Note

Acquisition of Information Management Solutions, LLC.

December 15, 2020,

the Company entered into an asset purchase agreement to purchase substantially all the assets of Information Management Solutions, LLC ("IMS"), a Texas limited liability company in the business of electronic bill presentment, document composition, document decomposition and printing and mailing services serving hundreds of customers representing a wide range of industry verticals, including utilities and financial institutions. The total purchase price consideration consisted of a cash payment of

$5,907,408

at closing and warrant considerations valued at

$552,283.

The warrants were comprised of

945,599

unregistered warrants to purchase shares of common stock of Usio, Inc., or

945,599

shares of common stock,

$0.001

par value per share, with an exercise price of

$4.23

per share.

The final number of warrants was determined by dividing

$2,000,000

by the

-day weighted average closing price for the

four

trading days preceding the closing date and the closing day, or

$2.115

per share. The exercise price of the warrants was determined by multiplying the

-day weighted average closing price by the number

The warrants vest in

three

equal installments on the first,

second

and

third

anniversary of the closing date and have a term of

five

years from vest.

The purchase price was allocated to the net assets acquired based upon their estimated fair values as follows:

	Estimated Fair		Estimated Useful
	Value		Life (in years)

Accounts receivable	$	683,736
Inventory		168,138
Fixed assets		1,211,225		5
Prepaid expenses		29,849
Other assets		7,408
Customer list		3,807,052		5
Total Cash Consideration	$	5,907,408

Customer list	$	552,283
Total Warrant Consideration	$	552,283

Total Purchase Price	$	6,459,691

The

2020

consolidated statement of operations includes

month of IMS operations, which is approximately

$1.2

million of revenue and

$0.6

million of gross profit.

Unaudited Pro Forma Information

The Company estimates that the revenues and net income for the periods below that would have been reported if the IMS acquisition would have taken place on the

first

day of the Company's

2019

calendar year would be as follows and includes pro-forma adjustments to normalize results in line with future operating performance:

	2020			2019
Revenues	$	45,184,678		$	41,809,997
Gross Profit		9,251,517			8,099,868
Net (Loss)		(3,127,387	)		(4,909,074	)
Income per share:
Basic	$	(0.17	)	$	(0.28	)
Diluted	$	(0.17	)	$	(0.28	)

Amounts set forth above are

not

necessarily indicative of the results that would have been obtained had the IMS acquisition had taken place on the

first

day of the Company's

2019

calendar year or of the results that

may

be achieved by the combined enterprise in the future.