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.
Overview
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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
Revenues
The following table compares total revenue for the periods indicated.
Three months Ended March 31,
2021 2020
% Change
Client services $1,283 $99 1,196%
Brewery management software 19,200 37,106 (48)%Shipping coordination and label generation services 3,473,902 2,536,885 37% Merchant processing services
12,525 92,910 (87)%
Shipping calculator services 5,863 8,322 (30)%
Total revenues $3,512,773 $2,675,322 31%
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Revenues increased 31% in the first quarter primarily from the impact of new marketing services in combination with impact from the COVID-19 virus on the growth of our shipping coordination and label generation services.
Client services revenues increased
Brewery management software revenues decreased
Shipping coordination and label generation services revenues increased
Merchant processing services is available to businesses that accept credit card
processing online. This segment has had difficulties with the launch and has
declined 87% from
Shipping calculator services revenue decreased
Gross Profit
Gross profit increased
Operating Expenses
Total operating expenses in the first quarter 2021 were
Net Income (Loss)
The Company recorded a net loss in the first quarter of 2021 of (
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
2021 2020
Net loss $(179,733) $(113,242)
Depreciation and amortization 127,980 122,404Amortization of operating lease right-of-use assets 7,993 6,880 Share-based compensation
263,613 (20,789)
Provision for bad debt - 20,125
Changes in assets and liabilities 141,861 80,065
Net cash provided by operating activities $361,714 $95,443
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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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