Equibles

10-Q

PAID INC (PAYD)

10-Q 2022-05-16 For: 2022-03-31
View Original
Added on April 06, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

For the quarterly period ended March 31, 2022

COMMISSION FILE NUMBER 0-28720

payd20220331_10qimg001.jpg

(Exact Name of Registrant as Specified in its Charter)

Delaware 73-1479833
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)

225 Cedar Hill Street, Marlborough, Massachusetts 01752

(Address of Principal Executive Offices) (Zip Code)

(617) 861-6050

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol Name of each exchange on which registered
None None None

Securities registered under Section 12(g) of the Act:

Common Stock, $0.001 Par Value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ☐     No ☑

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐     No ☑

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒     No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒     No ☐

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):

Large accelerated filer ☐ Accelerated Filer ☐ Non-accelerated filer ☑ Smaller reporting company ☑ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐     No ☒

As of May 15, 2022, the issuer had outstanding 7,773,263 shares of its Common Stock.

PAID, INC.

FORM 10-Q

TABLE OF CONTENTS

Part I –Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets March 31, 2022 (unaudited) and December 31, 2021 (audited) 1
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss Three months ended March 31, 2022 and 2021 2
Unaudited Condensed Consolidated Statements of Cash Flows Three months ended March 31, 2022 and 2021 3
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity Three months ended March 31, 2022 and 2021 4
Notes to Condensed Consolidated Financial Statements (unaudited) 5-13
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 14
Item 3. Quantitative and Qualitative Disclosures about Market Risk 17
Item 4. Controls and Procedures 17
Part II –Other Information
Item 1. Legal Proceedings 18
Item 1A. Risk Factors 18
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 18
Item 3. Defaults Upon Senior Securities 18
Item 4. Mine Safety Disclosures 18
Item 5. Other Information 18
Item 6. Exhibits 18
Signatures 19

Table of Contents

PART I

–

FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

PAID, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents 2,876,293 $ 2,839,687
Accounts receivable, net 309,969 215,109
Prepaid expenses and other current assets 129,571 164,823
Total current assets 3,315,833 3,219,619
Property and equipment, net 37,111 40,493
Intangible assets, net 3,134,522 3,175,198
Operating lease right-of-use assets 52,971 61,040
Total assets 6,540,437 $ 6,496,350
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 2,156,471 $ 2,300,509
Accrued expenses 564,723 376,387
Contract liabilities 12,140 11,154
Operating lease obligations – current portion 37,348 36,123
Total current liabilities 2,770,682 2,724,173
Long-term liabilities:
Operating lease obligations – net of current portion 15,593 25,187
Deferred tax liability, net 849,542 838,312
Total liabilities 3,635,817 3,587,672
Commitments and contingencies
Shareholders' equity:
Series A Preferred stock, 0.001 par value, 5,000,000 shares authorized; no shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively - -
Common stock, 0.001 par value, 25,000,000 shares authorized; 7,807,103 shares issued and 7,773,263 shares outstanding at March 31, 2022 and December 31, 2021 7,807 7,807
Additional paid-in capital 72,709,297 72,691,201
Accumulated other comprehensive income 628,367 590,067
Accumulated deficit (70,383,004 ) (70,322,550 )
Common stock in treasury, at cost, 33,840 shares at March 31, 2022 and December 31, 2021 (57,847 ) (57,847 )
Total shareholders' equity 2,904,620 2,908,678
Total liabilities and shareholders' equity 6,540,437 $ 6,496,350

All values are in US Dollars.

See accompanying notes to condensed consolidated financial statements

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PAID, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

Three Months Ended
March 31, 2022 March 31, 2021
Revenues, net $ 3,609,701 $ 3,512,773
Cost of revenues 2,811,209 2,633,758
Gross profit 798,492 879,015
Operating expenses:
Salaries and related 458,509 430,175
General and administrative 299,402 243,165
Share-based compensation 18,096 263,613
Amortization of other intangible assets 82,039 121,395
Total operating expenses 858,046 1,058,348
Loss from operations (59,554 ) (179,333 )
Provision for income taxes 900 400
Net loss $ (60,454 ) $ (179,733 )
Net loss per share – basic and diluted $ (0.01 ) $ (0.03 )
Weighted average number of common shares outstanding – basic and diluted 7,773,263 6,455,164
Condensed consolidated statements of comprehensive loss
Net loss $ (60,454 ) $ (179,733 )
Other comprehensive income:
Foreign currency translation adjustments 38,300 40,512
Comprehensive loss $ (22,154 ) $ (139,221 )

See accompanying notes to condensed consolidated financial statements

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PAID, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31,

(Unaudited)

2022 2021
Cash flows from operating activities:
Net loss $ (60,454 ) $ (179,733 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 85,909 127,980
Amortization of operating lease right-of-use assets 8,761 7,993
Share-based compensation 18,096 263,613
Changes in assets and liabilities:
Accounts receivable (92,022 ) (71,038 )
Prepaid expenses and other current assets 36,448 43,852
Accounts payable (169,876 ) (4,540 )
Accrued expenses 182,153 180,803
Contract liabilities 826 1,076
Operating lease obligations (9,059 ) (8,292 )
Net cash provided by operating activities 782 361,714
Cash flows from investing activities:
Purchase of property and equipment - (1,120 )
Net cash used in investing activities - (1,120 )
Cash flows from financing activities:
Payments on finance leases - (1,417 )
Net cash used in financing activities - (1,417 )
Effect of exchange rate changes on cash and cash equivalents 35,824 22,615
Net change in cash and cash equivalents 36,606 381,792
Cash and cash equivalents, beginning of period 2,839,686 1,644,210
Cash and cash equivalents, end of period $ 2,876,293 $ 2,026,002
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Income taxes $ 900 $ 400
Interest $ - $ 57
SUPPLEMENTAL DISCLOSURES OF NON-CASH ITEMS
Issuance of common shares in settlement of accrued expenses $ - $ 2,005,500

See accompanying notes to condensed consolidated financial statements

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PAID, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Unaudited)

Common Stock Accrued Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Treasury Stock
Shares Amount Bonus Capital Income Deficit Shares Amount Total
Balance, January 1, 2021 6,489,004 $ 6,489 $ 2,005,500 $ 70,083,486 $ 570,761 $ (69,625,790 ) (33,840 ) $ (57,847 ) $ 2,982,599
Foreign currency translation adjustment - - - - 40,512 - - - 40,512
Share-based compensation expense - - - 24,863 - - - - 24,863
Issuance of common stock for accrued bonus and compensation 1,300,000 1,300 (2,005,500 ) 2,242,950 - - - - 238,750
Net loss - - - - - (179,733 ) - - (179,733 )
Balance, March 31, 2021 7,789,004 $ 7,789 $ - 72,351,299 $ 611,273 $ (69,805,523 ) (33,840 ) $ (57,847 ) $ 3,106,991

PAID, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2022

(Unaudited)

Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Treasury Stock
Shares Amount Capital Income Deficit Shares Amount Total
Balance, January 1, 2022 7,807,103 $ 7,807 $ 72,691,201 $ 590,067 $ (70,322,550 ) (33,840 ) $ (57,847 ) $ 2,908,678
Foreign currency translation adjustment - - - 38,300 - - - 38,300
Share-based compensation expense - - 18,096 - - - - 18,096
Net loss - - - - (60,454 ) - - (60,454 )
Balance, March 31, 2022 7,807,103 $ 7,807 $ 72,709,297 $ 628,367 $ (70,383,004 ) (33,840 ) $ (57,847 ) $ 2,904,620

See accompanying notes to condensed consolidated financial statements

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PAID, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

March 31, 2022

Note 1. Organization and Significant Accounting Policies

ShipTime Canada Inc. (“ShipTime”) has developed a SaaS-based application, which focuses on the small and medium business segments. This offering allows members to quote, process, generate labels, dispatch and track courier and LTL shipments all from a single interface. The application provides customers with a choice of today’s leading couriers and freight carriers all with discounted pricing allowing members to save on every shipment. ShipTime can also be integrated into on-line shopping carts to facilitate sales via e-commerce. We actively sell directly to small and medium businesses and through long standing partnerships with selected associations throughout Canada.

PAID, Inc. (“PAID”, the “Company”, “we”, “us”, or “our”) has developed AuctionInc, which is a suite of online shipping and tax management tools assisting businesses with e-commerce storefronts, shipping solutions, tax calculation, inventory management, and auction processing. The product has tools to assist with other aspects of the fulfillment process, but the main purpose of the product is to provide accurate shipping and tax calculations and packaging algorithms that provide customers with the best possible shipping and tax solutions.

BeerRun Software is a brewery management and Alcohol and Tobacco Tax and Trade Bureau tax reporting software. Small craft brewers can utilize the product to manage brewery schedules, inventory, packaging, sales and purchasing. Tax reporting can be processed with a single click and is fully customizable by state or providence. The software is designed to integrate with QuickBooks accounting platforms by using our powerful sync engine. We currently offer two versions of the software BeerRun and BeerRun Light which excludes some of the enhanced features of BeerRun without disrupting the core functionality of the software.

PaidPayments provides commerce solutions to small - and medium-sized businesses by enabling them to sell their goods and services, accept payment, and create repeat sales though an online payment processing solution. The Company has operated as a Payment Facilitator since 2019, which enables our merchants to get the benefit of instant boarding and discounted rates. Our platform provides all aspects required for payment processing, including merchant boarding, underwriting, fraud monitoring, settlement, funding to the sub-merchant, and monthly reporting and statements. The Company controls all of these necessary aspects in the payment process and is then able to supply a one-step boarding process for our partners and value-added resellers. This capability also provides cost advantages, rapid response to market needs, simplified processes for boarding business and a seamless interface for our merchant customers.

General Presentation and Basis of Consolidated Financial Statements

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and with the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2021 that was filed on March 31, 2022.

In the opinion of management, the Company has prepared the accompanying unaudited condensed consolidated financial statements on the same basis as its audited consolidated financial statements, and these unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year 2022.

Liquidity and Management’s Plans

At March 31, 2022 the Company reported cash and cash equivalents of $2,876,293 and net working capital of $545,151 and reported cash flows from operations of $782 for the three months ended Mach 31, 2022. The Company has reported an operating loss of $60,454 for the period ended March 31, 2022 and has an accumulated deficit of $70,383,004 at March 31, 2022.

Management believes that the Company has adequate cash resources to fund operations during the next 12 months after the filing of this quarterly report of Form 10-Q. In addition, management continues to explore opportunities and has organized additional resources to monetize its patents. However, there can be no assurance that anticipated growth in new business will occur, and that the Company will be successful in launching new products and services. Management continues to seek alternative sources of capital to support the growth of future operations.

Although there can be no assurances, the Company believes that the above management plans will be sufficient to meet the Company's working capital requirements through the end of May 2023 and will have a positive impact on the Company for the foreseeable future.

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Principles of Consolidation

The condensed consolidated financial statements include the accounts of PAID, Inc. and its wholly owned subsidiaries, PAID Run, LLC and ShipTime Canada, Inc. All intercompany accounts and transactions have been eliminated.

Foreign Currency

The currency of ShipTime, the Company’s international subsidiary, is in Canadian dollars. Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at March 31, 2022 and December 31, 2021. Results of operations and cash flows are translated using the average exchange rates throughout the period. The effect of exchange rate fluctuations on translation of assets and liabilities is included as a separate component of shareholders’ equity in accumulated other comprehensive income.

Geographic Concentrations

The Company conducts business in the U.S. and Canada. For customers headquartered in their respective countries, the Company derived approximately 99% of its revenues from Canada and 1% from the U.S. during the three months ended March 31, 2022 and 2021.

At March 31, 2022, the Company maintained 100% of its property and equipment net of accumulated depreciation in Canada.

Right of Use Assets

A right-of-use asset represents a lessee’s right to use a leased asset for the term of the lease. Our right-of-use assets generally consist of an operating lease for a building.

Right-of-use assets are measured initially at the present value of the lease payments, plus any lease payments made before a lease began and any initial direct costs, such as commissions paid to obtain a lease.

Right-of-use assets are subsequently measured at the present value of the remaining lease payments, adjusted for incentives, prepaid or accrued rent, and any initial direct costs not yet expensed.

Long-Lived Assets

The Company reviews the carrying values of its long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the expected future cash flow from the use of the asset and its eventual disposition is less than the carrying amount of the asset, an impairment loss is recognized and measured using the fair value of the related asset. No impairment charges were recognized during the three months ended March 31, 2022 and 2021. There can be no assurance, however, that market conditions will not change or demand for the Company’s services will continue, which could result in impairment of long-lived assets in the future.

Revenue Recognition

The Company generates revenue principally from fees for coordinating shipping services, sales of shipping calculator subscriptions, brewery management software subscriptions, merchant processing services and client services.

Nature of Goods and Services

For label generation service revenues, the Company recognizes revenue when a customer has successfully prepared a shipping label and scheduled a pickup. Customers with pickups after the end of the reporting period are recorded as contract liabilities on the condensed consolidated balance sheets. The service is offered to consumers via an online registration and allows users to create a shipping label using a credit card on their account (all customers must have a valid credit card on file to process shipments on the ShipTime platform).

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For shipping calculator revenues and brewery management software revenues, the Company recognizes subscription revenue on a monthly basis. Shipping calculator customers’ renewal dates are based on their date of installation and registration of the shipping calculator line of products. The timing of the revenue recognition and cash collection may vary within a given quarter and the deposits for future services are recorded as contract liabilities on the condensed consolidated balance sheets. Brewery management software subscribers are billed monthly at the first of the month. All payments are made via credit card for the following month.

Merchant processing revenue consists of fees a seller pays us to process their payment transactions and is recognized upon authorization of a transaction. Revenue is recognized net of estimated refunds, which are reversals of transactions initiated by sellers. We act as the merchant of record for our sellers, which puts us in their shoes with respect to card networks and puts the risk for refunds and chargebacks on us. The gross transaction fees collected from sellers is recognized as revenue as we are the primary obligor to the seller and are responsible for processing the payment, have latitude in establishing pricing with respect to the sellers and other terms of service, have sole discretion in selecting the third party to perform the settlement, and assume the credit risk for the transaction processed.

Revenue Disaggregation

The Company operates in five reportable segments (see below).

Performance Obligations

At contract inception, an assessment of the goods and services promised in the contracts with customers is performed and a performance obligation is identified for each distinct promise to transfer to the customer a good or service (or bundle of goods or services). To identify the performance obligations, the Company considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Revenue is recognized when the performance obligation has been met, which is when the customer has successfully prepared a shipping label and scheduled a pickup for shipping coordination and label generation services. The Company considers control to have transferred at that time because the Company has a present right to payment at that time, the Company has provided the shipping label, and the customer is able to direct the use of, and obtain substantially all of the remaining benefits from the shipping label.

For arrangements under which the Company provides a subscription for shipping calculator services and brewery management software, the Company satisfies its performance obligations over the life of the subscription, typically twelve months or less.

Customers of PaidPayments receive a merchant identification number which allows them to process credit card transactions. Once the transaction is approved, the funds are disbursed in an overnight feed and the Company has met its performance obligation.

The Company has no shipping and handling activities related to contracts with customers.

Revenues are recognized net of any taxes collected from customers, which are subsequently remitted to government authorities.

Significant Payment Terms

Pursuant to the Company’s contracts with its customers, amounts are collected up front primarily through credit/debit card transactions. The Company has offered to its customers consolidated payments which are billed weekly and are paid with a credit card on file. Accordingly, the Company determined that its contracts with customers do not include extended payment terms or a significant financing component.

Variable Consideration

In some cases, the nature of the Company’s contracts may give rise to variable consideration, including rebates and cancellations or other similar items that generally decrease the transaction price.

Variable consideration is estimated at the most likely amount that is expected to be earned. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the anticipated performance and all information (historical, current and forecasted) that is reasonably available.

Revenues are recorded net of variable consideration, such as rebates, refunds, and cancellations.

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Warranties

The Company’s products and services are provided on an “as is” basis and no warranties are included in the contracts with customers. Also, the Company does not offer separately priced extended warranty or product maintenance contracts.

Contract Assets

Typically, the Company has already collected revenue from the customer at the time it has satisfied its performance obligation. Accordingly, the Company has only a small balance of accounts receivable, totaling $309,969 and $215,109 as of March 31, 2022 and December 31, 2021, respectively. The Company has one customer that makes up 10% of the accounts receivable balance at March 31, 2022. Generally, the Company does not have material amounts of contract assets since revenue is recognized as control of goods is transferred or as services are performed.

Contract Liabilities (Deferred Revenue)

Contract liabilities are recorded when cash payments are received in advance of the Company’s performance (including rebates). Contract liabilities were $12,140 and $11,154 at March 31, 2022 and December 31, 2021, respectively. During the three months ended March 31, 2022, the Company recognized revenues of $11,154, related to contract liabilities outstanding at the beginning of the year.

Earnings (Loss) Per Common Share

Basic earnings (loss) per share represent income (loss) available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income (loss) that would result from the assumed issuance. The potential common shares that may be issued by the Company relate to outstanding stock options and have been excluded from the computation of diluted earnings (loss) per share because they would reduce the reported loss per share and therefore have an anti-dilutive effect.

For the three months ended March 31, 2022 and 2021, there were approximately 33,000 and 36,000, respectively, of potentially dilutive shares excluded from the diluted loss per share calculation, as their effect would be anti-dilutive.

The Company computes its income (loss) available to common shareholders by subtracting dividends on preferred stock, including undeclared or unpaid dividends if cumulative, and any deemed dividends or discounts on redeemed preferred stock from its reported net income (loss) and reports the same on the face of the consolidated statements of operations and comprehensive income (loss).

The following is a reconciliation of the numerators and denominators of the basic earnings (loss) per common share and diluted earnings (loss) per common share computation for the three months ended March 31, 2022 and 2021.

Three Months Ended<br> <br>March 31, 2022 Three Months Ended<br> <br>March 31, 2021
Numerator:
Net loss available to common shareholders $ (60,454 ) $ (179,333 )
Denominator:
Basic weighted-average shares outstanding 7,773,263 6,455,164
Effect of dilutive securities - -
Diluted weighted-average shares outstanding 7,773,263 6,455,164
Basic loss per common share $ (0.01 ) $ (0.03 )
Diluted loss per common share $ (0.01 ) $ (0.03 )

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Segment Reporting

The Company reports information about segments of its business in its annual consolidated financial statements and reports selected segment information in its quarterly reports issued to shareholders. The Company also reports on its entity-wide disclosures about the products and services it provides and reports revenues and its major customers. The Company’s five reportable segments are managed separately based on fundamental differences in their operations. At March 31, 2022, the Company operated in the following five reportable segments:

a. Client services;
b. Shipping calculator services;
c. Brewery management software;
d. Merchant processing services;
e. Shipping coordination and label generation services; and
f. Corporate operations

The Company evaluates performance and allocates resources based upon operating income. The accounting policies of the reportable segments are the same as those described in this summary of significant accounting policies. The Company’s chief operating decision maker is the Chief Executive Officer/Chief Financial Officer.

The following table compares total revenue for the periods indicated.

Three Months Ended
March 31, 2022 March 31, 2021
Client services $ 280 $ 1,283
Shipping calculator services 5,544 5,863
Brewery management software 9,375 19,200
Merchant processing services 12,053 12,525
Shipping coordination and label generation services 3,582,449 3,473,902
Total revenues $ 3,609,701 $ 3,512,773

The following table compares total loss from operations for the periods indicated.

Three Months Ended
March 31, 2022 March 31, 2021
Client services $ 280 $ 969
Shipping calculator services 3,565 2,011
Brewery management software (4,743 ) 11,632
Merchant processing services 4,039 4,622
Shipping coordination and label generation services 138,901 (81,827 )
Corporate operations (201,596 ) (116,740 )
Total loss from operations $ (59,554 ) $ (179,333 )

Subsequent Events

The Company has evaluated subsequent events through the filing date of this Form 10-Q and has determined that no subsequent events have occurred that would require recognition in the condensed consolidated financial statements or disclosure in the notes thereto, other than as disclosed herein.

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Recent Accounting Pronouncements

There were no new accounting pronouncements issued by the FASB during the period that would apply to the Company and would have a material impact on its financial position or results of operations.

Note 2. Accrued Expenses

Accrued expenses are comprised of the following:

March 31, 2022<br> <br>(unaudited) December 31, 2021
Payroll and related costs $ 53,735 $ 58,182
Professional and consulting - 26,070
Royalties 47,803 47,803
Accrued cost of revenues 430,873 212,020
Sales tax 31,902 31,902
Other 410 410
Total $ 564,723 $ 376,387

Note 3. Intangible Assets

The Company holds several patents for the real-time calculation of shipping costs for items purchased through online auctions using a zip code as a destination location indicator. It includes shipping charge calculations across multiple carriers and accounts for additional characteristics of the item being shipped, such as weight, special packaging or handling, and insurance costs. These patents help facilitate rapid and accurate estimation of shipping costs across multiple shipping carriers and also include real-time calculation of shipping.

In addition, the Company has various other intangibles from past business combinations.

At March 31, 2022, intangible assets consisted of the following:

Patents Trade Name Technology & Software Customer Relationships Total
Gross carrying amount $ 16,000 $ 857,522 $ 631,402 $ 5,027,498 $ 6,532,422
Accumulated amortization (16,000 ) (857,522 ) (631,402 ) (1,892,976 ) (3,397,900 )
$ - $ - $ - $ 3,134,522 $ 3,134,522

At December 31, 2021, intangible assets consisted of the following:

Patents Trade Name Technology & Software Customer Relationships Total
Gross carrying amount $ 16,000 $ 846,186 $ 624,162 $ 4,963,860 $ 6,450,208
Accumulated amortization (16,000 ) (843,240 ) (624,162 ) (1,791,608 ) (3,275,010 )
$ - $ 2,946 $ - $ 3,172,252 $ 3,175,198

Amortization expense of intangible assets for the three months ended March 31, 2022 and 2021 was $82,039 and $121,395, respectively.

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Note 4. Commitments and Contingencies

Legal Matters

In the normal course of business, the Company periodically becomes involved in litigation and disputes. During 2021, the Company was notified of a dispute related to its non-renewal of the employment agreement with Mr. Allan Pratt, the Company's former President, CEO and Chairman. In February 2020, the Company did not renew Mr. Pratt’s employment agreement, but Mr. Pratt alleges in a court in Canada that the Company terminated him and that the Company owes him a severance payment. Around the same time that Mr. Pratt’s employment term expired, the Company’s Board of Directors voted to reduce the size of the Board from five to three, and Mr. Pratt and Mr. Austin Lewis, then CFO, automatically rolled off from the Board of Directors. More than a year later, in 2021, Mr. Pratt filed a claim in Delaware courts to contest that decision.

Indemnities and Guarantees

The Company has made certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party, in relation to certain actions or transactions. The Company indemnifies its directors, officers, employees and agents, as permitted under the laws of the State of Delaware. In connection with its facility lease, the Company has agreed to indemnify its lessor for certain claims arising from the use of the facilities. The duration of the guarantees and indemnities varies and is generally tied to the life of the agreement. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated nor incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees in the accompanying condensed consolidated balance sheets.

Note 5. Shareholders’ Equity

Preferred Stock

The Company’s amended Certificate of Incorporation authorizes the issuance of 20,000,000 shares of blank-check preferred stock at $0.001 par value. The Board of Directors will be authorized to fix the designations, rights, preferences, powers and limitations of each series of the preferred stock.

The Company filed a Certificate of Designations effective on December 30, 2016, which sets aside 5,000,000 shares of Preferred Stock as Series A Preferred Stock. The Series A Preferred Stock carries a coupon payment obligation of 1.5% of the liquidation value per share ($3.03) per year in cash or additional Series A Preferred Stock, calculated by taking the 30-day average closing price for a share of common stock for the month immediately preceding the coupon payment date which is made annually. The Series A Preferred Stock has no voting or conversion rights. If purchased, redeemed, or otherwise acquired (other than conversion), the preferred stock may be reissued. As of March 31, 2022 and December 31, 2021, there are no outstanding shares of Series A Preferred Stock.

Common Stock

In February 2020, ShipTime Canada amended its rights to exchange one share of ShipTime Canada stock from 45 PAID common shares and 311 PAID preferred shares to 356 PAID common shares. The Company made available to its ShipTime Canada exchangeable preferred shareholders the one-time option to convert existing book entry preferred shares and exchangeable rights to preferred shares into PAID common shares. As a result, certain ShipTime exchangeable shareholders exercised their rights to receive 1,461,078 shares of PAID Series A Preferred Stock for 1,461,078 shares of PAID common stock. At the same time, the Company made available to its Series A Preferred Stock shareholder the option to exchange existing Series A preferred shares for PAID common shares. The exchange was offered on a one-to-one basis. Shareholders holding 1,015,851 shares of Series A Preferred Stock exchanged such shares for 1,015,851 shares of PAID common stock. Furthermore, because of the amended exchange rights, the Company reflected an additional exchange of PAID Series A Preferred Stock shares totaling 2,089,298 to PAID common shares, representing the additional amount of PAID common shares that will be issued to the ShipTime shareholders upon the exchange. During 2020, two shareholders sold 500 ShipTime exchangeable shares which were subsequently exchanged for 178,000 common shares. In total, the Company has reserved for future issuance of 2,213,608 shares of PAID common stock with respect to the remaining 6,218 exchangeable shares to be issued as a result of the ShipTime acquisition which are considered issued and outstanding as of March 31, 2022 for financial reporting purposes.

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On March 29, 2021, the Company's Board of Directors authorized the issuance of 1,050,000 bonus shares of PAID common stock to the CEO/CFO for services rendered during 2019 and 2020. This bonus was valued at $2,005,500 based on the closing price of the Company's common stock at March 29, 2021 and was recorded in accrued common stock bonus in shareholders’ equity at December 31, 2020. Also, at March 29, 2021, the Company’s Board of Directors authorized the issuance of an additional 250,000 shares to the CEO/CFO as a one-time sign-on bonus resulting in a share-based compensation expense of $477,500, which was recognized ratably during 2021 as the bonus shares were subject to repurchase if the CEO/CFO terminated employment through January 1, 2022. All of these shares were issued on March 31, 2021.

Share-based Incentive Plans

On March 23, 2018, the Board of Directors voted to approve the 2018 Stock Option Plan which reserves 450,000 non-qualified stock options to be granted to employees. The Company has three additional stock option plans that include both incentive and non-qualified stock options to be granted to certain eligible employees, non-employee directors, or consultants of the Company. On November 10, 2020, the board voted to increase the 2018 Stock Option Plan from 450,000 options to 900,000 options. For the year ended December 31, 2020, the Company granted 105,000 stock options to employees, consultants and directors. During 2021, as a result of the termination of several employees, the Company recorded 61,948 expired options and an additional 20,459 that were cancelled. During 2022, the Company issued 10,000 stock options to one employee. These options have a three-year vesting schedule with one-third vesting immediately, one-third vesting in 18 months and the final one-third vesting in 36 months, they expire if not exercised in ten years from the grant date, and their exercise price is $1.91 per share.

For the three-month periods ended March 31, 2022, and 2021, the Company recorded $18,096 and $263,613, respectively, of share-based compensation expense related to the vesting of applicable options granted in 2022 and prior years and the issuance of shares in the first quarter of 2021 for employment compensation.

Note 6. Leases

We have an operating lease for our corporate offices in Canada and finance leases for furniture and equipment which expired in June 2021. Our leases have remaining lease terms of sixteen months to seventeen months, and our primary operating leases include options to extend the leases for four years. Future renewal options that are not likely to be executed as of the balance sheet date are excluded from right-of-use assets and related lease liabilities.

We report operating leased assets, as well as operating lease current and noncurrent obligations on our balance sheets for the right to use the building in our business.

Generally, interest rates are stated in our leases for equipment. When no interest rate is stated in a lease, however, we review the interest rates implicit in our recent finance leases to estimate our incremental borrowing rate. We determine the rate implicit in a lease by using the most recent finance lease rate, or other method we think most closely represents our incremental borrowing rate.

The components of lease expense were as follows:

Three Months Ended<br> <br>March 31, 2022 Three Months Ended<br> <br>March 31, 2021
Operating lease cost $ 10,093 $ 10,095
Finance lease cost:
Amortization of leased assets $ - $ 2,741
Interest on lease liabilities - 57
Total finance lease cost $ - $ 2,798

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Supplemental cash flow information related to leases was as follows:

Three Months Ended<br> March 31, 2022 Three Months Ended<br> March 31, 2021
Cash paid for amounts included in leases:
Operating cash flows from operating leases $ 10,392 $ 10,395
Operating cash flows from finance leases $ - $ 57
Financing cash flows from finance leases $ - $ 1,417
Right-of-use assets obtained in exchange for lease obligations:
Operating leases $ - $ -
Finance leases $ - $ -

Supplemental balance sheet information related to leases was as follows:

March 31, 2022 December 31, 2021
Operating leases:
Operating lease right-of-use assets $ 52,971 $ 61,040
Current portion of operating lease obligations $ 37,348 $ 36,123
Operating lease obligations, net of current portion 15,593 25,187
Total operating lease liabilities $ 52,941 $ 61,310
Finance leases:
Property and equipment, at cost $ 55,206 $ 53,885
Accumulated depreciation (55,206 ) (53,885 )
Property and equipment, net $ - $ -
Current portion of finance lease obligations $ - $ -
Finance lease obligations, net of current portion - -
Total finance lease liabilities $ - $ -
March 31, 2022 December 31, 2021
--- --- --- --- --- --- ---
Weighted Average Remaining Lease Term
Operating lease (in years) 1.4 1.6
Finance leases - -
Weighted Average Discount Rate
Operating lease 9.0 % 9.0 %
Finance leases - % - %

A summary of future minimum payments under non-cancellable operating lease commitment as of March 31, 2022 is as follows:

Years ending December 31, Total
2022 (remaining portion) 31,298
2023 25,807
Total lease liabilities $ 57,105
Less amount representing interest (4,164 )
Total 52,941
Less current portion (37,348 )
$ 15,593

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

This Quarterly Report on Form 10-Q contains certain forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) regarding PAID, Inc. (the “Company”) and its business, financial condition, results of operations and prospects. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates", "could", "may", "should", "will", "would", and similar expressions or variations of such words are intended to identify forward-looking statements in this report. Additionally, statements concerning future matters such as the development of new services, technology enhancements, purchase of equipment, credit arrangements, possible changes in legislation and other statements regarding matters that are not historical are forward-looking statements.

Although forward-looking statements in this quarterly report reflect the good faith judgment of the Company's management, such statements can only be based on facts and factors currently known by the Company. Consequently, forward-looking statements are inherently subject to risks, contingencies and uncertainties, and actual results and outcomes may differ materially from results and outcomes discussed in this report. Although the Company believes that its plans, intentions and expectations reflected in these forward-looking statements are reasonable, the Company can give no assurance that its plans, intentions or expectations will be achieved. For a more complete discussion of these risk factors, see Item 1A, "Risk Factors", in the Company's Form 10-K for the fiscal year ended December 31, 2021 that was filed on March 31, 2022.

For example, the Company's ability to maintain positive cash flow and to become profitable may be adversely affected as a result of a number of factors that could thwart its efforts. These factors include the Company's inability to successfully implement the Company's business and revenue model, higher costs than anticipated, the Company's inability to sell its products and services to a sufficient number of customers, the introduction of competing products or services by others, the Company's failure to attract sufficient interest in, and traffic to, its site, the Company's inability to complete development of its products, the failure of the Company's operating systems, and the Company's inability to increase its revenues as rapidly as anticipated. If the Company is not profitable in the future, it will not be able to continue its business operations.

Except as required by applicable laws, we do not intend to publish updates or revisions of any forward-looking statements we make to reflect new information, future events or otherwise. Readers are urged to review carefully and to consider the various disclosures made by the Company in this Quarterly Report, which attempts to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

Overview

ShipTime Inc. has developed a SaaS based application, which focuses on the small to medium business segment. This offering allows members to quote, process, generate labels, dispatch and track courier and LTL shipments all from a single interface. The application provides customers with a choice of today’s leading couriers and freight carriers all with discounted pricing allowing members to save on every shipment. ShipTime can also be integrated into on-line shopping carts to facilitate sales via e-commerce. We actively sell directly to small businesses and through long standing partnerships with selected associations throughout Canada.  Our focus in 2022 will be to significantly grow this portion of our business.

PAID, Inc. (the “Company”) has developed AuctionInc, which is a suite of online shipping and tax management tools assisting businesses with e-commerce storefronts, shipping solutions, tax calculation, inventory management, and auction processing. The product does have tools to assist with other aspects of the fulfillment process, but the main purpose of the product is to provide accurate shipping and tax calculations and packaging algorithms that provide customers with the best possible shipping and tax solutions.

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BeerRun Software is a brewery management and Alcohol and Tobacco Tax and Trade Bureau tax reporting software. Small craft brewers can utilize the product to manage brewery schedules, inventory, packaging, sales and purchasing. Tax reporting can be processed with a single click and is fully customizable by state or providence. The software is designed to integrate with QuickBooks accounting platforms by using our powerful sync engine. We currently offer two versions of the software BeerRun and BeerRun Light which excludes some of the enhanced features of BeerRun without disrupting the core functionality of the software.

PaidPayments provides commerce solutions to small - and medium-sized businesses by enabling them to sell their goods and services, accept payment, and create repeat sales though an online payment processing solution. The Company has operated as a Payment Facilitator since 2019, which enables our merchants to get the benefit of instant boarding and discounted rates. Our platform provides all aspects required for payment processing, including merchant boarding, underwriting, fraud monitoring, settlement, funding to the sub-merchant, and monthly reporting and statements. The Company controls all of these necessary aspects in the payment process and is then able to supply a one-step boarding process for our partners and value-added resellers. This capability also provides cost advantages, rapid response to market needs, simplified processes for boarding business and a seamless interface for our merchant customers.

Significant Accounting Policies

Our significant accounting policies are more fully described in Note 3 to our consolidated financial statements for the years ended December 31, 2021 and 2020 included in our Form 10-K filed on March 31, 2022, as updated and amended in Note 1 of the Notes to Condensed Consolidated Financial Statements included herein. However, certain of our accounting policies, most notably with respect to revenue recognition, are particularly important to the portrayal of our financial position and results of operations and require the application of significant judgment by our management; as a result, they are subject to an inherent degree of uncertainty. In applying these policies, our management makes estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. Those estimates and judgments are based upon our historical experience, the terms of existing contracts, our observance of trends in the industry, information that we obtain from our customers and outside sources, and on various other assumptions that we believe to be reasonable and appropriate under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Results of Operations

Comparison of the three months ended March 31, 2022 and 2021 .

The following discussion compares the Company's results of operations for the three months ended March 31, 2022 with those for the three months ended March 31, 2021. The Company's condensed consolidated financial statements and notes thereto included elsewhere in this quarterly report contain detailed information that should be referred to in conjunction with the following discussion.

Revenues

The following table compares total revenue for the periods indicated.

Three months Ended March 31,
2022 2021 % Change
Client services $ 280 $ 1,283 (78 )%
Brewery management software 9,375 19,200 (51 )%
Shipping coordination and label generation services 3,582,449 3,473,902 3 %
Merchant processing services 12,053 12,525 (4 )%
Shipping calculator services 5,544 5,863 (5 )%
Total revenues $ 3,609,701 $ 3,512,773 3 %

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Revenues increased 3% in the first quarter primarily from the annual increase in carrier rates along with the ongoing increases to the fuel surcharges for revenues related to our shipping coordination and label generation services.

Client services revenues decreased $1,003 or 78% to $280 in the first quarter of 2022 compared to $1,283 in 2021. This decrease is a result of the limited number of movie posters available for auction during the quarter.

Brewery management software revenues decreased $9,825 to $9,375 in 2022 from $19,200 in 2021. The decrease in revenues is due to cancellations of several clients and limited marketing of the software to new clients.

Shipping coordination and label generation services revenues increased $108,547 or 3% to $3,582,449 in the first quarter of 2022 compared to $3,473,902 in 2021. The increase is attributable to the annual increases imposed by the carriers in addition to the impact of the rising fuel surcharges.

Merchant processing services is available to businesses that accept credit card processing online. This segment has had difficulties with the launch and has reduced the offering which resulted in a decline of 4% from $12,525 to $12,053 in the first quarter of 2022. The Company is reevaluating the launch and preparing to combine these services with other Paid products for a re-release.

Shipping calculator services revenue decreased $319 or 5% to $5,544 in the first quarter of 2022 compared to $5,863 in 2021.  The decrease was primarily due to the reduction in volume for the remaining customer using this platform.

Gross Profit

Gross profit decreased $80,523 or 9% in the first quarter of 2022 to $798,492 compared to $879,015 in 2021. Gross margin decreased to 22% for the first quarter of 2022 compared to 25% in the first quarter of 2021. The decrease in gross margin and gross profit are a result of ongoing pricing evaluations of our shipping label generation services to remain competitive in the market.

Operating Expenses

Total operating expenses in the first quarter 2022 were $858,046 compared to $1,058,348 in the first quarter of 2021, a decrease of $200,302 or 19%. The decrease is due to lower share-based compensation of $18,096 recorded in the first quarter of 2022, compared to $263,613 recorded in the first quarter of 2021.

Net Income (Loss)

The Company recorded a net loss in the first quarter of 2022 of ($60,454) compared to a net loss of ($179,733) for the same period in 2021. The net loss per share available to common shareholders for the first quarter of 2022 and 2021 was ($0.01) and ($0.03) per share, respectively.

Cash Flows from Operating Activities

A summarized reconciliation of the Company's net loss to cash and cash equivalents provided by operating activities for the three months ended March 31, 2022 and 2021 is as follows:

2022 2021
Net loss $ (60,454 ) $ (179,733 )
Depreciation and amortization 85,909 127,980
Amortization of operating lease right-of-use assets 8,761 7,993
Share-based compensation 18,096 263,613
Changes in assets and liabilities (51,530 ) 141,861
Net cash provided by operating activities $ 782 $ 361,714

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Working Capital and Liquidity

The Company had cash and cash equivalents of $2,876,293 at March 31, 2022, compared to $2,839,687 at December 31, 2021. The Company had net working capital of $545,151 at March 31, 2022, an improvement of $49,705 compared to $495,446 at December 31, 2021. The increase in net working capital is attributable to the increase in cash and cash equivalents.  This is due to the additional growth of the business along with ongoing cost savings measures.

The Company may need an infusion of additional capital to fund anticipated operating costs over the next 12 months, however, management believes that the Company has adequate cash resources to fund operations. There can be no assurance that anticipated growth will occur, and that the Company will be successful in launching new products and services. If necessary, management will seek alternative sources of capital to support operations.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, the Company is not required to provide the information for this Item 3. ****

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company's management, including the Chief Executive Officer/Chief Financial Officer of the Company, as its principal financial officer has evaluated the effectiveness of the Company's “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Based upon this evaluation, the Chief Executive Officer/Chief Financial Officer has concluded that, as of March 31, 2022, the Company's disclosure controls and procedures were not effective, due to material weaknesses in internal control over financial reporting, for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time period specified by the Securities and Exchange Commission's rules and forms, and is accumulated and communicated to the Company's management, including its principal executive/financial officer as appropriate to allow timely decisions regarding required disclosure.

The Company has identified numerous material weaknesses in internal control over financial reporting as described in the Company's Form 10-K for the year ended December 31, 2021.

Changes in Internal Control over Financial Reporting

The Company continues to evaluate the internal controls over financial reporting and is working toward implementation of corporate governance and operational process documentation.

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PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

In the normal course of business, the Company periodically becomes involved in litigation and disputes. During 2021, the Company was notified of a dispute related to its non-renewal of the employment agreement with Mr. Allan Pratt, the Company's former CEO, in which Mr. Pratt appears to be treating it as a termination which would trigger a two-year severance payment. Around the same time that Mr. Pratt’s employment term expired, the Company’s Board of Directors voted to reduce the board from five to three, and Mr. Pratt and Mr. Austin Lewis, CFO, automatically rolled off from the Board of Directors. More than a year later, in 2021, Mr. Pratt filed a claim in Delaware courts to contest that decision. As of March 31, 2022, in the opinion of management, the Company had no pending litigation and disputes that would have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows.

ITEM 1A.

RISK FACTORS

The COVID-19 pandemic has created economic and financial disruptions that could adversely affect our business, financial condition, liquidity, capital, and results of operations. Even as efforts to contain the pandemic, including vaccinations, have made progress and some restrictions have relaxed, new variants of the virus are causing additional outbreaks. The impact of additional variants that may emerge, cannot be predicted at this time, and could depend on numerous factors, including the availability of vaccines in different parts of the world, vaccination rates among the population, the effectiveness of COVID-19 vaccines against other variants, and the response by governmental bodies to reinstate restrictive measures. The Company continues to monitor the health and wellbeing of its employees across the US and Canada.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no issuances of unregistered securities during the three months ended March 31, 2022.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5.

OTHER INFORMATION

Not Applicable

ITEM 6.

EXHIBITS

10.1 Amendment to 2018 Non-Qualified Stock Option Plan
31.1 CEO Certification required under Section 302 of Sarbanes-Oxley Act of 2002
31.2 CFO Certification required under Section 302 of Sarbanes-Oxley Act of 2002
32 CEO and CFO Certification required under Section 906 of Sarbanes-Oxley Act of 2002
101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
--- ---
101.SCH Inline XBRL Taxonomy Extension Schema
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB Inline XBRL Taxonomy Extension Label Linkbase
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase
104 Cover Page Interactive Data File (embedded within the Inline XBRL Document and include in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PAID, INC.
By: /s/ W. Austin Lewis IV
Date: May 16, 2022 W. Austin Lewis, IV, CEO, CFO

LIST OF EXHIBITS

Exhibit No. Description
10.1 Amendment to 2018 Non-Qualified Stock Option Plan
31.1 CEO Certification required under Section 302 of Sarbanes-Oxley Act of 2002
31.2 CFO Certification required under Section 302 of Sarbanes-Oxley Act of 2002
32 CEO and CFO Certification required under Section 906 of Sarbanes-Oxley Act of 2002
101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
--- ---
101.SCH Inline XBRL Taxonomy Extension Schema
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB Inline XBRL Taxonomy Extension Label Linkbase
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase
104 Cover Page Interactive Data File (embedded within the Inline XBRL Document and include in Exhibit 101)

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ex_372941.htm

EXHIBIT 31.1

CERTIFICATION

I, W. Austin Lewis, IV, certify that:

1.         I have reviewed this quarterly report on Form 10-Q of PAID, INC.;

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.         I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) for the Registrant and have:

(a)         Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)         Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)         Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)         Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.         I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):

(a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information;

(b)         Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: May 16, 2022
/s/ W. Austin Lewis, IV<br><br> <br>W. Austin Lewis, IV, Chief Executive Officer, Chief Financial Officer<br><br> <br>(Principal Financial and Accounting Officer)

ex_372942.htm

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of PAID, INC. (the “Company”) on Form 10-Q for the quarter ended March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in their capacities as CEO and CFO of the Company, certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.         The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.         The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ W. Austin Lewis, IV

W. Austin Lewis, IV, Chief Executive Officer, Chief Financial Officer

May 16, 2022

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