Usio, Inc. (NASDAQ:USIO) Q4 2020 Earnings Conference Call March 30, 2021 11:00 AM ET Company Participants Joseph Hassett - IR Louis Hoch - President and CEO Greg Carter - SVP, Payment Facilitation Tom Jewell - SVP and CFO Houston Frost - SVP, Prepaid Services Conference Call Participants Barry Sine - Spartan Capital Securities LLC Gary Prestopino - Barrington Research Brian Kinstlinger - Alliance Global Partners * Operator Good day, and welcome to Usio Earnings Conference Call for the Fourth Quarter Ended D ...

PART I [Business](index=5&type=section&id=Item%201.%20Business) Usio, Inc. offers integrated electronic payment processing services, including ACH, credit, debit, and prepaid card solutions, expanded by strategic acquisitions - Usio provides a comprehensive suite of payment services, including ACH, credit/debit card processing, and customizable prepaid cards for corporate and consumer use[15](index=15&type=chunk) - In December 2020, Usio acquired Information Management Solutions (IMS), expanding its portfolio with electronic bill presentment and printing/mailing services[17](index=17&type=chunk)[24](index=24&type=chunk) - The company's 'PayFac-in-a-Box' platform enables software developers to monetize payments, offering various card and ACH issuance via a single API[20](index=20&type=chunk) Growth in U.S. Non-Cash Payments (2015-2018) | Payment Type | Metric | 2015 | 2018 | Growth | | :--- | :--- | :--- | :--- | :--- | | Core Non-Cash Payments | Number (billions) | 143.6 | 174.2 | +30.6 billion | | Core Non-Cash Payments | Value (trillions) | $86.79 | $97.04 | +$10.25 trillion | | ACH Payments | Annual Growth (Number) | - | - | 6.0% | | Card Payments | Annual Growth (Number) | - | - | 8.9% | | Prepaid Debit Cards | Annual Growth (Number) | - | - | 10.5% | - Merchant customer accounts grew by **30% in 2020**, from 3,830 at the end of 2019 to 4,984 at the end of 2020, demonstrating significant expansion[53](index=53&type=chunk) - No single customer accounted for more than **10% of revenues** in either 2020 or 2019, indicating a diversified customer base[54](index=54&type=chunk) [Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) The company faces business, industry, and stock-related risks, including COVID-19 impacts, regulatory changes, and stock volatility - The COVID-19 pandemic created economic uncertainty, initially affecting transaction volumes, though some segments recovered and the prepaid business benefited from relief fund disbursements[80](index=80&type=chunk)[82](index=82&type=chunk) - The company has a history of substantial losses, reporting a net loss of **$2.9 million** in 2020 and **$5.1 million** in 2019, with an accumulated deficit of **$65.1 million** as of December 31, 2020[95](index=95&type=chunk) - Usio's operations are highly dependent on relationships with third-party processors and sponsor banks to access ACH and card networks, posing service disruption risks if partners fail to comply with rules[93](index=93&type=chunk)[94](index=94&type=chunk) - The business is subject to extensive and complex regulations, including the Dodd-Frank Act, CARD Act, anti-money laundering laws, and consumer protection rules, which could increase compliance costs and operational risks[100](index=100&type=chunk)[101](index=101&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) - The company's common stock is volatile, with prices fluctuating **between $0.75 and $3.72** in 2020, and is subject to SEC 'penny stock' rules which can limit liquidity[144](index=144&type=chunk)[145](index=145&type=chunk) [Properties](index=31&type=section&id=Item%202.%20Properties) Usio, Inc. leases multiple office and operational spaces across San Antonio, Nashville, and Austin, with various lease expiration dates Leased Properties Overview | Location | Purpose | Lease Expiration | Square Footage | | :--- | :--- | :--- | :--- | | San Antonio, TX | Headquarters | July 2024 | 6,000 - 10,535 | | Nashville, TN | Sales Organization | April 2023 | 3,794 | | San Antonio, TX | Output Solutions | September 2024 | 22,400 | | Austin, TX | Technology Org. | January 2023 | 1,890 | | San Antonio, TX | HQ Expansion | September 2024 | 2,734 | [Legal Proceedings](index=31&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in legal matters, including a defaulted note receivable and a lawsuit against a former officer for non-compete violations - The company has a loss reserve of **$145,000** as of December 31, 2020, for a defaulted note receivable from C2Go, Inc., reflecting the unlikelihood of recovery[156](index=156&type=chunk) - In January 2021, Usio sued its former Chief Revenue Officer, Vaden Landers, for violating his non-compete obligations, with Mr. Landers filing counterclaims for damages exceeding $1,000,000[157](index=157&type=chunk)[158](index=158&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[162](index=162&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=33&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Usio's common stock trades on Nasdaq, with no dividends paid, and a share repurchase program in place - The company's common stock is listed on the Nasdaq Capital Market under the ticker symbol 'USIO'[164](index=164&type=chunk) - The company has never declared or paid dividends and has no plans to do so in the foreseeable future[166](index=166&type=chunk) - A share buyback program was renewed in November 2019, with **$1,120,409** available for repurchases as of December 31, 2020[173](index=173&type=chunk) [Selected Financial Data](index=34&type=section&id=Item%206.%20Selected%20Financial%20Data) As a smaller reporting company, Usio, Inc. is not required to provide selected financial data - The company is a smaller reporting company and is not required to provide selected financial data[176](index=176&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Usio's 2020 revenue grew 14.4% to $32.3 million, narrowing net loss to $2.9 million, and improving liquidity Revenue by Segment (FY 2020 vs. FY 2019) | Revenue Segment | 2020 | 2019 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | ACH and complementary service | $8,471,705 | $9,343,974 | $(872,269) | (9.3)% | | Credit card | $19,453,501 | $17,329,322 | $2,124,179 | 12.3% | | Prepaid card services | $3,166,580 | $1,527,239 | $1,639,341 | 107.3% | | Output solutions | $1,160,037 | $0 | $1,160,037 | 100.0% | | **Total Revenue** | **$32,251,823** | **$28,200,535** | **$4,051,288** | **14.4%** | Key Profitability Metrics (FY 2020 vs. FY 2019) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Gross Profit | $7.4 million | $5.9 million | | Net Loss | $(2.9) million | $(5.1) million | - The company's liquidity position improved significantly, with cash and cash equivalents increasing to $5.0 million at year-end 2020 from $2.1 million at year-end 2019[202](index=202&type=chunk) - Financing activities in 2020 provided **$10.0 million** in cash, primarily from a **$3.0 million** private offering and **$7.4 million** in net proceeds from a public offering[204](index=204&type=chunk)[205](index=205&type=chunk)[209](index=209&type=chunk) - The company received an **$813,500 PPP loan** which was fully forgiven in December 2020, contributing to other income[199](index=199&type=chunk)[203](index=203&type=chunk) - The COVID-19 pandemic had a mixed impact, adversely affecting consumer lending merchants but creating new opportunities in the prepaid business for disbursing financial assistance[218](index=218&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=43&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Usio, Inc. is not required to provide market risk disclosures - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[228](index=228&type=chunk) [Financial Statements and Supplementary Data](index=44&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Audited financial statements show total assets grew to $82.7 million, equity doubled, and net loss narrowed to $2.9 million - The independent auditor, ADKF, P.C., issued an **unqualified opinion** that the consolidated financial statements present fairly, in all material respects, the financial position of the company[232](index=232&type=chunk) - Critical audit matters identified were the valuation of intangible assets (customer lists) and the valuation allowance for deferred tax assets due to significant management judgments involved[236](index=236&type=chunk)[238](index=238&type=chunk)[240](index=240&type=chunk) Consolidated Balance Sheet Summary (as of Dec 31) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Total Assets | $82,667,557 | $61,560,179 | | Total Liabilities | $65,964,196 | $53,991,844 | | Total Stockholders' Equity | $16,703,361 | $7,568,335 | Consolidated Statement of Operations Summary (Year Ended Dec 31) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Revenues | $32,251,823 | $28,200,535 | | Gross Profit | $7,375,893 | $5,949,210 | | Net Loss | $(2,906,183) | $(5,115,747) | | Basic & Diluted Loss Per Share | $(0.19) | $(0.39) | - In December 2020, the company acquired Information Management Solutions, LLC (IMS) for **$5.9 million** in cash and warrants valued at **$552,283**, adding **$4.4 million** in customer list intangible assets[288](index=288&type=chunk)[290](index=290&type=chunk) - The company has net operating loss carryforwards of approximately **$39.4 million**, but a valuation allowance has been provided, reducing the net deferred tax asset to **$1.4 million** due to uncertainty of realization[277](index=277&type=chunk)[323](index=323&type=chunk) [Changes In and Disagreements with Accountants on Accounting and Financial Disclosure](index=69&type=section&id=Item%209.%20Changes%20In%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) No changes in or disagreements with accountants on accounting and financial disclosure were reported - None reported[353](index=353&type=chunk) [Controls and Procedures](index=69&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2020 - Management concluded that as of December 31, 2020, the company's disclosure controls and procedures were **effective**[354](index=354&type=chunk) - Management concluded that as of December 31, 2020, the company's internal control over financial reporting was **effective**[355](index=355&type=chunk) [Other Information](index=70&type=section&id=Item%209B.%20Other%20Information) No other information is reported for this item - None[358](index=358&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=71&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2021 Proxy Statement - Information is incorporated by reference from the 2021 Proxy Statement[360](index=360&type=chunk) [Executive Compensation](index=71&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the 2021 Proxy Statement - Information is incorporated by reference from the 2021 Proxy Statement[365](index=365&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=71&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership and equity compensation plan details are incorporated by reference from the 2021 Proxy Statement - Information is incorporated by reference from the 2021 Proxy Statement[366](index=366&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=71&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Related party transactions and director independence information is incorporated by reference from the 2021 Proxy Statement - Information is incorporated by reference from the 2021 Proxy Statement[367](index=367&type=chunk) [Principal Accounting Fees and Services](index=71&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Principal accounting fees and services information is incorporated by reference from the 2021 Proxy Statement - Information is incorporated by reference from the 2021 Proxy Statement[368](index=368&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=72&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists consolidated financial statements and provides a comprehensive index of all exhibits filed with the Form 10-K - The consolidated financial statements are filed in Part II, Item 8 of the report[370](index=370&type=chunk) - All financial statement schedules have been omitted because they are not required or applicable[371](index=371&type=chunk) - A detailed list of exhibits is provided, including articles of incorporation, bylaws, employment agreements, acquisition agreements, and various certifications[373](index=373&type=chunk) [Form 10-K Summary](index=78&type=section&id=Item%2016.%20Form%2010-K%20Summary) No Form 10-K summary is provided - None[380](index=380&type=chunk)

Usio, Inc. (NASDAQ:USIO) Q3 2020 Earnings Conference Call November 13, 2020 11:00 AM ET Company Participants Joseph Hassett - IR Louis Hoch - President and CEO Greg Carter - SVP, Payment Facilitation Tom Jewell - SVP and CFO Houston Frost - SVP, Prepaid Services Conference Call Participants Gary Prestopino - Barrington Research Jon Hickman - Ladenburg Brian Kinstlinger - Alliance Global Partners Michael Diana - Maxim Group Operator Good morning, and welcome to Usio Earnings Conference Call for the Third Qua ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________. Commission File Number:000-30152 USIO, INC. (Exact name of registrant as specified in its charter) Nevada 98-0190072 (State o ...

Financial Data and Key Metrics Changes - Consolidated revenues decreased by approximately 3% to $7 million compared to $7.2 million in the same period last year, which is significantly less than the revenue decreases reported across the industry [34][35] - Gross profits decreased by 18% to $1.3 million, with gross margins down 340 basis points to 18.5% from 21.9% in the prior period, reflecting a shift in product mix [36] - Net loss remained unchanged at $1.3 million or $0.10 per share, consistent with the prior period [38] Business Line Data and Key Metrics Changes - Prepaid revenues increased by 58% year-over-year, with card load volume up 64% and transaction volumes up 47% [20][28] - Credit card revenues were up 4%, including a 167% growth in the PayFac business [35] - ACH revenues decreased by approximately 25% due to weakness in the consumer lending industry [35] Market Data and Key Metrics Changes - Credit card transactions increased by 26%, with the number of transactions reaching the highest in the company's history [15] - The prepaid business has seen significant growth, particularly in government and charitable organization programs, with five of the ten largest U.S. cities adopting their prepaid solutions [21][22] Company Strategy and Development Direction - The company aims to leverage its broad portfolio of payment solutions across diversified end markets, which has proven more resilient during economic downturns [11] - A $3 million private placement was completed to support growth initiatives and strengthen the balance sheet [24] - The company is focused on enhancing its prepaid and PayFac business lines, with plans to improve operational efficiency and conversion rates [45][49] Management's Comments on Operating Environment and Future Outlook - Management noted that while the second quarter was impacted by COVID-19, performance improved progressively from April to June and into July [10] - The company expects consumer lending to recover slowly, which will continue to affect ACH in the near term, but anticipates growth in other segments [26][76] - Management expressed confidence in the company's positioning for strong growth once the economy fully recovers [27] Other Important Information - The company reported a cash balance of $1.8 million at June 30, 2020, which increased to approximately $4.6 million by the end of July [40] - The company has signed 55 new clients in 2020, with expectations for substantial growth in load and transaction volumes in the third quarter [29][32] Q&A Session Summary Question: Was there any sequential revenue growth in PayFac this quarter? - Yes, there was a 4% growth month-over-month or quarter-over-quarter [58] Question: Can you discuss the focus on ISVs and merchant boarding? - There was a lack of structure and discipline around the implementation phase, which has now been addressed by creating a dedicated implementation team [60] Question: How many of the new accounts are generating revenues? - Approximately 25% to 30% of the new accounts have not yet started generating revenue [62] Question: What is the expected OpEx for the quarter? - OpEx is expected to increase due to new hires and increased call center support [69] Question: What is the sequential decline in ACH from Q1 to Q2? - The decline in ACH revenues was approximately $500,000 [72][73] Question: How does the company plan to address the ACH business challenges? - Management believes ACH has already hit its bottom and expects it to recover alongside the economy [81] Question: What is the spoilage revenue expected from prepaid programs? - Spoilage revenue is expected to be material, with significant growth anticipated over the next 12 to 24 months [85][86]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________. Commission File Number:000-30152 USIO, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of ...

Financial Data and Key Metrics Changes - The company reported record revenues for Q1 2020, with an 18% increase to $7.8 million compared to the same period last year [9][30] - Adjusted EBITDA improved to a loss of approximately $200,000, an improvement of $400,000 from Q4 2019 [32] - The net loss for the quarter was $0.8 million or $0.06 per share, an improvement from a net loss of $1.1 million or $0.09 per share in the same period last year [33] Business Line Data and Key Metrics Changes - Revenue from the prepaid card division increased by 69%, while credit card revenue rose by 28% [10][30] - The PayFac division saw a 52% sequential increase in processing volumes from Q4 2019 [11][36] - ACH revenues remained relatively flat, but the division continues to generate strong margins and cash flow [30][14] Market Data and Key Metrics Changes - The ACH business experienced a decline in transaction volumes due to the COVID-19 pandemic, with a 7% decrease in April compared to the previous year [20][48] - The company onboarded 30 new accounts in March, indicating underlying strength despite the pandemic's impact [14] - The prepaid segment saw a significant uptick in disbursement sales related to COVID relief programs, potentially doubling activity over the next two quarters [25][27] Company Strategy and Development Direction - The company is focusing on enhancing revenue transparency and has delivered segmented revenue reporting in 2020 [9] - There is a strategic shift towards scalable solutions in the prepaid business, prioritizing partnerships and disbursement cards [23] - The company is exploring acquisition opportunities that are accretive and synergistic with existing business lines [62][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to resume growth as restrictions are lifted, despite the challenges posed by COVID-19 [21][34] - The company has implemented cost controls and is experiencing lower expenses during the pandemic [44] - Management anticipates that the second half of the year will see further acceleration in growth, particularly in the PayFac division [40] Other Important Information - The company secured $813,500 in funding through the Paycheck Protection Plan, which may be subject to forgiveness [33][77] - Leadership changes were announced within the Payment Facilitation division, with Greg Carter stepping into a key role [16][72] Q&A Session Summary Question: What were the prepaid sales growth and total credit card sales growth in the quarter? - Prepaid sales growth was 69% and total credit card sales growth was 28% [42] Question: How do you expect expenses to trend for the rest of the year? - Expenses are expected to remain at current levels, with no new hires and reduced travel costs [44] Question: What was the impact of COVID-19 on transaction volumes in March and April? - ACH transactions were down 7% in April compared to last year, with significant declines in the dentist portfolio [48][56] Question: How is the company positioned for future growth in the PayFac segment? - The PayFac segment is expected to continue its growth trajectory, with strong client signings and a healthy pipeline [39][40] Question: What is the company's approach to acquisitions during this period? - The company is looking for accretive acquisitions that complement existing business lines, although a recent potential acquisition was halted due to COVID-19 [69][70]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 or [_] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________. Commission File Number:000-30152 USIO, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporatio ...

Usio, Inc. (NASDAQ:USIO) Q4 2019 Earnings Conference Call March 30, 2020 5:00 PM ET Company Participants Joe Hassett - IR Louis Hoch - President and CEO Tom Jewell - SVP and CFO Vaden Landers - EVP and CRO Conference Call Participants Gary Prestopino - Barrington Research Brian Kinstlinger - Alliance Global Partners Barry Sine - Spartan Capital Operator Good afternoon and welcome to the Usio Earnings Conference Call for the Fourth Quarter Ended December 31st, 2019. All participants will be in listen-only mo ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019. For the transition period from ______ to ________ Commission File No. 000-30152 Nevada 98-0190072 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) [_] TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ...