Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

In addition to historical information, this Form 10-Q may contain forward-looking statements relating to CoreCard. All statements, trend analyses and other information relative to markets for our products and trends in revenue, gross margins and anticipated expense levels, as well as other statements including words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", and other similar expressions, constitute forward-looking statements. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties including those factors described below under "Factors That May Affect Future Operations", and that actual results may differ materially from those contemplated by such forward-looking statements. CoreCard undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results.

For purposes of this discussion and analysis, we are assuming and relying upon the reader's familiarity with the information contained in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, in the Form 10- K for the year ended December 31, 2024 as filed with the Securities and Exchange Commission.

Overview

CoreCard Corporation, a Georgia corporation, and its predecessor companies have operated since 1973 and its securities have been publicly traded since 1980. In this report, sometimes we use the terms "Company", "CoreCard", "us", "ours", "we", "Registrant" and similar words to refer to CoreCard Corporation and subsidiaries. Our executive offices are located in Norcross, Georgia and our website is www.corecard.com.

We are primarily engaged in the business of providing technology solutions and processing services to the financial technology and services market, commonly referred to as the FinTech industry.

Our operations are conducted through our affiliate companies located in Romania, India, the United Arab Emirates and Colombia, as well as our corporate office in Norcross, Georgia which provides significant administrative, human resources and executive management support. CoreCard's foreign subsidiaries that perform software development and testing as well as processing operations support are CoreCard SRL in Romania, CoreCard Software Pvt Ltd in India, CoreCard Colombia SAS in Colombia and CoreCard Software DMCC in the United Arab Emirates.

Our results vary in part depending on the size and number of software licenses recognized as well as the value and number of professional services contracts recognized in a particular period. As we continue to grow our Processing Services business, we continue to gain economies of scale on the investments we have made in the infrastructure, resources, processes and software features developed over the past number of years to support this growing side of our business. We are adding new processing customers at a faster pace than we are adding new license customers, resulting in steady growth in the processing revenue stream.

We receive license revenue and professional services revenue, including such revenue from Goldman Sachs Group, Inc. ("Goldman"), which was added as a customer in 2018 and is referred to as "Customer A" in the Notes to Consolidated Financial Statements. In total, this customer represented 63% and 61% of our consolidated revenues in the first six months of 2025 and 2024, respectively. On October 23, 2024, we executed an Omnibus Amendment with Goldman covering the following agreements between the Company and Goldman:

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Software License and Support Agreement, dated as of October 16, 2018 (the "SLSA");

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Master Professional Services Agreement, dated as of August 1, 2019 (the "MPSA", and together with the SLSA, the "Agreements");

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Schedule of Work No. 1 to Professional Services Agreement, dated as of August 1, 2019, and Amendment No. 2 to Schedule of Work No. 1, dated as of January 13, 2021 ("SOW 1"); and

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Schedule of Work No. 2 to Professional Services Agreement, dated as of August 1, 2019, and Amendment No. 2 to Schedule of Work No. 2, dated as of January 13, 2021 ("SOW 2", and together with SOW 1, the "SOWs").

The Omnibus Amendment, which is effective as of October 23, 2024, extends the Support Services term of the SLSA through December 31, 2030, and extends the term of the SOWs through December 31, 2030. Among other things, the Amendment also (i) provides for increased monthly fees under SOW 2 starting January 2025, and (ii) allows Goldman to terminate the agreements no earlier than January 1, 2027, with termination payments due if terminated prior to December 31, 2030. All other material terms of the Agreements and SOWs, as amended, remain unchanged.

The amount and timing of future revenues from Goldman will be dependent on various factors not in our control such as the number of accounts on file and the level of customization needed by the customer and whether the customer continues the credit card line of business. License revenue from this customer, similar to other license arrangements, is tiered based on the number of active accounts on the system. Once the customer achieves each tier level, they receive a perpetual license up to that number of accounts; inactive accounts do not count toward the license tier. The customer receives an unlimited perpetual license at a maximum tier level that allows them to utilize the software for any number of active accounts. Support and maintenance fees are charged based on the tier level achieved and increase at new tier levels.

Goldman recently announced the transition of its General Motors co-branded credit card to a new issuer, which is processed under our agreement with Goldman, with an expected close in 2025. Sale of the loans by Goldman will not affect the maintenance revenue that we receive under the agreement, which is set based on the most recently achieved license tier. However, the removal of active accounts following a sale of the loans will proportionately increase the number of accounts that will need to be added to earn the license fees attributable to the next license tier under the agreement. Additionally, selling one of their two portfolios, combined with their narrowed focus on consumer-related activities, could make it more likely that Goldman will exit the credit card business. In addition, Apple Inc. could decide to replace Goldman with a new credit card partner in the future with respect to its Apple Card portfolio.

The infrastructure of our multi-customer environment is designed to be scalable for the future. A significant portion of our expense is related to personnel, including approximately 1,000 employees located in India, Romania, the United Arab Emirates and Colombia. In October 2020, we opened a new office in Dubai, the United Arab Emirates to support CoreCard's expansion of processing services into new markets in the Asia Pacific, Middle East, Africa and European regions. In October 2021, we opened a new location in Bogotá, Colombia to support existing customers and continued growth. Our ability to hire and train employees on our processes and software impacts our ability to onboard new customers and deliver professional services for software customizations. In addition, we have certain corporate office expenses associated with being a public company that impact our operating results.

Our revenue fluctuates from period to period and our results are not necessarily indicative of the results to be expected in future periods. It is difficult to predict the level of consolidated revenue on a quarterly or annual basis for a number of reasons, including the following:

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Software license revenue in a given period may consist of a relatively small number of contracts and contract values can vary considerably depending on the software product and scope of the license sold. Consequently, even minor delays in delivery under a software contract (which may be out of our control) could have a significant and unpredictable impact on the consolidated revenue that we recognize in a given quarterly or annual period.

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Customers may decide to postpone or cancel a planned implementation of our software for any number of reasons, which may be unrelated to our software or contract performance, but which may affect the amount, timing and characterization of our deferred and/or recognized revenue.

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Customers typically require our professional services to modify or enhance their CoreCard software implementation based on their specific business strategy and operational requirements, which vary from customer to customer and period to period.

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The timing of new processing customer implementations is often dependent on third party approvals or processes which are typically not under our direct control.

We continue to believe that we have a strong cash position, and we intend to use cash balances to support the domestic and international operations associated with our CoreCard business and to expand our operations in the FinTech industry through financing the growth of CoreCard and, if appropriate opportunities become available, through acquisitions of businesses in this industry. In May 2022, the Board of Directors of the Company (the "Board") authorized a new $20 million share repurchase program, and we had approximately $7.1 million of authorized share repurchases remaining as of June 30, 2025.

Proposed Merger with Euronet Worldwide Inc.

On July 30, 2025, CoreCard Corporation, a Georgia corporation (the "Company"), entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, Euronet Worldwide, Inc., a Delaware corporation ("Euronet"), and Genesis Merger Sub Inc., a Georgia corporation and wholly owned subsidiary of Euronet ("Merger Sub"). Pursuant to the Merger Agreement, and upon the terms and subject to the conditions therein and in accordance with the Georgia Business Corporation Code, Merger Sub will merge with and into the Company (the "Merger"), with the Company surviving the Merger and continuing as a wholly owned subsidiary of Euronet. The respective boards of directors of the Company and Euronet have approved the Merger Agreement, and the board of directors of the Company has recommended that the Company's shareholders adopt the Merger Agreement.

Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger (the "Effective Time"), each issued and outstanding share of common stock, par value $0.01 per share, of the Company ("Company Common Stock") (other than such shares owned by the Company, Euronet or Merger Sub or owned by any wholly owned subsidiary of Euronet (other than Merger Sub) or of the Company will be converted into the right to receive: (i) a number of shares of Euronet's common stock, par value $0.02 per share (the "Euronet Common Stock"), equal to the Exchange Ratio (as defined below) and (ii) any cash payable in lieu of fractional shares, without interest and subject to any applicable withholding taxes (collectively, the "Per Share Merger Consideration"). Under the terms of the Merger Agreement, the "Exchange Ratio" means:

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if the volume weighted average price per share of Euronet Common Stock on Nasdaq for the fifteen consecutive trading days ending on, and including, the second full trading day prior to the Effective Time (the "Euronet Stock Price") is equal to or less than $95.4798, then 0.3142;

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if the Euronet Stock Price is greater than $95.4798 but less than $107.7997, then the quotient obtained by dividing $30.00 by the Euronet Stock Price, rounded to four decimal places; or

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if the Euronet Stock Price is greater than or equal to $107.7997, then 0.2783.

The proposed transaction values the Company at approximately $248 million, or $30 per share of Company Common Stock.

As a result of the Merger Agreement, (i) each outstanding and unvested Company restricted stock unit ("RSU") award will become vested and will automatically be converted into the right to receive the Per Share Merger Consideration in respect of each share of Company Common Stock subject to such Company RSU, and (ii) each Company stock option that is outstanding and unexercised immediately prior to the Effective Time will become fully vested and exercisable, and will be automatically terminated, and will be converted into the right to receive an amount in cash in respect of each share subject thereto equal to the excess of (x) the product of the Exchange Ratio multiplied by the Euronet Stock Price over (y) the per share exercise price.

If the Merger is consummated, the Company Common Stock will be delisted from The New York Stock Exchange and deregistered under the Securities Exchange Act of 1934, as amended. Following the closing of the Merger, the Euronet Common Stock will continue to be listed on the NASDAQ Global Select Market ("Nasdaq") under the ticker symbol "EEFT."

The Merger Agreement contains customary representations, warranties and covenants, including, among others, covenants requiring (i) each of the Company and Euronet to conduct its respective businesses in the ordinary course of business consistent with past practice during the period between the execution of the Merger Agreement and the Effective Time, (ii) each of the Company and Euronet to use reasonable best efforts to obtain required government approvals, subject to certain exceptions, and (iii) the preparation and filing of a registration statement on Form S-4 containing a proxy statement/prospectus with the U.S. Securities and Exchange Commission ("SEC") in connection with the Merger. The Merger Agreement also includes covenants requiring the Company (x) not to solicit, or enter into discussions with third parties relating to, alternative business combination transactions during the period between the execution of the Merger Agreement and the Effective Time, subject to certain exceptions, and (y) to call and hold a special meeting of the Company's shareholders to approve the Merger and, subject to certain customary "fiduciary out" exceptions, not to withdraw, change, amend, modify or qualify in a manner adverse to Euronet the recommendation of the Company's board of directors that the Company's shareholders vote to adopt the Merger Agreement and the Merger.

The consummation of the Merger is subject to certain closing conditions set forth in the Merger Agreement, including: (i) adoption of the Merger Agreement by the Company's shareholders (the "Company Shareholder Approval"), (ii) the expiration or termination of the waiting period under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (iii) the absence of certain orders or laws preventing consummation of the Merger, (iv) the effectiveness of the registration statement on Form S-4 to be filed by Euronet with the SEC in connection with the Merger and (v) the authorization for listing on Nasdaq of the shares of Euronet Common Stock to be issued in connection with the Merger. The obligation of each party to consummate the Merger is also subject to other customary closing conditions, including, among others, (a) the absence of a material adverse effect with respect to the other party, (b) the accuracy of the other party's representations and warranties, subject to certain materiality standards set forth in the Merger Agreement, (c) compliance in all material respects with the other party's obligations under the Merger Agreement and (d) the receipt of a tax opinion from their respective counsel to the effect that the Merger will qualify for federal income tax purposes as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.

The Merger Agreement contains certain termination rights, including (1) the right of either party to terminate the Merger Agreement if (a) the parties mutually consent to terminate in writing, (b) there has been a breach of any representation, warranty, covenant or agreement made by the other party in the Merger Agreement such that a closing condition would not be satisfied (subject to cure rights), (c) the Merger does not occur by January 30, 2026 (which date will be automatically extended by up to two three-month periods to July 30, 2026 if the only then-outstanding closing conditions relate to clearance under the HSR Act or other applicable antitrust laws) (such date, as may be extended, the "Outside Date"), (d) there is a final, non-appealable order, injunction, decree or ruling permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger; or (e) the Company is unable to obtain the Company Shareholder Approval; (2) the right of Euronet to terminate the Merger Agreement if, prior to the Company Shareholder Approval, the Company's board of directors changes its recommendation in favor of the Merger; and (3) the right of the Company to terminate the Merger Agreement, prior to receiving the Company Shareholder Approval, in order to enter into a definitive agreement for a superior proposal (so long as the Company complies in all material respects with the non-solicitation provisions in the Merger Agreement).

The Merger Agreement provides that the Company must pay Euronet a termination fee equal to $7.5 million if the Merger Agreement is terminated in certain circumstances, including (i) in the circumstances described in clauses (2) and (3) in the preceding paragraph; (ii) if either party terminates the Merger Agreement due to the failure to obtain the Company Shareholder Approval, an acquisition proposal is made public and not publicly withdrawn at least two business days prior to the Company's shareholders' meeting and within 12 months of such termination, an acquisition proposal is consummated or a definitive agreement is entered into with respect to an acquisition proposal; or (iii) if (a) prior to the termination of the Merger Agreement, an acquisition proposal is made to the Company or becomes publicly disclosed and is not withdrawn prior to such termination, (b) either party terminates the Merger Agreement because the Outside Date has been reached or Euronet terminates the Merger Agreement due to the Company's breach of one or more covenants of the Merger Agreement after the receipt of such acquisition proposal and (c) within 12 months of such termination, an acquisition proposal is consummated or a definitive agreement is entered into with respect to an acquisition proposal.

Subject to satisfaction of the closing conditions in the Merger Agreement, the closing of the Merger is expected to occur in the fourth quarter of 2025.

Results of Operations

The following discussion should be read in conjunction with the Consolidated Financial Statements and the Notes to Consolidated Financial Statements presented in this quarterly report.

Revenue - Total revenue in the three and six month periods ended June 30, 2025 was $17,594,000 and $34,282,000, respectively, which represents increases of 28 percent compared to the respective periods in 2024.

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Revenue from serviceswas $17,594,000 and $34,282,000 in the three and six month periods ended June 30, 2025, respectively, which represents increases of 28 percent compared to the respective periods in 2024. Revenue in the second quarter and first six months of 2025 was higher due to an increase in the number and value of professional services contracts completed during 2025, primarily related to higher professional services revenue from our largest customer, Goldman Sachs Group, Inc. We also experienced increased revenue from transaction processing services and software maintenance and support services in the second quarter of 2025 as compared to the second quarter of 2024 due to an increase in the number of customers and accounts on file. The increased revenue from transaction processing services and software maintenance and support services in the first six months of 2025, was partially offset by the acceleration of approximately $500,000 of processing revenue from a customer that was acquired in 2023 and, as a result, formally terminated their contract in the first quarter of 2024. We expect that processing services will continue to grow as our customer base increases; however, the time required to implement new customer programs could be delayed due to third party integration and approval processes. It is difficult to predict with accuracy the number and value of professional services contracts that our customers will require in a given period. Customers typically request our professional services to modify or enhance their CoreCard software implementation based on their specific business strategy and operational requirements, which vary from customer to customer and period to period.

●	Revenue from products, which is primarily software license fees, was $0 in the three and six month periods ended June 30, 2025 and 2024, respectively. No new license tiers were achieved in 2025 or the first six months of 2024.

Cost of Revenue - Total cost of revenue was 55 percent of total revenue in the three and six month periods ended June 30, 2025, respectively, compared to 66 percent and 69 percent in the corresponding periods of 2024. The decrease in cost of revenue as a percentage of revenue is primarily driven by higher rates for professional services, primarily from the increased managed services revenue from Goldman, partially offset by higher low-margin third-party revenues. Cost of revenue includes costs to provide annual maintenance and support services to our installed base of licensed customers, costs to provide professional services, and costs to provide our financial transaction processing services. The cost and gross margins on such revenues can vary considerably from period to period depending on the customer mix, customer requirements and project complexity as well as the mix of our U.S. and offshore employees working on the various aspects of services provided. In addition, we continue to devote the resources necessary to support our growing processing business, including direct costs for regulatory compliance, infrastructure, network certifications, and customer support. Investments in our infrastructure are in anticipation of adding customers in future periods. As such, we will not experience economies of scale unless we add additional customers, as anticipated. This may be subject to change in the future if new regulations or processing standards are implemented causing us to incur additional costs to comply.

Operating Expenses - In the three and six month periods ended June 30, 2025, total operating expenses from consolidated operations increased 49 percent and 48 percent compared to the corresponding periods in 2024, respectively. Development expenses were 63 percent and 66 percent higher in the three and six month periods in 2025, respectively, as compared to the same periods in 2024, primarily due to higher bonus accruals in the 2025 periods. General and administrative expenses were 37 percent and 31 percent higher in the three and six month periods ended June 30, 2025, respectively, as compared to the same periods in 2024, primarily due to higher bonus accruals in the 2025 periods. Marketing expenses decreased 40 percent and 10 percent for the three and six month periods in 2025, respectively, as compared to the same periods in 2024. Our client base continues to increase with minimal marketing efforts as we continue to have prospects contact us via online searches; however, we will continue to re-evaluate our marketing expenditures as needed to competitively position the Processing Services business.

Investment Loss - In the three and six months ended June 30, 2025, we recorded $145,000 and $580,000 of investment losses, respectively, compared to investment losses of $199,000 and $438,000 for the three and six months ended June 30, 2024, respectively. The investment loss primarily relates to our equity method investment in a privately held identity and professional services company with ties to the FinTech industry (see Note 4). The privately held company has incurred losses as they invest in future growth.

Other Income, net - In the three and six months ended June 30, 2025, we recorded income of $169,000 and $306,000, respectively, compared to income of $235,000 and $526,000 for the comparable 2024 periods.

Income Taxes - Our effective tax rates for the three and six months ended June 30, 2025 were 26.2 percent and 25.1 percent compared to effective tax rates of 24.4 and 24.8 percent for the respective periods in 2024.

Liquidity and Capital Resources

Our cash and cash equivalents balance at June 30, 2025, was $26,621,000 compared to $19,481,000 at December 31, 2024. During the six months ended June 30, 2025, cash provided by operations was $10,716,000 compared to cash provided by operations of $2,341,000 for the six months ended June 30, 2024. The increase in cash provided by operations is primarily due to lower accounts receivable, higher net income, higher accounts payable and accrued payroll, partially offset by higher other current assets and lower depreciation expense.

During the six months ended June 30, 2025, we invested $945,000 in publicly traded multi sector corporate and municipal debt securities, offset by related maturities of $869,000, which is described in more detail in Note 8 to the Consolidated Financial Statements.

During the six months ended June 30, 2025, we used $3,105,000 of cash, compared to $2,753,000 of cash during the six months ended June 30, 2024, to acquire computer equipment and related software and for personnel and contractor development costs for the development of a new processing platform and to enhance our existing processing environment in the U.S.

We expect to have sufficient liquidity from cash on hand as well as projected customer payments to support our operations and capital equipment purchases in the foreseeable future. Currently we expect to use cash in excess of what is required for our current operations for opportunities we believe will expand our FinTech business, as exemplified in transactions described in Note 3 and 4 to the Consolidated Financial Statements, although there can be no assurance that appropriate opportunities will arise. In May 2022, the Board authorized an additional $20 million for our share repurchase program. We made no share repurchases for the six months ended June 30, 2025, and share repurchases of $3.7 million for the six months ended June 30, 2024. We had approximately $7.1 million of authorized share repurchases remaining as of June 30, 2025.

Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements that are reasonably likely to have a current or future material effect on our financial condition, liquidity or results of operations.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations is based upon our Consolidated Financial Statements which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, revenues and expenses. We consider certain accounting policies related to revenue recognition and valuation of investments to be critical policies due to the estimation processes involved in each. Management discusses its estimates and judgments with the Audit Committee of the Board of Directors. For a detailed description on the application of these and other accounting policies, see Note 1 to the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "2024 Form 10-K"). Reference is also made to the discussion of the application of these critical accounting policies and estimates contained in Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Form 10-K. During the six-month period ended June 30, 2025, there were no significant or material changes in the application of critical accounting policies.

Factors That May Affect Future Operations

Future operations are subject to risks and uncertainties that may negatively impact our future results of operations or projected cash requirements. It is difficult to predict future quarterly and annual results with certainty.

Among the numerous factors that may affect our consolidated results of operations or financial condition are the following:

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Goldman Sachs Group, Inc., our largest customer, represented 63% of our consolidated revenues for the six months ended June 30, 2025. In the event of material failures to meet contract obligations related to the services provided, there is risk of breach of contract and loss of the customer and related future revenues. Additionally, loss of the customer and related future revenues or a reduction in revenues could result if they or their customers choose an alternative service provider, build an in-house solution, or decide to exit the business or service line that falls under the services that we provide for them. Goldman Sachs Group, Inc., recently announced the transition of its General Motors co-branded credit card to a new issuer, with an expected close in 2025. They continue to narrow the focus of their consumer-related activities, which makes it more likely that they exit the remaining business line that we support. In addition, Apple Inc. could decide to replace Goldman with a new credit card partner in the future with respect to its Apple Card portfolio.

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The Merger is subject to conditions, some or all of which may not be satisfied, and the Merger may not be completed on a timely basis, if at all. The completion of the Merger is subject to certain closing conditions, including, among others, (i) adoption of the Merger Agreement by the Company's shareholders (the "Company Shareholder Approval"), (ii) the expiration or termination of the waiting period under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (iii) the absence of certain orders or laws preventing consummation of the Merger, (iv) the effectiveness of the registration statement on Form S-4 to be filed by Euronet with the SEC in connection with the Merger and (v) the authorization for listing on Nasdaq of the shares of Euronet Common Stock to be issued in connection with the Merger. The obligation of each party to consummate the Merger is also subject to other customary closing conditions, including, among others, (a) the absence of a material adverse effect with respect to the other party, (b) the accuracy of the other party's representations and warranties, subject to certain materiality standards set forth in the Merger Agreement, (c) compliance in all material respects with the other party's obligations under the Merger Agreement and (d) the receipt of a tax opinion from their respective counsel to the effect that the Merger will qualify for federal income tax purposes as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended. Further, either we or Euronet may terminate the Merger Agreement if the Merger has not been consummated by January 30, 2026 (which date will be automatically extended by up to two three-month periods to July 30, 2026 if the only then-outstanding closing conditions relate to clearance under the HSR Act or other applicable antitrust laws). However, this right to terminate the Merger Agreement will not be available to any party whose failure to perform any of its obligations under the Merger Agreement has been a proximate cause of, or been a primary factor in the failure of the Merger to have been consummated on or by such date. The Merger Agreement may also be terminated in certain other circumstances. Failure to complete the Merger in a timely manner or at all could have material adverse effects on our ongoing business, financial condition, financial results and stock price.

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Similarly, delays in the completion of the Merger could, among other things, result in additional transaction costs, loss of revenue or other negative effects associated with uncertainty about completion of the Merger.

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Because the market price of the Euronet Common Stock may fluctuate, our shareholders cannot be certain of the precise value of the merger consideration they may receive in our pending Merger with Euronet.

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If the Merger is not completed, we may owe a termination fee of $7.5 million to Euronet in certain circumstances.

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The Merger Agreement contains provisions that limit our ability to pursue alternatives to the Merger, could discourage a potential competing acquiror from making a favorable alternative transaction proposal to us and, in specified circumstances, could require us to pay a termination fee to Euronet.

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If the Merger Agreement is terminated and our board of directors seeks another business combination, our shareholders cannot be certain that we will be able to find a party willing to enter into a transaction on terms equivalent to or more attractive than the terms that Euronet has agreed to in the Merger Agreement.

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Time and resources committed by our management to matters relating to the Merger could otherwise have been devoted to pursuing other beneficial opportunities for our Company.

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We may experience negative reactions from the financial markets or from our customers, business partners or employees as a result of the announcement of the Merger Agreement.

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We are subject to certain restrictions on the conduct of our business prior to completing the Merger, which may restrict our ability to execute on certain business strategies without Euronet's prior written consent.

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We may be unable to attract or retain key employees during the pendency of the Merger.

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Litigation may arise in connection with the Merger, which could be costly, prevent consummation of the Merger, divert management's attention, and otherwise harm our business. In addition, if the Merger is not consummated for any reason, litigation could also be filed in connection with the failure to consummate the Merger. Any litigation related to the Merger may result in negative publicity or an unfavorable impression of us, which could adversely affect the price of our common stock, impair our ability to recruit or retain employees, damage our relationships with our customers and other business partners, or otherwise harm our operations and financial performance.

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Weakness or instability in the global financial markets could have a negative impact due to potential customers (most of whom perform some type of financial services) delaying decisions to purchase software or initiate processing services.

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Increased federal and state regulations and reluctance by financial institutions to act as sponsor banks for prospective customers could result in losses and additional cash requirements.

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Delays in software development projects could cause our customers to postpone implementations or delay payments, which would increase our costs and reduce our revenue and cash.

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We could fail to deliver software products which meet the business and technology requirements of our target markets within a reasonable time frame and at a price point that supports a profitable, sustainable business model.

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Our processing business is impacted, directly or indirectly, by more regulations than our licensed software business. If we fail to provide services that comply with (or allow our customers to comply with) applicable regulations or processing standards, we could be subject to financial or other penalties that could negatively impact our business.

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A security breach in our platform could expose confidential information of our customers' account holders, hackers could seize our digital infrastructure and hold it for ransom or other cyber risk events could occur and create material losses in excess of our insurance coverage.

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Software errors or poor-quality control may delay product releases, increase our costs, result in non-acceptance of our software by customers or delay revenue recognition.

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We could fail to expand our base of customers as quickly as anticipated, resulting in lower revenue and profits and increased cash needs.

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We could fail to retain key software developers and managers who have accumulated years of know-how in our target markets and company products or fail to attract and train a sufficient number of new software developers and testers to support our product development plans and customer requirements at projected cost levels.

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Increasing and changing government regulations in the United States and foreign countries related to such issues as data privacy, financial and credit transactions could require changes to our products and services which could increase our costs and could affect our existing customer relationships or prevent us from getting new customers.

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Delays in anticipated customer payments for any reason would increase our cash requirements and could adversely impact our profits.

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Competitive pressures (including pricing, changes in customer requirements and preferences, and competitor product offerings) may cause prospective customers to choose an alternative product solution, resulting in lower revenue and profits (or losses).

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Our future capital needs are uncertain and depend on a number of factors; additional capital may not be available on acceptable terms, if at all.

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Volatility in the markets, including as a result of political instability, civil unrest, war or terrorism, or pandemics or other natural disasters, such as the recent outbreak of coronavirus, could adversely affect future results of operations and could negatively impact the valuation of our investments.

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Other general economic and political conditions, including heightened or uncertain tariffs, inflation, volatility in interest rates, changes in trade policies and the results thereof, could cause customers to reduce spending, or delay or cancel payments or purchases.