Usio (USIO) risk factors, FY2025 10-K

RISKS RELATED TO OUR BUSINESS

1. 01Loss of key resellers could reduce our revenue growth
2. 02Market conditions could negatively impact our business, results of operations, cash flows and financial condition
3. 03Changes in these factors are difficult to predict, and a change in one factor could affect other factors, which could result in adverse effects to our business, results of operations, financial condition, and cash flows55% rewritten
4. 04If our security applications are breached by cyberattacks or are not adequate to address changing market conditions and customer concerns, we may incur significant losses and be unable to sell our services
5. 05Our efforts to expand our product portfolio and market reach, including through acquisitions, may not succeed and may reduce our revenue growth and we may not achieve or maintain profitability43% rewritten
6. 06Unauthorized disclosure of cardholder data, whether through breach of our computer systems or otherwise, could expose us to liability and protracted and costly litigation
7. 07If our efforts to protect the security of information about our customers, cardholders and vendors are unsuccessful, we may face additional costly government enforcement actions and private litigation, and our sales and reputation could suffer
8. 08If we fail to comply with the applicable requirements of the respective card networks, they could seek to fine us, suspend us or terminate our registrations
9. 09If we do not adapt to rapid technological change, including as a result of AI, our business may fail45% rewritten
10. 10Fraud by merchants or others could have an adverse effect on our operating results and financial condition72% rewritten
11. 11Business interruptions or systems failures may impair the availability of our websites, applications, products or services, or otherwise harm our business
12. 12We rely on our relationship with the Automated Clearing House network, and if the Federal Reserve rules were to change, our business could be adversely affected
13. 13If we lose key personnel or we are unable to attract, recruit, retain and develop qualified employees, our business, financial condition and results of operations may be adversely affected
14. 14We may not be able to obtain and maintain sufficient insurance coverage
15. 15We have recorded significant deferred tax assets, and we might never realize their full value, which would result in a charge against our earnings
16. 16Our prepaid card revenues from the sale of services to merchants that accept Mastercard cards are dependent upon our continued Mastercard registration and financial institution sponsorship and, in some cases, continued participation in certain payment networks
17. 17If our software fails, and we need to repair or replace it, or we become subject to warranty claims, our costs could increase
18. 18We depend on Louis A. Hoch, our Chairman, President, Chief Executive and Chief Operating Officer, and if he ceased to be active in our management, our business may not be successful
19. 19Risks associated with reduced levels of consumer spending could adversely affect our revenues and earnings23% rewritten
20. 20We are subject to risks and write-offs resulting from fraudulent activities and losses from overdrawn cardholder accounts that could adversely impact our financial performance and results of operations
21. 21Our business strategy includes identifying businesses and assets to acquire, and if we cannot integrate acquisitions into our Company successfully, we may have limited growth
22. 22If we do not manage our credit risks related to our merchant accounts, we may incur significant losses

RISKS RELATED TO OUR INDUSTRY

1. 23The electronic commerce market is evolving and if it does not continue to grow, we may not be able to sell sufficient services to make our business viable
2. 24If we cannot compete successfully in our industry, we could lose market share and our costs could increase
3. 25Payments and other financial services-related regulations and oversight are material to our business and any failure by us to comply could materially harm our business42% rewritten
4. 26As an agent of, and third-party service provider to, our issuing banks, we are subject to indirect regulation and direct audit and examination by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, or FRB, and the Federal Deposit Insurance CorporationNew
5. 27We are subject to U.S. laws, regulations, rules, standards, policies, contractual obligations and other legal obligations, particularly those related to privacy, data protection and information security, and our actual or perceived failure to comply with such obligations could harm our business
6. 28We are subject to the CARD Act which could subject us to civil and criminal liabilities
7. 29We are subject to regulations relating to prepaid card programs which could further increase our compliance costs
8. 30The use of AI could make us subject to evolving regulatory risks28% rewritten

RISKS RELATED TO OUR COMMON STOCK

1. 31Our stock price is volatile, and you may not be able to sell your shares at a price higher than what you paid27% rewritten
2. 32If security or industry analysts publish reports that are interpreted negatively by the investment community, publish negative research reports about our business, cease coverage of our company or fail to regularly publish reports or us, our share price could decline
3. 33Additional stock issuances could result in significant dilution to our stockholders29% rewritten
4. 34We may issue additional equity securities, or engage in other transactions that could dilute our book value or affect the priority of our common stock, which may adversely affect the market price of our common stock
5. 35We may issue shares of preferred stock with greater rights than our common stock
6. 36We have not paid any cash dividends on our common stock to date and do not anticipate any cash dividends being paid to holders of our common stock in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our Board
7. 37Shares eligible for future sale may depress our stock price
8. 38Our directors and officers have substantial control over us27% rewritten
9. 39We have adopted certain measures that may make it more difficult for a third party to acquire control of our Company28% rewritten