Usio Announces Record Fourth Quarter and Full Year 2022 Financial Results

Full Year Revenues up 12%; Sixth Consecutive Year of Record Revenue

Strong Momentum Expected to Drive 18-20% Growth in Revenue and Positive Operating Cash Flow and Adjusted EBITDA in Fiscal 2023

Usio, Inc. (Nasdaq:USIO), a leading FinTech company that operates a full stack of integrated, cloud-based electronic payment and embedded financial solutions, today announced financial results for the fourth quarter and year 2022, which ended December 31, 2022.

Louis Hoch, Chairman and Chief Executive Officer of Usio, said, “Usio ended the year on a high note, as revenue in the fourth quarter was a record, as well as our tenth consecutive quarter of quarterly revenue growth, which led to our sixth consecutive year of record revenue. Revenue for the year also met our guidance. For the quarter, revenue growth accelerated sequentially from the third quarter in our ACH, Prepaid, and Output Solution businesses as we generate strong momentum that we expect will propel accelerated revenue growth. We also posted record gross profits in the fourth quarter, in part due to the success of our prepaid business, which generated strong residual revenues from large, completed contracts. This led to $1.0 million of positive Adjusted EBITDA in the quarter.1"

Mr. Hoch continued, "Growth in both our Prepaid and Output Solutions businesses was very strong in both the quarter and the year. We expect Output Solutions to continue to generate attractive growth in 2023 as we potentially implement one of our largest contracts, expand capacity and implement new technology that will enable our services and solutions to be more efficient and effective. We expect that prepaid revenues and margins should almost double in the upcoming year as we anticipate generating approximately $10-12 million in revenue on programs where we have fulfilled our contractual obligations. The Card business grew, albeit slowly, in 2022 due to customers delaying the start of new implementations, many of which appear to be now ramping up. Our Credit Card business segment is also being integrated into prepaid and ACH programs, a feature that is being well received by many of our customers. Our ACH business was adversely impacted by disruption in the cryptocurrency market in 2022, which began affecting a large customer in the second quarter and continued throughout the remainder of the year. Our business has recovered from this disruption, with strong growth in our returned checks business, and plans to capitalize on any economic weakness that increases activity in lending markets, which will help resume growth in the second half of the year. Absent the ACH business generated from the cryptocurrency market, our ACH business transaction volume grew 46%, dollars processed grew 18%, and returned checks processed went up 45%."

"Despite a number of headwinds throughout 2022, we grew the business, maintained our financial strength, and invested in strengthening the organization in preparation of what we see as another year of outstanding growth and opportunity. The year is already off to a great start, with new customers like the County of Los Angeles, MoviePass and tremendous returns expected from the success of large prepaid programs, where much of our economics were delayed until the contracts were completed. We are extremely excited by the prospect of further growth as we continue to build value for our shareholders."

The Company ended the year in a strong financial position, with positive cash flow achieved once again during the fourth quarter. During the year, the company repurchased approximately 507,000 of its own shares under its Board approved buyback program, which primarily accounts for the change in the company's cash position over the course of 2022. Usio intends to continue to utilize its financial strength to enhance its growth initiatives and maintain its strong business momentum across all business segments, both in terms of enhancing its leading technology as well as expanding its marketing initiatives.

Processing and Transaction Volumes

For the Fourth Quarter, total payment dollars processed through all payment channels were $1.2 billion, down compared to 2021's fourth quarter, mainly attributable to our exit from the cryptocurrency market, which also resulted in a decrease in total payment transactions processed to 9.5 million.

In our Card segment, dollars processed were up 3% and transactions processed were up 49% from the 2021 quarter. Prepaid Card Load Volume was down 23%, transactions processed were down 44%, and purchase dollars processed were down 17% from the same quarter in 2021, as government assistance programs for the COVID-19 pandemic have essentially wound down from their record highs in 2021. ACH electronic check transaction volume was down 32%, electronic check dollars processed were down 67%, and return check transactions processed were down 5% compared to 2021. Absent the ACH business generated from the cryptocurrency market in Q4 of 2022, our ACH business transaction volume grew 35%, dollars processed grew 4%, and returned checks processed went up 10% as compared to 2021. Transactions/pieces processed at Output Solutions were up 32% from the same period in 2021.

For the year, total dollars processed were $7.2 billion, down 24% due to our exit from crypto. Total transactions processed for the year 2022 were 40.8 million, a new full year record and up 16% from full year 2021.

Card dollars processed were up 10% and transactions processed were up 44% over 2021. Compared to the previous year, prepaid card load volumes were up 14%, transactions processed were up 39%, and purchase volume was up 23%. Full year load volumes, transactions, and purchase volumes were records. ACH electronic check transaction volume was down 6%, electronic check dollars processed were down 30%, and returned check transactions processed were up 31% for the year. Absent the ACH business generated from the cryptocurrency market in 2022, our ACH business transaction volume grew 46%, dollars processed grew 18%, and returned checks processed went up 45% as compared to 2021. Transactions/pieces processed at Output Solutions were up 28% over 2021 and equated to over 28.5 million pieces processed in the year.

Share Repurchase Program

For the quarter, the company repurchased approximately 181,000 shares at a cost of approximately $340,000, with an average per share cost of $1.88. Since the initiation of the program on May 13, 2022, the Company has purchased approximately 507,000 shares at a cost of approximately $1,115,000, with an average per share cost of $2.20.

Fiscal 2023 Guidance

The Company continues to expect strong 18-20% growth in revenue in 2023 while also anticipating positive operating cash flows and Adjusted EBITDA1. Guidance is conditioned on no appreciable deterioration in economic conditions.

Fourth Quarter 2022 Financial Summary

Revenues were $18.7 million for the fourth quarter, up 7% compared to $17.4 million in the same period last year.

 

 

Three Months Ended December 31,

 

 

 

(in millions, except percentages)

 

 

 

2022

 

 

2021

 

 

$ Change

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACH and complementary service revenue

 

$

3.8

 

 

$

4.6

 

 

$

(0.8

)

 

 

(18

)%

Credit card revenue

 

 

6.6

 

 

 

6.4

 

 

 

0.2

 

 

 

4

%

Prepaid card services revenue

 

 

3.4

 

 

 

2.6

 

 

 

0.8

 

 

 

31

%

Output solutions revenue

 

 

4.9

 

 

 

3.9

 

 

 

1.0

 

 

 

27

%

Total Revenue

 

$

18.7

 

 

$

17.4

 

 

$

1.3

 

 

 

7

%

Revenue growth was primarily attributable to a 27% increase in Output solutions revenues, and a 31% increase in Prepaid revenues compared to the same period last year.

Gross profits were $4.7 million, a quarterly record, and up 3% from $4.6 million for the same period last year. Gross margins were 25.1% compared to 26.2% in the same period last year. Gross margins in the quarter primarily reflect a shift to a higher proportion of revenues from our less profitable business lines and a decline in our most profitable business unit, ACH and complementary services.

The Company was nearly breakeven for the quarter, with an operating loss of $(90,814), compared to an operating loss of $(1,497), largely unchanged from the same period last year.

Adjusted EBITDA1 was a positive $1.0 million in the quarter, up approximately $1.6 million on a sequential basis, but down $0.2 million from $1.3 million in the same period a year ago.

Net loss for the fourth quarter of 2022 was $0.15 million, or $(0.01) per share, compared to net income of $0.04 million or $0.00 per share for the same period last year.

Usio continues to be in solid financial condition with $5.7 million in cash and cash equivalents and no significant debt at December 31, 2022.

1 See reconciliation of non-GAAP financial measures below

Financial Results for Full Year 2022

Revenues for 2022 were $69.4 million, up 12% from $61.9 million for the same period last year.

 

 

Year Ended December 31,

 

 

 

(in millions, except percentages)

 

 

 

2022

 

 

2021

 

 

$ Change

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACH and complementary service revenue

 

$

14.8

 

 

$

15.4

 

 

$

(0.7

)

 

 

(4

)%

Credit card revenue

 

27.1

 

 

 

25.2

 

 

 

1.9

 

 

 

8

%

Prepaid card services revenue

 

 

9.1

 

 

 

6.5

 

 

 

2.6

 

 

 

39

%

Output solutions revenue

 

 

18.4

 

 

 

14.8

 

 

 

3.6

 

 

 

24

%

Total Revenue

 

$

69.4

 

 

$

61.9

 

 

$

7.5

 

 

 

12

%

Revenue growth was primarily attributable to a $3.6 million, or 24%, increase in Output Solutions revenues, attributable primarily to the success of cross-selling efforts and the conversion of pipeline opportunities into programs. In addition, prepaid revenues were up 39%, driven by the success of our disbursement program partnership, including the significant increase in revenues recognized in one of its largest programs.

Gross profit for the year ended December 31, 2022 was $14.6 million, down 7% from $15.6 million for the same period in 2021. Gross margins were 21.0% for the year ended December 31, 2022 compared to 25.2% in the same period in 2021, generally reflecting a shift in business mix over the year.

Profitability for the full year 2022 was adversely impacted by the loss of one of the Company's largest customers, the disruption to efficiency caused thereby, as well as other macroeconomic factors. The Company reported a $5.2 million operating loss for the year ended December 31, 2022 compared to a $0.2 million operating loss for the same period of 2021, due to the decline in gross profits and increases in SG&A expense. The Company reported an Adjusted EBITDA1 loss of $0.4 million for the year ended December 31, 2022, compared to a positive $4.0 million for the same period in the prior year. Net loss for the year ended December 31, 2022 was $5.5 million or $0.27 per share compared to a net loss of $0.3 million or $0.02 per share in the same period last year.

Conference Call and Webcast

Usio, Inc.'s management will host a conference call with a live webcast Wednesday, March 8, 2023 at 4:30 pm Eastern time to provide a business update. To listen to the conference call, interested parties within the U.S. should call +1-844-883-3890. International callers should call + 1-412-317-9246. All callers should ask for the Usio conference call. The conference call will also be available through a live webcast, which can be accessed via the company’s website at www.usio.com/invest.

A replay of the call will be available approximately one hour after the end of the call through March 22, 2023. The replay can be accessed via the Company’s website or by dialing +1-877-344-7529 (U.S.) or +1-412-317-0088 (international). The replay conference playback code is 1930892.

About Usio, Inc.

Usio, Inc. (Nasdaq: USIO), is a leading Fintech that operates a full stack of proprietary, cloud-based integrated payment and embedded financial solutions in a single ecosystem to a wide range of merchants, billers, banks, service bureaus and card issuers. The Company operates credit/debit and ACH payment processing platforms, as well as a turn-key card issuing platform to deliver convenient, world-class payment solutions and services to their clients. The company, through its Usio Output Solutions division offers services relating to electronic bill presentment, document composition, document decomposition and printing and mailing services. The strength of the Company lies in its ability to provide tailored solutions for card issuance, payment acceptance, and bill payments as well as its unique technology in the prepaid sector. Usio is headquartered in San Antonio, Texas, and has a development office in Austin, Texas.

Websites: www.usio.com, www.payfacinabox.com, www.akimbocard.com and www.usiooutput.com. Find us on Facebook® and Twitter.

About Non-GAAP Financial Measures

This press release includes non-GAAP financial measures, EBITDA, adjusted EBITDA, adjusted EBITDA margins and adjusted operating cash flows, as defined in Regulation G of the Securities and Exchange Act of 1934, as amended. The Company reports its financial results in compliance with GAAP, but believes that also discussing non-GAAP financial measures provides investors with financial measures it uses in the management of its business. The Company defines EBITDA as operating income (loss), before interest, taxes, depreciation and amortization of intangibles. The Company defines adjusted EBITDA as EBITDA, as defined above, plus non-cash stock option costs and certain non-recurring items, such as costs related to acquisitions. The Company defines adjusted operating cash flow as net cash provided (used) by operating activities, less changes in prepaid card load obligations, customer deposits, merchant reserves and net operating lease assets and obligations. These adjustments to net cash provided (used) by operating activities are not inclusive of any regular expense items, and only include changes in our assets and liabilities accounts on the balance sheet. These measures may not be comparable to similarly titled measures reported by other companies. Management uses EBITDA, adjusted EBITDA, and adjusted operating cash flows as indicators of the Company's operating performance and ability to fund acquisitions, capital expenditures and other investments and, in the absence of refinancing options, to repay debt obligations.

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

EBITDA, adjusted EBITDA, adjusted EBITDA margins and adjusted operating cash flow should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. They are not measurements of our financial performance under GAAP and should not be considered as alternatives to revenue, net income, or cash provided (used) by operating activities, as applicable, or any other performance measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other businesses. EBITDA, adjusted EBITDA, adjusted EBITDA margins and adjusted operating cash flow have limitations as analytical tools and you should not consider these Non-GAAP measures in isolation or as a substitute for analysis of our operating results as reported under GAAP.

1 See reconciliation of non-GAAP financial measures below

FORWARD-LOOKING STATEMENTS DISCLAIMER

Except for the historical information contained herein, the matters discussed in this release include forward-looking statements which are covered by safe harbors. Those statements include, but may not be limited to, all statements regarding management's intent, belief and expectations, such as statements concerning our future and our operating and growth strategy. These forward-looking statements are identified by the use of words such as "believe," "should," "intend," "look forward," "anticipate," "schedule,” and "expect" among others. Forward-looking statements in this press release are subject to certain risks and uncertainties inherent in the Company's business that could cause actual results to vary, including such risks related to an economic downturn, the realization of opportunities from the IMS acquisition, the management of the Company's growth, the loss of key resellers, the relationships with the Automated Clearinghouse network, bank sponsors, third-party card processing providers and merchants, the security of our software, hardware and information, the volatility of the stock price, the need to obtain additional financing, risks associated with new legislation, and compliance with complex federal, state and local laws and regulations, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission including its annual report on Form 10-K for the fiscal year ended December 31, 2022. One or more of these factors have affected, and in the future, could affect the Company’s businesses and financial results in the future and could cause actual results to differ materially from plans and projections. The Company believes that the assumptions underlying the forward-looking statements included in this release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the objectives and plans will be achieved. All forward-looking statements made in this release are based on information presently available to management. The Company assumes no obligation to update any forward-looking statements, except as required by law.

 

USIO, INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

December 31,

2022

 

 

December 31,

2021

 

ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

5,709,117

 

 

$

7,255,321

 

Accounts receivable, net

 

 

4,371,640

 

 

 

4,979,493

 

Settlement processing assets

 

 

49,737,068

 

 

 

63,824,646

 

Prepaid card load assets

 

 

20,170,761

 

 

 

36,590,893

 

Customer deposits

 

 

1,554,122

 

 

 

1,364,193

 

Inventory

 

 

507,355

 

 

 

434,532

 

Prepaid expenses and other

 

 

450,389

 

 

 

426,963

 

Current assets before merchant reserves

 

 

82,500,452

 

 

 

114,876,041

 

Merchant reserves

 

 

4,909,501

 

 

 

6,381,153

 

Total current assets

 

 

87,409,953

 

 

 

121,257,194

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

3,222,816

 

 

 

3,607,157

 

 

 

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

 

 

 

Intangibles, net

 

 

2,625,360

 

 

 

4,163,894

 

Deferred tax asset

 

 

1,504,000

 

 

 

1,504,000

 

Operating lease right-of-use assets

 

 

2,795,483

 

 

 

2,802,113

 

Other assets

 

 

355,357

 

 

 

345,357

 

Total other assets

 

 

7,280,200

 

 

 

8,815,364

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

97,912,969

 

 

$

133,679,715

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

858,622

 

 

$

1,400,100

 

Accrued expenses

 

 

3,721,108

 

 

 

2,325,665

 

Operating lease liabilities, current portion

 

 

617,319

 

 

 

504,027

 

Equipment loan, current portion

 

 

56,429

 

 

 

54,760

 

Settlement processing obligations

 

 

49,737,068

 

 

 

63,824,646

 

Prepaid card load liabilities

 

 

20,170,761

 

 

 

36,590,893

 

Customer deposits

 

 

1,554,122

 

 

 

1,364,193

 

Deferred revenues

 

 

 

 

 

17,647

 

Current liabilities before merchant reserve obligations

 

 

76,715,429

 

 

 

106,081,931

 

Merchant reserve obligations

 

 

4,909,501

 

 

 

6,381,153

 

Total current liabilities

 

 

81,624,930

 

 

 

112,463,084

 

 

 

 

 

 

 

 

 

 

Non-current liabilities:

 

 

 

 

 

 

 

 

Equipment loan, non-current portion

 

 

14,994

 

 

 

71,434

 

Operating lease liabilities, non-current portion

 

 

2,338,947

 

 

 

2,476,291

 

Total liabilities

 

 

83,978,871

 

 

 

115,010,809

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value, 10,000,000 shares authorized; -0- shares issued and outstanding in 2022 and 2021

 

 

 

 

 

 

Common stock, $0.001 par value, 200,000,000 shares authorized; 27,044,900 and 26,807,145 issued and 25,097,963 and 25,473,453 outstanding in 2022 and 2021

 

 

195,471

 

 

 

195,235

 

Additional paid-in capital

 

 

94,048,603

 

 

 

93,100,129

 

Treasury stock, at cost; 1,946,937 and 1,333,692 shares in 2022 and 2021

 

 

(3,749,027

)

 

 

(2,404,458

)

Deferred compensation

 

 

(5,697,900

)

 

 

(6,842,195

)

Accumulated deficit

 

 

(70,863,049

)

 

 

(65,379,805

)

Total stockholders' equity

 

 

13,934,098

 

 

 

18,668,906

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$

97,912,969

 

 

$

133,679,715

 

 

USIO, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Three Months Ended

(unaudited)

 

 

Twelve Months Ended

 

 

 

December

31, 2022

 

 

December

31, 2021

 

 

December

31, 2022

 

 

December

31, 2021

 

Revenues

 

$

18,705,496

 

 

$

17,426,465

 

 

$

69,428,285

 

 

$

61,942,316

 

Cost of services

 

 

14,015,833

 

 

 

12,862,258

 

 

 

54,835,069

 

 

 

46,309,706

 

Gross profit

 

 

4,689,663

 

 

 

4,564,207

 

 

 

14,593,216

 

 

 

15,632,610

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

531,666

 

 

 

501,409

 

 

 

2,072,041

 

 

 

1,489,976

 

Other expenses

 

 

3,677,161

 

 

 

3,304,888

 

 

 

15,000,487

 

 

 

11,654,340

 

Depreciation and Amortization

 

 

571,650

 

 

 

759,407

 

 

 

2,735,118

 

 

 

2,643,675

 

Total operating expenses

 

 

4,780,477

 

 

 

4,565,704

 

 

 

19,807,646

 

 

 

15,787,991

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss)

 

 

(90,814

)

 

 

(1,497

)

 

 

(5,214,430

)

 

 

(155,381

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

10,762

 

 

 

1,240

 

 

 

15,237

 

 

 

7,643

 

Other income (expense)

 

 

 

 

 

279

 

 

 

 

 

 

279

 

Interest expense

 

 

(807

)

 

 

(1,350

)

 

 

(4,051

)

 

 

(4,314

)

Other income and (expense), net

 

 

9,955

 

 

 

169

 

 

 

11,186

 

 

 

3,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) before income taxes

 

 

(80,859

)

 

 

(1,328

)

 

 

(5,203,244

)

 

 

(151,773

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal income tax (benefit)

 

 

 

 

 

(110,000

)

 

 

 

 

 

(110,000

)

State income tax expense

 

 

70,000

 

 

 

69,861

 

 

 

280,000

 

 

 

279,861

 

Income taxes

 

 

70,000

 

 

 

(40,139

)

 

 

280,000

 

 

 

169,861

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

(150,859

)

 

$

38,811

 

 

$

(5,483,244

)

 

$

(321,634

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (Loss) Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic (loss) per common share:

 

$

(0.01

)

 

$

0.00

 

 

$

(0.27

)

 

$

(0.02

)

Diluted (loss) per common share:

 

$

(0.01

)

 

$

0.00

 

 

$

(0.27

)

 

$

(0.02

)

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

20,548,742

 

 

 

20,156,562

 

 

 

20,379,386

 

 

 

20,028,850

 

Diluted

 

 

20,548,742

 

 

 

20,156,562

 

 

 

20,379,386

 

 

 

20,028,850

 

 

USIO, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

December 31,

2022

 

 

December 31,

2021

 

Operating Activities

 

 

 

 

 

 

 

 

Net (loss)

 

$

(5,483,244

)

 

$

(321,634

)

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

 

 

 

 

 

 

 

 

Depreciation

 

 

1,196,584

 

 

 

771,808

 

Amortization

 

 

1,538,534

 

 

 

1,871,867

 

Bad Debt

 

 

 

 

 

151,951

 

Deferred federal income tax

 

 

 

 

 

(110,000

)

Non-cash stock-based compensation

 

 

2,072,041

 

 

 

1,489,976

 

Amortization of stock warrant costs

 

 

20,963

 

 

 

35,940

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

607,853

 

 

 

(2,267,806

)

Prepaid expenses and other

 

 

(23,426

)

 

 

(125,208

)

Operating lease right-to-use assets

 

 

6,630

 

 

 

(130,847

)

Other assets

 

 

(10,000

)

 

 

22,721

 

Inventory

 

 

(72,823

)

 

 

(258,066

)

Accounts payable and accrued expenses

 

 

853,965

 

 

 

1,410,472

 

Operating lease liabilities

 

 

(24,052

)

 

 

137,522

 

Prepaid card load obligations

 

 

(16,420,132

)

 

 

28,980,651

 

Merchant reserves

 

 

(1,471,652

)

 

 

(1,884,402

)

Customer deposits

 

 

189,929

 

 

 

58,897

 

Deferred revenue

 

 

(17,647

)

 

 

(48,925

)

Net cash provided (used) by operating activities

 

 

(17,036,477

)

 

 

29,784,917

 

 

 

 

 

 

 

 

 

 

Investing Activities

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(812,242

)

 

 

(1,273,039

)

Net cash (used) by investing activities

 

 

(812,242

)

 

 

(1,273,039

)

 

 

 

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

 

 

 

Proceeds from PPP Loan Program

 

 

 

 

 

165,996

 

Forgiveness of PPP Loan

 

 

(54,771

)

 

 

(39,802

)

Proceeds from private offering

 

 

 

 

 

1,000,000

 

Purchases of treasury stock

 

 

(1,344,569

)

 

 

(238,737

)

Net cash provided by financing activities

 

 

(1,399,340

)

 

 

887,457

 

 

 

 

 

 

 

 

 

 

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

 

 

(19,248,059

)

 

 

29,399,335

 

Cash, cash equivalents, prepaid card load assets, customer deposits and merchant reserves, beginning of year

 

 

51,591,560

 

 

 

22,192,225

 

 

 

 

 

 

 

 

 

 

Cash, Cash Equivalents, Prepaid Card Load Assets, Customer Deposits and Merchant Reserves, End of Year

 

$

32,343,501

 

 

$

51,591,560

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

Interest

 

$

4,314

 

 

$

4,314

 

Income taxes

 

 

269,500

 

 

 

116,204

 

Non-cash transactions:

 

 

 

 

 

 

 

 

Issuance of deferred stock compensation

 

 

166,330

 

 

 

2,164,361

 

 

USIO, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

 

 

 

Common Stock

 

 

Additional

Paid- In

 

 

Treasury

 

 

Deferred

 

 

Accumulated

 

 

Total Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Stock

 

 

Compensation

 

 

Deficit

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2020

 

 

26,260,776

 

 

$

194,692

 

 

$

89,659,433

 

 

$

(2,165,721

)

 

$

(5,926,872

)

 

$

(65,058,171

)

 

$

16,703,361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under equity incentive plan

 

 

536,878

 

 

 

535

 

 

 

2,750,204

 

 

 

 

 

 

(2,168,347

)

 

 

 

 

 

582,392

 

Warrant compensation cost

 

 

 

 

 

 

 

 

35,940

 

 

 

 

 

 

 

 

 

 

 

 

35,940

 

Cashless warrant exercise

 

 

39,745

 

 

 

39

 

 

 

(39

)

 

 

 

 

 

 

 

 

 

 

 

 

Reversal of deferred compensation amortization that did not vest

 

 

(173,111

)

 

 

(173

)

 

 

(345,267

)

 

 

 

 

 

241,295

 

 

 

 

 

 

(104,145

)

Issuance of common stock, private offering

 

 

142,857

 

 

 

142

 

 

 

999,858

 

 

 

 

 

 

 

 

 

 

 

 

1,000,000

 

Deferred compensation amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,011,729

 

 

 

 

 

 

1,011,729

 

Purchase of treasury stock

 

 

 

 

 

 

 

 

 

 

 

(238,737

)

 

 

 

 

 

 

 

 

(238,737

)

Net (loss) for the year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(321,634

)

 

 

(321,634

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2021

 

 

26,807,145

 

 

$

195,235

 

 

$

93,100,129

 

 

$

(2,404,458

)

 

$

(6,842,195

)

 

$

(65,379,805

)

 

$

18,668,906

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under equity incentive plan

 

 

369,755

 

 

 

368

 

 

 

1,182,939

 

 

 

 

 

 

(166,329

)

 

 

 

 

 

1,016,978

 

Warrant compensation cost

 

 

 

 

 

 

 

 

20,963

 

 

 

 

 

 

 

 

 

 

 

 

20,963

 

Reversal of deferred compensation amortization that did not vest

 

 

(132,000

)

 

 

(132

)

 

 

(255,428

)

 

 

 

 

 

145,498

 

 

 

 

 

 

(110,062

)

Deferred compensation amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,165,126

 

 

 

 

 

 

1,165,126

 

Purchase of treasury stock

 

 

 

 

 

 

 

 

 

 

 

(1,344,569

)

 

 

 

 

 

 

 

 

(1,344,569

)

Net (loss) for the year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,483,244

)

 

 

(5,483,244

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2022

 

 

27,044,900

 

 

$

195,471

 

 

$

94,048,603

 

 

$

(3,749,027

)

 

$

(5,697,900

)

 

$

(70,863,049

)

 

$

13,934,098

 

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

 

 

Three Months Ended

(unaudited)

 

 

Twelve Months Ended

 

 

 

December

31, 2022

 

 

December

31, 2021

 

 

December 31,

2022

 

 

December 31,

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from Operating (Loss) to Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (Loss)

 

$

(90,814

)

 

$

(1,497

)

 

$

(5,214,430

)

 

$

(155,381

)

Depreciation and amortization

 

 

571,650

 

 

 

759,407

 

 

 

2,735,118

 

 

 

2,643,675

 

EBITDA

 

 

480,836

 

 

 

757,910

 

 

 

(2,479,312

)

 

 

2,488,294

 

Non-cash stock-based compensation expense, net

 

 

531,666

 

 

 

501,409

 

 

 

2,072,041

 

 

 

1,489,976

 

Adjusted EBITDA

 

$

1,012,502

 

 

$

1,259,319

 

 

$

(407,271

)

 

$

3,978,270

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Adjusted EBITDA margins:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

18,705,496

 

 

$

17,426,465

 

 

$

69,428,285

 

 

$

61,942,316

 

Adjusted EBITDA

 

 

1,012,502

 

 

 

1,259,319

 

 

 

(407,271

)

 

 

3,978,270

 

Adjusted EBITDA margins

 

 

5.4

%

 

 

7.2

%

 

 

(0.6

)%

 

 

6.4

%

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

 

 

December 31,

2022

 

 

December 31,

2021

 

 

 

 

 

 

 

 

 

 

Reconciliation from net cash provided (used) by operating activities to Non-GAAP Adjusted Operating Cash Flow (used):

 

 

 

 

 

 

 

 

Net cash provided (used) by operating activities

 

$

(17,036,477

)

 

$

29,784,917

 

Operating cash flow (used) adjustments:

 

 

 

 

 

 

 

 

Prepaid card load obligations

 

 

16,420,132

 

 

 

(28,980,651

)

Customer deposits

 

 

(189,929

)

 

 

(58,897

)

Merchant reserves

 

 

1,471,652

 

 

 

1,884,402

 

Operating lease right-of-use assets

 

 

(6,630

)

 

 

130,847

 

Operating lease liabilities

 

 

24,052

 

 

 

(137,522

)

Total adjustments to net cash provided (used) by operating activities

 

$

17,719,277

 

 

$

(27,161,821

)

Adjusted operating cash flows (used)

 

$

682,800

 

 

$

2,623,096

 

 

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