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[ALTERNATE PAGE FOR CANADIAN PROSPECTUS] TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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As filed with the Securities and Exchange Commission on September 1,4, 2015

Registration No. 333-206218

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No 1.No. 2
to

Form S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933

CPI Card Group Inc.
(Exact name of Registrant as specified in its charter)

CPI Card Group Inc.
10368 West Centennial Road
Littleton, CO 80127
(303) 973-9311
(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)

Steven Montross
President and Chief Executive Officer
CPI Card Group Inc.
10368 West Centennial Road
Littleton, CO 80127
(303) 973-9311

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

          If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box:    o

          If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

CALCULATION OF REGISTRATION FEE

⁽¹⁾

Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

⁽²⁾

Includes additional shares that the underwriters have the option to purchase.

⁽³⁾

Previously paid.

          The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission acting pursuant to said Section 8(a) may determine.

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EXPLANATORY NOTE

        This registration statement contains two forms of prospectus: one to be used in connection with the offering of the securities described herein in the United States, which we refer to as the "U.S. Prospectus," and one to be used in connection with the offering of such securities in Canada, which we refer to as the "Canadian Prospectus." The U.S. Prospectus and the Canadian Prospectus are identical except for the cover page, the table of contents and the back page, and except that the Canadian Prospectus includes pages 164166 through 168,169, a "Certificate of the Company" and a "Certificate of the Canadian Underwriters." The form of the U.S. Prospectus is included herein and is followed by the alternate and additional pages to be used in the Canadian Prospectus. Each of the alternate pages for the Canadian Prospectus included herein is labeled "Alternate Page for Canadian Prospectus." Each of the additional pages for the Canadian Prospectus included herein is labeled "Additional Page for Canadian Prospectus."

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The information in this preliminary prospectus is not complete and may be changed. Neither we nor the selling stockholders may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

                            Shares

CPI Card Group Inc.

Common Stock

$           per share

This is the initial public offering of our common stock. We are selling                           shares of our common stock, and the selling stockholders named in this prospectus are selling                           shares of our common stock. We currently expect the initial public offering price to be between $             and $             per share of our common stock. We will not receive any proceeds from the sale of shares by the selling stockholders.

Prior to this offering, there has been no public market for our common stock. We have applied to list our common stock on the NASDAQ Global Select Market under the symbol "PMTS."

We are an "emerging growth company" as that term is used in the Jumpstart our Business Startups Act of 2012, and as such, have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. See "Prospectus Summary—JOBS Act."

Investing in our common stock involves risks. See "Risk Factors" beginning on page 18.17.

The selling stockholders have granted the underwriters an option to purchase up to                           additional shares of our common stock within 30 days of the closing date of this offering to cover over-allotments.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares to purchasers on or about                                        , 2015 through the book-entry facilities of The Depository Trust Company.

Prospectus dated                           , 2015

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A copy of this amended and restated preliminary prospectus has been filed with the securities regulatory authority in each of the provinces and territories of Canada, but has not yet become final for the purpose of the sale of securities. Information contained in this amended and restated preliminary prospectus may not be complete and may have to be amended. The securities may not be sold until a receipt for the prospectus is obtained from the securities regulatory authorities.

This prospectus has been filed under procedures in each of the provinces and territories of Canada that permit certain information about these securities to be determined after the prospectus has become final and that permit the omission of that information from this prospectus. The procedures require the delivery to purchasers of a supplemented PREP prospectus containing the omitted information within a specified period of time after agreeing to purchase any of these securities.

All of the information contained in the supplemented PREP prospectus that is not contained in the base PREP prospectus will be incorporated by reference into this base PREP prospectus as of the date of the supplemented PREP prospectus.

No securities regulatory authority has expressed an opinion about any information contained herein and it is an offence to claim otherwise. This preliminary prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and only by persons permitted to sell those securities.

We have filed a registration statement on Form S-1 with the United States Securities and Exchange Commission under the United States Securities Act of 1933, as amended, with respect to these securities.

Second Amended and Restated Preliminary Base
PREP Prospectus dated September 1,4, 2015,
amending and restating the Amended and Restated Preliminary
Base PREP Prospectus dated August 12,September 1, 2015

US$

Common Stock

This preliminary base PREP prospectus (the "Prospectus") qualifies the distribution (the "Offering") of an aggregate of                         shares of common stock (the "Common Shares") of CPI Card Group Inc. (the "Company" or "CPI"). We expect the public offering price to be between US$            and US$            per Common Share (the "Offering Price").

The Common Shares are being offered for sale concurrently in Canada under this Prospectus and in the United States under a registration statement on Form S-1 filed with the United States Securities and Exchange Commission. The Common Shares are being offered in Canada by BMO Nesbitt Burns Inc., Goldman Sachs Canada Inc., CIBC World Markets Inc., Raymond James Ltd., Scotia Capital Inc. and GMP Securities L.P. (the "Canadian Underwriters") and in the United States by BMO Capital Markets Corp., Goldman, Sachs & Co., CIBC World Markets Corp. and��, Robert W. Baird & Co. Incorporated, William Blair & Company, L.L.C., Raymond James & Associates, Inc., Scotia Capital (USA) Inc. and Griffiths McBurney Corp. (the "US Underwriters," and together with the Canadian Underwriters, the "Underwriters").                        Common Shares are being offered by the Company and                        Common Shares are being offered by selling stockholders named in this Prospectus. See "Principal and Selling Stockholders."

Affiliates of each of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., Goldman Sachs Canada Inc., Goldman, Sachs & Co., CIBC World Markets Inc. and, CIBC World Markets Corp., Scotia Capital Inc. and Scotia Capital (USA) Inc. are lenders to the Company under its credit facility. Another affiliate of CIBC World Markets Inc. and CIBC World Markets Corp. is a limited partner of Tricor Pacific Capital Partners (Fund IV), Limited Partnership, one of the selling stockholders named in this Prospectus. Consequently, the Company may be considered a "connected issuer" to each of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., Goldman Sachs Canada Inc., Goldman, Sachs & Co., CIBC World Markets Inc. and, CIBC World Markets Corp., Scotia Capital Inc. and Scotia Capital (USA) Inc., and such selling stockholder may be considered a "connected issuer" to CIBC World Markets Inc. and CIBC World Markets Corp., in each case within the meaning of National Instrument 33-105—Underwriting Conflicts of the Canadian Securities Administrators. See "Underwriting—Conflicts of Interest".

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The Canadian Underwriters, as principals, conditionally offer the Common Shares qualified under this Prospectus, subject to prior sale, if, as and when issued by CPI and accepted by the Canadian Underwriters in accordance with the conditions contained in the underwriting agreement referred to under "Underwriting" and subject to the approval of certain legal matters on behalf of CPI by Blake, Cassels & Graydon LLP, as to matters of Canadian law, and by Winston & Strawn LLP, as to matters of U.S. law, and on behalf of the Underwriters by Stikeman Elliott LLP, as to matters of Canadian law, and Paul, Weiss, Rifkind, Wharton & Garrison LLP, as to matters of U.S. law.

In connection with this Offering, the Underwriters may, subject to applicable laws, overallot or effect transactions that stabilize, maintain or otherwise affect the market price of the Common Shares at levels other than those which otherwise might prevail on the open market. Such transactions, if commenced, may be discontinued at any time.The Underwriters may offer the Common Shares at a lower price than stated above. See "Underwriting."

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There is currently no market through which the Common Shares may be sold and purchasers may not be able to resell the Common Shares purchased under this Prospectus. This may affect the pricing of the Common Shares in the secondary market, the transparency and availability of trading prices, the liquidity of the securities and the extent of issuer regulation. See "Risk Factors".

Subscriptions for the Common Shares will be received subject to rejection or allotment in whole or in part and the right is reserved to close the subscription books at any time without notice. The Common Shares to be issued or sold in this Offering will be issued in registered form to CDS Clearing and Depositary Services Inc. ("CDS") or the Depositary Trust Company ("DTC"), and deposited with CDS or DTC on the closing date of this Offering which is expected to occur on or about                        , 2015 or such later date as the Company and the Underwriters may agree, but in any event not later than                        , 2015 (the "Closing Date"). A purchaser of the Common Shares in Canada will receive only a customer confirmation from a registered dealer that is a participant in CDS through which the Common Shares are purchased, unless such purchaser requests from the Company the issuance of a certificate evidencing such Common Shares.

Any "template version" of any "marketing materials" (as such terms are defined under Canadian securities laws) that are utilized by the Canadian Underwriters in connection with the Offering are not part of this prospectus to the extent that the contents of the template version of the marketing materials have been modified or superseded by a statement contained in this prospectus. Any template version of any marketing materials that has been, or will be, filed under the Company's profile on www.sedar.com before the termination of the distribution under the Offering (including any amendments to, or an amended version of, any template version of any marketing materials) is deemed to be incorporated into this prospectus.

The Company, the Company's auditor, Tricor Pacific Capital Partners (Fund IV) US, Limited Partnership, and each of Bradley Seaman, Nicholas Peters, Steven Montross and David Brush (collectively, the "Non-Canadian Directors and Signatories"), are incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada. The Company, the Company's auditor, Tricor Pacific Capital Partners (Fund IV) US, Limited Partnership and the Non-Canadian Directors and Signatories have appointed the following agent for service of process:

Purchasers are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated, continued or otherwise organized under the laws of a

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foreign jurisdiction or resides outside of Canada, even if the party has appointed an agent for service of process.

INVESTMENT IN THE COMMON SHARES INVOLVES SIGNIFICANT RISKS. INVESTORS SHOULD CAREFULLY CONSIDER THE RISKS REFERRED TO UNDER THE HEADING "RISK FACTORS" STARTING ON PAGE 1817 IN THIS PROSPECTUS.

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        We are responsible for the information contained in this prospectus and in any free-writing prospectus we have authorized. Neither we, the selling stockholders nor the underwriters have authorized anyone to provide you with different information, and neither we, the selling stockholders nor the underwriters take responsibility for any other information others may give you. Neither we, the selling stockholders nor the underwriters are making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than its date.

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RISK FACTORS

        An investment in our common stock involves a high degree of risk and many uncertainties. You should carefully consider the specific factors listed below together with the other information included in this prospectus before purchasing our common stock in this offering. If any of the possibilities described as risks below actually occurs, our operating results and financial condition would likely suffer and the trading price of our common stock could fall, causing you to lose some or all of your investment. The following is a description of what we consider the key challenges and material risks to our business and an investment in our common stock.

Risks Related to Our Business

Material breaches in the security of our systems may have a significant effect on our business.

        The reliability and security of our information technology (IT) infrastructure and our ability to protect sensitive and confidential information for our customers, which include many financial institutions, is critical to our business. Our handling of sensitive cardholder data, including cardholder names, account numbers and similar information, makes us a potential target of cyber attacks and threats to our secure IT systems. We may face attempts by others to penetrate our computer systems and networks to misappropriate this information or interrupt our business. Any system or network disruption could result in a loss of our intellectual property, the release of sensitive cardholder information, customer or employee personal data, or the loss of production capabilities at one or more of our production facilities. The protective measures we have in place may not prevent system or network disruptions and may be insufficient to prevent or limit the damage from any future security breaches.

        In addition, our encryption systems are at risk of being breached or decoded. Smart cards are equipped with keys that encrypt and decode messages in order to secure transactions and maintain the confidentiality of data. The security afforded by this technology depends on the integrity of the encryption keys and the complexity of the algorithms used to encrypt and decode information. Any significant advances in technology that enable the breach of cryptographic systems, malicious software infiltration or allow for the exploitation of weaknesses in such systems, could result in a decline in the security we are able to provide through this technology. Any material breach of our secured systems could harm our competitive position, result in a loss of customer trust and confidence, and cause us to incur significant costs to remedy the damages caused by system or network disruptions, whether caused by cyber attacks, security breaches or otherwise, which could ultimately have an adverse effect on our business, financial condition and results of operations. In addition, as these threats continue to evolve, we may be required to invest significant additional resources to modify and enhance our information security and controls or to investigate and remediate any security vulnerabilities.

New and developing technology solutions and products could make our existing technology solutions and products obsolete or irrelevant, and if we are unable to introduce new products and services in a timely manner, our business could be adversely affected.

        The markets for our products and services are subject to technological changes, frequent introductions of new products and services and evolving industry standards. In particular, the rise in the adoption in wireless payment systems or mobile payments may make physical cards less attractive as a method of payment. Although to date we have not seen any reduction in card-based payments resulting from the emergence of mobile payment applications, mobile payments offer consumers an alternative method to make purchases without the need to carry a physical card and could, if widely adopted, reduce the number of Financial Payment Cards issued to consumers. In addition, other new and developing technology solutions and products could make our existing technology solutions and products obsolete or irrelevant.

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        Our ability to enhance our current products and services and to develop and introduce innovative products and services that address the increasingly sophisticated needs of our customers will significantly affect our future success. We may not be successful in developing, marketing or selling new products and services that meet these changing demands. In addition, we may experience difficulties that could delay or prevent the successful development, introduction or marketing of these services, or our new services and enhancements may not adequately meet the demands of the marketplace or achieve market acceptance. We continually engage in significant efforts to innovate and upgrade our products and services. If we are unsuccessful in completing or gaining market acceptance of new products, services and technologies, it would likely have a material adverse effect on our ability to retain existing customers or attract new ones.

        Our ability to develop and deliver new products and services successfully will depend on various factors, including our ability to:

•

identify and capitalize upon opportunities in new and emerging geographical and product markets effectively;



•

invest resources in innovation and research and development;



•

complete and introduce new products and integrated services solutions in a timely manner;



•

license any required third-party technology or intellectual property rights;



•

qualify for and obtain required industry certification for our products; and



•

comply with applicable data protection regulations.

        Opportunities to bundle or package products and service offerings and the ability to cross-sell products and services are critical to remaining competitive in our industry. As a result, part of our business strategy is to develop new products and services that may be used in conjunction with or in addition to our existing offerings. If we are unable to identify adequate opportunities to cross-sell our products and services, our financial condition could be negatively impacted. Furthermore, if we are unable to develop and introduce new and innovative products in a cost-effective and timely manner, our product and service offerings could be rendered obsolete, which could have an adverse effect on our business, financial condition and results of operations.

The adoption of EMV technology and dual-interface capability in the United States may not be as rapid or widespread as we anticipate, which could adversely affect our growth.

        We have made significant investments in our North American EMV production capabilities. In particular, in 2014, we opened a 50,000 square foot technology center in Colorado dedicated to EMV production and personalization and enhanced our EMV capabilities across our network. Our ability to grow depends significantly on whether U.S. card issuing banks incorporate EMV technology as part of their new technological standards and, following the initial conversion to EMV, whether such banks issue Dual-Interface EMV cards. Banks may be delayed in transitioning to the issuance of EMV cards or Dual-Interface EMV cards due to increased costs and other factors. If these entities do not continue to deploy EMV and Dual-Interface EMV technology or deploy such technology less quickly and/or completely than we expect, the consequence could have an adverse effect on our business, financial condition and results of operations.

Our business could suffer from production problems.

        We produce our products using processes that are highly complex, require advanced and costly equipment and must continually be modified to improve yields and performance. Difficulties in the production process can reduce yields or interrupt production and, as a result of such problems, we may on occasion not be able to deliver products or do so in a timely or cost-effective manner. As the complexity of both our products and our technological processes has become more advanced,

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production tolerances have been reduced and requirements for precision have become more demanding. We may suffer disruptions in our production, either due to production difficulties, such as machinery or technology failures, or as a result of external factors beyond our control, such as interruption of our electrical service or a natural disaster. Any such event could have an adverse effect on our business, financial condition and results of operations.

We may experience software defects, which could harm our business and reputation and expose us to potential liability.

        Our services are based on sophisticated software and computing systems, and the software underlying our services may contain undetected errors or defects when first introduced or when new versions are released. In addition, we may experience difficulties in installing or integrating our technology on systems used by our clients. Defects in our software, errors or delays in the processing of electronic transactions or other difficulties could result in the interruption of business operations, delays in market acceptance, additional development and remediation costs, diversion of technical and other resources, loss of clients, negative publicity or exposure to liability claims. Although we attempt to limit our potential liability through disclaimers and limitation of liability provisions in our license and client agreements, we cannot be certain that these measures will successfully limit our liability.

Our failure to operate our business in accordance with the standards of the PCI Security Standards Council or other industry standards applicable to our customers, such as Payment Card Brand certification standards, could have a material adverse effect on our business.

        Many of our customers issue their cards on the networks of the Payment Card Brands that are subject to the standards of the PCI Security Standards Council or other standards and criteria relating to service providers' and manufacturers' facilities, products and physical and logical security which we must satisfy in order to be eligible to supply products and services to these customers. Most of our contractual arrangements with our customers may be terminated if we fail to comply with these standards and criteria.

        We make significant investments to our network of seven North American and one European high-security facilities in order to meet these standards and criteria, including investments required to satisfy changes adopted from time to time in their respective standards and criteria. Further investments may be costly, and if we are unable to continue to meet these standards and criteria, we may become ineligible to provide products and services that have constituted in the past an important part of our revenues and profitability. For the year ended December 31, 2014, the vast majority of the products we produced and services we provided were subject to certification with one or more of the Payment Card Brands. If we were to lose our certification from one or more of the Payment Card Brands, Interac (in Canada) or PCI certification for one or more of our facilities, we may lose the ability to produce cards for or provide services to banks issuing credit or debit cards on the networks of the Payment Card Brands. If we are not able to produce cards for or provide services to any or all of the issuers issuing debit or credit cards on such networks, we could lose a substantial number of our customers and our financial condition and results of operations would be adversely affected.

The continued adoption of EMV technology may cause our customers to extend their expiration cycles, which could reduce the volume of cards they purchase from us.

        We estimate that, on average, bank debit cards and general purpose credit cards have historically been renewed every three years due to fixed expiration dates, and this regular renewal cycle is a significant driver of demand for Financial Payment Cards. As card issuers continue to adopt EMV technology, First Annapolis estimates that certain issuers of bank debit cards and general purpose credit cards will extend the length of time that each card may be active prior to expiration from three years to four or five years in order to reduce the costs associated with issuing more expensive EMV cards. As a result of this longer reissuance cycle, we may experience a decreased demand for bank

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debit cards and general purpose credit cards. If the reissuance cycle is significantly extended beyond historical averages, demand from our customers for our products may decrease significantly and our business, financial condition and results of operations could be materially and adversely affected.

Demand for credit cards may be adversely impacted by U.S. and global market and economic conditions.

        For the foreseeable future, we expect to continue to derive most of our revenue from products and services we provide to the financial services industry. Given this concentration, we are exposed to the economic conditions affecting the financial services industry in North America and Europe. In particular, prolonged economic downturns typically have resulted in significant reductions in the demand for general purpose credit cards due to tightening credit conditions. A prolonged poor economic environment could result in significant decreases in demand by current and potential customers for our products and services, which could have a material adverse effect on our business, results of operations and financial condition.

Failure to identify, attract and retain new customers or a failure to maintain our relationships with our major customers could adversely affect our business.

        Our business is dependent upon our ability to identify, attract and retain new customers and to maintain our relationships with our existing customers. A decline in the business of our large customers or a failure to retain such customers may adversely affect our business, financial condition and results of operations.

        A substantial portion of our net sales is derived from several large customers. Our top five customers as of December 31, 2014 accounted for approximately 33.9% of our pro forma net sales (37.8% of our reported net sales) for the year ended December 31, 2014, and our top customer accounted for approximately 10.1% of our pro forma net sales (11.3% of our reported net sales) for the same period. Our continued business relationship with these customers, and the renewal of key contracts by major customers, may be impacted by several factors beyond our control, including more attractive product offerings from our competitors, pricing pressures or the financial health of these customers. Many of our key customers operate in competitive businesses, and their demand and market positions may vary considerably. These customers depend on favorable macroeconomic conditions and are impacted by the availability of affordable credit and capital, the level and volatility of interest rates, inflation, employment levels and consumer confidence, among other factors.

        With most of our key customers, we enter into long-term master agreements that govern the general terms and conditions of our commercial relationships. We then enter into purchase order or other short-term agreements that define the prices and the quantities of products to be delivered. Usually, our contractual arrangements include neither exclusivity clauses nor commitments from our customers to order any given quantities of products on a medium-term or longer basis.

        Therefore, we may not be able to maintain our market share with our key customers, which in turn could affect the revenue streams upon which we currently rely. Furthermore, there is no guarantee that we will be able to renew or win significant contracts in a given year. If we were to lose important programs for our products with any of our key customers, or if any key customer were to reduce or change its contract, seek alternate suppliers, increase its product returns or become unable or otherwise fail to meet its payment obligations, our business, financial condition and results of operations could be materially adversely affected.

Our outstanding indebtedness may impact our business and may restrict our growth and results of operations.

        As of August 17, 2015, we had $444.0 million of total indebtedness outstanding, including $435.0 million outstanding under our New Term Loan Facility. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" and "Description of Certain Indebtedness."

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        We may incur additional indebtedness in the future to help fund the growth of our business, subject to market and other conditions. Our substantial indebtedness and interest expense could have important consequences to us, including:

•

limiting our ability to use a substantial portion of our cash flow from operations in other areas of our business, including for working capital, capital expenditures and other general business activities, because we must dedicate a substantial portion of these funds to service our debt;



•

requiring us to seek to incur further indebtedness in order to make the capital expenditures and other expenses or investments planned by us to the extent our future cash flows are insufficient;



•

limiting our ability to obtain additional financing in the future for working capital, capital expenditures, debt service requirements, acquisitions and the execution of our growth strategy, and other expenses or investments planned by us;



•

limiting our flexibility and our ability to capitalize on business opportunities and to react to competitive pressures and adverse changes in government regulation, our business and our industry;



•

limiting our ability to satisfy our obligations under our indebtedness (which could result in an event of default and acceleration if we fail to comply with the requirements of our indebtedness);



•

increasing our vulnerability to a downturn in our business and to adverse economic and industry conditions generally;



•

placing us at a competitive disadvantage as compared to our competitors that are less leveraged; and



•

limiting our ability, or increasing the costs, to refinance indebtedness.

        The limitations described above could have a material adverse effect on our business, financial condition, results of operations, prospects, and ability to satisfy our obligations under our indebtedness.

We may be required to defend against alleged infringement of the intellectual property rights of others and/or may be unable to adequately protect or enforce our own intellectual property rights.

        Companies in our industry aggressively protect and pursue their intellectual property rights. Our products may contain technology provided to us by other parties such as suppliers or customers. We may have little or no ability to determine in advance whether such technology infringes the intellectual property rights of a third party. From time to time, we receive notices that claim we have infringed upon, misappropriated or misused other parties' proprietary rights. Additionally, we receive notices that challenge the validity of our patents. Intellectual property litigation can be expensive, time consuming and distracting to management. An adverse determination in any of these types of disputes could prevent us from producing or offering some of our products and services or could prevent us from enforcing our intellectual property rights. Furthermore, settlements can involve royalty or other payments that could reduce our profit margins and adversely affect our financial results. Our suppliers, customers and licensors may not be required to indemnify us in the event that a claim of infringement is asserted against us, or they may be required to indemnify us only up to a maximum amount, above which we would be responsible for any further costs or damages. Any of these claims or litigation may materially and adversely affect our business, financial condition and results of operations.

        We may also be required to indemnify some customers and strategic partners under our agreements if a third party alleges or if a court finds that our products or activities have infringed upon, misappropriated or misused another party's proprietary rights. Indemnification provisions may, in some circumstances, extend our liability beyond the products we provide and may include consequential damages and/or lost profits. Even if claims or litigation against us are not valid or successfully asserted,

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these claims could result in significant costs and the diversion of the attention of management and other key employees to defend.

        Furthermore, our success and future revenue growth will depend, in part, on our ability to protect our intellectual property. We depend significantly on patents and other intellectual property rights to protect our products, proprietary designs and technological processes against misappropriation by others. We may in the future have difficulty obtaining patents and other intellectual property protection, and the patents and intellectual property rights that we receive may be insufficient to provide us with meaningful protection or commercial advantage. Effective patent, trademark, service mark, copyright and trade secret protection may not be available in every country in which our services are made available. It is possible that competitors or other unauthorized third parties may obtain, copy, use or disclose our technologies and processes, or confidential employee, customer or supplier data. Any of our existing or future patents may be challenged, invalidated or circumvented. We engage in litigation to enforce or defend our intellectual property rights, protect our trade secrets and determine the validity and scope of the proprietary rights of others, including our customers. We also enter into confidentiality agreements with our consultants and strategic partners and control access to and distribution of our technologies, documentation and other proprietary information; however, such agreements may not be enforceable or provide us with an adequate remedy. Despite these efforts, internal or external parties may attempt to copy, disclose, obtain or use our products, services or technology without our authorization. If we cannot adequately protect our technology, our competitors may be able to offer certain products and/or services similar to ours.

        Our software may be derived from open source software, which is generally made available to the public by its authors and/or other third parties. Open source software is often made available under licenses, which impose certain obligations in the event we distribute derivative works of the open source software. These obligations may require us to make source code for the derivative works available to the public and/or license such derivative works on terms different from those customarily used to protect our intellectual property. With respect to our proprietary software, we generally license such software under terms that prohibit combining it with open source software. Despite these restrictions, parties may combine our proprietary software with open source software without our authorization, in which case we might nonetheless be required to release the source code of our proprietary software. In addition to risks related to license requirements, usage of open source software can lead to greater risks than the use of third-party commercial software, as open source licensors generally do not provide warranties, controls on the origin or development of the software, or remedies against the licensors. Many of the risks associated with usage of open source software cannot be eliminated and could adversely affect our business.

        Our efforts to prevent the misappropriation or infringement of our intellectual property or the intellectual property of our customers may not succeed. Although we actively seek to protect our proprietary rights, nevertheless, unauthorized parties may attempt to copy aspects of our products or technologies or to obtain and use information that we regard as proprietary. Identifying unauthorized use of our products and technologies is difficult and time consuming. The initiation of litigation as a result of the misappropriation or infringement of our intellectual property may adversely affect our relationships and agreements with certain customers that have a stake in the outcome of the litigation proceedings. Litigation is very expensive and may divert the attention of management and other key employees from the operation of our business, all of which could have an adverse effect on our business, financial condition and results of operations.

If we fail to meet customer demands in a timely manner, we could lose certain critical business relationships.

        Our ability to provide products and services and meet very high quality standards in a timely manner is critical to our business success. For example, one of the key services that we offer our customers is the prompt and timely production and delivery of replacement bank cards. Orders for replacement bank cards are often placed on short notice and may require personalization. If we are

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unable to offer these and our other products and services in a timely manner or due to software malfunction, logistical impediments at any of our facilities or economic, social, political or other challenges impacting the industry as a whole, our relationships with our customers may be adversely affected and we may lose major contracts, all of which could have an adverse effect on our business, financial condition and results of operations.

We face competition that may result in a loss of our market share and/or a decline in our profitability.

        We expect our marketplace to continue to be highly competitive as new product markets develop, industry standards become well known and other competitors attempt to enter the markets in which we operate. In addition, we expect to encounter further consolidation in the markets in which we operate.

        Some of our competitors have longer operating histories, and, when viewed globally, larger customer bases and significantly greater financial, sales and marketing, manufacturing, distribution, technical and other capabilities than we do. These competitors may be able to adapt more quickly to new or emerging technological requirements and changes in customer and/or regulatory requirements. They may also be able to devote greater resources to the promotion and sale of their products and services. We also face competition from newly established competitors, suppliers of products and customers who choose to develop their own products and services.

        Existing or new competitors may develop products, technologies or services that more effectively address our markets with enhanced features and functionality, greater levels of integration and/or lower cost. Additionally, mobile payment technology could develop to replace the products and services we offer, which could render our offerings dated or obsolete, or existing alternative standards of secured mobile payment technology could gain widespread market acceptance, which could have an adverse impact on our business. As the technological sophistication of our competitors and the size of the market increase, competing low-cost producers could emerge and grow stronger. If our customers prefer low-cost alternatives to our products, our revenues and profitability could be adversely affected. Increased competition has historically resulted in, and is likely to continue to result in, declining average selling prices and reduced gross margins in certain of our businesses and the loss of market share in certain markets. We may not be able to continue to compete successfully against current or new competitors. If we fail to compete successfully, we may lose market share in our existing markets, which could have an adverse effect on our business, financial condition and results of operations.

The financial payment card industry may be subject to price erosion, which could have an adverse effect on our business.

        One of the results of the rapid innovation in the financial payment card industry is that pricing pressure can be intense, in particular for large credit and debit card issuers and large card processors. Our large credit and debit card issuer customers face continued competitive pressure. As these issuers seek to reduce their expenses, we, in turn, may experience a decline in the prices at which our products can be sold and at which such services can be offered. In such instances, in order to continue to supply these products and services at competitive prices, we must reduce our production costs. Typically, we are able to accomplish this through leveraging our scale and production efficiencies. However, if we cannot continue to improve our efficiencies to a degree sufficient for maintaining the required margins, we may no longer be able to make a profit from the sale of these products and services. Moreover, we may not be able to cease production of such products, either due to our ongoing contractual obligations or the risk of losing our existing customer relationships, and as a result may be required to bear a loss on such products. Further competition in our core product and service markets may lead to price erosion, lower revenue growth rates and lower margins in the future. Should reductions in our production costs fail to keep pace with reductions in market prices for the products we sell, there could be an adverse effect on our business, financial condition and results of operations.

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Our business may be adversely affected by costs relating to product defects, and we could be faced with product liability and warranty claims.

        We offer highly complex services and products and, accordingly, there is a risk that defects may occur in any of our services or products. Such defects can give rise to significant costs, including expenses relating to recalling products, replacing defective items, writing down defective inventory and the loss of potential sales. In addition, the occurrence of such defects may give rise to product liability and warranty claims, including liability for damages caused by such defects. If we release defective products in the market, our reputation could suffer and we may lose sales opportunities and incur liability for damages, including damage claims from customers in excess of the amounts they pay us for our products, including consequential damages. In addition, our customers may recall their products if they prove to be defective or make compensatory payments in accordance with industry or business practice or in order to maintain good customer relationships. If such a recall or payment is caused by a defect in one of our products, our customers may seek to recover all or a portion of their losses from us. If any of these risks materialize, our reputation would be harmed and there could be an adverse effect to our business, financial condition and results of operations.

We rely on licensing arrangements in production and other fields, and actions taken by any of our licensing partners could adversely affect our business.

        Many of our products integrate third-party technologies that we license or otherwise obtain the right to use, including software relating to smart card operating systems used in products such as EMV cards. As part of our strategy, we have entered into licensing agreements with other leading industry participants that provide us, among other benefits, with access to technology owned by third parties. For example, we license Java card technology from Oracle and Multos card technology from Multos International, a subsidiary of a competitor, for use in certain of our products, including in EMV cards. This Java and Multos card technology provides a secure environment for applications on smart cards and other devices with limited memory and processing capabilities, and we rely on our commercial arrangements with Oracle and Multos International for the continued use of the Java and Multos platforms, respectively. Oracle and Multos International may not continue to renew their licenses with us on similar terms or at all, which could negatively impact our net sales. We have also entered into cross-licensing agreements with certain of our competitors that provide for an exchange of intellectual property, including the sharing of certain patent rights in our respective portfolios. If we are unable to continue to successfully renew these agreements we may lose our access to certain technologies that we rely upon to develop certain of our products, which could adversely affect our operations.

All of our facilities are leased, in whole or in part, and our inability to renew our leases on commercially acceptable terms or at all may adversely affect our results of operations.

        Each of our nine facilities, in whole or in part, is located on leased property. We may be unable to renew such leases on commercially acceptable terms or at all. Our inability to renew our leases, or a renewal of our leases with a rental rate higher than the prevailing rate under the applicable lease prior to expiration, may have an adverse impact on our operations, including disrupting our operations or increasing our cost of operations. In addition, in the event of non-renewal of any of our leases, we may be unable to locate suitable replacement properties for our facilities or we may experience delays in relocation that could lead to a disruption in our operations. Any disruption in our operations could have an adverse effect on our financial condition and results of operation.

The smart card systems developed by our competitors may put us at a competitive disadvantage.

        Certain of our competitors have internally developed their own smart card operating systems. Ownership of these internal operating systems may give our competitors a cost advantage over us, as we utilize JavaCard and Multos systems in our EMV cards, which we must license from the owners of such technology. If our competitors are able to reduce the prices of their products and services as a result of the cost savings they might realize from using their own internally developed operating system,

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our profitability may be adversely affected. Additionally, customers may prefer the operating systems of our competitors over the operating systems that we utilize in our EMV cards. If customers are more attracted to our competitors' internally developed operating systems, demand for our products and services may be reduced, thereby adversely affecting our results of operations.

Interruptions in our IT systems could adversely affect our business.

        We rely on the efficient and uninterrupted operation of complex IT applications, systems and networks to operate our business. The reliability of our IT infrastructure and software, and our ability to expand and continually update technologies in response to our changing needs, are critical to our business. Any significant interruption in our business applications, systems or networks, including, but not limited to, new system implementations, facility issues or energy blackouts, could have a material adverse impact on our operations, sales and operating results.

        Not only would we suffer damage to our reputation in the event of a system outage or data loss or interruption, but we may also be liable to third parties. Some of our contractual agreements with financial institutions require the payment of penalties if our systems do not meet certain operating standards. In addition, to successfully operate our business, we must be able to protect our processing and other systems from interruption, including from events that may be beyond our control. The protective measures we have adopted to avoid system or network disruptions may be insufficient to prevent or limit the damage from any future disruptions, and any such disruption could have an adverse effect on our business, financial condition and results of operations.

Our business depends on the continued viability of the card networks of the Payment Card Brands.

        The vast majority of cards we produce and the services we provide are associated with one of the Payment Card Brands. As a result, we depend on the continued viability of the card networks of the Payment Card Brands, including their authorization, clearing and settlement systems. If one or more of the Payment Card Brands were to discontinue their services or otherwise experience a decline in the volume of cards bearing their brands, our results of operations could be adversely affected.

The terms of our New Credit Facility restrict, and covenants contained in agreements governing indebtedness in the future may restrict, our ability to operate our business and to pursue our business strategies.

        Our New Credit Facility contains, and any future indebtedness of ours may contain, a number of restrictive covenants that impose customary operating and financial restrictions on us. Our New Credit Facility limits our ability and the ability of our restricted subsidiaries, among other things, to:

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incur additional debt or contingent liabilities;



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declare or pay dividends, redeem stock, or make other distributions to stockholders;



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make loans, advances, guarantees or other investments;



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create liens or use assets as security in other transactions;



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merge or consolidate, or sell, transfer, lease or dispose of substantially all of our assets;



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enter into transactions with affiliates; and



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enter into certain asset sale transactions or other dispositions of assets.

        In addition, as of the last day of any fiscal quarter, if the amount we have drawn under the New Revolving Credit Facility is greater than 50% of the aggregate principal amount of all commitments of the lenders thereunder, we are required to maintain a first lien net leverage ratio not in excess of 7.0x. Our failure to comply with any of these covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our indebtedness under the New Credit Facility.

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We are dependent on key executives, the loss of whom could adversely affect our business.

        Our future success depends to a significant extent on the efforts of our senior management. We believe there are only a limited number of available and qualified executives with substantial experience in our industry. Accordingly, the loss of the services of one or more of the members of our senior management could delay or prevent us from fully implementing our business strategy and, consequently, significantly and negatively affect our business.

        If any member of senior management dies or becomes incapacitated, or leaves the company to pursue employment opportunities elsewhere, we would need to locate an adequate replacement. To the extent that we are unable to locate an adequate replacement or are unable to do so within a reasonable period of time, our business may be significantly and negatively affected.

We rely on the timely supply of materials and products and our business could suffer if our suppliers fail to meet their delivery obligations or raise their prices.

        Our production operations depend on deliveries of microchips and other materials in a timely manner and, in some cases, on a just-in-time basis. From time to time, suppliers may extend lead times, limit the amounts supplied to us or increase prices due to capacity constraints or other factors. We may not be able to meet the demands of our customers in a timely manner, or at all, due to shortages in the supply of critical materials. Additionally, certain product materials required in our production operations are only available from a limited number of suppliers, and we may not be able to find an adequate replacement for such materials if our suppliers are unable to meet their delivery obligations to us. In particular, we rely on a small group of suppliers for the provision the EMV microchips that we use in our Financial Payment Cards. For the year ended December 31, 2014, we obtained approximately 96.1% of our total purchased EMV microchips from five main suppliers. If any one of these EMV microchip suppliers, or any supplier of our other raw materials, fails to deliver our requirements, our production could be disrupted. In addition, as a result of a shortage, we may be compelled to delay shipments of our products, or devote additional resources to maintaining higher levels of inventory. Consequently, we may experience substantial period-to-period fluctuations in our cost of revenues and, therefore, in our future results of operations. If we are unable to obtain adequate supplies of quality materials in a timely manner or if there are significant increases in the cost of these materials, our business, financial condition and results of operations could be adversely affected.

We are required to comply with laws and regulations in other countries and are exposed to business risks associated with our international operations.

        For the six months ended June 30, 2015 and the years ended December 31, 2014 and 2013, we derived 12.9%, 24.7% and 31.0%, respectively, of our net sales from outside the United States, primarily in Canada and the United Kingdom. As a result, we are subject to numerous evolving and complex laws and regulations which apply, among other things, to financial reporting standards, corporate governance, data privacy, tax, trade regulations, export controls, competitive practices, and labor and health and safety laws and regulations in each jurisdiction in which we operate. We are also required to obtain environmental permits and other authorizations or licenses from governmental authorities for certain of our operations and must protect our intellectual property worldwide. In the jurisdictions in which we operate, we need to comply with various standards and practices of different regulatory, tax, judicial and administrative bodies.

        There are a number of risks associated with international business operations, including political instability (e.g., the threat of war, terrorist attacks or civil unrest), inconsistent regulations across jurisdictions, unanticipated changes in the regulatory environment, and import and export restrictions. Any of these events may affect our employees, reputation, business or financial results as well as our ability to meet our objectives, including the following international business risks:

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negative economic developments in economies around the world and the instability of governments, or the downgrades in the debt ratings of certain major economies;

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social and political instability;



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complex regulations governing certain of our products;



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potential terrorist attacks;



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adverse changes in governmental policies, especially those affecting trade and investment;



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foreign currency exchange, particularly with respect to the Canadian Dollar and British Pound Sterling; and



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threats that our operations or property could be subject to nationalization and expropriation.

        We may not be in full compliance at all times with the laws and regulations to which we are subject. Likewise, we may not have obtained or may not be able to obtain the permits and other authorizations or licenses that we need. If we violate or fail to comply with laws, regulations, permits, health and safety regulations or other authorizations or licenses, we could be fined or otherwise sanctioned by regulators. In such a case, or if any of these international business risks were to materialize, our business, financial condition and results of operations could be adversely affected.

Changes in laws, regulations and enforcement activities relating to the financial services industry may adversely affect the products, services and markets in which we operate.

        We and our customers are subject to laws and regulations that affect the financial services industry in the many countries in which our products and services are used. In particular, our customers are subject to numerous laws and regulations applicable to banks, financial institutions and card issuers in the United States, Europe and other regions. The U.S. Government, for instance, has increased its scrutiny of a number of credit and debit card practices, from which some of our customers derive significant revenue. Regulation of the payments industry, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), privacy and data security regulations such as the Gramm-Leach-Bliley Act (the "GLBA"), and other regulations applicable to us and our customers, has increased significantly in recent years. Our failure to comply with the laws and regulations applicable to our business may result in the suspension or revocation of our licenses or registrations, the limitation, suspension or termination of our services, and/or the imposition of consent orders or civil and criminal penalties, including fines, which could have an adverse effect on our business, financial condition and results of operations.

Environmental, health and safety laws and regulations expose us to liability and any such liability may adversely affect our business.

        We are subject to environmental, health and safety laws and regulations in each jurisdiction in which we operate. Such regulations govern, among other things, emissions of pollutants into the air, wastewater discharges, waste disposal, the investigation and remediation of soil and groundwater contamination, and the health and safety of our employees. For example, our products and the raw materials we use in our production processes are subject to numerous environmental laws and regulations. We are also required to obtain environmental permits from governmental authorities for certain of our operations. We may not have been, nor may we be able to be at all times, in full compliance with such laws, regulations and permits. If we violate or fail to comply with these laws, regulations or permits, we could be fined or otherwise sanctioned by regulators.

        As with other companies engaged in similar activities or that own or operate real property, we face inherent risks of environmental liability at our current and historical production facilities. Certain environmental laws impose strict and, in certain circumstances, joint and several liability on current or previous owners or operators of real property for the cost of the investigation, removal or remediation of hazardous substances as well as liability for related damages to natural resources. In addition, we

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may discover new facts or conditions that may change our expectations or be faced with changes in environmental laws or their enforcement that would increase our liabilities. Furthermore, our costs of complying with current and future environmental and health and safety laws, or our liabilities arising from past or future releases of, or exposure to, regulated materials, may have a material adverse effect on our business, financial condition and results of operations.

        The scientific examination of, political attention to, and rules and regulations on issues surrounding the existence and extent of climate change may result in an increase in our cost of production due to increases in the price of energy and/or the introduction of energy or carbon taxes. A variety of regulatory developments have been introduced that focus on restricting or managing the emission of carbon dioxide, methane and other greenhouse gasses. Companies such as ours may need to purchase at higher costs new equipment or raw materials with lower carbon footprints. These developments and further legislation that is likely to be enacted could negatively affect our operations. Changes in environmental regulations could increase our production costs, which could adversely affect our business, financial condition and results of operations.

Certain natural disasters, such as flooding, earthquakes, nuclear disasters, certain weather conditions and other catastrophic events, such as fire, may negatively impact our business.

        The occurrence of severe weather events, such as rain, snow, wind, storms, hurricanes or other natural disasters, such as flooding, earthquakes, nuclear disasters, fire or a combination thereof, may negatively impact our business. If certain natural disasters, extreme weather conditions or other events such as fire were to directly damage, destroy or disrupt our production facilities, it could disrupt our operations, delay new production and shipments of existing inventory or result in costly repairs, replacements or other costs, all of which would negatively impact our business. Even if our production facilities are not directly damaged, a large natural disaster or fire may result in disruptions in distribution channels or supply chains and significantly increase the prices of the raw materials we use in our production processes. The impact of any such natural disasters, weather changes or other disasters such as fire depends on the specific geographic circumstances but could be significant, and we cannot predict the economic impact, if any, of natural disasters or climate change. Any such disruptions could have an adverse effect on our business, financial condition and results of operations.

Our revenue may be adversely affected by fluctuations in currency exchange rates.

        A portion of our revenues, costs, assets and liabilities are denominated in foreign currencies, including the Canadian Dollar and the British Pound Sterling. However, we report our financial condition and results of operations in U.S. dollars. As a result, our results of operations and, in some cases, cash flows may in the future be adversely affected by certain movements in exchange rates. In particular, the exchange rate from the U.S. dollar to the Canadian Dollar has fluctuated substantially in the past and may continue to do so in the future. Though we may choose to hedge our exposure to foreign currency exchange rate changes in the future, there is no guarantee such hedging, if undertaken, will be successful.

Our insurance may be inadequate to cover future liabilities and our insurance premiums may increase substantially.

        We may be subject to significant losses from claims, liabilities, hazards and disasters. While we currently maintain insurance which we believe is adequate and consistent with industry practice, we may experience losses in excess of our insurance coverage or claims not covered by our insurance. Furthermore, we may not be able to obtain insurance coverage in the future on acceptable terms, or at all. Any such losses not covered by insurance may have a material adverse effect on our business, financial condition and results of operations.

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We face risks associated with our acquisition strategy.

        Our future success may depend on acquiring businesses and technologies, making investments or forming joint ventures that complement, enhance or expand our current portfolio or otherwise offer us growth opportunities. The expansion of our business through acquisitions allows us to complement our existing product offerings and enhance our technological capabilities.

        We face a number of challenges associated with our acquisition strategy that could disrupt our ongoing business and distract our management team, including:

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lower gross margins, revenues and operating income than originally anticipated at the time of acquisition and other financial challenges;



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delays in the timing and successful integration of an acquired company's technologies;



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the loss of key personnel; and



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becoming subject to intellectual property, antitrust or other litigation.

        Acquisitions can result in increased debt or contingent liabilities. Acquisitions can also result in adverse tax consequences, warranty or product liability exposure related to acquired assets, additional stock-based compensation expense, the write-up of acquired inventory to fair value, and the recording and later amortization of amounts related to certain purchased intangible assets, all of which can adversely affect our reported results. In addition, we have in the past and may in the future record goodwill and other purchased intangible assets in connection with an acquisition and incur impairment charges.

        A failure to implement our acquisition strategy, obtain sufficient financing or integrate acquired businesses successfully could adversely affect our business, financial condition and results of operations.

Goodwill and other identifiable intangible assets represent a significant portion of our total assets, and we may never realize the full value of our intangible assets.

        We have recorded a significant amount of goodwill. Total goodwill, which reflects, among other things, our market share and assembled workforce, our ability to develop future innovative technologies and seize business opportunities, was $73.8 million as of June 30, 2015, or 25.6% of our total assets.

        We perform goodwill impairment testing on an annual basis on October 1 of each year. If we were to conclude that a future write-down of our goodwill is necessary, we would have to record the appropriate charge, which could result in a material adverse effect on our results of operations. A write-down of our goodwill may result from, among other things, deterioration in our performance and a decline in expected future cash flows and could have an adverse effect on our business, financial condition and results of operations.

The ability to recruit, retain and develop qualified personnel is critical to our success and growth.

        Our business functions are complex and require wide-ranging expertise and intellectual capital. For us to successfully compete and grow, we must retain, recruit and develop personnel who can provide the needed expertise across the entire spectrum of our intellectual capital needs. In addition, we must develop our personnel to provide succession plans capable of maintaining continuity in the midst of the inevitable unpredictability of human capital. However, the market for qualified personnel is competitive and we may not succeed in recruiting additional personnel or may fail to effectively replace current personnel who depart with qualified or effective successors. Our efforts to retain and develop personnel may also result in significant additional expenses, which could adversely affect our profitability. Our key personnel may not continue to be employed or we may be unable to attract and retain qualified

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personnel in the future. Such a failure to retain or attract key personnel could have an adverse effect on our business, financial condition and results of operations.

Our operating results may vary significantly from quarter to quarter and annually, and may differ significantly from our expectations or guidance.

        Our operating results are affected by a wide variety of factors that could materially and adversely affect revenues and profitability or lead to significant variability in our operating results. These factors include, among others, the cyclicality of the financial card and electronic payment industries, capital requirements, inventory management, the availability of funding, competition, new product developments, technological changes and production problems. For example, if anticipated sales or shipments do not occur when expected, expenses and inventory levels in a given quarter can be disproportionately high, and our results of operations for that quarter, and potentially for future quarters, may be adversely affected. In addition, our effective tax rate currently takes into consideration certain favorable tax rates and incentives which, in the future, may not be available to us.

        A number of other factors could lead to fluctuations in quarterly and annual operating results, including:

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order cancellations or rescheduling by customers;



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restructuring and impairment charges;



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fluctuations in currency exchange rates, particularly between the U.S. dollar and the Canadian Dollar and British Pound Sterling;



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intellectual property developments;



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changes in distribution and sales arrangements;



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the failure to win new projects;



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production performance and yields;



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product liability or warranty claims;



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litigation;



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taxation;



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acquisitions or divestitures;



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problems in obtaining adequate raw materials or production equipment on a timely basis;



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property loss or damage or interruptions to our business, including as a result of fire, natural disasters or other disturbances at our facilities or those of our customers and suppliers that may exceed the amounts recoverable under our insurance policies; and



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changes in the market value or yield of the financial instruments in which we invest our liquidity.

        Unfavorable changes related to certain of the above factors have in the past and any of the above factors may in the future adversely affect our operating results. Furthermore, in periods of industry overcapacity or when our key customers encounter difficulties in their end-markets, orders are more exposed to cancellations, reductions, price renegotiations or postponements, which in turn reduce our management's ability to forecast the next quarter or full-year production levels, net sales and margins. For these reasons, our net sales and operating results may differ materially from our expectations or guidance as visibility is reduced and have an adverse effect on our business, financial condition and results of operations.

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Consolidations in the banking and financial services industry could eliminate existing or potential clients.

        Failures, mergers and consolidations of financial institutions may reduce the number of our clients and potential clients, which could adversely affect our net sales. Further, if our clients fail, merge with or are acquired by other entities that are not our clients, or that use fewer of our services, they may discontinue or reduce their use of our services. It is also possible that the larger financial institutions that result from mergers or consolidations would have greater leverage in negotiating terms with us or could decide to perform in-house some or all of the services which we currently provide or could provide. Any of these developments could have an adverse effect on our business, results of operations and financial condition.

We are subject to the credit risk that our customers may be unable to satisfy their obligations to us.

        A significant portion of our net sales are on an open credit basis, with typical payment terms of up to 60 days in some cases, and we are subject to the credit risk of our customers being unable to make payments to us. If any of our customers experience a bankruptcy or are otherwise unable to satisfy their payment obligations to us, any related losses, if incurred, could harm our business and have an adverse effect on our operating results and financial condition if they significantly exceed our reserve for losses on our balance sheet.

Our business depends upon our ability to obtain specialized equipment from third-party suppliers, and we may be subject to delayed deliveries and future price increases.

        Our production processes depend on specialized equipment that we purchase and/or lease from third party suppliers. At times during the business cycle, there may be high demand for such equipment, with extended lead times to obtain such equipment. Further, there are a limited number of suppliers that manufacture and service the equipment we use. Should our current suppliers be unable or unwilling to provide the necessary equipment or otherwise fail to deliver or service such equipment in a timely manner, any resulting delays in our production processes could have an adverse effect on our business, financial condition, results of operations. In addition, the prices of the equipment we use may rise in the future, and any future price increases for this type of equipment could negatively impact our ability to purchase new equipment or to service existing equipment.

We have identified a material weakness in our internal controls over financial reporting. If we are unable to implement and maintain effective internal controls over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.

        As a public company, we will be required to maintain internal controls over financial reporting and to report any material weaknesses in such internal controls. A material weakness is a deficiency, or a combination of deficiencies, in financial reporting such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be presented or detected on a timely basis. Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") requires that we evaluate and determine the effectiveness of our internal controls over financial reporting and, beginning with our annual report for the fiscal year ending December 31, 2016, provide a management report on the internal controls over financial reporting. We are in the process of designing and implementing internal controls over financial reporting required to comply with this obligation, which process will be time consuming, costly and complicated. Such report must also be attested to by our independent registered public accounting firm to the extent we are no longer an "emerging growth company," as defined by the JOBS Act. We do not expect to have our independent registered public accounting firm attest to our management report on our internal controls over financial reporting for so long as we are an emerging growth company.

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        In connection with our preparation for this offering, we recently identified a material weakness in our internal controls over financial reporting related to a current lack of finance expertise that could result in a failure to properly account for non-routine and complex transactions in accordance with GAAP. With the oversight of senior management, we are taking steps to remediate the underlying causes of this material weakness, primarily through the hiring of additional finance personnel and through the development and implementation of formal policies and improved processes. Although we plan to complete this remediation process as quickly as possible, we cannot at this time estimate how long it will take, and our initiatives may not prove to be successful in remediating this material weakness.

        If we are unable to remediate this material weakness, or if we identify other material weaknesses in our internal controls over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. In addition, if we are unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, if we are unable to assert that our internal controls over financial reporting are effective, or if our independent registered public accounting firm is not required to express an opinion due to the provisions of the JOBS Act or is unable to express an opinion as to the effectiveness of our internal controls over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the stock exchange on which our common stock is listed, the Securities and Exchange Commission (the "SEC"), or other regulatory authorities, which could require additional financial and management resources.

We will incur significantly increased costs and devote substantial management time as a result of operating as a public company.

        As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. For example, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and will be required to comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules and regulations subsequently implemented by the SEC, the Canadian Securities Administrators, the TSX and the NASDAQ Global Select Market, including the establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices, including the establishment and maintenance of a majority independent board of directors and required committees. In addition, depending on the composition of our board of directors and stockholder base, we may become subject to additional periodic reporting requirements under Canadian securities laws. We expect that compliance with these requirements will increase our legal and financial compliance costs and will make some activities more time consuming and costly. In addition, our management team and board of directors have limited experience implementing public company compliance requirements, and therefore we expect that our management and other personnel will need to divert attention from operational and other business matters to devote substantial time to such efforts. In particular, we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act, which will increase when we are no longer an emerging growth company, as defined in the JOBS Act. We will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and may need to establish an internal audit function. We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs. We also expect that operating as a public company will make it more difficult and significantly more expensive for us to obtain director and officer liability insurance.

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We are an "emerging growth company" and we cannot be certain if the reduced disclosure and other requirements applicable to emerging growth companies will make our common stock less attractive to investors.

        We are an "emerging growth company," as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act with respect to our internal control over financial reporting, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We may take advantage of these provisions for up to five years or such earlier time that we are no longer an "emerging growth company." We would cease to be an emerging growth company upon the earliest to occur of (i) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.0 billion or (c) in which we become a large accelerated filer, which means that we have been public for at least 12 months, have filed at least one annual report and the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last day of our then most recently completed second fiscal quarter and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. We may choose to take advantage of some but not all of these reduced reporting and other burdens. To the extent we take advantage of any of the reduced reporting burdens in this prospectus or in future filings, the information that we provide our security holders may be different than the information such holders might get from other public companies in which they hold equity interests. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

        In addition, Section 107 of the JOBS Act provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Stated another way, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to "opt out" of such extended transition period, however, and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

Risks Related to Ownership of Our Common Stock

There is no existing market for our common stock, and we do not know if one will develop to provide you with adequate liquidity to sell our common stock at prices equal to or greater than the price you paid in this offering.

        Prior to this offering, there has not been a public market for our common stock. We cannot predict the extent to which investor interest in our company will lead to the development of an active trading market on the NASDAQ Global Select Market or otherwise or how liquid that market might become. If an active trading market does not develop, you may have difficulty selling any of our common stock that you buy. The initial public offering price for the common stock will be determined by negotiations between us and the representatives of the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell our common stock at prices equal to or greater than the price you paid in this offering, or at all.

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The price of our common stock may fluctuate significantly, and you could lose all or part of your investment.

        Volatility in the market price of our common stock may prevent you from being able to sell your shares at or above the price you paid for them. The market price for our common stock could fluctuate significantly for various reasons, including:

•

our operating and financial performance and prospects;



•

our quarterly or annual earnings or those of other companies in our industry;



•

the public's reaction to our press releases, our other public announcements and our filings with the SEC;



•

changes in, or failure to meet, earnings estimates or recommendations by research analysts who track our common stock or the stock of other companies in our industry;



•

the failure of research analysts to cover our common stock;



•

general economic, industry and market conditions;



•

strategic actions by us, our customers or our competitors, such as acquisitions or restructurings;



•

new laws or regulations or new interpretations of existing laws or regulations applicable to our business;



•

changes in accounting standards, policies, guidance, interpretations or principles;



•

material litigation or government investigations;



•

changes in general conditions in the U.S. and global economies or financial markets, including those resulting from war, incidents of terrorism or responses to such events;



•

changes in key personnel;



•

sales of common stock by us, our principal stockholders or members of our management team;



•

termination of lock-up agreements with our management team and principal stockholders;



•

the granting or exercise of employee stock options;



•

volume of trading in our common stock; and



•

impact of the facts described elsewhere in "Risk Factors."

        In addition, in recent years, the stock market has regularly experienced significant price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies, including companies in our industry. The changes frequently appear to occur without regard to the operating performance of the affected companies. Hence, the price of our common stock could fluctuate based upon factors that have little or nothing to do with us and these fluctuations could materially reduce our share price.

Our majority stockholders will have the ability to control significant corporate activities after the completion of this offering.

        After the consummation of this offering, the Tricor Funds will collectively beneficially own approximately        % of our common stock, assuming the underwriters do not exercise their option to purchase additional shares (or        % if the underwriters exercise in full their option to purchase additional shares). As a result of its ownership, the Tricor Funds, so long as they hold a majority of our outstanding shares, will have the ability to control the outcome of matters submitted to a vote of stockholders and, through our board of directors, the ability to control decision-making with respect to our business direction and policies.

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        Matters over which the Tricor Funds will, directly or indirectly, exercise control following this offering include:

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election of directors;



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mergers and other business combination transactions, including proposed transactions that would result in our stockholders receiving a premium price for their shares;



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other acquisitions or dispositions of businesses or assets;



•

incurrence of indebtedness and the issuance of equity securities;



•

repurchases of stock and payment of dividends; and



•

the issuance of shares to management under our incentive plans.

Conflicts of interest may arise because directors who are principals of our largest stockholder constitute a majority of our board of directors.

        Messrs. Seaman, Peters and Rowntree, who are officers or affiliates of Tricor, serve on our board of directors. The Tricor Funds, our majority stockholders (prior to and after giving effect to this offering), are funds controlled by Tricor and its affiliates. Tricor and entities controlled by it may in the future hold equity interests in entities that directly or indirectly compete with us, and companies in which it currently invests may begin directly or indirectly competing with us. As a result of these relationships, when conflicts between the interests of Tricor, on the one hand, and of other stockholders, on the other hand, arise, these directors may not be disinterested. Although our directors and officers have a duty of loyalty to us under Delaware law and our certificate of incorporation, transactions that we enter into in which a director or officer has a conflict of interest are generally permissible so long as (1) the material facts relating to the director's or officer's relationship or interest as to the transaction are disclosed to our board of directors and a majority of our disinterested directors approves the transaction, (2) the material facts relating to the director's or officer's relationship or interest as to the transaction are disclosed to our stockholders and a majority of our disinterested stockholders approve the transaction or (3) the transaction is otherwise fair to us. Our certificate of incorporation also provides that any principal, officer, member, manager and/or employee of Tricor or any entity that controls, is controlled by or under common control with Tricor (other than any company that is controlled by us) or any investment funds managed by Tricor will not be required to offer any transaction opportunity of which they become aware to us and could take any such opportunity for themselves or offer it to other companies in which they have an investment, unless such opportunity is offered to them solely in their capacities as our directors. See "Description of Capital Stock—Corporate Opportunity."

If you purchase shares of our common stock in our initial public offering, you will experience substantial and immediate dilution.

        If you purchase shares of our common stock in our initial public offering, you will experience substantial and immediate dilution in the pro forma net tangible book value per share because the price that you pay will be substantially greater than the pro forma net tangible book value per share of the common stock that you acquire. This dilution is due in large part to the fact that our earlier investors paid substantially less than the initial public offering price when they purchased their shares of our capital stock. You will experience additional dilution upon exercise of options to purchase common stock under our equity incentive plans, upon vesting of options to purchase common stock under our equity incentive plans, if we issue restricted stock to our employees under our equity incentive plans, or if we otherwise issue additional shares of our common stock.

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Our ability to pay regular dividends to our stockholders is subject to the discretion of our board of directors and may be limited by our holding company structure and applicable provisions of Delaware law.

        We intend to pay regular cash dividends on our common stock. However, our board of directors may, in its sole discretion, change the amount or frequency of dividends or discontinue the payment of dividends entirely. In addition, because we are a holding company with no material direct operations, we are dependent on dividends and other payments from our operating subsidiaries to generate the funds necessary to pay dividends on our common stock. We expect to cause our subsidiaries to make distributions to us in an amount sufficient for us to pay dividends. However, their ability to make such distributions will be subject to their operating results, cash requirements and financial condition, the applicable provisions of Delaware law that may limit the amount of funds available for distribution and our ability to pay cash dividends, compliance with covenants and financial ratios related to existing or future indebtedness and other agreements with third parties. In addition, each of the companies in our corporate chain must manage its assets, liabilities and working capital in order to meet all of its cash obligations, including the payment of dividends or distributions. As a consequence of these various limitations and restrictions, we may not be able to make, or may have to reduce or eliminate, the payment of dividends on our common stock. Any change in the level of our dividends or the suspension of the payment thereof could adversely affect the market price of our common stock.

Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price.

        Sales of substantial amounts of our common stock in the public market after this offering, or the perception that these sales could occur, could adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional shares. Upon completion of this offering, there will be                 shares of our common stock outstanding. Of these, the                shares being sold in this offering (or                shares if the underwriters exercise their option to purchase additional shares in full) will be freely tradable immediately after this offering (except for any shares purchased by affiliates, if any) and approximately                shares may be sold upon expiration of lock-up agreements 180 days after the date of this prospectus (subject in some cases to volume limitations).

        We also intend to register all common stock that we may issue under the Omnibus Plan or pursuant to outstanding options under the CPI Holdings I, Inc. Amended and Restated 2007 Stock Option Plan (the "Option Plan"), as described in "Executive Compensation—Incentive Plans—CPI Card Group Inc. Omnibus Incentive Plan." Effective upon the completion of this offering, an aggregate of                        shares of our common stock will be reserved for future issuance under the Omnibus Plan and                shares of common stock will be issuable upon the exercise of outstanding options under the Option Plan. Once we register these shares, which we plan to do shortly after the completion of this offering, they can be freely sold in the public market upon issuance, subject to the lock-up agreements referred to above. If a large number of these shares are sold in the public market, the sales could reduce the trading price of our common stock.

Certain provisions of our organizational documents and other contractual provisions may make it difficult for stockholders to change the composition of our board of directors and may discourage hostile takeover attempts that some of our stockholders may consider to be beneficial.

        Certain provisions of our amended and restated certificate of incorporation and bylaws may have the effect of delaying or preventing changes in control if our board of directors determines that such changes in control are not in the best interests of us and our stockholders. The provisions in our

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amended and restated certificate of incorporation and bylaws will include, among other things, the following:

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the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms, including preferences and voting rights, of those shares without stockholder approval;



•

following the time that the Tricor Funds and their affiliates cease to beneficially own a majority of our common stock, stockholder action may only be taken at a special or regular meeting and not by written consent, and special meetings may only be called by a majority of the total number of directors that we would have if there were no vacancies on our board of directors;



•

advance notice procedures for nominating candidates to our board of directors or presenting matters at stockholder meetings;



•

following the time that the Tricor Funds and their affiliates cease to beneficially own a majority of our common stock, removal of directors only for cause, and only upon the affirmative vote of 75% of our outstanding voting stock at a meeting of our stockholders called for that purpose;



•

allowing only our board of directors to fill vacancies on our board of directors; and



•

following the time that the Tricor Funds and their affiliates cease to beneficially own a majority of our common stock, super-majority voting requirements to amend our bylaws and certain provisions of our certificate of incorporation.

        In connection with this offering, we will enter into a Director Nomination Agreement (the "Director Nomination Agreement") with the Tricor Funds that provides the Tricor Funds the right to designate nominees for election to our board of directors for so long as the Tricor Funds collectively beneficially own 5% or more of the total number of shares of our common stock then outstanding. The number of nominees that the Tricor Funds are entitled to designate under the Director Nomination Agreement will bear the same proportion to the total number of members of our board of directors as the number of shares of common stock beneficially owned by the Tricor Funds bears to the total number of shares of common stock outstanding, rounded up to the nearest whole number. In addition, the Tricor Funds shall be entitled to designate the replacement for any of its board designees whose board service terminates prior to the end of such designee's term regardless of the Tricor Funds' beneficial ownership at such time. The Tricor Funds shall also have the right to have their designees participate on committees of our board of directors, subject to compliance with applicable law and stock exchange rules. The Director Nomination Agreement will terminate at such time as the Tricor Funds collectively own less than 5% of our outstanding common stock.

        We will elect in our certificate of incorporation not to be subject to Section 203 of the Delaware General Corporation Law (the "DGCL"), an anti-takeover law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a business combination, such as a merger, with a person or group owning 15% or more of the corporation's voting stock for a period of three years following the date the person became an interested stockholder, unless (with certain exceptions) the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner. Accordingly, we will not be subject to any anti-takeover effects of Section 203. However, our certificate of incorporation will contain provisions that have the same effect as Section 203, except that they will provide that the Tricor Funds, their affiliates (including any investment funds managed by Tricor) and any person that becomes an interested stockholder as a result of a transfer of 5% or more of our voting stock by the forgoing persons to such person are excluded from the "interested stockholder" definition in our certificate of incorporation and are therefore not subject to the restrictions set forth therein that have the same effect as Section 203.

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        While these provisions have the effect of encouraging persons seeking to acquire control of our company to negotiate with our board of directors, they could enable the board of directors to hinder or frustrate a transaction that some, or a majority, of our stockholders might believe to be in their best interests and, in that case, may prevent or discourage attempts to remove and replace incumbent directors.

        In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. For more information regarding these provisions, see "Description of Capital Stock."

Any issuance of preferred stock could make it difficult for another company to acquire us or could otherwise adversely affect holders of our common stock, which could depress the price of our common stock.

        Upon completion of this offering, our board of directors will have the authority to issue preferred stock and to determine the preferences, limitations and relative rights of shares of preferred stock and to fix the number of shares constituting any series and the designation of such series, without any further vote or action by our stockholders. Our preferred stock could be issued with voting, liquidation, dividend and other rights superior to the rights of our common stock. The potential issuance of preferred stock may delay or prevent a change in control of us, discouraging bids for our common stock at a premium over the market price, and adversely affect the market price and the voting and other rights of the holders of our common stock.

Our business and stock price may suffer as a result of our lack of public company operating experience. In addition, if securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

        We are a privately-held company. Our lack of public company operating experience may make it difficult to forecast and evaluate our future prospects. If we are unable to execute our business strategy, either as a result of our inability to effectively manage our business in a public company environment or for any other reason, our business, prospects, financial condition and results of operations may be harmed. In addition, as a new public company we do not currently have and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of our company, the trading price for our stock would be negatively impacted. If we obtain securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline.

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FORWARD-LOOKING STATEMENTS

        This prospectus contains forward-looking statements that involve risks and uncertainties, such as statements about our plans, objectives, expectations, assumptions or future events. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "believe," "intend," "may," "will," "should," "could" and similar expressions. Examples of forward-looking statements include, without limitation:

•

statements regarding our growth and other strategies, results of operations or liquidity;



•

statements concerning projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results and future economic performance;



•

statements regarding our industry, including statements related to industry volume and revenue growth, EMV and Dual-Interface EMV adoption, fraud reduction, Financial Payment Card renewal and replacement rates, growing prevalence of card-based payments, growth of particular industry segments and mobile payment adoption rates;



•

statements of management's goals and objectives;



•

projections of revenue, earnings, capital structure and other financial items;



•

assumptions underlying statements regarding us or our business; and



•

other similar expressions concerning matters that are not historical facts.

        Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to, factors discussed under the headings "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business."

        Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from any future results, performances, or achievements expressed or implied by the forward-looking statements. These risks include, but are not limited to, those listed below and those discussed in greater detail under the heading "Risk Factors" above:

•

material breaches in the security of our systems;



•

market acceptance of developing technologies that make Financial Payment Cards less relevant;



•

a slower or less widespread adoption of EMV and Dual-Interface EMV technology than we anticipate;



•

difficulties in our production processes;



•

defects in our software;



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our failure to operate our business in accordance with the PCI security standards or other industry standards such as Payment Card Brand certification standards;



•

extension of card expiration cycles;



•

a decline in U.S. and global market and economic conditions;

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failure to identify, attract and retain new customers or a failure to maintain our relationships with our major customers;



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our substantial indebtedness;



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infringement on our intellectual property rights, or claims that our technology is infringing on third-party intellectual property;



•

failure to meet our customers' demands in a timely manner;



•

competition in the payment card industry;



•

price erosion in the financial payment card industry;



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costs related to product defects;



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our dependence on licensing arrangements;



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inability to renew leases for our facilities;



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competitive disadvantage caused by the smart card systems of our competitors;



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interruptions in our IT systems or production capabilities;



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our dependence on the viability of payment card brands;



•

the restrictive terms of our credit facility and covenants of future agreements governing indebtedness;



•

loss of our key executives;



•

failure by our suppliers to meet their delivery obligations to us;



•

non-compliance with, and changes in, laws in foreign jurisdictions in which we operate and sell our products;



•

changes in laws relating to the financial services industry;



•

our liability under environmental, health and safety laws and regulations;



•

the occurrence of natural disasters;



•

fluctuations in currency exchange rates;



•

inadequate insurance to cover future liabilities;



•

challenges related to our acquisition strategy;



•

that we may never realize the full value of our intangible assets;



•

our ability to recruit, retain and develop qualified personnel;



•

fluctuations in our results of operations;



•

consolidations in the banking industry eliminating clients;



•

the credit risk presented by our customers;



•

our dependence on specialized equipment from third party suppliers;



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the inability to maintain effective internal controls over financial reporting;



•

the increased costs of operating as a public company; and



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our status as an "emerging growth company" and its effect on investors.

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        Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results. Forward-looking statements are based on assumptions made in light of management's perception of trends, current conditions and expected developments, which may prove to be incorrect. Certain assumptions have been made with respect to the following, among others:

•

the successful completion of this offering;



•

the correctness of our market research and industry data referenced elsewhere in this prospectus;



•

our ability to accurately assess and anticipate trends in our industry;



•

the absence of material adverse changes in our industry or the global economy;



•

our ability to raise sufficient debt or equity financing if required to support our continued growth;



•

our ability to generate revenue while controlling our costs and expenses;



•

our ability to maintain current operating expenses;



•

our ability to realize our business objectives and manage cash flow;



•

our ability to manage and integrate acquisitions;



•

our ability to protect our intellectual property rights;



•

our continued compliance with third-party license terms and non-infringement of third-party intellectual property rights;



•

our ability to develop solutions that keep pace with the continuing changes in technology, evolving industry standards, changes to the regulatory environment, new product introductions by competitors and changing merchant preferences and requirements;



•

our ability to engage and retain qualified key personnel and employees;



•

our ability to maintain good business relationships with our merchants and vendors;



•

our customers entering into anticipated contracts with us; and



•

the ability of our customers to perform their obligations under existing contracts.

While we believe our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and we may not be able to anticipate all factors that could affect our actual results.

        The forward-looking statements speak only as of the date on which they are made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Consequently, you should not place undue reliance on forward-looking statements.

INDUSTRY AND MARKET DATA

        This prospectus includes industry data, forecasts and information that we have prepared based, in part, upon data, forecasts and information obtained from independent industry publications and surveys and other information available to us. In particular, this prospectus includes statistical data extracted from a market research report prepared by First Annapolis Consulting, Inc. ("First Annapolis"), which

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was commissioned by us and was issued in May 2015. First Annapolis provides consulting and investment banking services with a focus on payments-based industries. Unless otherwise indicated, all industry and market data presented in this prospectus is derived from data estimated and reported by First Annapolis or estimated by us using such data as the primary source. Additionally, certain data in this prospectus is derived from The Nilson Report, a publication covering global payment systems. The data presented in this prospectus, including data provided by First Annapolis and The Nilson Report, involves a number of assumptions and limitations and contains projections and estimates of the future performance of the industry in which we operate that are subject to a high degree of uncertainty. We caution you not to give undue weight to such projections, assumptions and estimates. Some data contained in this prospectus is also based on our good faith estimates, which are derived from management's knowledge of the industry and independent sources. Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable; however, we have not independently verified any of the data from third-party sources nor have we ascertained the underlying economic assumptions relied upon therein. In addition, statements as to our market position and projections, assumptions and estimates of our future performance and the future performance of our industry are based on data currently available to us, and such estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under the heading "Risk Factors" in this prospectus.

USE OF NON-GAAP FINANCIAL INFORMATION

        In this prospectus, we present EBITDA, Adjusted EBITDA and Adjusted EBITDA margin (calculated as Adjusted EBITDA divided by total net sales) (collectively, the "Non-GAAP Financial Measures"), as supplemental measures of our operating performance. EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures that do not have any standardized meaning prescribed by U.S. GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. EBITDA is defined as income from continuing operations before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA plus adjustments for foreign currency gain or loss, loss on debt modification and early extinguishment, gain on purchase of ID Data, non-cash compensation expense related to our phantom stock plan that will be terminated in connection with this offering, performance bonuses earned in connection with the EFT Source acquisition and investment banking and related fees. The Non-GAAP Financial Measures are the primary measures used by our management to evaluate operating performance. We believe the Non-GAAP Financial Measures are useful to investors because they provide a means to evaluate our operating performance on an ongoing basis using criteria that are used by our internal decision makers and because they are frequently used by investors and other interested parties when comparing companies in our industry that have different financing and capital structures and/or tax rates. We believe the Non-GAAP Financial Measures are meaningful measures because they present a transparent view of our recurring operating performance and allow management to readily view operating trends, perform analytical comparisons and identify strategies to improve operating performance.

        The Non-GAAP Financial Measures have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results or cash flows as reported under GAAP. Some of these limitations are:

•

they do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;



•

they do not reflect changes in, or cash requirements for, our working capital needs;



•

they do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;

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•

although depreciation is a non-cash charge, the assets being depreciated will often have to be replaced in the future, and the Non-GAAP Financial measures do not reflect any cash requirements for such replacements;



•

they are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows; and



•

other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures.

        Because of these limitations, the Non-GAAP Financial Measures should not be considered as an alternative to net income (loss), income (loss) from operations, or any other performance measure derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity. We compensate for these limitations by relying primarily on our GAAP results and using the Non-GAAP Financial Measures only for supplemental purposes. Please see our consolidated financial statements contained elsewhere in this prospectus. Our measures of EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation. Our presentation of the Non-GAAP Financial Measures should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.

        For a reconciliation of EBITDA and Adjusted EBITDA to net income from continuing operations, the most comparable GAAP measure, see "Summary Consolidated Historical Financial Data."

TRADEMARKS

        This prospectus contains references to our trademarks and service marks. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® or^TM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. In addition, this prospectus contains trade names, trademarks and service marks of other companies, which we do not own. We do not intend our use or display of other companies' trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.

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GLOSSARY OF INDUSTRY TERMS

        Set forth below is a glossary of industry and other terms used in this prospectus:

        "Automated Clearing House" ("ACH") is an electronic clearing and settlement system for electronic financial transactions among participating U.S. commercial banks and depository institutions.

        "Card Personalization" is the process of preparing a Financial Payment Card for the cardholder, including the encoding, programming and embossing of the card with the account-specific information and related data (such as an account number). In certain cases, this will also include the cardholder's name.

        "Card-Not-Present Fraud" is the unauthorized use of Financial Payment Card or Private Label Credit Card information to make transactions without physically swiping or inserting a card into a POS terminal, often when the card and its information cannot be visually verified by a merchant. This type of fraud can be conducted over the Internet, by phone, by fax or by mail, or by manually inputting card information into a POS terminal.

        "Card-Present Fraud" occurs when a Financial Payment Card or Private Label Credit Card is used to make an unauthorized transaction in a face-to-face setting, such as a retail store checkout lane. This type of fraud may involve the use of the actual stolen card or a fraudulent duplicated card made using card and cardholder information.

        "Contact EMV" represents a Financial Payment Card with an embedded microprocessor, which interfaces with an EMV payment terminal over a contact plate on the surface of the card when inserted into the terminal. These cards are commonly referred to as "chip cards."

        "Contactless Cards" are Financial Payment Cards with an RFID antenna, allowing transactions to be completed using Near Field Communication in proximity to an NFC-enabled payment terminal without having to physically insert the card into the terminal.

        "Dual-Interface EMV" refers to cards which contain both "contact" and "contactless" EMV technology and functionalities.

        "EMV" or "EMV standard," named for the original organizations that developed the standard (Europay, MasterCard and Visa), is a technologically advanced high-security protocol designed to reduce the fraud to which magnetic stripe cards are susceptible. The EMV standard for Financial Payment Cards utilizes an embedded microprocessor that, when paired with an EMV payment terminal, dynamically authenticates cardholder debit and credit card transactions using a cryptographic process that results in a significantly more secure payment transaction environment.

        "Financial Payment Cards" are credit, debit and Prepaid Debit Cards issued on the network of one of the Payment Card Brands.

        "General Purpose Reloadable Cards" ("GPR Cards") are a type of open-loop Prepaid Debit Card generally acquired through retail channels, both in-store and online. The user of a GPR card registers the card with the issuing bank or licensed money transmitter, determines the card's spending limit by adding money directly to the account and can reload the card with additional funds as needed. These cards lack the account requirements typically needed for a traditional debit or credit card (such as a credit check).

        "Group Service Provider" is an organization that assists small issuers, such as credit unions, with managing their credit and debit card programs, including managing the Financial Payment Card issuance process.

        "Large Issuer" is defined as the top 20 U.S. debit and credit card issuers, including financial institutions such as JPMorgan Chase, Bank of America, American Express and Wells Fargo.

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        "Liability Shift" is an agreement among the Payment Card Brands that, effective October 1, 2015, the party that caused a non-EMV transaction to occur (i.e., either the card issuer or the merchant) will be held financially liable for any resulting counterfeit fraud losses.

        "Near Field Communications" ("NFC") is a wireless technology that uses radio waves to enable communication over short distances (e.g., 4 cm), such as between a Contactless Card and a point of sale terminal.

        "Net Promoter Score" ("NPS") is a measure of customer loyalty calculated from customer surveys conducted by an independent research firm. Respondents judge how likely they would be willing to recommend a particular company to a colleague, answering on a scale of one to ten. NPS is calculated by taking the respondents who are enthusiastic promoters (a nine or a ten rating) and subtracting the percentage who are detractors (a one through six rating).

        "Payment Card Brands" are the operators of the debit and credit financial payment networks: Visa; MasterCard; American Express and Discover.

        "Payment Card Industry Security Standards Council" ("PCI") is an open global forum, launched in 2006, that is responsible for the development, management, education and awareness of the PCI Security Standards, including the Data Security Standard (PCI DSS), Payment Application Data Security Standard (PA-DSS) and PIN Transaction Security (PTS) requirements.

        "Prepaid Debit Cards" share many of the functional features and conveniences of traditional bank debit cards; they are issued on the network of a Payment Card Brand and usable in the same manner as a bank debit card. However, these cards are not linked to a traditional bank account, are easier to acquire (they do not require a credit check) and require cardholders to load money onto the card in advance of any transaction. Prepaid debit cards are sometimes referred to as "open-loop cards" to denote their acceptance on a network of the Payment Card Brands and to contrast them to retail gift or loyalty cards that are referred to as "closed-loop cards" and can only be used at a merchant whose brand such card carries (e.g. a Starbucks card).

        "Private Label Credit Cards" are credit cards that an individual merchant issues for exclusive use in its own stores. Such cards are generally not issued on the network of a Payment Card Brand and therefore do not constitute Financial Payment Cards.

        "Point of Sale ("POS")Terminals" are physical hardware installed in merchant locations that enables the electronic processing of card payments by transmitting account information and sales data through a payment network operated by one of the Payment Card Brands (and often facilitated by a merchant acquirer and/or card processor) to the issuing institution of the Financial Payment Card. POS Terminals acquire cardholder account information by reading the data stored on a card's magnetic stripe, contactless chip, or EMV-enabled microprocessor or, alternatively, by manual entry.

        "Radio-Frequency Identification" ("RFID") is a technology that uses electronic tags placed on objects to relay identifying information to an electronic reader by means of radio waves.

        "Small Issuer" is defined as all issuers other than the Large Issuers, including financial institutions such as regional banks, independent community banks and credit unions that issue Financial Payment Cards.

        "Trusted Service Manager" ("TSM") is a role within the ecosystem of NFC payments, acting as a neutral broker that coordinates the technical and business relationships of the various participants, including mobile network operators and service providers such as card-issuing banks. Trusted Service Managers can act either within a secure element, such as an embedded microprocessor, or in the cloud, via host card emulation technology.

        "unbanked" refers to households or persons that do not hold an account at an institution insured by the Federal Deposit Insurance Corporation ("FDIC").

        "underbanked" refers to households or persons that hold an account at an institution insured by the FDIC and have also used at least one of the following alternative financial services from non-bank providers in the last 12 months: money orders, check cashing, remittances, payday loans, refund anticipation loans, rent-to-own services, pawn shops loans or auto title loans.

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USE OF PROCEEDS

        We estimate that the net proceeds from our issuance and sale of               shares of common stock in this offering will be approximately $               million, assuming an initial public offering price of $            per share, which is the midpoint of the price range listed on the cover page of this prospectus, and after deducting underwriting discounts and commissions and offering expenses payable by us. The selling stockholders expect to receive net proceeds of approximately $             million, assuming an initial public offering price of $            per share, which is the midpoint of the price range listed on the cover page of this prospectus, and after deducting underwriting discounts and commissions and offering expenses payable by the selling stockholders (or if the underwriters exercise in full their over-allotment option, we estimate that the selling stockholders will receive net proceeds of approximately $             million). Of the proceeds going to the selling stockholders, the Tricor Funds expect to receive net proceeds of approximately $                million. We will not receive any proceeds from the sale of shares by the selling stockholders.

        A $1.00 increase (decrease) in the assumed initial public offering price of $            per share would increase (decrease) our net proceeds from this offering by approximately $             million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and offering expenses payable by us.

        We intend to use approximately $11.5 million of the net proceeds from this offering to redeem the remaining outstanding shares of our preferred stock, approximately $             million of the net proceeds to terminate our phantom stock plan and to satisfy all liabilities due thereunder and the remainder of the net proceeds to repay outstanding indebtedness under our New Term Loan Facility incurred in connection with the Partial Preferred Redemption. As of August 17, 2015, an aggregate of approximately $435.0 million of borrowings were outstanding under our New Term Loan Facility. The interest rate on the $435.0 million of borrowings outstanding under our New Term Loan Facility at August 17, 2015 was 5.5%. Our New Term Loan Facility matures on August 17, 2022. Borrowings under our New Credit Facility have been used to fund the Partial Preferred Redemption and to repay indebtedness under our previously outstanding term loan facility, and we expect to use our New Credit Facility in the future to fund capital expenditures, for acquisition activity and for general corporate purposes.

        Redeeming the remaining outstanding shares of our preferred stock, terminating our phantom stock plan and repaying outstanding borrowings under our New Term Loan Facility will achieve the objective of optimizing our capital structure in connection with the offering. Subject to the use of the net proceeds described herein, we may use any remaining net proceeds for general corporate and working capital purposes.

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DIVIDEND POLICY

        Following the consummation of this offering, we expect to pay quarterly cash dividends on our common stock, subject to the sole discretion of our board of directors and the considerations discussed below. We intend to fund any future dividends from distributions made by our operating subsidiaries from their available cash generated from operations.

        Future cash dividends, if any, will be at the discretion of our board of directors and the amount of cash dividends per share will depend upon, among other things, our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions, number of shares of common stock outstanding and other factors our board of directors may deem relevant. The timing and amount of future dividend payments will be at the discretion of our board of directors.

        In addition, because we are a holding company with no material direct operations, we are dependent on loans, dividends and other payments from our operating subsidiaries to generate the funds necessary to pay dividends on our common stock. We may be restricted from paying cash dividends on our common stock in certain circumstances, including by the covenants in our New Credit Facility, and may be further restricted by the terms of future debt or preferred securities. See "Risk Factors—Risks Related to Ownership of our Common Stock—Our ability to pay regular dividends to our stockholders is subject to the discretion of our board of directors and may be limited by our holding company structure and applicable provisions of Delaware law" and "Description of Certain Indebtedness."

        Our dividend policy entails certain risks and limitations, particularly with respect to liquidity. Although we expect to pay dividends according to our dividend policy, we may not pay dividends according to our policy, or at all, if, among other things, we do not have the cash necessary to pay our intended dividends. By paying cash dividends rather than saving or investing that cash, we risk, among other things, slowing the pace of our growth and having insufficient cash to fund our operations or unanticipated capital expenditures.

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CAPITALIZATION

        The following table sets forth our cash and cash equivalents and capitalization as of June 30, 2015:

•

on an actual basis;



•

on an adjusted basis to give effect to our entering into the New Credit Agreement, repaying borrowings under our previously outstanding term loan facility and effecting the Partial Preferred Redemption; and



•

on a further adjusted basis to give further effect to (i) the issuance of               shares of common stock in this offering and (ii) our receipt of the estimated net proceeds from the sale of shares of common stock offered by us in this offering at an assumed initial public offering price of $            per share, the midpoint of the price range set forth on the cover of this prospectus, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, and the application of the net proceeds as described in "Use of Proceeds."

        This information should be read in conjunction with "Use of Proceeds," "Selected Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical consolidated financial statements and related notes appearing elsewhere in this prospectus.

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DILUTION

        If you purchase our common stock in this offering, your ownership interest will be immediately diluted to the extent of the difference between the initial public offering price per share of our common stock and the net tangible book value per share of our common stock after this offering. Dilution results from the fact that the initial public offering price per share of our common stock is substantially in excess of the book value per share of common stock attributable to the existing stockholders for the currently outstanding shares of common stock.

        Our pro forma net tangible book value as of              was $             million, or $            per share of common stock after giving effect to the Partial Preferred Redemption and the -for-one22-for-1 stock split effected on ,September 3, 2015. Net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by the basic weighted average number of shares of common stock that will be outstanding immediately prior to the completion of the offering.

        After giving effect to the sale of the               shares of common stock offered by us in this offering at an assumed initial public offering price of $            per share, the midpoint of the price range set forth on the cover of this prospectus, less estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma net tangible book value as of              would have been approximately $             million, or $            per share of common stock after giving effect to this offering. This represents an immediate increase in net tangible book value to our existing stockholders of $            per share and an immediate dilution to purchasers in this offering of $            per share. The following table illustrates this pro forma per share dilution in net tangible book value to purchasers.

        A $1.00 increase or decrease in the assumed initial public offering price of $            per share, the midpoint of the price range set forth on the cover of this prospectus, would increase or decrease pro forma net tangible book value by $             million, or $            per share, and would increase or decrease the dilution per share to purchasers in this offering by $            , based on the assumptions set forth above.

        The following table summarizes as of              , on an as adjusted basis, the number of shares of common stock purchased, the total consideration paid and the average price per share paid by purchasers in this offering, based upon an assumed initial public offering price of $            per share, the midpoint of the initial public offering price range on the cover page of this prospectus, and before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us:

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        Except as otherwise indicated, the discussion and tables above assume no exercise of the underwriters' option to purchase additional shares and no exercise of any outstanding options. If the

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underwriters' option to purchase additional shares is exercised in full, our existing stockholders would own approximately        % and purchasers in this offering would own approximately         % of the total number of shares of our common stock outstanding after this offering. If the underwriters exercise their option to purchase additional shares in full, the pro forma net tangible book value per share after this offering would be $            per share, and the dilution in the pro forma net tangible book value per share to purchasers in this offering would be $            per share.

        The tables and calculations above are based on               shares of common stock outstanding as of              and assume no exercise by the underwriters of their option to purchase up to an additional               shares from us. This number excludes, as of              , an aggregate of               shares of common stock reserved for issuance under the Omnibus Plan that we intend to adopt in connection with this offering and               shares of common stock issuable upon the exercise of outstanding options under the Option Plan.

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SELECTED CONSOLIDATED FINANCIAL DATA

        The following tables set forth our selected consolidated historical financial data. You should read the information set forth below in conjunction with "Use of Proceeds," "Capitalization," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated historical financial statements and notes thereto included elsewhere in this prospectus. The statements of income data for the years ended December 31, 2014, 2013 and 2012 and the balance sheet data as of December 31, 2014 and 2013 are derived from our audited consolidated financial statements included elsewhere in this prospectus. The statements of income data for the six months ended June 30, 2015 and 2014 and the balance sheet data as of June 30, 2015 are derived from our unaudited condensed consolidated financial statements included elsewhere in this propectus. See "Index to Consolidated Financial Statements." Results of interim periods are not necessarily indicative of the results expected for a full year or for future periods.