PAID, INC. 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
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
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.
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Table of Contents Overview
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
Results of Operations
Comparison of the three months ended
The following discussion compares the Company's results of operations for the
three months ended
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Table of Contents Revenues
The following table compares total revenue for the periods indicated.
Three months ended September 30,
2022 2021 % Change
Client services $ 34 $ 1,548 (98 )%
Brewery management software 10,969 12,825 (14 )%
Shipping coordination and label generation
services 4,121,706 3,446,343 20 %
Merchant processing services 11,782 13,828 (15 )%
Shipping calculator services 778 5,565 (86 )%
Total revenues $ 4,145,269 $ 3,480,109 19 %
Revenues increased 19% in the third quarter primarily from the seasonal increase in shipping along with the ongoing increases to the fuel surcharges for revenues related to our shipping coordination and label generation services.
Client services revenues decreased
Brewery management software revenues decreased
Shipping coordination and label generation services revenues increased
Merchant processing services declined 15% from
Shipping calculator services revenue decreased
Gross Profit
Gross profit increased
Operating Expenses
Total operating expenses in the third quarter of 2022 were
Income Taxes
The Company recorded a tax provision for the three months ended
Net Loss
The Company recorded a net loss in the third quarter of 2022 of (
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Table of Contents
Comparison of the nine months ended
The following discussion compares the Company's results of operations for the
nine months ended
Revenues
The following table compares total revenue for the periods indicated.
Nine months ended September 30,
2022 2021 % Change
Client services $ 791 $ 3,057 (74 )%
Brewery management software 28,700 48,050 (40 )%
Shipping coordination and label generation
services 12,225,555 10,899,495 12 %
Merchant processing services 28,280 40,806 (31 )%
Shipping calculator services 7,309 17,284 (58 )%
Total revenues $ 12,290,635 $ 11,008,692 12 %
Revenues increased 12% in the first three quarters primarily from the increases to the fuel surcharges for revenues related to our shipping coordination and label generation services.
Client services revenues decreased
Brewery management software revenues decreased
Shipping coordination and label generation services revenues increased
Merchant processing services revenues declined 31% from
Shipping calculator services revenue decreased
Gross Profit
Gross profit increased
Operating Expenses
Total operating expenses in the first three quarters of 2022 were
Income Taxes
The Company recorded a tax provision for the nine months ended
Net Loss
The Company recorded a net loss for the first three quarters of 2022 of
(
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Table of Contents
Cash Flows from Operating Activities
A summarized reconciliation of the Company's net income (loss) to cash and cash
equivalents provided by operating activities for the nine months ended
2022 2021
Net loss $ (86,415 ) $ (354,645 )
Depreciation and amortization 248,676 385,848Amortization of operating lease right-of-use assets 26,558 24,840 Share-based compensation
75,745 502,427
Provision for bad debt 13,500 -
Changes in assets and liabilities 178,926 287,325
Net cash provided by operating activities $ 456,990 $ 845,795 Working Capital and Liquidity
The Company had cash and cash equivalents of
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.
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