ® , American Express ® and Discover ® ) but not linked to a traditional bank account, and related secure packaging solutions.
We are also a market leader in the production of “Prepaid Debit Cards,” defined as debit cards issued on the networks of the “Payment Card Brands” (Visa, Mastercard ® , American Express ® and Discover ® ) but not linked to a traditional bank account, and related secure packaging solutions.
We qualify as a smaller reporting company in accordance with Rule 12b-2 under the Exchange Act and have elected to follow certain of the scaled back disclosure accommodations within this Annual Report on Form 10-K. 12 Table of Contents
We qualify as a smaller reporting company in accordance with Rule 12b-2 under the Exchange Act and have elected to follow certain of the scaled back disclosure accommodations within this Annual Report on Form 10-K.
We also produce non-chip cards that only utilize magnetic stripes, contactless payment and non-payment cards that utilize NFC technology, and cards that include both magnetic stripes and NFC technology. Card Data Personalization and Fulfillment We facilitate the issuance and distribution of payment cards to consumers for the majority of our U.S. customers.
We also produce non-chip cards that only utilize magnetic stripes, contactless payment and non-payment cards that utilize NFC technology, and cards that include both magnetic stripes and NFC technology. 5 Table of Contents Card Data Personalization and Fulfillment We facilitate the issuance and distribution of payment cards to consumers for the majority of our U.S. customers.
See Part I, Item 2, Properties in this Annual Report on Form 10-K for information on the operations of each facility. We rely on secure ground and air freight to deliver finished products to our customers.
See Part I, Item 2, Properties in this Annual Report on Form 10-K for information on the operations of each facility. ​ 9 Table of Contents We rely on secure ground and air freight to deliver finished products to our customers.
We believe we are in competition with other card producers, card personalization service providers, card packaging providers, and others that provide technology and digital solutions related to payment cards, such as ABCorp, Arroweye, CompoSecure L.L.C., Entrust, FIS, Fiserv, Giesecke & Devrient GmbH, HID Global, IDEMIA, Perfect Plastic Printing, Thales, Travel Tags, and WestRock (Multi Packaging Solutions), among others.
We believe we are in competition with card producers, card personalization service providers, card packaging providers, and others that provide technology and digital solutions related to payment cards, such as ABCorp, CompoSecure L.L.C., Entrust, FIS, Fiserv, Giesecke & Devrient GmbH, HID Global, IDEMIA, Perfect Plastic Printing, Thales, and WestRock (Multi Packaging Solutions), among others.
For prepaid cards sold through retail, the relationships and processes we 6 Table of Contents developed allow us to provide activation data, including information printed on the packaging which transacts with the retailer’s point of sale system to activate cards for use.
For prepaid cards sold through retail, the relationships and processes we developed allow us to provide activation data, including information printed on the packaging which transacts with the retailer’s point of sale system to activate cards for use.
As part of our promotion and retention efforts, we also invest in ongoing leadership development and conduct employee surveys to measure employee engagement and identify areas of focus. ​ Employee health and safety in the workplace is one of our core values.
As part of our promotion and retention efforts, we also invest in ongoing leadership development and conduct employee surveys to measure employee engagement and identify areas of focus. ​ 12 Table of Contents Employee health and safety in the workplace is one of our core values.
We believe that our comprehensive solutions allow many of our customers to choose a single, trusted partner to address their card program needs in a cost-effective manner instead of managing multiple suppliers across a complex value chain. ● Payment Card Capabilities, Industry Experience, and Proprietary and Patented Solutions.
We believe that our comprehensive solutions, including our Arroweye on-demand solutions, allow many of our customers to choose a single, trusted partner to address their card program needs in a cost-effective manner instead of managing multiple suppliers across a complex value chain. ● Payment Card Capabilities, Industry Experience, and Proprietary and Patented Solutions.
We are also able to personalize payment cards and related collateral on a one-by-one, on-demand basis for our customers, enabling individualized offerings in an expedited manner. Our service offering includes online ordering of a customized payment card through a program manager, with direct fulfillment to a consumer.
We are also able to personalize payment cards and related collateral on a one-by-one, on-demand basis for our customers, enabling individualized offerings in an expedited manner. Our offerings include online ordering of a customized payment card through a program manager, with direct fulfillment to a consumer.
The majority of these sales are from Resellers, who provide our products and services to thousands of indirect customers. Through our direct and indirect customer relationships, a majority of our annual net sales in our Debit and Credit segment are derived from small to mid-sized financial institutions and fintechs.
The majority of these sales are from Resellers, who provide our products and related services to thousands of indirect customers. Through our direct and indirect customer relationships, a majority of our annual revenue in our Debit and Credit segment is derived from small to mid-sized financial institutions and fintechs.
Approximately 73% of our full-time employees are production and service facility staff. None of our employees are represented by labor unions.
Approximately 77% of our full-time employees are production and service facility staff. None of our employees are represented by labor unions.
We also strive to develop new or enhanced products by innovating through research and development activities. We believe these efforts drive customer retention and satisfaction and attract new customers. 9 Table of Contents Competition The market for products and services in the payment card industry is highly competitive.
We also strive to develop new or enhanced products by innovating through research and development activities. We believe these efforts drive customer retention and satisfaction and attract new customers. Competition The market for products and related services in the payment card industry is highly competitive.
We also focus on a variety of community initiatives to enhance the lives of people in the communities where we operate through volunteerism, charitable giving and economic support. ​ As of December 31, 2024, approximately 1,500 people were employed by CPI, of which nearly half are women and approximately 60% identify as being within a minority category.
We also focus on a variety of community initiatives to enhance the lives of people in the communities where we operate through volunteerism, charitable giving and economic support. ​ As of December 31, 2025, approximately 1,700 people were employed by CPI, of which nearly half are women and approximately 62% identify as being within a minority category.
As of December 31, 2024, we operated facilities comprising approximately 400,000 square feet in the United States, with the majority of the space dedicated to payment card production, personalization services, card packaging and fulfillment services.
As of December 31, 2025, we operated facilities comprising approximately 500,000 square feet in the United States, with the majority of the space dedicated to payment card production, card personalization services, card packaging and fulfillment services.
We are integral to many of our customers’ card programs, pairing design and production with an end-to-end offering of data personalization and services that are integrated within our customers’ operations and require process and/or technology integration, such as secure data links to transfer highly sensitive cardholder information.
We are integral to many of our customers’ card programs, pairing design and production with end-to-end offerings that are integrated within our customers’ operations and require process and/or technology integration, such as secure data links to transfer highly sensitive cardholder information.
For additional details regarding our segments, see Part II, Item 8, Financial Statements and Supplementary Data, Note 17 "Segment Reporting," and Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in this Annual Report on Form 10-K. Our Strategy Our vision is to be the most trusted partner for innovative payments technology solutions.
For additional details regarding our segments, see Part II, Item 8, Financial Statements and Supplementary Data, Note 17 "Segment Reporting," and Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in this Annual Report on Form 10-K. ​ 4 Table of Contents Our Strategy Our vision is to be the most trusted partner for innovative product and related payment technology solutions.
We aim to expand our addressable market over the long term through diversification by adding adjacent product and service offerings, including additional digital solutions, for our extensive customer base, and by leveraging our existing solutions for new 4 Table of Contents customer verticals.
We aim to expand our addressable market over the long term through diversification by adding adjacent product and related service offerings, including additional digital solutions, for our extensive customer base, and by leveraging our existing solutions for new customer verticals.
We are integral to many of our customers’ card programs, pairing design and production with an end-to-end offering of data personalization and services that are integrated within our customers’ operations and in certain cases utilize data links to transfer highly sensitive cardholder information.
We are integral to many of our customers’ card programs, pairing design and production with end-to-end offerings that are integrated within our customers’ operations and in certain cases utilize data links to transfer highly sensitive cardholder information.
Our revenues are primarily generated from the production of and services related to secure debit and credit cards that are issued on the networks of the Payment Card Brands, including Prepaid Debit Cards.
Our revenues are primarily generated from the production and related service offerings of secure debit and credit cards that are issued on the networks of the Payment Card Brands, including Prepaid Debit Cards.
Our solutions provide a full suite of products and services required to produce, personalize and fulfill payment cards, while maintaining the security requirements of the Payment Card Brands.
Our solutions provide a full suite of products and related services required to produce, personalize and fulfill payment cards, both physically and digitally, while maintaining the security requirements of the Payment Card Brands.
For many customers, we pair card design and production with an end-to-end offering of data personalization and services that are integrated within our customers’ operations. In addition to providing payment solutions to typical financial institution and fintech payment card issuers, we also produce payment and other cards for healthcare payments, entertainment venues, government disbursements, transit services, and other industries.
For many customers, we pair card design and production with end-to-end offerings that are integrated within our customers’ operations. In addition to providing payment solutions to typical financial institution and fintech payment card issuers, we also produce payment and other cards for healthcare payments, entertainment venues, government disbursements, and other industries.
The other key components for our products are substrates and inlays. Our Second Wave payment cards feature a core made with ROBP, which we either have sourced or currently source from suppliers in Haiti and Thailand. We monitor supply-chain risks and evaluate alternative suppliers based on numerous attributes including quality, performance, service, scalability, features, innovation, resiliency and price.
Our Second Wave payment cards feature a core made with ROBP, which we either have sourced or currently source from suppliers in Haiti and Thailand. We monitor supply-chain risks and evaluate alternative suppliers based on numerous attributes including quality, performance, service, scalability, features, innovation, resiliency, importation costs, and price.
Individually, many of these customers, including independent community banks and credit unions, represent minor amounts of our annual net sales. 8 Table of Contents We typically enter into master purchase or service agreements that govern the general terms and conditions of our commercial relationships.
Individually, many of these customers, including independent community banks and credit unions, represent minor amounts of our annual revenue. We typically enter into master purchase or related solution agreements that govern the general terms and conditions of our commercial relationships.
Services include personalization; instant issuance, which provides customers the ability to issue an instant personalized debit or credit card on-demand within a customer location; and other payment solutions such as digital push provisioning for mobile wallets; ● Prepaid Debit: primarily provides secure packaging solutions, Prepaid Debit Cards, and other integrated prepaid card services to prepaid program managers in the U.S.; and ● Other: primarily corporate expenses.
Our business consists of the following reportable segments: ● Debit and Credit: primarily produces secure debit and credit cards and provides related card services for U.S. card-issuing financial institutions, including personalization; instant issuance, which provides customers the ability to issue an instant personalized debit or credit card on-demand within a customer location; and other payment solutions such as digital push provisioning for mobile wallets; ● Prepaid Debit: primarily provides secure packaging solutions, Prepaid Debit Cards, and other related integrated prepaid card services to prepaid program managers in the U.S.; and ● Other: primarily corporate expenses.
CPI had one customer that accounted for 10% or more of its net sales in 2024. Net sales from this customer were approximately 18% of total net sales for the year ended December 31, 2024, and we have been serving this customer for nearly 20 years.
CPI had one customer that accounted for 10% or more of its revenue in 2025. Revenue from this customer was approximately 16% of total revenue for the year ended December 31, 2025, and we have been serving this customer for nearly 20 years.
Item 1. Busines s As used herein, “CPI,” “the Company,” “we,” “our” and similar terms refer to CPI Card Group Inc. and its subsidiaries, unless the context indicates otherwise. Overview CPI is a payments technology company providing a comprehensive range of payment cards and related digital solutions.
Item 1. Busines s As used herein, “CPI,” “the Company,” “we,” “our” and similar terms refer to CPI Card Group Inc. and its subsidiaries, unless the context indicates otherwise. Overview CPI is a payments technology company providing a comprehensive range of physical and digital payment solutions for U.S. financial institutions, processors, fintechs, prepaid program managers, and more.
Contactless cards have increased as a percentage of sales versus contact cards for both CPI and the wider U.S. industry. We believe we are a leading provider of eco-focused card solutions in the U.S. payments market.
Contactless cards are now the significant majority as a percentage of secure card volume for both CPI and the wider U.S. industry. We believe we are a leading provider of eco-focused card solutions in the U.S. payments market.
Although our direct relationship is with this customer, this customer resells our services to a large number of indirect customers. Nearly two-thirds of our net sales for the year ended December 31, 2024 were from our top 10 customers, whom we have been serving for an average of more than 10 years.
Although our direct relationship is with this customer, this customer resells our product and related services to a large number of indirect customers. More than half of our revenue for the year ended December 31, 2025 was from our top 10 customers, whom we have been serving for an average of more than 10 years.
We believe 7 Table of Contents these technology integrations could enable us to provide additional digital services to customers, including our digital push provisioning service as a complement to physical cards. ● Network of High-Security Facilities.
We believe these technology integrations could enable us to provide additional digital offerings to customers, including our digital push provisioning service for mobile wallets, which serves as a complement to our physical card personalization. ● Network of High-Security Facilities.
Our expanding digital offerings include Card@Once, a proprietary and patented instant card issuance system and SaaS-based solution. We believe that our technological and operational capabilities, combined with our continuous innovation, gives us a competitive advantage. ● Integrations with the U.S. Payments Eco-system .
We now offer highly-customizable on-demand payment card solutions with quick turnaround timing through our Arroweye acquisition. Our expanding digital offerings include Card@Once, a proprietary and patented SaaS-based instant card issuance system. We believe that our technological and operational capabilities, combined with our continuous innovation, gives us a competitive advantage. ● Integrations with the U.S. Payments Ecosystem .
Accordingly, we compete with certain of our customers, including those that offer transaction processing products and services to financial institutions. Suppliers Our general procurement philosophy is to prevent or avoid being dependent on a single-source supplier. We believe we have developed constructive relationships with our suppliers and, in general, receive a high level of cooperation and support from them.
Accordingly, we compete with certain of our customers, including those that offer transaction processing products and related services to financial institutions. ​ 10 Table of Contents Suppliers Our general procurement philosophy is to prevent or avoid being dependent on a single-source supplier.
SaaS-based Instant Card Issuance and Other Digital Solutions We provide a comprehensive solution that makes it easy for our customers to issue payment cards in a customer location and on-demand. Our proprietary and patented SaaS-based Card@Once® instant issuance system and personalization solution offers a faster delivery of payment cards by our customers to their consumers, typically within a few minutes.
SaaS-based Instant Card Issuance and Other Digital Solutions We provide a comprehensive solution that makes it easy for our customers to issue payment cards in a customer location and on-demand.
Production We have a network of high-security facilities that we leverage to fulfill customer orders, with an array of products and services available to our customers. We have attempted to design our facilities and operating processes to provide exceptional service to all customers, with capabilities to execute high-volume and lower-volume production runs and on-demand solutions.
We have attempted to design our facilities and operating processes to provide exceptional service to all customers, with capabilities to execute high-volume and lower-volume production runs and on-demand solutions.
We believe we are well positioned to expand our digital solutions offerings to our customers through technology integrations with certain financial institution platform providers, card processors, core banking systems, and mobile banking app providers. Many of these integrations have been developed over time to support the reselling of personalization services through our digital SaaS-based instant issuance solution.
We believe we are well positioned to expand our digital solutions offerings to our customers through our proprietary technology integrations with certain financial institution platform providers, card processors, core banking systems, and mobile banking app providers.
Our main suppliers of microchips and antennas include three leading international producers with locations in Germany, Thailand, and Singapore, some of which source materials from Taiwan. For the year ended December 31, 2024, approximately 95% of our purchased microchips and antennas came from these three main suppliers, and approximately 78% came from one supplier, including most of our contactless chips.
Some of the most important components of our products include the microchips and antennas for our card products. Our main suppliers of microchips and antennas include three leading international producers with locations in Germany, Thailand, and Singapore, some of which source materials from Taiwan.
We then enter into a purchase order or other short-term arrangement that defines the quantities of products to be delivered or services rendered and other terms specific to the order, as appropriate. In most cases, our contractual arrangements include neither exclusivity clauses nor commitments from our customers to order any given quantities of products on a medium or long-term basis.
We then enter into a purchase order or other short-term arrangement that defines the quantities of products to be delivered or related services to be rendered and other terms specific to the order, as appropriate.
These processes are audited for Payment Card Industry (“PCI”) Security Standards Council data security standards compliance annually. Our Card@Once solution generates both initial sales revenue for the hardware and recurring revenue from the sale of cards, card personalization and consumables.
This process results in the issuance of a completely personalized, permanent debit or credit card to individual cardholders within a customer’s location. These processes are audited for Payment Card Industry (“PCI”) Security Standards Council data security standards compliance annually. Our Card@Once solution generates both initial sales revenue for the hardware and recurring revenue from the related card issuance activities.
Prepaid Debit Cards and Related Tamper-Evident Secure Packaging Solutions CPI is a trusted and significant supplier of Prepaid Debit Cards and related secure packaging solutions in the U.S.
Digital solutions often require upfront investment and additional integration but have the potential to deliver incremental revenue and increased margins over time. Prepaid Debit Cards and Related Tamper-Evident Secure Packaging Solutions CPI is a trusted and significant supplier of Prepaid Debit Cards and related secure packaging solutions in the U.S.
In order to comply with our obligations under applicable privacy laws and regulations and our contractual agreements with our customers, we are required to implement adequate policies and safeguards to protect the privacy of personally identifiable information we receive.
In order to comply with our obligations under applicable privacy laws and regulations and our contractual agreements with our customers, we are required to implement adequate policies and safeguards to protect the privacy of personally identifiable information we receive. ​ 11 Table of Contents Under the PCI Security Standards Council’s requirements, we must meet certain security standards in order to achieve compliance that allows us to produce and personalize debit and credit cards issued on the Payment Cards Brands’ networks.
In order to comply with our obligations under applicable laws, we are required, among other things, to comply with reporting requirements, to implement operating policies and procedures to comply with Office of Foreign Assets Control requirements, to protect the privacy and security of our customers’ information and to undergo periodic audits and examinations. 11 Table of Contents The Dodd-Frank Wall Street Reform and Protection Act (the “Dodd-Frank Act”) set forth substantial reforms to the supervision and operation of the financial services industry, including the establishment of the Consumer Financial Protection Bureau (“CFPB”), which has broad supervisory, enforcement and rulemaking authority over consumer financial products and services.
In order to comply with our obligations under applicable laws, we are required, among other things, to comply with reporting requirements, to implement operating policies and procedures to comply with Office of Foreign Assets Control requirements, to protect the privacy and security of our customers’ information and to undergo periodic audits and examinations.
We have initiated the expansion of our offerings to customers in non-traditional industry verticals, such as the sale of our card solutions to the healthcare and gig economy verticals, which has already expanded our addressable markets. We also believe our digital SaaS-based instant card issuance solution could be utilized by certain businesses outside of the financial services industry.
We have initiated the expansion of our offerings to customers in non-traditional industry verticals, such as healthcare, which has already expanded our addressable markets.
We are party to certain patent cross-license arrangements with industry participants and may, from time to time, enter into similar commercial agreements we consider necessary or beneficial for our business. We rely on a combination of statutory (copyright, trademark and trade secret) and contractual safeguards to protect our intellectual property throughout the world.
Intellectual Property We own, control or license various intellectual property rights, such as patents, trade secrets, confidential information, trademarks, service marks, tradenames, copyrights and applications. We are party to certain patent cross-license arrangements with industry participants and may, from time to time, enter into similar commercial agreements we consider necessary or beneficial for our business.
Our U.S. and foreign patents and applications have an average remaining maturity of approximately 12 years, and our trademarks will be due for renewal for additional ten-year periods on an ongoing basis. 10 Table of Contents Regulation Privacy and Data Security In the course of our business, we receive personally identifiable information of cardholders from our customers, either from a financial institution or through a Reseller.
Our U.S. and foreign patents and applications have an average remaining maturity of approximately 11 years, and our trademarks will be due for renewal for additional ten-year periods on an ongoing basis.
We have increased installations of our instant issuance solution from approximately 11,000 customer locations in 2019 to more than 16,000 in 2024. We also have the ability to provide other digital solutions, including digital push provisioning, which allows our customers to push card credentials to a cardholder’s mobile wallet, and digital cards.
As of December 31, 2025, we serviced approximately 2,500 financial institutions representing more than 14,000 active Card@Once installations. ​ 6 Table of Contents We also have the ability to provide other digital solutions through our proprietary network of integrations, including digital push provisioning, which allows our customers to push card credentials to a cardholder’s mobile wallet, and digital cards.
We primarily produce contact and contactless cards that are issued on the networks of the Payment Card Brands. Contact cards feature an integrated circuit that interfaces with a payment terminal over a contact plate on the surface of the card when inserted into an enabled payment terminal.
We primarily produce contactless cards that are issued on the networks of the Payment Card Brands.
We believe these technology integrations could enable us to provide additional digital solutions to our customers, including our digital push provisioning service as a complement to physical cards. Digital solutions often require upfront investment and additional integration but have the potential to deliver incremental revenue and increased margins over time.
These integrations have been developed over more than a decade to support the reselling of card personalization services through our digital SaaS-based instant issuance solution. We believe these technology integrations could enable us to provide additional digital solutions to our customers, including our digital push provisioning service as a complement to physical cards.
However, certain components are only available from a single supplier, or substituting a component from a different supplier may require additional time and investment. Some of the most important components of our products include the microchips and antennas for our card products.
We believe we have developed constructive relationships with our suppliers and, in general, receive a high level of cooperation and support from them. However, certain components are only available from a single supplier, or substituting a component from a different supplier may require additional time and investment.
Our Card@Once software solution transfers data from our servers to encode a contact or contactless card and personalizes the card on a hardware solution placed in our customer’s location. This process results in the issuance of a completely personalized, permanent debit or credit card to individual cardholders within a customer’s location.
This network enables the Company to connect real-time data between our customers and those in the U.S. payments ecosystem supplying payment credentials, resulting in a market-leading customer experience. Our Card@Once software solution transfers data from our servers to encode a contact or contactless card and personalizes the card on a hardware solution placed in our customer’s location.
As of December 31, 2024, we had 66 U.S. and foreign trademark registrations and applications, 63 existing U.S. patents, 50 existing foreign patents, as well as 34 pending U.S. and foreign patent applications.
We rely on a combination of statutory (copyright, trademark and trade secret) and contractual safeguards to protect our intellectual property throughout the world. As of December 31, 2025, we had 67 U.S. and foreign trademark registrations and applications, 59 existing U.S. patents, 55 existing foreign patents, as well as 19 pending U.S. and foreign patent applications.
Such information can include names, email and physical addresses, card account numbers and expiration dates.
Regulation Privacy and Data Security In the course of our business, we receive personally identifiable information of cardholders from our customers, either from a financial institution or through a Reseller. Such information can include names, email and physical addresses, card account numbers and expiration dates.
Removed
Our business consists of the following reportable segments: ● Debit and Credit: primarily produces secure debit and credit cards and provides card services for U.S. card-issuing financial institutions.
Added
We also believe our connections into the U.S. payments ecosystem that support our digital SaaS-based instant card issuance solution could be utilized by our financial services customers for other digital solutions, as well as by certain businesses outside of the financial services industry.
Removed
We primarily sell in the U.S. market and our diverse customer base includes some of the largest issuers of secure credit and debit cards, the largest prepaid program managers, major financial institution platform providers and card processor organizations, leading fintechs, thousands of small to mid-sized financial institutions, and others.
Added
Integrated End-to-End On-Demand Payment Card Solution We expanded our card production, data personalization and fulfillment capabilities in May 2025 through our acquisition of Arroweye. These expanded capabilities allow us to offer our customers increased customization, production, and personalization options through a fully integrated, on-demand payment card solution.
Removed
We are also in the process of constructing a new facility in Fort Wayne, Indiana, pursuant to a build-to-suit lease agreement, to which we intend to relocate our current Indiana operations. This new facility is intended to modernize our operations, increase efficiencies and provide additional capacity and capabilities to accommodate future growth.
Added
This on-demand, highly customizable solution provides customers the opportunity to significantly reduce the time to set up new card programs and eliminates the need to maintain inventories of their customized cards and mailers.
Removed
In 2022 in order to fulfill the demands of our customers and to mitigate the impact of supply chain shortages, we entered into a capacity reservation agreement with one of our chip suppliers to reserve production supply capacity.
Added
Arroweye’s payment card solutions expanded our customer base across prepaid program managers, payroll related providers, healthcare related providers, and fintechs of all types, in addition to banks and credit unions. We provide these customers a variety of solutions, including debit and credit, incentives, rebates, gift cards, prepaid, payroll, healthcare, government disbursements, insurance, and fleet management services.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk Factors Summary Risks Relating to our Business and Industry ● A deterioration in general economic conditions, including due to inflation-related challenges, resulting in reduced consumer confidence and consumer and business spending and decreased demand for our products. ● The unpredictability of our operating results due to the varying cyclicality of the financial card and electronic payment industries, changes in customer inventory management practices, capital requirements, competition, new product developments, technological changes and other factors. ● Failure to retain existing key customers and attract new customers due to competitive products, pricing pressures, extended production lead times, financial health of our customers and macroeconomic conditions affecting our industry or our customers. ● The highly competitive, saturated and consolidated nature of our marketplace. ● Our inability to develop new or enhanced products and services, including due to our inability to undertake time-consuming and costly research and development activities. ● The widespread adoption of technological changes, new products or industry standards, such as digital payment systems or mobile payments, which may render our products obsolete or irrelevant, and our failure to develop, introduce and commercialize innovative products to address the evolving needs of our customers in a timely manner or at all. ● A cyber-attack or breach of our information technology systems resulting in losses of our intellectual property and/or sensitive cardholder data, harm to our competitive position and a loss of customer trust and confidence, and, as threats evolve, the necessity to invest in significant additional resources to enhance our information security and controls. ● The usage, or lack thereof, of artificial intelligence technologies. ● Disruptions, delays or other failures in our supply chain, including due to increased costs and inflationary pressures in our supply chain, single-source suppliers, or the failure or inability of our suppliers to comply with our codes of conduct or contractual requirements , trade restrictions, tariffs, foreign conflicts or political unrest in countries in which our suppliers operate, and our inability to pass related costs on to our customers or difficulty meeting customers’ delivery expectations due to extended lead times . ● Any interruption of our information technology systems, including disruptions or failures of our third-party data centers, inhibiting our ability to serve our customers. ● Defects in our software and computing systems, resulting in errors or delays in the processing of transactions and other interruptions in our business operations. ● A disruption at any of our production facilities due to weather conditions, climate change, political instability, or social unrest and our inability to recover quickly or otherwise provide continuity of production to meet customer requirements. ● Problems in our production processes, including as a result of mechanical or technological failures, which could lead to reduced production capacity and quality. ● Defects in our products that may give rise to products recalls, product liability and warranty claims as well as damage to our reputation. ● Failure to recruit, retain and develop qualified new and replacement personnel and implement effective succession processes amidst labor shortages and competitive labor markets. ● Our substantial indebtedness and the covenants and restrictions in the agreements governing our indebtedness limiting our ability to use our cash flow in certain areas of our business, capitalize on certain business opportunities and pursue our business strategies, all of which could be further impacted if we incur additional debt and could impact our ability to make debt service payments. 13 Table of Contents ● Our inability to make debt service payments and an inability to refinance our existing debt on favorable terms or at all. ● Our inability to execute successfully on an acquisition strategy or strategic relationships. ● Our inability to divest or consolidate certain non-strategic businesses. ● Our potential failure to comply with the Sarbanes-Oxley Act of 2002, including maintaining effective control over financial reporting and risks relating to investor confidence in our financial reports. ● The impact of the increasing focus on ESG factors on our ability to access capital, produce our products in conformity with stakeholder preferences, and comply with stakeholder demands as well as comply with any new ESG-related legal or regulatory requirements or restrictions, and negative perceptions of our products due to the impact of our products and production processes on the environment and other ESG-related risks. ● Damage to our reputation or brand image resulting from negative perceptions of our business or those entities or individuals with whom we do business. ● The effects of climate change on our business. ● Our inability to protect our trade secrets, intellectual property and proprietary software; to obtain additional intellectual property rights in the future; and to ensure our products are not infringing the intellectual property rights of others. ● Our inability to renew licenses with key technology licensors, resulting in our loss of access to certain technologies upon which we rely to develop certain of our products. ● Our inability to successfully access capital markets due to the effects of the low trading volume and fluctuating trading price of our common stock as well as terms of our outstanding indebtedness and unfavorable market conditions, which may lead to delays in innovation or the abandonment of our strategic initiatives. ● Our exposure to additional tax collection efforts by states, unclaimed property laws, or future increases in U.S. federal or state income taxes, resulting in additional expenses which we may be unable to pass along to our customers. ● Our inability to realize the full value of our long-lived assets, which represent a significant portion of our total assets. ● Challenges, costs and potential liabilities associated with compliance or failure to comply with existing or future data privacy and security laws, regulations and other requirements, including customer contractual requirements. ● Our failure to comply with the standards of the PCI Security Standards Council and other industry standards, including due to an inability to continue to make investments in our facilities necessary to maintain compliance with such standards. ● The effects of delays or interruptions in our ability to source raw materials and components used in our products from foreign countries due to economic downturns or disruptions, including as a result of responses to global health emergencies and tariffs and trade restrictions. ● The effects of ongoing foreign conflicts on the global economy. ● Adverse conditions in the banking system and financial markets, including bank and financial institution failures. ● Our failure to comply with environmental, health and safety laws and regulations, including climate change regulations, that apply to our products and the raw materials we use in our production processes.
Biggest changeRisk Factors Summary Risks Relating to our Business and Industry ● A deterioration in general economic conditions, including due to inflation-related challenges, resulting in reduced consumer confidence and consumer and business spending and decreased demand for our products. ● The unpredictability of our operating results due to the varying cyclicality of the financial card and electronic payment industries, changes in customer inventory management practices, capital requirements, competition, new product developments, technological changes and other factors. ● Failure to retain existing key customers and attract new customers due to competitive products, pricing pressures, extended production lead times, or the financial health of our customers. ● The highly competitive, saturated and consolidated nature of our marketplace. ​ 13 Table of Contents ● Our inability to develop new or enhanced products and related services, including due to our inability to undertake time-consuming and costly research and development activities, or the widespread adoption of technological changes, new products or industry standards, such as digital payment systems or mobile payments, which may render our products obsolete or irrelevant. ● A cyber-attack or breach of our information technology systems resulting in losses of our intellectual property and/or sensitive cardholder data, harm to our competitive position and a loss of customer trust and confidence, and, as threats evolve, the necessity to invest in significant additional resources to enhance our information security and controls. ● The usage, or lack thereof, of artificial intelligence technologies. ● Disruptions, delays or other failures in our supply chain, including due to increased costs and inflationary pressures in our supply chain, single-source suppliers, or the failure or inability of our suppliers to comply with our codes of conduct or contractual requirements , trade restrictions, tariffs, foreign conflicts or political unrest in countries in which our suppliers operate, and our inability to pass related costs on to our customers or difficulty meeting customers’ delivery expectations due to extended lead times . ● Changes in U.S. and global trade policy and the impact of tariffs have had and may continue to have a material adverse effect on our business and results of operations. ● Any interruption of our information technology systems, including disruptions or failures of our third-party data centers, inhibiting our ability to serve our customers. ● Defects in our software and computing systems, resulting in errors or delays in the processing of transactions and other interruptions in our business operations. ● A disruption at any of our production facilities due to weather conditions, climate change, political instability, or social unrest and our inability to recover quickly or otherwise provide continuity of production to meet customer requirements. ● Problems in our production processes, including as a result of mechanical or technological failures, which could lead to reduced production capacity and quality. ● Defects in our products that may give rise to products recalls, product liability and warranty claims as well as damage to our reputation. ● Failure to recruit, retain and develop qualified new and replacement personnel and implement effective succession processes amidst labor shortages and competitive labor markets. ● Our indebtedness and the covenants and restrictions in the agreements governing our indebtedness limiting our ability to use our cash flow in certain areas of our business, capitalize on certain business opportunities and pursue our business strategies, all of which could be further impacted if we incur additional debt and could impact our ability to make debt service payments. ● Our inability to make debt service payments and an inability to refinance our existing debt on favorable terms or at all. ● Our inability to execute successfully on an acquisition strategy or strategic relationships. ● We may not realize the potential benefits from the acquisition of Arroweye because of difficulties related to integration, the achievement of synergies and other challenges. ● Our inability to divest or consolidate certain non-strategic businesses. ● Our potential failure to comply with the Sarbanes-Oxley Act of 2002, including maintaining effective control over financial reporting and risks relating to investor confidence in our financial reports. ● The impact of the increasing focus on ESG factors on our ability to produce our products in conformity with stakeholder preferences, and comply with stakeholder demands as well as comply with any new ESG-related legal or regulatory requirements or restrictions, and negative perceptions of our products due to the impact of our products and production processes on the environment and other ESG-related risks. ● Damage to our reputation or brand image resulting from negative perceptions of our business or those entities or individuals with whom we do business. ● Our inability to protect our trade secrets, intellectual property and proprietary software; to obtain additional intellectual property rights in the future; and to ensure our products are not infringing the intellectual property rights of others. ● Our inability to renew licenses with key technology licensors, resulting in our loss of access to certain technologies upon which we rely to develop certain of our products. ● Our inability to successfully access capital markets due to the effects of the low trading volume and fluctuating trading price of our common stock as well as terms of our outstanding indebtedness and unfavorable market conditions, which may lead to delays in innovation or the abandonment of our strategic initiatives. 14 Table of Contents ● Our exposure to additional tax collection efforts by states, unclaimed property laws, or future increases in U.S. federal or state income taxes, resulting in additional expenses which we may be unable to pass along to our customers. ● Our inability to realize the full value of our long-lived assets, which represent a significant portion of our total assets. ● Challenges, costs and potential liabilities associated with compliance or failure to comply with existing or future data privacy and security laws, regulations and other requirements, including customer contractual requirements. ● Our failure to comply with the standards of the PCI Security Standards Council and other industry standards, including due to an inability to continue to make investments in our facilities necessary to maintain compliance with such standards. ● The effects of ongoing foreign conflicts on the global economy. ● Adverse conditions in the banking system and financial markets, including bank and financial institution failures. ● Our failure to comply with environmental, health and safety laws and regulations, including climate change regulations, that apply to our products and the raw materials we use in our production processes.
Many of the risks associated with open source software cannot be eliminated and could have a material adverse effect on our business, financial condition and results of operations. In addition, the rise of artificial intelligence and machine learning technologies may expose us to increasing risk with regard to both protecting of our intellectual property and defending against misappropriation claims.
Many of the risks associated with open-source software cannot be eliminated and could have a material adverse effect on our business, financial condition and results of operations. In addition, the rise of artificial intelligence and machine learning technologies may expose us to increasing risk with regard to both protecting our intellectual property and defending against misappropriation claims.
Our substantial indebtedness and interest expense could have important consequences to us, including: ● limiting our ability to use significant cash flow from operations in other areas of our business, including for working capital, research and development, expanding our infrastructure, capital expenditures and other general business activities and investment opportunities in our company, because we must dedicate a substantial portion of these funds to pay interest, make principal payments and/or otherwise service our debt; ● impacting our cash flows, results of operations and financial condition when interest rates rise, because the interest rate on our revolving credit facility is a floating rate that varies depending on market interest rates and issuance or refinancing of other debt in the future may be incurred at higher interest rates than current debt; ● limiting our ability to retain or attract customers and our ability to attract or retain qualified employees due to our significant amount of debt and the related implications of such debt for the Company’s long-term financial condition; ● limiting our ability to obtain additional financing in the future for working capital, capital expenditures, debt service requirements, acquisitions and the execution of our strategy, and other expenses or investments planned by us; ● limiting our flexibility and our ability to capitalize on business opportunities and to react to competitive pressures and adverse changes in government regulation, our business and our industry; ● limiting our ability to timely make our debt service payments or to satisfy our other obligations under our indebtedness (which could result in an event of default and acceleration if we fail to comply with the requirements of our indebtedness); ● limiting our ability, or increasing the costs, to refinance indebtedness prior to maturity dates; ● increasing our vulnerability to a downturn in our business and to adverse economic and industry conditions generally; and ● placing us at a competitive disadvantage as compared to our competitors that are less leveraged.
Our substantial indebtedness and interest expense could have important consequences to us, including: ​ 23 Table of Contents ● limiting our ability to use significant cash flow from operations in other areas of our business, including for working capital, research and development, expanding our infrastructure, capital expenditures and other general business activities and investment opportunities in our company, because we must dedicate a substantial portion of these funds to pay interest, make principal payments and/or otherwise service our debt; ● impacting our cash flows, results of operations and financial condition when interest rates rise, because the interest rate on our revolving credit facility is a floating rate that varies depending on market interest rates and issuance or refinancing of other debt in the future may be incurred at higher interest rates than current debt; ● limiting our ability to retain or attract customers and our ability to attract or retain qualified employees due to our significant amount of debt and the related implications of such debt for the Company’s long-term financial condition; ● limiting our ability to obtain additional financing in the future for working capital, capital expenditures, debt service requirements, acquisitions and the execution of our strategy, and other expenses or investments planned by us; ● limiting our flexibility and our ability to capitalize on business opportunities and to react to competitive pressures and adverse changes in government regulation, our business and our industry; ● limiting our ability to timely make our debt service payments or to satisfy our other obligations under our indebtedness (which could result in an event of default and acceleration if we fail to comply with the requirements of our indebtedness); ● limiting our ability, or increasing the costs, to refinance indebtedness prior to maturity dates; ● increasing our vulnerability to a downturn in our business and to adverse economic and industry conditions generally; and ● placing us at a competitive disadvantage as compared to our competitors that are less leveraged.
We may not be successful in developing, gaining market acceptance of, marketing or selling new or enhanced products and services that meet these changing demands in a timely manner or at all. Our failure to do so would likely have a material adverse effect on our ability to retain existing customers or attract new ones.
We may not be successful in developing, gaining market acceptance of, marketing or selling new or enhanced products and related services that meet these changing demands in a timely manner or at all. Our failure to do so would likely have a material adverse effect on our ability to retain existing customers or attract new ones.
New or enhanced product and service offerings may also expose us to additional risks, such as new sources of supplies, increased regulation or reputational harm. If we have difficulty producing innovative products, there could be a material adverse effect on our revenue, results of operations, reputation and business.
New or enhanced product and related service offerings may also expose us to additional risks, such as new sources of supplies, increased regulation or reputational harm. If we have difficulty producing innovative products, there could be a material adverse effect on our revenue, results of operations, reputation and business.
Many of our customers issue their cards on the networks of the Payment Card Brands that are subject to the standards of the PCI Security Standards Council or other standards and criteria relating to service providers’ and producers’ facilities, products and physical and logical security which we must satisfy to be eligible to supply products and services to such customers.
Many of our customers issue their cards on the networks of the Payment Card Brands that are subject to the standards of the PCI Security Standards Council or other standards and criteria relating to service providers’ and producers’ facilities, products and physical and logical security which we must satisfy to be eligible to supply products and related services to such customers.
In recent years these types of incidents have become more prevalent and pervasive across industries, including in our industry. In addition, our encryption systems are at risk of being breached or decoded. We use encryption technology to protect sensitive data while in transit and at rest.
In recent years these types of incidents have become more prevalent and pervasive across industries, including in our industry. In addition, our encryption systems are at risk of being breached or decoded. We use encryption technology designed to protect sensitive data while in transit and at rest.
Artificial intelligence and machine learning technologies have rapidly developed and if we cannot successfully integrate these technologies into our internal business processes and product and service offerings in a timely, cost-effective, compliant and responsible manner, we may be at a competitive disadvantage.
Artificial intelligence and machine learning technologies have rapidly developed and if we cannot successfully integrate these technologies into our internal business processes and product and related service offerings in a timely, cost-effective, compliant and responsible manner, we may be at a competitive disadvantage.
If we are unable to identify adequate opportunities to cross-sell our products and services or successfully leverage our offerings to new customer verticals or markets, this may have a material adverse effect on our business, financial condition and results of operations.
If we are unable to identify adequate opportunities to cross-sell our products and related services or successfully leverage our offerings to new customer verticals or markets, this may have a material adverse effect on our business, financial condition and results of operations.
Our ability to develop and deliver new products and services successfully will depend on various factors, including our ability to: ● effectively identify and capitalize upon opportunities in new and emerging product markets; ● invest resources in innovation and research and development; ● complete and introduce new products and integrated services solutions in a timely manner; ● license any required third-party technology or intellectual property rights; ● qualify for and obtain required industry compliance for our products; ● effectively manage the supply chain and related risks; ● comply with applicable data protection regulations; ● execute on our strategy to diversify our products by adding adjacent product and service offerings, including digital solutions; and ● retain and hire personnel experienced in developing new products and services. ​ The research and development of new or enhanced products and services is a complex, time-consuming, costly and uncertain process requiring the accurate anticipation of technological, market and industry trends, as well as precise technical execution, and all such challenges could adversely affect our ability to meet customer demand for new or enhanced products.
Our ability to develop and deliver new products and related services successfully will depend on various factors, including our ability to: ● effectively identify and capitalize upon opportunities in new and emerging product markets; ● invest resources in innovation and research and development; ● complete and introduce new products and integrated services solutions in a timely manner; ● license any required third-party technology or intellectual property rights; ● qualify for and obtain required industry compliance for our products; ● effectively manage the supply chain and related risks; ● comply with applicable data protection regulations; 17 Table of Contents ● execute on our strategy to diversify our products by adding adjacent product and service offerings, including digital solutions; and ● retain and hire personnel experienced in developing new products and related services. ​ The research and development of new or enhanced products and related services is a complex, time-consuming, costly and uncertain process requiring the accurate anticipation of technological, market and industry trends, as well as precise technical execution, and all such challenges could adversely affect our ability to meet customer demand for new or enhanced products.
Also, smart cards are equipped with keys that encrypt and decode messages to secure transactions and maintain the confidentiality of data. The security afforded by this technology depends on the integrity of the encryption keys and the complexity of the algorithms used to encrypt and decode information.
Also, smart cards are equipped with keys that encrypt and decode messages intended to secure transactions and maintain the confidentiality of data. The security afforded by this technology depends on the integrity of the encryption keys and the complexity of the algorithms used to encrypt and decode information.
In addition to the costs and distraction that result from intellectual property litigation and infringement claims, an adverse outcome in these types of disputes could prevent us from offering some of our products and services or from enforcing our intellectual property rights.
In addition to the costs and distraction that result from intellectual property litigation and infringement claims, an adverse outcome in these types of disputes could prevent us from offering some of our products and related services or from enforcing our intellectual property rights.
Regularly considering strategic acquisitions or relationships can also divert management’s attention from other business concerns and lead to significant negotiation, due diligence and other expenses, regardless of whether we pursue or consummate any transaction or arrangement.
Regularly considering strategic acquisitions, investments, or relationships can also divert management’s attention from other business concerns and lead to significant negotiation, due diligence and other expenses, regardless of whether we pursue or consummate any transaction or arrangement.
Further, the markets for our products and services are subject to technological changes, frequent introductions of new products and services, evolving industry standards and changing customer preferences and demands, and our product and service offerings could be rendered obsolete.
Further, the markets for our products and related services are subject to technological changes, frequent introductions of new products and related services, evolving industry standards and changing customer preferences and demands, and our product and service offerings could be rendered obsolete.
Further investments may be costly, and if we are unable to continue to meet these standards and criteria, we may become ineligible to provide products and services that have been an important part of our revenue and profitability.
Further investments may be costly, and if we are unable to continue to meet these standards and criteria, we may become ineligible to provide products and related services that have been an important part of our revenue and profitability.
Even if an acquisition or business partnership is successfully integrated, it could result in unforeseen liabilities, cause us to lose key employees or other business relationships or may not otherwise perform as planned.
Even if an acquisition, investment, or business partnership is successfully integrated, it could result in unforeseen liabilities, cause us to lose key employees or other business relationships or may not otherwise perform as planned.
As a result, part of our business strategy is to develop new products and services, including digital solutions, that may be used in conjunction with or in addition to our existing offerings.
As a result, part of our business strategy is to develop new products and related services, including digital solutions, that may be used in conjunction with or in addition to our existing offerings.
Although our directors and officers have a duty of loyalty to the Company under Delaware law and our certificate of incorporation, transactions that we enter into in which a director or officer has a conflict of interest are generally permissible so long as (1) the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our board of directors and a majority of our disinterested directors approves the transaction, (2) the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our stockholders and a majority of our disinterested stockholders approve the transaction or (3) the transaction is otherwise fair to us.
Although our directors and officers have a duty of loyalty to the Company under Delaware law and our Amended and Restated Certificate of Incorporation, transactions that we enter into in which a director or officer has a conflict of interest are generally permissible so long as (1) the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our Board of Directors and a majority of our disinterested directors approves the transaction, (2) the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our stockholders and a majority of our disinterested stockholders approve the transaction or (3) the transaction is otherwise fair to us.
Additionally, opportunities to combine or package products and service offerings and the ability to cross-sell products and services or expand into new customer verticals or markets are critical to remaining competitive in our industry.
Additionally, opportunities to combine or package products and related service offerings and the ability to cross-sell products and related services or expand into new customer verticals or markets are critical to remaining competitive in our industry.
In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. 32 Table of Contents General Risk Factors We are required to comply with complex laws and regulations in the United States and other countries and are exposed to business risks associated with our international business.
In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors, which is responsible for appointing the members of our management. ​ 35 Table of Contents General Risk Factors We are required to comply with complex laws and regulations in the United States and other countries and are exposed to business risks associated with our international business.
If such supplier is unable or delayed in fulfilling our microchip orders, we could fail to timely fulfill customer orders, which could damage our reputation and result in a loss of customers and customer opportunities and material harm to our financial results. 18 Table of Contents Additionally, our Second Wave cards featuring a core made with ROBP, rely on a largely international supply chain to provide such plastic in accordance with our parameters.
If such supplier is unable or delayed in fulfilling our microchip orders, we could fail to timely fulfill customer orders, which could damage our reputation and result in a loss of customers and customer opportunities and material harm to our financial results. ​ 19 Table of Contents Additionally, our Second Wave cards featuring a core made with ROBP, rely on a largely international supply chain to provide such plastic in accordance with our parameters.
Risks Relating to Ownership of our Common Stock ● Continued concentrated ownership of our shares by our significant stockholders and their ability to control decisions regarding our business direction and policies as well as the potential conflicts of interest that may arise between our significant stockholders and our other stockholders. ● The impact of concentrated ownership of our common stock and the sale or perceived sale of a substantial amount of common stock on the trading volume and market price of our common stock. ● Potential conflicts of interest for certain individuals serving on our board of directors due to their relationships with our significant stockholders. ● The influence of securities analysts over the trading market for and price of our common stock, particularly due to the lack of substantial research coverage of our common stock. ● The impact of stockholder activism or securities litigation on the trading price and volatility of our common stock. 14 Table of Contents ● Certain provisions of our organizational documents and other contractual provisions that may delay or prevent a change in control and make it difficult for stockholders other than our significant stockholders to change the composition of our board of directors.
Risks Relating to Ownership of our Common Stock ● Continued concentrated ownership of our shares by our significant stockholders and their ability to control decisions regarding our business direction and policies as well as the potential conflicts of interest that may arise between our significant stockholders and our other stockholders. ● The impact of concentrated ownership of our common stock and the sale or perceived sale of a substantial amount of common stock on the trading volume and market price of our common stock. ● Potential conflicts of interest for certain individuals serving on our Board of Directors due to their relationships with our significant stockholders. ● The influence of securities analysts over the trading market for and price of our common stock, particularly due to the lack of substantial research coverage of our common stock. ● The impact of stockholder activism or securities litigation on the trading price and volatility of our common stock. ● Certain provisions of our organizational documents and other contractual provisions that may delay or prevent a change in control and make it difficult for stockholders other than our significant stockholders to change the composition of our Board of Directors.
New products and services we develop may also require that we obtain and retain more personally identifiable information for a longer period of time than we have done historically.
New products and related services we develop may also require that we obtain and retain more personally identifiable information for a longer period of time than we have done historically.
Any of these factors could have a material adverse effect on our business, financial condition and results of operations. 17 Table of Contents System security risks, data protection breaches, and cyber-attacks could compromise our proprietary information, impair customer and vendor relationships, disrupt our internal operations, harm perception of our products and expose us to litigation and/or regulatory penalties, which could have a material adverse effect on our business and our reputation.
Any of these factors could have a material adverse effect on our business, financial condition and results of operations. ​ 18 Table of Contents System security risks, data protection breaches, and cyber-attacks could compromise our proprietary information, impair customer and vendor relationships, disrupt our internal operations, harm perception of our products and expose us to litigation and/or regulatory penalties, which could have a material adverse effect on our business and our reputation.
Additionally, as we continue to innovate our products and services offerings, including potentially leveraging the use of artificial intelligence and machine learning capabilities, and expand into new lines of business, and as the number of jurisdictions enacting privacy and related laws increases and the scope of these laws and enforcement efforts expand, we have and may continue to become subject to additional data privacy and security legal requirements and regulations such as HIPAA.
Additionally, as we continue to innovate our products and related services offerings, including potentially leveraging the use of artificial intelligence and machine learning capabilities, and expand into new lines of business, and as the number of jurisdictions enacting privacy and related laws increases and the scope of these laws and enforcement efforts expand, we have and may continue to become subject to additional data privacy and security legal requirements and regulations.
General Risk Factors ● Our inability to comply with numerous evolving and complex laws and regulations relating to financial reporting standards, corporate governance, data privacy, tax, trade regulations, environmental regulations and permit requirements, export controls, competitive practices, labor and health and safety. ● Legal costs, the adequacy of our insurance policies, settlement costs and the risk of an adverse decision related to legal or regulatory proceedings or litigation. ​ Risks Relating to our Business and Industry ​ Risks associated with reduced levels of consumer and business spending, inflation-related challenges and the effects of an economic downturn could adversely affect our business, financial condition and results of operations.
General Risk Factors ● Our inability to comply with numerous evolving and complex laws and regulations relating to financial reporting standards, corporate governance, data privacy, tax, trade regulations, environmental regulations and permit requirements, export controls, competitive practices, labor and health and safety. ● Legal costs, the adequacy of our insurance policies, settlement costs and the risk of an adverse decision related to legal or regulatory proceedings or litigation. 15 Table of Contents Risks Relating to our Business and Industry ​ Risks associated with reduced levels of consumer and business spending, inflation-related challenges and the effects of an economic downturn could adversely affect our business, financial condition and results of operations.
Specifically, certain customers are beginning to request that the Company provide information on its plans relating to certain environmental related matters such as greenhouse gas emissions, waste sent to landfills and energy usage. The enhanced stakeholder focus on ESG issues requires the continuous monitoring of various and evolving standards, which is time consuming and costly.
Specifically, certain customers are beginning to request that the Company provide information on its plans relating to certain environmental matters such as greenhouse gas (“GHG”) emissions, waste sent to landfills and energy usage. The enhanced stakeholder focus on ESG issues requires the continuous monitoring of various and evolving standards, which is time consuming and costly.
In addition, we could become subject to investigations by any stock exchange on which our securities are listed, the SEC or other regulatory authorities, or litigation or disputes with stockholders, which could require additional financial and 23 Table of Contents management resources and result in more costly directors’ and officers’ insurance, which could have an adverse impact on our business. ​ Expectations of stakeholders relating to environmental, social and governance matters may impose additional costs and expose us to new risks as well as have an adverse effect on our business, financial condition, results of operations, and cash flows.
In addition, we could become subject to investigations by any stock exchange on which our securities are listed, the SEC or other regulatory authorities, or litigation or disputes with stockholders, which could require additional financial and management resources and result in more costly directors’ and officers’ insurance, which could have an adverse impact on our business. ​ Expectations of stakeholders relating to environmental, social and governance matters may impose additional costs and expose us to new risks as well as have an adverse effect on our business, financial condition, results of operations, and cash flows.
However, such increases or maintaining such increases may result in customer pushback or attrition and be difficult or impossible in future periods, all of which may have an adverse effect on our financial condition and results of operations. Our operating results are unpredictable and may vary significantly from quarter to quarter and annually, and may differ significantly from our expectations.
Such increases may result in customer pushback or attrition and be difficult or impossible in future periods, all of which may have an adverse effect on our financial condition and results of operations. Our operating results are unpredictable and may vary significantly from quarter to quarter and annually and may differ significantly from our expectations.
Additionally, we have in the past been subject to securities litigation following volatility in the price of our common stock, and may again be subject to securities litigation, including as a result of the volatility in the price of our common stock, related to stockholder activism, or otherwise.
Additionally, we have in the past been subject to actual and threatened securities litigation following volatility in the price of our common stock, and may again be subject to securities litigation, including as a result of the volatility in the price of our common stock, related to stockholder activism, or otherwise.
The continuation or escalation of geopolitical tensions or military action related to the conflict and the imposition of additional economic sanctions could continue to adversely affect the global economy and financial markets, disrupt trade and accelerate 28 Table of Contents inflationary pressures, among other things, which could negatively affect the demand for our products and further intensify problems in the global supply chain.
The continuation or escalation of geopolitical tensions or military action related to the conflict and the imposition of additional economic sanctions could continue to adversely affect the global economy and financial markets, disrupt trade and accelerate inflationary pressures, among other things, which could negatively affect the demand for our products and further intensify problems in the global supply chain.
We do not control these analysts. Historically, we have not attracted substantial research coverage, and the current or future analysts who publish information about our common stock may have relatively little experience with us, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates.
Historically, we have not attracted substantial research coverage, and the current or future analysts who publish information about our common stock may have relatively little experience with us, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates.
However, our certificate of incorporation contains provisions that have the same effect as Section 203, except that they provide that the Tricor Funds, their affiliates (including any investment funds managed by Tricor) and any person that becomes an interested stockholder as a result of a transfer of 5% or more of our voting stock by the forgoing persons to such person are excluded from the “interested stockholder” definition in our certificate of incorporation and are therefore not subject to the restrictions set forth therein that have the same effect as Section 203.
However, our Amended and Restated Certificate of Incorporation contains provisions that have the same effect as Section 203, except that they provide that Parallel49, their affiliates (including any investment funds managed by Parallel49) and any person that becomes an interested stockholder as a result of a transfer of 5% or more of our voting stock by the forgoing persons to such person are excluded from the “interested stockholder” definition in our Amended and Restated Certificate of Incorporation and are therefore not subject to the restrictions set forth therein that have the same effect as Section 203.
Furthermore, in periods of industry overcapacity or when our customers encounter difficulties, orders are more exposed to cancellations, reductions, price reductions or postponements, or changes in customer inventory management practices which in turn reduce our ability to forecast the next quarter or full-year production levels, net sales, profits and cash flows.
Furthermore, in periods of industry overcapacity or when our customers encounter difficulties, orders are more exposed to cancellations, reductions, price reductions or postponements, or changes in customer inventory management practices which in turn reduce our ability to forecast the next quarter or full-year production levels, revenue, profits and cash flows.
Personnel shortages have resulted, and may in the future result, in extended 21 Table of Contents production lead times and difficulty in meeting customers’ delivery expectations, which could result in the loss of customers and damage to our reputation and have a material adverse effect on our business, financial condition and results of operations.
Personnel shortages have resulted, and may in the future result, in extended production lead times and difficulty in meeting customers’ delivery expectations, which could result in the loss of customers and damage to our reputation and have a material adverse effect on our business, financial condition and results of operations.
Such technologies are imperfect and the use of artificial intelligence or machine learning technologies by us, our customers or 25 Table of Contents parties with whom we conduct business, and by unrelated third parties could inadvertently cause us to infringe upon other parties’ intellectual property ownership or rights, or could alternatively infringe upon our intellectual property rights.
Such technologies are imperfect and the use of artificial intelligence or machine learning technologies by us, our customers or parties with whom we conduct business, and by unrelated third parties could inadvertently cause us to infringe upon other parties’ intellectual property ownership or rights or could alternatively infringe upon our intellectual property rights.
Furthermore, our costs of complying with current and future environmental and health and safety laws, or our liabilities arising from past or future 29 Table of Contents releases of, or exposure to, regulated materials, may have a material adverse effect on our business, financial condition and results of operations.
Furthermore, our costs of complying with current and future environmental and health and safety laws, or our liabilities arising from past or future releases of, or exposure to, regulated materials, may have a material adverse effect on our business, financial condition and results of operations.
Most of our contractual arrangements with our customers may be terminated, or customers may cease doing business with us, if we fail to comply with these standards and criteria. 27 Table of Contents We make significant investments in our high-security facilities to meet these standards and criteria and changes in them.
Most of our contractual arrangements with our customers may be terminated, or customers may cease doing business with us, if we fail to comply with these standards and criteria. We make significant investments in our high-security facilities to meet these standards and criteria and changes in them.
We have sought and intend to continue to seek acquisition opportunities and business relationships to potentially expand into new markets and to enhance our position in existing markets.
We have sought and intend to continue to seek acquisition opportunities, strategic investments, and business relationships to potentially expand into new markets and to enhance our position in existing markets.
We may be unable to produce or procure our products in conformity with these preferences and concerns, or doing so may require significant research and development costs, increased costs to procure alternative raw materials and components, and additional capital expenditures. ​ Furthermore, customer, investor and consumer ESG expectations have been varied, rapidly evolving and increasing.
We may be unable to produce or procure our products in conformity with these preferences and concerns, or doing so may require significant research and development costs, increased costs to procure alternative raw materials and components, and additional capital expenditures. ​ ​ 26 Table of Contents Furthermore, customer, investor and consumer ESG expectations have been varied, rapidly evolving and increasing.
These costs and other consequences from the unauthorized use of our intellectual property could have a material adverse effect on our business, financial condition and results of operations. Companies in our industry aggressively protect their intellectual property rights.
These costs and other consequences from the unauthorized use of our intellectual property could have a material adverse effect on our business, financial condition and results of operations. ​ 27 Table of Contents Companies in our industry aggressively protect their intellectual property rights.
If we refinance on terms less favorable to us than the current terms, our interest expense may increase significantly, which could impact our results of operations and impair our ability to use our funds for other purposes. ​ We may not be able to successfully execute our acquisition strategy or integrate acquisitions successfully, or successfully enter into, maintain and leverage business relationships, which could adversely affect our financial condition and results of operations.
If we refinance on terms less favorable to us than the current terms, our interest expense may increase significantly, which could impact our results of operations and impair our ability to use our funds for other purposes. ​ ​ 24 Table of Contents We may not be able to successfully execute our acquisition strategy or integrate acquisitions or strategic investments successfully, or successfully enter into, maintain and leverage business relationships, which could adversely affect our financial condition and results of operations.
Certain provisions of our amended and restated certificate of incorporation and bylaws may have the effect of delaying or preventing changes in control if our board of directors determines that such changes in control are not in the best interests of us and our stockholders.
Certain provisions of our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws may have the effect of delaying or preventing changes in control if our Board of Directors determines that such changes in control are not in the best interests of us and our stockholders.
If some or all of the remaining shares are sold by the Tricor Funds or the participants in their funds, either through sale on the open market, through privately negotiated transactions or through a distribution to the participants in their funds, or if it is perceived that they will be sold, the market price of our common stock could decline. ​ 30 Table of Contents Conflicts of interest may arise because directors who are principals of or who were nominated by our significant stockholders serve on our board of directors.
If some or all of the remaining shares are sold by Parallel49 or the participants in their funds or the Tricor Family Office, either through sale on the open market, through privately negotiated transactions or through a distribution to the participants in their funds, or if it is perceived that they will be sold, the market price of our common stock could decline. ​ Conflicts of interest may arise because directors who are principals of or who were nominated by our significant stockholders serve on our Board of Directors.
Such audits may cause us to incur significant costs related to outside professional fees and divert management’s time away from business operations. 26 Table of Contents Additionally, we may be subject to assessments, penalties or fines that could adversely affect our financial results.
Such audits may cause us to incur significant costs related to outside professional fees and divert management’s time away from business operations. Additionally, we may be subject to assessments, penalties or fines that could adversely affect our financial results.
Changes in the financial or business condition of our suppliers, political instability, social or civil unrest, war or adverse market conditions in a supplier’s country, including any new global health emergency, demand from other customers of such suppliers or failure to comply with our codes of conduct or other contractual requirements, could render our suppliers unable to provide us with, or render us unable or unwilling to accept, the components we need and thus subject us to losses or adversely affect our ability to bring products to market.
Changes in the financial or business condition of our suppliers, political instability, social or civil unrest, war or adverse market conditions in a supplier’s country, including any new global health emergency, climate change, extreme weather events, demand from other customers of such suppliers or failure to comply with our codes of conduct or other contractual requirements, could render our suppliers unable to provide us with, or render us unable or unwilling to accept, the components we need and thus subject us to losses or increased costs or adversely affect our ability to bring products to market.
For the year ended December 31, 2024, the vast majority of our products and services were subject to compliance with the standards of one or more of the Payment Card Brands.
For the year ended December 31, 2025, the vast majority of our products and related services were subject to compliance with the standards of one or more of the Payment Card Brands.
The provisions in our amended and restated certificate of incorporation and bylaws include, among other things, the following: ​ ● the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms, including preferences and voting rights, of those shares without stockholder approval; ● stockholder action may only be taken at a special or regular meeting and not by written consent, and special meetings may only be called by a majority of the total number of directors that we would have if there were no vacancies on our board of directors; ● advance notice procedures and information and disclosure requirements for nominating candidates to our board of directors or presenting matters at stockholder meetings; and ● allowing only our board of directors to fill vacancies on our board of directors. ​ We have entered into a director nomination agreement (the “Director Nomination Agreement”) with the Tricor Funds that provides the Tricor Funds the right to designate nominees for election to our board of directors for so long as the Tricor Funds collectively beneficially own 5% or more of the total number of shares of our common stock then outstanding.
The provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws include, among other things, the following: ​ ● the ability of our Board of Directors to issue shares of preferred stock and to determine the price and other terms, including preferences and voting rights, of those shares without stockholder approval; ● stockholder action may only be taken at a special or regular meeting and not by written consent, and special meetings may only be called by a majority of the total number of directors that we would have if there were no vacancies on our Board of Directors; ● advance notice procedures and information and disclosure requirements for nominating candidates to our Board of Directors or presenting matters at stockholder meetings; and ● allowing only our Board of Directors to fill vacancies on our Board of Directors. ​ ​ 34 Table of Contents We have entered into the Parallel49 Director Nomination Agreement that provides Parallel49 the right to designate nominees for election to our Board of Directors for so long as Parallel49 collectively beneficially owns 5% or more of the total number of shares of our common stock then outstanding.
These licensors may not continue to renew their licenses with us on similar terms or at all, which could negatively impact our net sales.
These licensors may not continue to renew their licenses with us on similar terms or at all, which could negatively impact our revenue.
We have elected in our certificate of incorporation not to be subject to Section 203 of the Delaware General Corporation Law, an anti-takeover law.
We have elected in our Amended and Restated Certificate of Incorporation not to be subject to Section 203 of the Delaware General Corporation Law, an anti-takeover law.
In response to inflation, we have increased and may in the future increase, the sales prices of our products and services in order to maintain satisfactory margins.
In response, we have increased in the past and may in the future increase, the sales prices of our products and related services in order to maintain satisfactory margins.
Risks Relating to Ownership of our Common Stock Our former controlling stockholders continue to own a significant percentage of our common stock, and such stockholders may influence major corporate decisions of the Company and our interests may conflict with the interests of other holders of our common stock.
Risks Relating to Ownership of our Common Stock Certain stockholders own a significant percentage of our common stock, and such stockholders may influence major corporate decisions of the Company and our interests may conflict with the interests of other holders of our common stock.
Parallel49 and entities controlled by it may in the future hold equity interests in entities that directly or indirectly compete with us, and companies in which it currently invests may begin directly or indirectly competing with us.
Parallel49, the Tricor Family Office, and entities controlled by each may in the future hold equity interests in entities that directly or indirectly compete with us, and companies in which it currently invests may begin directly or indirectly competing with us.
The number of nominees that the Tricor Funds are entitled to designate under the Director Nomination Agreement bears the same proportion to the total number of members of our board of directors as the number of shares of common stock beneficially owned by the Tricor Funds bears to the total number of shares of common stock outstanding, rounded up to the nearest whole number.
The number of nominees that Parallel49 is entitled to designate under the Parallel49 Director Nomination Agreement bears the same proportion to the total number of members of our Board of Directors as the number of shares of common stock beneficially owned by Parallel49 bears to the total number of shares of common stock outstanding, rounded up to the nearest whole number.
For example, the California Consumer Privacy Act and the California Privacy Rights Act generally require companies like ours, which process consumer personal information on behalf of their customers, to use, retain or disclose consumer personal information solely for certain limited purposes, including to provide services to our customers according to the terms of our customer contracts.
For example, the California Consumer Privacy Act, as amended by the California Privacy Rights Act, imposes obligations on companies like ours, which process consumer personal information on behalf of their customers, including to use, retain or disclose consumer personal information solely for certain limited purposes, including to provide services to our customers according to the terms of our customer contracts.
Such problems have resulted, and may in the future result, in our inability to properly fulfill customer orders and/or our obligation or election to replace products at our cost and expense, provide credit to or reimburse customers for related damages. We may also be subject to claims relating to such issues.
Such problems have resulted, and may in the future result, in our inability to properly fulfill customer orders and/or our obligation or election to replace products at our cost and expense, provide credit to or reimburse customers for related damages.
Any serious disruption at any of our facilities, including as a result of public health emergencies, severe weather conditions, climate change, natural disasters, hostilities, political instability, social unrest, network outages, terrorist activities, or our inability to successfully relocate our Fort Wayne, Indiana operations to a new location as anticipated could impair our ability to use our facilities and have a material adverse impact on our revenues and increase our costs.
Any serious disruption at any of our facilities, including as a result of public health emergencies, severe weather conditions, climate change, natural disasters, hostilities, political instability, social unrest, network outages, or terrorist activities could impair our ability to use our facilities and have a material adverse impact on our revenues and increase our costs.
For the year ended December 31, 2024 approximately 95% of the total value of our purchased microchips and antennas came from three main suppliers, and approximately 78% came from one supplier, including most of our contactless chips.
For the year ended December 31, 2025 approximately 93% of the total value of our purchased microchips and antennas came from three main suppliers, and approximately 74% came from one supplier, including most of our contactless chips.
Our reputation forms the foundation of our relationships with key stakeholders and other constituencies, including employees, consumers, customers and suppliers, and maintaining a positive reputation globally is critical to the successful operation of our business.
Damage to our reputation or brand image can adversely affect our business. Our reputation forms the foundation of our relationships with key stakeholders and other constituencies, including employees, consumers, customers and suppliers, and maintaining a positive reputation globally is critical to the successful operation of our business.
As a result of these relationships, when conflicts between the interests of Parallel49, on the one hand, and of our other stockholders, on the other hand, arise, such directors may not be disinterested.
As a result, when conflicts between the interests of Parallel49 or the Tricor Family Office, on the one hand, and of our other stockholders, on the other hand, arise, such directors may not be disinterested.
There have also been changing consumer concerns and perceptions (whether accurate or inaccurate) regarding the potentially adverse environmental effects of certain substances and components the Company uses in its products, including PVC plastic. Potential consumer concerns may also extend to the sourcing of certain materials and labor and other conditions in those locations.
There have also been changing consumer concerns and perceptions (whether accurate or inaccurate) regarding the potentially adverse environmental effects or sourcing of certain substances and components the Company uses in its products, including PVC plastic.
In addition, any problems faced by our third-party data center operations or hosted infrastructure partners with their or our telecommunications network providers, or with the systems by which our telecommunications providers allocate capacity among their customers, including us, could adversely affect the experience of our customers.
In addition, any problems faced by those third-parties with their or our telecommunications network providers, or with the systems by which our telecommunications providers allocate capacity among their customers, including us, could adversely affect the experience of our customers.
In addition, increased attention on and use of artificial intelligence increases the risk of cyber-attacks and data breaches, which can occur more quickly and evolve more rapidly when artificial intelligence is used.
In addition, increased attention on and use of artificial intelligence in general or by our employees increases the risk of cyber-attacks and data breaches, which can occur more quickly and evolve more rapidly when artificial intelligence is used, or unintentional disclosure of our proprietary information.
Our long-lived assets recorded as of December 31, 2024 include $68.6 million of plant, equipment, leasehold improvements and operating lease right-of-use assets, $10.5 million of net intangible assets, and $47.2 million of goodwill. We perform goodwill impairment testing on an annual basis as of October 1 of each year.
Our long-lived assets recorded as of December 31, 2025 include $108.4 million of plant, equipment, leasehold improvements and operating lease right-of-use assets, $18.5 million of net intangible assets, and $48.8 million of goodwill. We perform goodwill impairment testing on an annual basis as of October 1 of each year.
Our certificate of incorporation also provides that any principal, officer, member, manager and/or employee of Parallel49 or any entity that controls, is controlled by or under common control with Parallel49 (other than any company that is controlled by us) or any investment funds managed by Parallel49 will not be required to offer any transaction opportunity of which such person becomes aware to us and could take any such opportunity for himself, herself or itself or offer such opportunity to other companies in which such person has an investment, unless such opportunity is offered to such person solely in his, her or its capacity as one of our directors.
Our Amended and Restated Certificate of Incorporation also provides that any principal, officer, member, manager and/or employee of Parallel49 or any entity that controls, is controlled by or under common control with Parallel49 (other than any company that is controlled by us) or any investment funds managed by Parallel49 will not be required to offer any transaction opportunity of which such person becomes aware to us and could take any such opportunity for himself, herself or itself or offer such opportunity to other companies in which such person has an investment, unless such opportunity is offered to such person solely in his, her or its capacity as one of our directors. 33 Table of Contents Securities analysts may publish unfavorable research or reports about our business or may not publish at all, which could cause our stock price or trading volume to decline.
If we are unable to enter into new cross-licensing agreements or continue to successfully renew existing cross-licensing agreements, we may lose our access to certain technologies that we rely upon to develop certain of our products and or be forced to cease or delay certain growth initiatives, which could have a material adverse effect on our business.
If we are unable to enter into new cross-licensing agreements or continue to successfully renew existing cross-licensing agreements, we may lose our access to certain technologies that we rely upon to develop certain of our products and or be forced to cease or delay certain growth initiatives, which could have a material adverse effect on our business. ​ 28 Table of Contents Our ability to raise capital in the future may be limited, which could lead to delays in innovation and abandonment of our strategic initiatives.
We may not be able to sell non-strategic businesses on terms that are acceptable to us, or at all. In addition, if the sale of any non-strategic business cannot be consummated or is not practical, alternative courses of action, including relocation of operations or closure, may not be available to us or may be more costly than anticipated.
In addition, if the sale of any non-strategic business cannot be consummated or is not practical, alternative courses of action, including relocation of operations or closure, may not be available to us or may be more costly than anticipated.
A sustained deterioration in general economic conditions, particularly in the United States, or increases in interest rates may adversely affect our financial performance by reducing the demand for our payment card solutions or reducing the purchase of our higher margin products.
A sustained deterioration in general economic conditions, particularly in the United States, or increases in interest rates may adversely affect our financial performance by reducing the demand for our payment card solutions or reducing the purchase of our higher margin products and credit card issuers may reduce credit limits, close accounts and become more selective in issuing credit cards.
We may also risk non-compliance with certain industry standards if we experience failure of certain required operations or processes, such as those related to facility security, which may impede our ability to deliver products to our customers.
If we do not advance our production processes at the market rate, we may experience lower production quality than the market standard. We may also risk non-compliance with certain industry standards if we experience failure of certain required operations or processes, such as those related to facility security, which may impede our ability to deliver products to our customers.
If, as a result of noncompliance with standards of the PCI Security Standards Council or the Payment Card Brands, we are not able to produce cards for or provide services to any or all of the issuers issuing debit or credit cards on such networks, we could lose a substantial number of our customers, which could have a material adverse effect on our business, financial condition and results of operations.
If, as a result of noncompliance with standards of the PCI Security Standards Council or the Payment Card Brands, we are not able to produce cards for or provide services to any or all of the issuers issuing debit or credit cards on such networks, we could lose a substantial number of our customers, which could have a material adverse effect on our business, financial condition and results of operations. 30 Table of Contents Prolonged military action in foreign conflicts has impacted and may continue to have adverse effects on the global economy, and such effects could materially adversely affect our business, operations, operating results and financial condition.
The concentration of ownership by our significant stockholders and the sale or availability for sale of substantial amounts of our common stock may adversely impact the market price and liquidity of our common stock.
The concentration of ownership by our significant stockholders and the sale or availability for sale of substantial amounts of our common stock may adversely impact the market price and liquidity of our common stock. Parallel49 and the Tricor Family Office maintain a significant ownership position in the Company.
We have been serving this customer for nearly 20 years. In addition, nearly two-thirds of our net sales for the year ended December 31, 2024 were from our top 10 direct customers, which include certain Resellers. We have been serving these top 10 direct customers for an average of more than 10 years.
In addition, more than half of our revenue for the year ended December 31, 2025 were from our top 10 direct customers, which include certain Resellers. We have been serving these top 10 direct customers for an average of more than 10 years.
The shares of our common stock held by the Tricor Funds are registered for resale, which means that they may be offered and sold to the public now or in the future without regard to the volume limitations under Rule 144 of the Securities Act, and the Tricor Funds sold a portion of these shares through an underwriter in 2024.
The shares of our common stock held by Parallel49 and the Tricor Family Office may be registered for resale, which means that they may be offered and sold to the public in the future without regard to the volume limitations under Rule 144 of the Securities Act.
Some of our contractual agreements require the payment of 19 Table of Contents penalties if our systems do not meet certain operating standards, and failure to operate in accordance with the standards of one or more of the Payment Card Brands could result in a loss of compliance of our facilities, any of which could have a material adverse effect on our business.
Some of our contractual agreements require the payment of penalties if our systems do not meet certain operating standards, and failure to operate in accordance with the standards of one or more of the Payment Card Brands could result in a loss of compliance of our facilities, any of which could have a material adverse effect on our business. ​ 21 Table of Contents In addition, to successfully operate our business, we must be able to protect our processing and other systems from interruption, including from events that may be beyond our control.
Any adverse determination in litigation could also subject us to significant liabilities. 31 Table of Contents Certain provisions of our organizational documents and other contractual provisions may make it difficult for stockholders to change the composition of our board of directors and may discourage hostile takeover attempts that some of our stockholders may consider to be beneficial.
Certain provisions of our organizational documents and other contractual provisions may make it difficult for stockholders to change the composition of our Board of Directors and may discourage hostile takeover attempts that some of our stockholders may consider to be beneficial.
Such regulations govern, among other things, emissions of pollutants into the air, wastewater discharges, waste disposal, the investigation and remediation of soil and groundwater contamination, and the health and safety of our employees. For example, the handling of certain materials and equipment we use in our production processes is subject to health and safety and environmental laws and regulations.
We are subject to environmental, health and safety laws and regulations in each jurisdiction in which we operate. Such regulations govern, among other things, emissions of pollutants into the air, wastewater discharges, waste disposal, the investigation and remediation of soil and groundwater contamination, and the health and safety of our employees.
Further, the price of our common stock could be subject to significant fluctuation or otherwise be adversely affected.
Further, the price of our common stock could be subject to significant fluctuation or otherwise be adversely affected. Any adverse determination in litigation could also subject us to significant liabilities.
For these reasons, our net sales and operating results and cash flows may differ materially from our expectations. This may have a material adverse effect on our business, financial condition and results of operations.
For these reasons, our revenue and operating results and cash flows may differ materially from our expectations. This may have a material adverse effect on our business, financial condition and results of operations. Failure to retain our existing customers or identify and attract new customers would have a material adverse effect on our business.
In addition, the Tricor Funds are entitled to designate the replacement for any of its board designees whose board service terminates prior to the end of such designee’s term regardless of the Tricor Funds’ beneficial ownership at such time.
In addition, Parallel49 and the Tricor Family Office are entitled to designate or nominate the replacement for any of its board designees whose board service terminates prior to the end of such designee’s term.
As with other companies engaged in similar activities or that own or lease real property, we face inherent risks of environmental liability at our current and historical production facilities.
If we violate or fail to comply with these laws, regulations or permits, we could be fined or otherwise sanctioned by regulators. As with other companies engaged in similar activities or that own or lease real property, we face inherent risks of environmental liability at our current and historical production facilities.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor more information regarding risks related to system security risks, data protection breaches and cyber-attacks, see the risk factor entitled “System security risks, data protection breaches, and cyber-attacks could compromise our proprietary information, impair customer and vendor relationships, disrupt our internal operations, harm perception of our products and expose us to litigation and/or regulatory penalties, which could have a material adverse effect on our business and our reputation” included as part of our risk factor disclosures at Item 1A of this Annual Report on Form 10-K.
Biggest changeFor more information regarding risks related to system security risks, data protection breaches and cyber-attacks, see the risk factor entitled “System security risks, data protection breaches, and cyber-attacks could compromise our proprietary information, impair customer and vendor relationships, disrupt our internal operations, harm perception of our products and expose us to litigation and/or regulatory penalties, which could have a material adverse effect on our business and our reputation” included as part of our risk factor disclosures at Item 1A of this Annual Report on Form 10-K. ​ 36 Table of Contents Risk Management and Strategy Our policies and processes for assessing, identifying and managing material risks from cybersecurity threats are integrated into our overall risk management program and are based on the frameworks established by the National Institute of Standards and Technology (“NIST”) and other applicable industry standards.
Management’s Role Our Chief Information Security Officer (“CISO”), Chief Information Officer (“CIO”), Chief Technology Officer (“CTO”), Chief Legal and Compliance Officer (“CLCO”) and Director of Information and Cybersecurity (“DC”) have primary responsibility for assessing and managing material cybersecurity risks and are members of an internal committee that reviews issues and initiatives related to data security and privacy (the “Security Committee”), which drives alignment on security decisions across the Company.
Management’s Role Our Chief Technology Officer (“CTO”), Chief Legal and Compliance Officer (“CLCO”) and Director of Information and Cybersecurity (“DC”) have primary responsibility for assessing and managing material cybersecurity risks and are members of an internal committee that reviews issues and initiatives related to data security and privacy (the “Security Committee”), which drives alignment on security decisions across the Company.
The CIO, CTO and DC also each have over 20 years of experience serving in various roles in information technology fields; the CIO has over 25 years of global technology leadership across fintech, software, and payments industries, leading technology, product, and engineering organizations for multinational companies, with extensive experience in implementing software solutions and managing risk across the entire technology lifecycle.
The CTO and DC each have over 20 years of experience serving in various roles in information technology fields; the CTO has over 25 years of global technology leadership across fintech, software, and payments industries, leading technology, product, and engineering organizations for multinational companies, with extensive experience in implementing software solutions and managing risk across the entire technology lifecycle.
The results of significant assessments are reported to management, the board of directors and Audit Committee. Cybersecurity processes are adjusted based on the information provided from these assessments. Governance Board Oversight The board of directors, in coordination with the Audit Committee, oversees our management of cybersecurity risk.
The results of significant assessments are reported to management, the Board of Directors and Audit Committee. Cybersecurity processes are adjusted based on the information provided from these assessments, as appropriate. Governance Board Oversight The Board of Directors, in coordination with the Audit Committee, oversees our management of cybersecurity risk.
Technical Safeguards The Company’s cybersecurity program evaluates new threats to learn new attacker techniques, adopt defenses and implement new safeguards to protect our information systems from cybersecurity threats. These safeguards are evaluated and improved based on vulnerability assessments, cybersecurity threat intelligence and incident response experience.
Technical Safeguards The Company’s cybersecurity program evaluates new threats to learn new attacker techniques, adopt defenses and implement new safeguards designed to protect our information systems from cybersecurity threats. These safeguards are evaluated and improved based on, for example, vulnerability assessments, cybersecurity threat intelligence and incident response experience.
External Assessments Our cybersecurity policies, standards, processes and practices are regularly assessed by consultants and external auditors. These assessments include a variety of activities including information security maturity assessments, audits 34 Table of Contents and independent reviews of our information security control environment and operating effectiveness.
External Assessments Our cybersecurity policies, standards, processes and practices are regularly assessed by consultants and external auditors. These assessments include a variety of activities including information security maturity assessments, audits and independent reviews of our information security control environment and operating effectiveness.
The CTO has been with the Company since 2014 and the DC previously served as the Chief Information Security Officer at an IT services and consulting company. The CLCO has over 20 years of experience managing risks and related disclosure requirements, including risks arising from cybersecurity threats, at publicly traded companies.
The DC previously served as the Chief Information Security Officer at an IT services and consulting company. The CLCO has over 20 years of experience managing risks and related disclosure requirements, including risks arising from cybersecurity threats, at publicly traded companies .
Our cybersecurity program in particular focuses on the following key areas: 33 Table of Contents Collaboration We work to identify and address our cybersecurity risks through a comprehensive, cross-functional approach.
Our cybersecurity program in particular focuses on the following key areas: Collaboration We work to identify and address our cybersecurity risks through a comprehensive, cross-functional approach.
Third-Party Risk Management We have implemented controls designed to identify and mitigate cybersecurity threats associated with our use of third-party service providers. Such providers are subject to security risk assessments at the time of onboarding, contract renewal and upon detection of an increase in risk profile.
We regularly review, test and evaluate the plan for effectiveness. Third-Party Risk Management We have implemented controls designed to identify and mitigate cybersecurity threats associated with our use of third-party service providers. Such providers are subject to security risk assessments at the time of onboarding, contract renewal and upon detection of an increase in risk profile.
Education and Awareness Our Company policies require our employees to assist in the protection of our customers’ data. We have various training programs, conducted frequently, designed to heighten employees' awareness of current threats, educate them on effective mitigation strategies and reinforce the importance of handling and safeguarding customer and employee data in accordance with our established security protocols.
We have various training programs, conducted frequently, designed to heighten employees' awareness of current threats, educate them on effective mitigation strategies and reinforce the importance of handling and safeguarding customer and employee data in accordance with our established security protocols.
The Security Committee also considers and makes recommendations to the Audit Committee on security policies and procedures, security service requirements and risk mitigation strategies .
The Security Committee also considers and makes recommendations to the Audit Committee on security policies and procedures, security service requirements and risk mitigation strategies . 38 Table of Contents
Independent assessments of the safeguards by external third-party consultants, which also include the detection of threats, are evaluated and improvements to systems are incorporated. Incident Response and Recovery Planning In an effort to effectively respond to a security event, we follow a comprehensive cybersecurity incident response plan. We regularly review, test and evaluate the plan for effectiveness.
Independent assessments of the safeguards by external third-party consultants, which also include the detection of threats, are evaluated and improvements to systems are assessed and incorporated where appropriate. Incident Response and Recovery Planning In an effort to effectively respond to a security event, we follow a comprehensive cybersecurity incident response plan.
The Security Committee meets at least quarterly to evaluate security performance metrics, prioritize risks identified through threat intelligence, vulnerability and risk assessments, external audits, and incident response insights, and review the progress of approved security enhancements.
The Security Committee is informed about and monitors the prevention, detection, mitigation and remediation of cybersecurity incidents by meeting at least quarterly to evaluate security performance metrics, prioritizing risks identified through threat intelligence, vulnerability and risk assessments, external audits, and incident response insights, and reviewing the progress of approved security enhancements.
We use a variety of inputs in such risk assessments, including information supplied by providers and third parties . In addition, we require our providers to meet appropriate security requirements, controls and responsibilities and investigate security incidents that have impacted our third-party providers, as appropriate.
We use a variety of inputs in such risk assessments, including information supplied by providers and third parties.
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Risk Management and Strategy Our policies and processes for assessing, identifying and managing material risks from cybersecurity threats are integrated into our overall risk management program and are based on the frameworks established by the National Institute of Standards and Technology (“NIST”) and other applicable industry standards.
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In addition, we require our providers to meet appropriate security requirements, controls and responsibilities and investigate security incidents that have impacted our third-party providers, as appropriate. ​ 37 Table of Contents Education and Awareness Our Company policies require our employees to assist in the protection of our customers’ data.
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The CISO has over 20 years of experience in various roles related to information security and related technology, including roles specific to managing security requirements related to organizations operating in the payment card industry.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePropertie s ​ Information regarding each of our facilities, which may include multiple leases at each location, is set forth below. ​ ​ ​ ​ ​ ​ ​ Location Operations Square Footage Owned/ Leased Littleton, Colorado Debit and Credit card production, corporate facility 65,000 Leased Roseville, Minnesota Debit and Credit card production and personalization services; and Prepaid Debit card packaging services, fulfillment 227,000 Leased Fort Wayne, Indiana (1) Debit and Credit card production 45,000 Leased Nashville, Tennessee Debit and Credit card personalization services, instant issuance, fulfillment 65,000 Leased (1) In 2025, we intend to relocate our current Indiana operations to a new build-to-suit leased facility.
Biggest changePropertie s ​ Information regarding each of our facilities, which may include multiple leases at each location, is set forth below. ​ ​ ​ ​ ​ ​ ​ Location ​ ​ ​ Operations ​ ​ ​ Square Footage ​ ​ ​ Owned/ Leased Littleton, Colorado Debit and Credit card production 65,000 Leased Roseville, Minnesota Debit and Credit personalization services; and Prepaid Debit card packaging services, fulfillment 227,000 Leased Fort Wayne, Indiana Debit and Credit card production 80,000 Leased Nashville, Tennessee Debit and Credit card personalization services, instant issuance, fulfillment 65,000 Leased Las Vegas, Nevada ​ Debit and Credit card production and personalization ​ 76,000 ​ Leased Denver, Colorado ​ Corporate facility ​ 4,000 ​ Leased Henderson, Nevada ​ Corporate facility ​ 6,000 ​ Leased ​ ​
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This new facility will be located in Fort Wayne, Indiana and will be approximately 80,000 square feet. ​ ​ ​ 35 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAny future cash dividend or other dividend declarations are subject to the determination of the Company’s board of directors. Repurchases On November 2, 2023, the Company's board of directors approved a share repurchase plan authorizing the Company to repurchase up to $20.0 million of the Company's common stock, par value $0.001 per share.
Biggest changeAny future cash dividend or other dividend declarations are subject to the determination of the Company’s Board of Directors. Repurchases None. ​ ​
Item 5. Market for Registrant’s Common Equit y, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Our common stock trades on the Nasdaq Global Market under the symbol “PMTS”. Holders There were 19 stockholders of record as of February 27, 2025.
Item 5. Market for Registrant’s Common Equit y, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Our common stock trades on the Nasdaq Global Market under the symbol “PMTS”. Holders There were 17 stockholders of record as of February 25, 2026.
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This authorization expired on December 31, 2024 with a remaining unused authorized amount of $11.2 million . ​ In connection with the share repurchase plan, the Company entered into stock repurchase agreements with Parallel49, which was one of the Company’s majority stockholders.
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The Company agreed to purchase from Parallel49, and Parallel49 agreed to sell to the Company, three times the number of shares of the Company’s common stock acquired by the Company in the open market from time to time from non-Parallel49 holders up to a maximum of 650,000 shares in total.
Removed
Pursuant to these agreements, the Company repurchased 364,848 shares from Parallel49 at an average price of $18.09 per share during the year ended December 31, 2024.
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The agreements with Parallel49 expired on June 30, 2024. ​ The following table sets forth share repurchases activity for each of the three months of the quarter ended December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ Total Number of Shares Purchased ​ Average Price Paid per Share ​ Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ​ Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) October 1 - 31 ​ ​ — ​ $ — ​ ​ — ​ $ 11,154 November 1 - 30 ​ ​ — ​ $ — ​ ​ — ​ $ 11,154 December 1 - 31 ​ ​ — ​ $ — ​ ​ — ​ $ — Total ​ ​ — ​ $ — ​ ​ — ​ ​ ​ 36 Table of Contents ​

Item 7. Management's Discussion & Analysis

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

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Biggest changeProducts net sales were relatively consistent, as higher volumes of contactless cards were offset by volume declines in contact-only and other cards. ​ Gross Profit and Gross Profit Margin: ​ Gross profit for Debit and Credit was relatively consistent and gross profit margin decreased for the year ended December 31, 2024 as the increase in net sales was offset by a higher volume of lower margin products sold compared to the prior year period. ​ 40 Table of Contents Income from Operations: ​ Income from operations for Debit and Credit decreased for the year ended December 31, 2024, primarily due to increased employee performance-based incentive compensation related to stronger 2024 company performance compared to 2023 and salary expenses. ​ Prepaid Debit: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 ​ $ Change ​ % Change ​ ​ ​ (dollars in thousands) ​ Net sales ​ $ 106,541 ​ $ 84,237 ​ $ 22,304 ​ 26.5 % Gross profit ​ $ 43,124 ​ $ 28,713 ​ $ 14,411 ​ 50.2 % Income from operations ​ $ 37,201 ​ $ 24,927 ​ $ 12,274 ​ 49.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit margin ​ ​ 40.5% ​ ​ 34.1% ​ ​ ​ ​ ​ ​ ​ Net Sales: ​ Net sales for Prepaid Debit increased for the year ended December 31, 2024, primarily due to increased sales to existing customers of higher-priced packaging solutions and healthcare payment cards. ​ Gross Profit and Gross Profit Margin: Gross profit and gross profit margin for Prepaid Debit increased for the year ended December 31, 2024, primarily due to higher net sales discussed above and the resulting operating leverage. ​ Income from Operations: ​ Income from operations for Prepaid Debit increased for the year ended December 31, 2024, primarily due to the factors discussed in “Gross Profit and Gross Profit Margin” above, partially offset by increased employee performance-based incentive compensation related to stronger 2024 company performance compared to 2023 and salary expenses. ​ Other: ​ As the Other segment is comprised entirely of corporate expenses, income from operations for Other consists of operating expenses shown below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 ​ $ Change ​ % Change ​ ​ ​ (dollars in thousands) ​ Operating expenses ​ $ 67,265 ​ $ 58,243 ​ $ 9,022 ​ 15.5 % ​ Operating Expenses: ​ Other operating expenses increased for the year ended December 31, 2024, primarily due to an increase in compensation-related expenses, including the factors discussed in consolidated “Operating Expenses” above. ​ 41 Table of Contents ​ Liquidity and Capital Resources At December 31, 2024, we had $33.5 million of cash and cash equivalents.
Biggest changeThe prior year period benefited from significant sales of higher-priced packaging solutions to existing customers. ​ Gross Profit and Gross Profit Margin: Gross profit and gross profit margin for Prepaid Debit decreased for the year ended December 31, 2025, primarily due to decreased revenue, including the impact of the change in accounting that was implemented in the second quarter resulting in reduced revenue recognition for work-in-process orders. ​ Income from Operations: ​ Income from operations for Prepaid Debit decreased for the year ended December 31, 2025, primarily due to the factors discussed in “Gross Profit and Gross Profit Margin” above. ​ Other: ​ As the Other segment is comprised entirely of corporate expenses, income from operations for Other consists of selling, general and administrative expenses shown below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ $ Change ​ % Change ​ ​ ​ (dollars in thousands) ​ Selling, general and administrative expenses ​ $ 63,288 ​ $ 67,265 ​ $ (3,977) ​ (5.9) % ​ ​ 45 Table of Contents Selling, general and administrative expenses: ​ Other selling, general and administrative expenses decreased for the year ended December 31, 2025, primarily due to decreased compensation-related expenses, including employee performance-based incentive compensation and prior year costs associated with the prior-CEO retention agreement; partially offset by increased professional service fees related to acquisition and integration costs associated with the acquisition of Arroweye. ​ 2026 Changes in Reportable Segments ​ In connection with our increased strategic focus on expanding and developing additional proprietary integrated technological solutions for our customer base, we will implement a new segment structure to assess performance and allocate resources, beginning in the first quarter of 2026.
Other (Expense) Income, net Other (expense) income, net consists primarily of interest expense and other non-operating items. Income Tax Expense Income tax expense consists of our federal and state income taxes at statutory rates, including the impact of other items such as valuation allowances, tax credits, permanent items, and foreign taxes.
Other Expense, net Other expense, net consists primarily of interest expense and other non-operating items. Income Tax Expense Income tax expense consists of our federal and state income taxes at statutory rates, including the impact of other items such as valuation allowances, tax credits, permanent items, and foreign taxes.
The remaining interest payments are expected to be paid over the remaining term of the 2029 Senior Notes, which mature in 2029, and the principal is due upon maturity.
The remaining interest payments are expected to be paid over the remaining term of the Senior Notes, which mature in 2029, and the principal is due upon maturity.
Factors include, but are not limited to, demand from some of our customers for certain products and services, changes in economic conditions, especially those impacting our customers, and the pricing, terms and availability of goods and services that we purchase, and financings that we enter into.
Factors include, but are not limited to, demand from some of our customers for certain products and related services; changes in economic conditions, especially those impacting our customers; the pricing, terms and availability of goods and services that we purchase; and financings that we enter into.
However, we may borrow additional amounts under the 2029 ABL Revolver, redeem principal on the 2029 Senior Notes early or refinance all or a portion of our borrowings in future periods. Leases We lease equipment and real property for production and services.
However, we may borrow additional amounts under the ABL Revolver, redeem principal on the Senior Notes early, or refinance all or a portion of our borrowings in future periods. Leases We lease equipment and real property for production and services.
Product costs include the cost of raw materials, including microchips for all applicable cards and antennas for contactless cards, labor costs, equipment and facilities costs, operation overhead, depreciation and amortization, leases and transport costs. Product costs also include Card@Once instant issuance hardware and consumable product costs.
Costs include the cost of raw materials, including microchips for all applicable cards and antennas for contactless cards, labor costs, equipment and facilities costs, operation overhead, depreciation and amortization, leases and transport costs. These costs also include Card@Once instant issuance hardware and consumable product costs.
We have estimated our future interest payments assuming no additional borrowings under the 2029 ABL Revolver, no early redemptions of principal on the 2029 Senior Notes, and no debt issuances or renewals upon the maturity dates of our notes.
We have estimated our future interest payments assuming no additional borrowings under the ABL Revolver, no early redemptions of principal on the Senior Notes, and no debt issuances or renewals upon the maturity dates of our notes.
Our primary source of liquidity has been cash generated from our operating activities, which has been driven from net income and fluctuations in working capital.
Our primary source of liquidity has been cash generated from our operating activities, which has been driven by net income and fluctuations in working capital.
In preparing our financial statements, we make estimates, assumptions and judgments that can have a significant impact on our reported net sales, results of operations and net income, as well as on the value of certain assets and liabilities on our balance sheet during and as of the reporting periods.
In preparing our financial statements, we make estimates, assumptions and judgments that can have a significant impact on our reported revenue, results of operations and net income, as well as on the value of certain assets and liabilities on our balance sheet during and as of the reporting periods.
We are also a market leader in the production of “Prepaid Debit Cards,” which we define as debit cards issued on the networks of the “Payment Card Brands” (Visa, Mastercard ® , American Express ® and Discover ® ) but not linked to a traditional bank account, and related secure packaging solutions.
We are also a market leader in the production of “Prepaid Debit Cards,” defined as debit cards issued on the networks of the “Payment Card Brands” (Visa, Mastercard ® , American Express ® and Discover ® ) but not linked to a traditional bank account, and related secure packaging solutions.
Our ability to make investments in and grow our business, service our debt and improve our debt leverage ratios, while maintaining strong liquidity, depends on our ability to generate excess operating cash flows through our operating subsidiaries.
Our ability to make investments in and grow our business, service our debt, and improve our debt leverage ratios, while maintaining strong liquidity, depends on our ability to generate excess operating cash flows.
Our working capital fluctuates primarily due to the timing of tax payments, timing of receipts from customers, inventory purchases, payments of employee incentive programs and interest payments on our outstanding Senior Notes, with the interest payments being due in the first and third quarters of the year.
Our working capital fluctuates primarily due to timing and size of tax payments, collections from customers, inventory purchases, payments of employee incentive programs, and interest payments on our outstanding Senior Notes, with the interest payments being due in the first and third quarters of the year.
Operating Expenses Operating expenses are primarily comprised of selling, general and administrative expenses (“SG&A”) which generally consist of expenses for executive, finance, sales, marketing, legal and compliance, information technology, procurement, customer service, human resources, research and development and administrative personnel, including payroll, benefits and stock-based compensation expense, bad debt expense and outside legal and other advisory fees, including consulting, accounting, and software related fees.
Selling, General and Administrative Expenses Selling, general and administrative expenses (“SG&A”) primarily consist of expenses for executive, finance, sales, marketing, legal and compliance, information technology, procurement, customer service, human resources, research and development and administrative personnel, including payroll, benefits and stock-based compensation expense, bad debt expense and outside legal and other advisory fees, including consulting, accounting, and software related fees.
We also generate product revenue from the sale of our Card@Once ® instant issuance system and consumables, private label credit cards and retail gift cards. Services net sales include revenue from the personalization and fulfillment of payment cards, tamper-evident secure packaging, fulfillment services, SaaS-based personalization of instant issuance payment cards and other digital offerings.
We also generate revenue from the sale of our Card@Once ® instant issuance system and consumables, private label credit cards and retail gift cards, the personalization and fulfillment of payment cards, tamper-evident secure packaging, fulfillment services, SaaS-based personalization of instant issuance payment cards and other digital offerings.
In particular, prolonged economic downturns typically have resulted in significant reductions in the production demand for general purpose credit cards due to tightening credit conditions. Our net sales are also influenced by changes in customer behavior such as altering inventory management practices, payment card renewal cycles and demand for new products, such as contactless cards.
In particular, prolonged economic downturns typically have resulted in significant reductions in the production demand for general purpose credit cards due to tightening credit conditions. Our revenue is also influenced by changes in customer behavior such as altering inventory management practices, payment card renewal cycles and demand for new products, such as contactless cards.
Services costs include the cost of labor, raw materials in the case of tamper-evident secure packaging, equipment and facilities costs, operation overhead, depreciation and amortization, leases and transport costs. Cost of sales can be impacted by many factors, including volume, operational efficiencies, procurement costs, promotional activity, and employee relations.
Additionally, costs include the cost of labor, raw materials in the case of tamper-evident secure packaging, equipment and facilities costs, operation overhead, depreciation and amortization, leases and transport costs. Cost of goods sold can be impacted by many factors, including volume, operational efficiencies, procurement costs, promotional activity, and employee relations.
The 43 Table of Contents Borrowing Base is further reduced by credit line reserves and letters of credit, as well as the loan ledger balance outstanding on the ABL Revolver.
The Borrowing Base is further reduced by credit line reserves and letters of credit, as well as the loan ledger balance outstanding on the ABL Revolver.
Operating expense also includes depreciation and amortization expense and may include impairment charges on tangible and intangible assets, when necessary. Income from Operations and Operating Margin Income from operations consists of our gross profit less our net operating expenses. Operating margin is income from operations as a percentage of net sales.
Selling, general and administrative expenses also includes depreciation and amortization expense and may include impairment charges on tangible and intangible assets, when necessary. Income from Operations and Operating Margin Income from operations consists of our gross profit less our net selling, general and administrative expenses. Operating margin is income from operations as a percentage of revenue.
Although we can provide no assurances, we believe that our cash flows from operations, combined with our current cash levels, and our senior secured revolving credit facility (the “2029 ABL Revolver”) with available borrowing capacity of $72.8 million as of December 31, 2024, will be adequate to fund debt service requirements and provide cash, as required, to support our ongoing operations, capital expenditures, lease obligations, and working capital needs.
Although we can provide no assurances, we believe that our cash flows from operations, combined with our current cash levels and our senior secured revolving credit facility (the “ABL Revolver”) with available borrowing capacity of $74.7 million as of December 31, 2025, will be adequate to fund debt service requirements and provide cash, as required, to support our ongoing operations, capital expenditures, lease obligations and working capital needs.
Net proceeds from the 2029 Senior Notes, together with cash on hand, were used to redeem the entire principal balance of $267.9 million on the 2026 Senior Notes as of the Closing Date, and to pay related fees, an early redemption premium of 2.156%, and other expenses.
Net proceeds from the Senior Notes, together with cash on hand, were used to redeem the entire principal balance of $267.9 million of the 8.625% Senior Secured Notes due 2026 (the “2026 Senior Notes”) as of the Closing Date, and to pay related fees, an early redemption premium of 2.156%, and other expenses.
In the event we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.
Changes in the relevant facts can significantly impact the judgment or need for valuation allowances. In the event we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.
Debt Service Requirements As of December 31, 2024, the total projected principal and interest payments on our borrowings are $429.7 million, primarily related to the 2029 Senior Notes, of which $29.2 million of interest is expected to be paid in the next 12 months.
Debt Service Requirements As of December 31, 2025, the total projected principal and interest payments on our borrowings are $392.7 million, primarily related to the Senior Notes, of which $28.5 million of interest is expected to be paid in the next 12 months.
Borrowings under the 2029 ABL Revolver bear interest at a rate per annum that ranges based on the applicable term secured overnight financing rate (“SOFR”) as administered by the Federal Reserve Bank of New York plus 1.50% to 1.75% (subject, in each case, to a credit spread adjustment of 0.10%), based on the average daily borrowing capacity under the 2029 ABL Revolver over the most recently completed month.
The ABL Revolver matures on the earliest to occur of July 11, 2029 and the date that is 91 days prior to the maturity of the Senior Notes. ​ Borrowings under the ABL Revolver bear interest at a rate per annum that ranges based on the applicable term secured overnight financing rate as administered by the Federal Reserve Bank of New York plus 1.50% to 1.75% (subject, in each case, to a credit spread adjustment of 0.10%), based on the average daily borrowing capacity under the ABL Revolver over the most recently completed month.
The unused portion of the 2029 ABL Revolver commitment accrues a commitment fee, which ranges from 0.375% to 0.50% per annum, based on the average daily excess availability under the 2029 ABL Revolver over the immediately preceding month. As of December 31, 2024, there were no outstanding borrowings on the 2029 ABL Revolver.
The unused portion of the ABL Revolver commitment accrues a commitment fee, which ranges from 0.375% to 0.50% per annum, based on the average daily excess availability under the ABL Revolver over the immediately preceding month. ​ As of December 31, 2025, we had $25.0 million of outstanding borrowings on the ABL Revolver.
We include the costs of shipping and handling related to customer sales in cost of sales. Gross Profit and Gross Margin Gross profit consists of our net sales less our cost of sales. Gross margin is gross profit as a percentage of net sales.
We include the costs of shipping and handling related to customer sales in cost of goods sold. 41 Table of Contents Gross Profit and Gross Margin Gross profit consists of our revenue less our cost of goods sold. Gross margin is gross profit as a percentage of revenue.
We include gross shipping and handling revenue in net sales. Cost of Sales Cost of sales includes the direct and indirect costs of the products we sell and the services that we provide.
We include revenue from gross shipping and handling in revenue. Cost of Goods Sold Cost of goods sold includes the direct and indirect costs of the products we sell and the related services that we provide.
(1) For the years ended December 31, 2024 and 2023, net sales and cost of sales each include $1.2 million and $0.7 million of intersegment eliminations, respectively. ​ The following discussion of our consolidated results of operations and segment results refers to the year ended December 31, 2024 compared to the corresponding prior year period.
(1) For the years ended December 31, 2025 and 2024, revenue and cost of goods sold each include $1.6 million and $1.2 million of intersegment eliminations, respectively. ​ The following discussion of our consolidated results of operations and segment results refers to the year ended December 31, 2025 compared to the corresponding prior year period.
Factors that we believe are important in assessing our credit ratings include earnings, cash flow generation, leverage, available liquidity and the overall health of the business. ​ The 2029 Senior Notes and the 2029 ABL Revolver contain covenants limiting the ability of the Company, the Borrower and the Company’s restricted subsidiaries to, among other things, incur or guarantee additional debt or issue disqualified stock or certain preferred stock; create or incur liens; pay dividends, redeem stock or make other distributions; make certain investments; create restrictions on the ability of the Borrower and its restricted subsidiaries to pay dividends to the Company or make other intercompany transfers; transfer or sell assets; merge or consolidate; and enter into certain transactions with affiliates, subject to a number of important exceptions and qualifications as set forth in the indenture governing the 2029 Senior Notes and the ABL Credit Agreement.
Factors that we believe are important in assessing our credit ratings include earnings, cash flow generation, leverage, available liquidity and the overall health of the business. ​ The Senior Notes and the ABL Revolver contain covenants limiting the ability of the Company, the Borrower and the Company’s restricted subsidiaries to, among other things, incur or guarantee additional debt or issue disqualified stock or certain preferred stock; create or incur liens; pay dividends, redeem stock or make other distributions; make certain investments; create restrictions on the ability of the Borrower and its restricted subsidiaries to pay dividends to the Company or make other intercompany transfers; transfer or sell assets; merge or consolidate; and enter into certain transactions with affiliates, subject to a number of important exceptions and qualifications as set forth in the indenture governing the Senior Notes and the ABL Credit Agreement. ​ 48 Table of Contents The ABL Revolver includes limitations on the Borrower’s ability to borrow in certain situations, including limitations based on the calculation of borrowing capacity and further limitations that are triggered if the amount available to borrow under the ABL Revolver is less than the greater of $7.5 million and 10% of the Maximum Revolver Amount.
The 2029 ABL Revolver also includes an uncommitted accordion feature whereby the Borrower may increase the 2029 ABL Revolver commitment by an aggregate amount not to exceed $25.0 million, subject to certain conditions.
The Amendment did not modify the maturity date of the ABL Revolver nor the interest rate. ​ ABL Revolver also includes an uncommitted accordion feature whereby the Borrower may increase the ABL Revolver commitment by an aggregate amount not to exceed $25.0 million, subject to certain conditions.
Financing As of December 31, 2024 and 2023, we had the following outstanding borrowings: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 ​ ​ (dollars in thousands) 2029 Senior Notes ​ $ 285,000 ​ $ — 2026 Senior Notes ​ ​ — ​ ​ 267,897 Unamortized deferred financing costs ​ ​ (4,595) ​ ​ (2,900) Total long-term debt ​ $ 280,405 ​ $ 264,997 ​ 2029 Senior Notes ​ On July 11, 2024 (the “Closing Date”), we completed a private offering by our wholly-owned subsidiary, CPI CG Inc.
Cash Flows from Financing Activities As of December 31, 2025 and 2024, we had the following outstanding borrowings: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ (dollars in thousands) Senior Notes ​ $ 265,000 ​ $ 285,000 ABL Revolver ​ ​ 25,000 ​ ​ — Unamortized deferred financing costs ​ ​ (3,332) ​ ​ (4,595) Total long-term debt ​ $ 286,668 ​ $ 280,405 ​ Senior Notes On July 11, 2024 (the “Closing Date”), we completed a private offering by our wholly-owned subsidiary, CPI CG Inc.
Product net sales include the design and production of payment cards, including contact and contactless cards, which includes our eco-focused cards. Contactless cards have additional technology to process contactless transactions and generally have a higher selling price 37 Table of Contents than contact-only cards.
Revenue Revenue is generated from the sale to our customers, including the design and production of contact and contactless payment cards, which includes our eco-focused cards. Contactless cards have additional technology to process contactless transactions and generally have a higher selling price than contact-only cards.
To the extent that the final tax outcome of these matters is different from the amounts recorded, such differences will impact the current provision for income taxes.
To the extent that the final tax outcome of these matters is different from the amounts recorded, such differences will impact the current provision for income taxes. We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense.
We may be required to make an offer to repurchase the 2029 Senior Notes, upon the occurrence of certain events including a change of control or certain asset sales. 2029 ABL Revolver ​ On the Closing Date, the Company and CPI CG Inc. as borrower (the “Borrower”), entered into a credit agreement (the “ABL Credit Agreement”) with JPMorgan Chase Bank, N.A., as lender, administrative agent and collateral agent, providing for an asset-based, senior secured revolving credit facility (the “2029 ABL Revolver”) of up to $75.0 million (the “Maximum Revolver Amount”).
ABL Revolver ​ On the Closing Date, the Company and CPI CG Inc. as borrower (the “Borrower”), entered into a credit agreement with JPMorgan Chase Bank, N.A., as lender, administrative agent and collateral agent (“JPMorgan”), providing for an asset-based, senior secured revolving credit facility (the “ABL Revolver”) of up to $75.0 million.
(the “Issuer”), of $285.0 million aggregate principal amount of 10.000% Senior Secured Notes due 2029 (the “2029 Senior Notes”) and related guarantees at an issue price of 100%.
(the “Issuer”), of $285.0 million aggregate principal amount of 10.000% Senior Notes due 2029 (the “Senior Notes”) and related guarantees at an issue price of 100%. The Senior Notes mature on July 15, 2029 and interest is payable on January 15 and July 15 of each year.
Segment Overview ​ Our business consists of the following reportable segments: Debit and Credit, Prepaid Debit, and Other. Debit and Credit Segment Our Debit and Credit segment primarily produces secure debit and credit cards and provides card services for U.S. card-issuing financial institutions.
Debit and Credit Segment Our Debit and Credit segment primarily produces secure debit and credit cards and provides card services for U.S. card-issuing financial institutions.
Refer to Part II, Item 8, Financial Statements and Supplementary Data , Note 9, “Financing and Operating Leases,” for details on our leasing arrangements, including future maturities of our operating lease liabilities, as of December 31, 2024.
Refer to Part II, Item 8, Financial Statements and Supplementary Data , Note 9, “Financing and Operating Leases,” for details on our leasing arrangements, including future maturities of our operating lease liabilities, as of December 31, 2025. Purchase Obligations A purchase obligation is an agreement to purchase goods or services that is enforceable, legally binding, and specifies all significant terms.
To do so, we estimate the amount of the contract costs over the term of the contract as well as the timing of future revenue over the term of the contract to determine the amortization of such costs.
To do so, we estimate the amount of the contract costs over the term of the contract as well as the timing of future revenue over the term of the contract to determine the amortization of such costs. Contract costs incurred but unpaid are included in “Accrued expenses” on the Company's consolidated balance sheets.
Additionally, we historically have generated higher net sales in the third and fourth quarters of the year, as our sales of Prepaid Debit Card solutions are more heavily weighted toward the second half of the year when consumers tend to purchase more of these products and services in anticipation of the holiday season in the United States and timing related to the production of health insurance and health savings account cards.
Additionally, we historically have generated higher revenue in the third and fourth quarters of the year, as our sales of Prepaid Debit Card solutions are more heavily weighted toward the second half of the year when consumers tend to purchase more of these products and other integrated prepaid card services in anticipation of the holiday season in the United States and timing related to the production of health insurance and health savings account cards. 49 Table of Contents Critical Accounting Policies and Estimates Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States of America.
The determination of the amount of valuation allowance to be provided on recorded deferred tax assets involves consideration of estimates regarding the timing and amount of the reversal of taxable temporary differences and the impact of tax planning strategies. Changes in the relevant facts can significantly impact the judgment or need for valuation allowances.
Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. The determination of the amount of valuation allowance to be provided on recorded deferred tax assets involves consideration of estimates regarding the timing and amount of future taxable income by jurisdiction, the reversal of taxable temporary differences and the impact of tax planning strategies.
Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.
Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. ​ 50 Table of Contents The Company has deferred tax assets and liabilities and maintains valuation allowances where it is more likely than not that all or a portion of deferred tax assets, including net operating loss carryforwards, will not be realized.
In the event that the supplier is unable to deliver the specified quantity of chips, it will be subject to liquidated damages of 10% of the price of any non-delivered products. ​ Cyclical and Seasonal Nature of Business Payment cards are generally influenced by broader cyclical changes in the economy, with economic downturns potentially resulting in decreases in the demand for our products and services and economic upturns potentially resulting in increases in demand.
Cyclical and Seasonal Nature of Business Payment cards are generally influenced by broader cyclical changes in the economy, with economic downturns potentially resulting in decreases in the demand for our products and related services and economic upturns potentially resulting in increases in demand.
Cash Flows from Operating Activities Cash provided by operating activities for the year ended December 31, 2024 increased to $43.3 million from $34.0 million for the year ended December 31, 2023, primarily due to higher net income excluding debt refinancing costs and changes in working capital.
Cash Flows from Operating Activities Cash provided by operating activities for the year ended December 31, 2025 increased to $59.5 million from $43.3 million for the year ended December 31, 2024, primarily due to reduced working capital usage.
Our actual results may differ materially from those anticipated in these forward - looking statements as a result of certain factors, some of which are not within our control. See "Risk Factors" and “Cautionary Statement Regarding Forward - Looking Statements.” Company Overview CPI is a payments technology company providing a comprehensive range of payment cards and related digital solutions.
Our actual results may differ materially from those anticipated in these forward - looking statements as a result of certain factors, some of which are not within our control.
Additionally, other changes to the federal and state tax regulations can lead to variability in allowable deductions, which can impact the Company’s valuation allowance. Recent Accounting Pronouncements Refer to Part II, Item 8, Financial Statements and Supplementary Data , Note 2, “Summary of Significant Accounting Policies” for a discussion of recent accounting pronouncements.
Recent Accounting Pronouncements Refer to Part II, Item 8, Financial Statements and Supplementary Data , Note 2, “Summary of Significant Accounting Policies” for a discussion of recent accounting pronouncements.
The early redemption premium paid is recorded in “Interest, net” on the consolidated statement of operations and comprehensive income for the year ended December 31, 2024. 42 Table of Contents The 2029 Senior Notes mature on July 15, 2029.
The early redemption premium paid is recorded in “Interest, net” on the consolidated statement of operations and comprehensive income for the year ended December 31, 2024. On July 15, 2025, the Company used available capacity under the ABL Revolver (defined below) to redeem $20.0 million of its outstanding $285.0 million aggregate principal amount Senior Notes.
As of December 31, 2024, the remaining commitment was $62.0 million, of which $49.9 million is expected to be paid in the next 12 months.
As of December 31, 2025, we had approximately $62.2 million of outstanding purchase obligations, nearly all of which is expected to be paid in the next 12 months.
Contract costs are expensed as incurred when the amortization period is one year or less. Income Taxes We are subject to income taxes in the United States and certain foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes.
Amortization of these costs, recorded as a reduction of revenue, totaled $2.6 million and $1.8 million for the years ended December 31, 2025 and 2024, respectively. Income Taxes We are subject to income taxes in the United States and certain foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes.
We serve thousands of customers through direct and indirect sales channels and have maintained long-standing relationships with our top customers. Our revenues are primarily generated from the production of and services related to secure debit and credit cards that are issued on the networks of the Payment Card Brands, including Prepaid Debit Cards.
Our revenues are primarily generated from the production of and services related to secure debit and credit cards that are issued on the networks of the Payment Card Brands, including Prepaid Debit Cards. ​ 40 Table of Contents Segment Overview ​ Our business consists of the following reportable segments: Debit and Credit, Prepaid Debit, and Other.
Net Income Net income consists of our income from operations, less other expense, net, and income taxes. ​ ​ 38 Table of Contents Results of Operations Year Ended December 31, 2024 Compared With Year Ended December 31, 2023 The following table presents the components of our consolidated statements of operations and comprehensive income for each of the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2024 ​ 2023 ​ $ Change ​ % Change ​ ​ ​ (dollars in thousands) Net sales: (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Products $ 250,008 $ 249,354 $ 654 0.3 % Services ​ ​ 230,593 ​ 195,193 ​ ​ 35,400 18.1 % Total net sales ​ ​ 480,601 ​ ​ 444,547 ​ ​ 36,054 8.1 % Cost of sales (1) ​ ​ 309,382 ​ 289,058 ​ ​ 20,324 7.0 % Gross profit ​ ​ 171,219 ​ ​ 155,489 ​ ​ 15,730 10.1 % Operating expenses ​ ​ 108,427 ​ 93,899 ​ ​ 14,528 15.5 % Income from operations ​ ​ 62,792 ​ ​ 61,590 ​ ​ 1,202 2.0 % Other expense, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest, net ​ ​ (34,087) ​ (26,913) ​ ​ (7,174) 26.7 % Loss on debt extinguishment ​ ​ (2,987) ​ ​ (243) ​ ​ (2,744) ​ * ​ Other (expense) income, net ​ ​ (691) ​ 28 ​ ​ (719) * ​ Income before taxes ​ ​ 25,027 ​ ​ 34,462 ​ ​ (9,435) (27.4) % Income tax expense ​ ​ (5,506) ​ (10,477) ​ ​ 4,971 (47.4) % Net income ​ $ 19,521 ​ $ 23,985 ​ $ (4,464) (18.6) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit margin ​ ​ 35.6% ​ ​ 35.0% ​ ​ ​ ​ ​ ​ * Calculation not meaningful.
Net Income Net income consists of our income from operations, less other expense, net, and income taxes. 42 Table of Contents Results of Operations Year Ended December 31, 2025 Compared with Year Ended December 31, 2024 The following table presents the components of our consolidated statements of operations and comprehensive income for each of the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2025 ​ 2024 ​ $ Change ​ % Change ​ ​ ​ (dollars in thousands) Revenue (1) ​ ​ ​ $ 543,534 ​ ​ ​ $ 480,601 ​ ​ ​ $ 62,933 ​ ​ ​ 13.1 % Cost of goods sold (1) ​ ​ 373,438 ​ 309,382 ​ ​ 64,056 20.7 % Gross profit ​ ​ 170,096 ​ ​ 171,219 ​ ​ (1,123) (0.7) % Selling, general and administrative expenses ​ ​ 115,255 ​ 108,427 ​ ​ 6,828 6.3 % Income from operations ​ ​ 54,841 ​ ​ 62,792 ​ ​ (7,951) (12.7) % Other expense, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest, net ​ ​ (32,466) ​ (34,087) ​ ​ 1,621 (4.8) % Loss on debt extinguishment ​ ​ (287) ​ ​ (2,987) ​ ​ 2,700 ​ * ​ Other expense, net ​ ​ (348) ​ (691) ​ ​ 343 * ​ Income before taxes and equity in losses of unconsolidated affiliates ​ ​ 21,740 ​ ​ 25,027 ​ ​ (3,287) (13.1) % Income tax expense ​ ​ (6,656) ​ (5,506) ​ ​ (1,150) 20.9 % Equity in losses of unconsolidated affiliates ​ ​ (134) ​ ​ — ​ ​ (134) ​ * % Net income ​ $ 14,950 ​ $ 19,521 ​ $ (4,571) (23.4) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit margin ​ ​ 31.3% ​ ​ 35.6% ​ ​ ​ ​ ​ ​ * Calculation not meaningful.
See Part II, Item 8, Financial Statements and Supplementary Data , Note 12, “Stockholders’ Deficit” of the consolidated financial statements for further information. ​ Income Tax Expense: ​ Our effective tax rates on pre-tax income were 22.0% and 30.4% for the years ended December 31, 2024 and 2023, respectively.
Other Expense, net: ​ Other expense, net was relatively consistent for the year ended December 31, 2025. ​ Income Tax Expense: ​ Our effective tax rates on pre-tax income were 30.6% and 22.0% for the years ended December 31, 2025 and 2024, respectively.
We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. 46 Table of Contents The Company’s valuation allowance recorded as of December 31, 2024, relates to certain state net operating losses, which the Company estimates may not be fully utilized.
The Company’s valuation allowance recorded as of December 31, 2025, primarily relates to certain federal and state net operating losses obtained through the Arroweye acquisition that the Company estimates may not be fully utilized. Additionally, other changes to the federal and state tax regulations can lead to variability in allowable deductions, which can impact the Company’s valuation allowance.
Operating Expenses: Operating expenses increased for the year ended December 31, 2024, primarily due to increased compensation-related expenses, including employee performance-based incentive compensation related to stronger 2024 company performance compared to 2023 and salary expenses. 39 Table of Contents ​ Interest, net : ​ Interest expense increased for the year ended December 31, 2024, primarily due to payment of an early redemption premium of $5.8 million related to the redemption of the $267.9 million 8.625% Senior Secured Notes due 2026 (the “2026 Senior Notes”), as well as impacts from higher interest rates on the 10.000% Senior Secured Notes due 2029 (defined below) entered into on July 11, 2024. ​ Loss on Debt Extinguishment: During the year ended December 31, 2024, we recorded a loss on debt extinguishment relating to unamortized deferred financing costs in connection with the redemption of the 2026 Senior Notes and the refinancing of our ABL Revolver Credit Agreement in July 2024.
The decrease was partially offset by impacts of higher average borrowings on the Senior Notes due 2029 and ABL Revolver (defined below) for the year ended December 31, 2025. ​ Loss on Debt Extinguishment: During the year ended December 31, 2024, we recorded a $3.0 million loss on debt extinguishment relating to the unamortized deferred financing costs in connection with the redemption of the 2026 Senior Notes and the refinancing of our ABL Revolver in July 2024.
Cash Priorities ​ Capital Expenditures ​ We primarily use cash in investing activities for capital expenditures. During the year ended December 31, 2024, capital expenditures, including investments to support the business, such as machinery and information technology equipment, totaled $9.3 million. ​ During 2023, we commenced work on relocating and modernizing our production facility in Indiana.
Capital Expenditures ​ During the year ended December 31, 2025, capital expenditures, including investments to support the business, such as machinery and information technology equipment, totaled $18.2 million, primarily related to our new production facility in Indiana. ​ Equity Method Investment On October 7, 2025, we acquired a 20% equity interest in Gift Card Co Pty Ltd, doing business as “Karta,” a digital card technology company and prepaid program manager based in Australia.
Working capital changes included lower employee performance-based incentive compensation payments in 2024 related to 2023 performance as compared to those made in 2023 related to 2022 performance and lower cash paid for interest on our Senior Notes due to the timing of the refinancing, partially offset by payments for incentives related to a customer contract entered into in the first quarter of 2024, a $5.0 million payment pursuant to an agreement entered into on June 2, 2023 with the Company’s prior CEO, and deposits made on machinery and equipment yet to be placed in service.
Working capital benefited from increased collections on accounts receivable, lower inventory purchases and timing of payments, and lower payments related to the prior-CEO retention agreement, partially offset by incentive payments related to a customer contract originally entered into in the first quarter of 2024, higher employee performance-based incentive compensation payments in 2025, and higher cash paid for interest on our Senior Notes. ​ 46 Table of Contents Cash Flows from Investing Activities Arroweye Acquisition On May 6, 2025, we acquired Arroweye for a final purchase price of $45.8 million.
Key Components of Results of Operations Set forth below is a brief description of key line items of our consolidated statements of operations and comprehensive income. Net Sales Net sales reflect our revenue generated from the sale of products and services.
Accordingly, we no longer present “Products” and “Services” separately within revenue and cost of goods sold, and prior period amounts have been revised to conform the prior period presentation to the current period presentation. Set forth below is a brief description of key line items of our consolidated statements of operations and comprehensive income.
Removed
Net Sales: ​ Net sales increased for the year ended December 31, 2024, primarily due to higher Services net sales in our Prepaid Debit segment and higher personalization services net sales in our Debit and Credit segment. ​ Net sales were negatively impacted by reduced demand from some of our customers for debit and credit card products during 2023 and the first half of 2024, which we believe was the result of economic concerns and supply chain-related purchase timing, whereby certain customers increased their inventory of our products during 2022 amid product availability concerns and then focused on reducing their inventory levels in subsequent periods. ​ Gross Profit and Gross Profit Margin: Gross profit and gross profit margin increased for the year ended December 31, 2024, primarily due to higher net sales described above and the resulting operating leverage.
Added
See "Risk Factors" and “Cautionary Statement Regarding Forward - Looking Statements.” Company Overview CPI is a payments technology company providing a comprehensive range of physical and digital payment solutions for U.S. financial institutions, processors, fintechs, prepaid program managers, and more.
Removed
Other (Expense) Income, net: ​ Other (expense) income, net increased for the year ended December 31, 2024, primarily due to expenses incurred related to a secondary offering of our common stock.
Added
We serve thousands of customers through direct and indirect sales channels and have maintained long-standing relationships with our top customers.
Removed
The effective tax rate for the year ended December 31, 2024 benefited from increased deductibility of stock-based compensation realized upon certain stock option exercises and restricted stock unit vesting, and benefits recognized due to the lapse of the statute of limitations related to specific uncertain tax benefit positions.
Added
Key Components of Results of Operations Beginning in the fourth quarter of 2025, we revised our financial statement presentation to better reflect the integrated nature of the services and solutions provided in connection with our product offerings.
Removed
The effective tax rate for the year ended December 31, 2023 was impacted by limitation of executive compensation deductibility related to the former Chief Executive Officer’s (“CEO’s”) retention agreement. ​ Segment Discussion ​ Debit and Credit: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 ​ $ Change ​ % Change ​ ​ ​ (dollars in thousands) ​ Net sales ​ $ 375,261 ​ $ 361,057 ​ $ 14,204 ​ 3.9 % Gross profit ​ $ 128,095 ​ $ 126,776 ​ $ 1,319 ​ 1.0 % Income from operations ​ $ 92,856 ​ $ 94,906 ​ $ (2,050) ​ (2.2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit margin ​ ​ 34.1% ​ ​ 35.1% ​ ​ ​ ​ ​ ​ ​ Net Sales: ​ Net sales for Debit and Credit increased for the year ended December 31, 2024, primarily due to increased Services net sales.
Added
Revenue: ​ Revenue increased $62.9 million for the year ended December 31, 2025, primarily due to contributions of $42.8 million, or 7.9% of revenue for the year ended December 31, 2025, from the acquisition of Arroweye as well as increased volumes of contactless cards, partially offset by decreased revenue in our Prepaid Debit segment. ​ The decrease in revenue in the Prepaid Debit segment for the year ended December 31, 2025 was primarily attributable to a change in accounting in the second quarter of 2025 resulting in reduced revenue recognition related to work-in-process orders as discussed in Part II, Item 8, Financial Statements and Supplementary Data , Note 2, “Summary of Significant Accounting Policies.” Excluding the change in accounting, the increase in consolidated revenue would have been $73.0 million, or 15.3%. ​ Gross Profit and Gross Profit Margin: Gross profit and gross profit margin decreased for the year ended December 31, 2025, primarily due to unfavorable sales mix and increased production costs, including increased depreciation and tariff expenses, partially offset by benefits of operating leverage from increased revenue. 43 Table of Contents Selling, General and Administrative Expenses: Selling, general and administrative expenses increased for the year ended December 31, 2025, primarily due to increased professional service fees and other costs of $6.0 million associated with the acquisition and integration of Arroweye. ​ Interest, net : ​ Interest expense decreased for the year ended December 31, 2025, primarily due to payment in the prior year period of an early redemption premium of $5.8 million related to the redemption in full of the $267.9 million 8.625% Senior Secured Notes due 2026 (the “2026 Senior Notes”), as compared to payment in the current period of a $0.6 million premium related to the redemption of $20.0 million of our 10.000% Senior Secured Notes due 2029.
Removed
The increase in Services net sales was driven by higher personalization and Card@Once services.
Added
The increase in the Company’s effective tax rate for the year ended December 31, 2025 related to non-deductible acquisition-related costs and increased state tax expenses related to the acquisition of Arroweye.
Removed
Working capital was also significantly impacted in 2024 by the timing of collections from customers and payments to our vendors.
Added
The effective tax rate for the year ended December 31, 2024 was impacted by the increased deductibility of stock-based compensation realized upon certain stock option exercises and restricted stock unit vesting. ​ Segment Discussion ​ Debit and Credit: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ $ Change ​ % Change ​ ​ ​ (dollars in thousands) ​ Revenue ​ $ 451,475 ​ $ 375,261 ​ $ 76,214 ​ 20.3 % Gross profit ​ $ 138,154 ​ $ 128,095 ​ $ 10,059 ​ 7.9 % Income from operations ​ $ 91,430 ​ $ 92,856 ​ $ (1,426) ​ (1.5) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit margin ​ ​ 30.6% ​ ​ 34.1% ​ ​ ​ ​ ​ ​ ​ Revenue: ​ Revenue for Debit and Credit increased for the year ended December 31, 2025, primarily due to contributions from the Arroweye acquisition, higher volumes of contactless cards, including metal cards, and increased Card@Once instant issuance sales, partially offset by decreased sales of other cards and personalization services. ​ ​ 44 Table of Contents Gross Profit and Gross Profit Margin: ​ Gross profit increased for Debit and Credit for the year ended December 31, 2025, primarily due to the increase in revenue discussed above. ​ Gross profit margin decreased for Debit and Credit for the year ended December 31, 2025, primarily due to unfavorable sales mix and increased production costs, including increased depreciation and tariff expenses, partially offset by benefits of operating leverage from increased revenue. ​ Income from Operations: ​ Income from operations for Debit and Credit decreased for the year ended December 31, 2025, primarily due to increased selling, general and administrative expenses driven by increased compensation-related expenses resulting from increased headcount due to the Arroweye acquisition, and increased technology costs; partially offset by increased gross profit. ​ Prepaid Debit: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ $ Change ​ % Change ​ ​ ​ (dollars in thousands) ​ Revenue ​ $ 93,625 ​ $ 106,541 ​ $ (12,916) ​ (12.1) % Gross profit ​ $ 31,942 ​ $ 43,124 ​ $ (11,182) ​ (25.9) % Income from operations ​ $ 26,699 ​ $ 37,201 ​ $ (10,502) ​ (28.2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit margin ​ ​ 34.1% ​ ​ 40.5% ​ ​ ​ ​ ​ ​ ​ Revenue: ​ Revenue for Prepaid Debit decreased $12.9 million for the year ended December 31, 2025, primarily due to a change in accounting in the second quarter of 2025 resulting in reduced revenue recognition for work-in-process orders.
Removed
Interest is payable on the 2029 Senior Notes on January 15 and July 15 of each year, beginning on January 15, 2025. The 2029 Senior Notes are guaranteed by us and our domestic subsidiaries (other than the Issuer), and are secured by substantially all of the assets of the Issuer and the guarantors, subject to customary exceptions.
Added
Excluding the change in accounting, the decrease in revenue would have been $3.3 million, or 3.3%.
Removed
The 2029 ABL Revolver is guaranteed by us and our subsidiaries (other than excluded subsidiaries (as defined in the ABL Credit Agreement)), and is secured by substantially all of the assets of the Company, the Borrower and their subsidiaries, (other than excluded subsidiaries (as defined in the ABL Credit Agreement)).
Added
The changes in our segment structure primarily relate to the separation of our proprietary integrated technological related operations into a separate segment from the Debit and Credit segment.
Removed
The 2029 ABL Revolver consists of revolving loans, letters of credit and swing line loans provided by lenders, with a sublimit on letters of credit outstanding at any time of $10.0 million.
Added
A summary of how the segments will be structured follows: ​ ● Secure Card Solutions: primarily produces secure debit and credit cards and provides card personalization services for U.S. card-issuing financial institutions, including highly customizable, on-demand payment card solutions; ​ ● Prepaid Solutions: primarily provides prepaid debit cards and secure packaging solutions and other integrated prepaid card services to prepaid program managers in the U.S.; and ​ ● Integrated Paytech: primarily provides a SaaS-based instant issuance solution, which gives customers the ability to issue an instant personalized debit or credit card within a customer location; and other digital payment solutions such as push provisioning for mobile wallets. ​ Liquidity and Capital Resources At December 31, 2025, we had $21.7 million of cash and cash equivalents.
Removed
The 2029 ABL Revolver matures on the earliest to occur of July 11, 2029 and the date that is 91 days prior to the maturity of the 2029 Senior Notes.
Added
The net cash consideration paid was $44.2 million, which reflects cash acquired of $1.6 million. The acquisition was funded through a combination of cash on hand and our available capacity under the ABL Revolver. Refer to Part II, Item 8, Financial Statements and Supplementary Data , Note 4, “Acquisition” for information regarding the acquisition.
Removed
As of the Closing Date, the Borrower had $4.0 million of outstanding borrowings under a prior Credit Agreement with Wells Fargo Bank, N.A. entered into in March 2021 (the “2026 ABL Revolver”).
Added
Total consideration for the transaction was $10.0 million, with $2.5 million paid in cash upon closing and the remaining $7.5 million was recorded as a contingent consideration, which is included in “Other long-term liabilities” on our consolidated balance sheet. We also retain an option to purchase an additional 31% of Karta prior to early April 2027.
Removed
The Company used initial borrowings under the 2029 ABL Revolver, together with cash on hand and proceeds under the notes, to repay in full and terminate the 2026 ABL Revolver and to pay related fees and expenses, and will use future borrowings for general corporate purposes.
Added
Additionally, we incurred $0.3 million in related costs. As of December 31, 2025, the value of the investment was $10.2 million and is included in “Other assets” on our consolidated balance sheet.
Removed
Credit Ratings and Debt Covenants ​ The credit ratings on our debt are an important consideration in our overall business, managing our financing costs and facilitating access to additional capital on favorable terms.

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