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Although forward-looking statements in this Annual 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.
−Removed: 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.
+Added: Consequently, forward-looking statements are inherently subject to risks, contingencies and uncertainties, and actual results and outcomes may differ materially from the 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.
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(the “Company”) has developed a full line of SaaS-based business services including PaidPayments, PaidCart, PaidShipping and PaidWeb.
−Removed: These solutions are developed to provide businesses with a streamlined experience for website creation, online sales, payment collection and shipping all in one platform.
−Removed: 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.
−Removed: The Company has operated as a Payment Facilitator since 2019, which enables our merchants to get the benefit of instant boarding and discounted rates.
−Removed: 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.
−Removed: 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.
+Added: These eCommerce services provide commerce solutions to small - and medium-sized businesses by enabling them to use one platform to market their products, sell their goods and services, accept payment, and create repeat sales though an online payment processing solution.
This capability also provides cost advantages, rapid response to market needs, simplified processes for boarding business and a seamless interface for our merchant customers.
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Our critical accounting policies include:
−Removed: Revenue Recognition
−Removed: The Company generates revenue principally from the sales related to the coordinating shipping services, sales of shipping calculator subscriptions, brewery management software subscriptions, merchant processing services, and client services.
−Removed: The Company recognizes revenues in accordance with the FASB ASC Topic 606.
−Removed: Accordingly, the Company recognizes revenues when the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
−Removed: For label generation service revenues, the Company recognizes revenue when a customer has successfully prepared a shipping label and had a pickup.
−Removed: Customers with pickups after the end of the reporting period are recorded as contract liabilities on the condensed consolidated balance sheets.
−Removed: 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 to process shipments on the ShipTime platform).
−Removed: For shipping calculator revenues and brewery management software and other subscription-based revenues, the Company recognizes subscription revenue on a monthly basis.
−Removed: Shipping calculator customers’ renewal dates are based on their date of installation and registration of the shipping calculator line of products.
−Removed: 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 consolidated balance sheets.
−Removed: Brewery management software subscribers are billed monthly at the first of the month.
−Removed: All payments are made via credit card for the month following.
−Removed: Merchant processing revenue consists of fees a seller pays to process payment transactions and is recognized upon authorization of a transaction.
−Removed: Revenue is recognized net of estimated funds, which are reversals of transactions initiated by sellers.
−Removed: 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.
−Removed: 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.
−Removed: Long-Lived Assets
−Removed: The Company reviews the carrying value of its long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
−Removed: 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.
−Removed: 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 additional impairment of long-lived assets in the future.
−Removed: Share- Based Compensation
−Removed: The Board of Directors has on occasion voted to award stock options or common shares/preferred shares to employees or directors.
−Removed: The price at which the option shares may be purchased is based on the fair market value of the shares on the date of the agreement.
−Removed: Each recipient’s option agreement may differ;
−Removed: the vesting terms may vary from fully vested immediately to one-third immediately, one-third vesting in 18 months and the final one-third vesting in 36 months from the date of the grant.
−Removed: Historically the options granted have had a 10-year term.
−Removed: If the recipient’s employment or relationship with the Company is terminated the options recipient may be allowed up to three months to exercise their options.
−Removed: Option compensation is calculated by using the Black-Scholes-Merton option pricing model to estimate the fair value of these share-based awards.
Note Receivable
−Removed: The Company has one note receivable outstanding that accrues annual interest and penalties for non-payment.
−Removed: The note is backed by the assets of the debtor and management continues to evaluate the collectability of the note.
−Removed: The Company has recognized significant gains on the interest and penalties, however, as of the year ended 2023, the note is in default.
−Removed: If the Company determines the note is uncollectible, it could result in a significant loss and subsequent litigation for the Company.
+Added: The Company has two notes receivable outstanding that accrue annual interest and penalties for non-payment.
+Added: The notes are backed by the assets of the debtor and management continues to evaluate the collectability of the notes.
+Added: The Company has recognized significant gains on interest and penalties, however, as of the year ended 2024, one of the notes is in default.
+Added: If the Company determines this note is uncollectible, it could result in a significant loss and subsequent litigation for the Company.
Results of Operations
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Shipping coordination and label generation services
−Removed: Merchant processing services
+Added: eCommerce services
Total revenues
−Removed: Revenues decreased $21,100 or 0.1% in 2023 from the result of a minor change in the pricing model to be more competitive.
−Removed: This change has had a minimal impact on the pricing but has shifted business to a more profitable carrier.
+Added: Revenues increased $2,020,696 or 12% in 2024 primarily from a result of the 32% fourth quarter increase in shipping coordination and label generation services due to the impacts of the Canada Post carrier strike.
+Added: This event has had a significant impact on the entire Canadian transportation industry.
Client services revenues, which include brewery management software and shipping calculator services decreased $16,123 or 48% to $17,815 compared to $33,938 in 2023.
The decrease was attributable to the cancellation of several clients using our brewery management software and the limited marketing of this segment of the business.
−Removed: Shipping coordination and label generation services revenues decreased $32,707 or 0.2% to $16,465,724 in 2023 compared to $16,498,431 in 2022.
−Removed: The decrease is attributable to the change in our pricing structure to remain competitive in addition to the reduced cost of fuel as it significantly impacts the shipping industry.
−Removed: Merchant processing services has launched its United States shipping portal which resulted in an increase of $25,014 or 62% to $65,167 in 2023 compared to $40,153 in 2022.
+Added: Shipping coordination and label generation services revenues increased $2,033,889 or 13% to $18,499,613 in 2024 compared to $16,465,724 in 2023.
+Added: The increase is largely attributable to impacts of the Canada Post strike and the additional marketing for this segment of the business.
+Added: eCommerce services have launched its United States shipping portal which resulted in an increase of $2,930 or 4% to $68,097 in 2024 compared to $65,167 in 2023.
The Company continues to increase the product offerings in this segment of the business.
Gross profit increased $285,768 or 8% to $4,071,417 in 2024 compared to $3,785,648 in 2023.
−Removed: Gross margin increased one percentage point to 23% in 2023 from 22% in 2022.
−Removed: The increase in gross margin was due to ongoing efforts to reduce the cost of goods sold in addition to a pricing restructure to more profitable carriers.
+Added: Gross margin remained at 23% for the years ended 2024 and 2023.
+Added: The increase in gross profit was due to growth of the shipping coordination and label generation service revenues.
Operating Expenses
Total operating expenses in 2024 were $4,564,799 compared to $4,373,471 in 2023, an increase of $191,328 or 4%.
−Removed: The increase is mainly due to the additional share-based compensation for 2023 compared to 2022.
+Added: The increase is mainly due to the salaries for newly hired employees and consultants in 2024.
Other Income/Expense, net
Net other income in 2024 was $1,215,925 compared to $849,258 in 2023, an increase of $366,667 or 43%.
−Removed: The 2023 amount is made up of other income of $849,258 on the Embolx, Inc.
−Removed: note receivable vs other income of $104,167 recorded in 2022.
−Removed: Note receivable interest income of $203,425 which is included in Other Income has been recognized in 2023.
+Added: The 2024 amount is made up of a gain of $1,192,182 on the Embolx, Inc.
+Added: note receivable and an additional gain of $25,884 for the note receivable with 5String Solutions.
(Benefit) Provision for Income Taxes
Total income tax (benefit) provision for 2024 was $(41,049) compared to $(91,779) in 2023.
−Removed: The change of $364,712 is a result of the net effect of the adjustment for 2017 to 2023 transfer price adjustments and the reserve for long term tax liabilities.
+Added: The change of $50,730 is a result of the net effect of the adjustment for long term tax liabilities.
The Company reported a net income in 2024 of $763,592 compared to $353,214 for the same period in 2023.
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A summarized reconciliation of the Company's cash flows for the years ended December 31, 2024 and 2023 is as follows:
−Removed: Provision for bad debts
Depreciation and amortization
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Share-based compensation
−Removed: Write-off of other payables
Changes in current assets and liabilities
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The Company had cash and cash equivalents of $1,284,965 on December 31, 2024 compared to $1,731,993 on December 31, 2023.
−Removed: The Company had working capital of $2,912,950 on December 31, 2023 compared to $1,635,370 as of December 31, 2022, an improvement of $1,277,580.
−Removed: The improvement in working capital is primarily attributed to the recognition of the interest and penalties due on the note receivable.
+Added: The Company had working capital of (629,467) on December 31, 2024 compared to $2,592,522 on December 31, 2023, a decrease of (3,221,989).
+Added: The decrease in working capital is primarily attributed to the reclassification of the short term note receivable to long term.
Management believes that the Company has adequate cash resources to fund operations during the next 12 months.
In addition, management continues to explore opportunities and partnerships to grow the Paid platform of services.
−Removed: 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.
+Added: However, there can be no assurance that the 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.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.