What changed in this filing

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Item 1. Financial Statements

2025-05-15 compared with 2024-11-14 · 127 added, 182 removed, 429 unchanged (42% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

March 31, 2025

December 31, 2024

Current assets:

1 unchanged sentence

Accounts receivable, net

Note receivable, net of discount

Prepaid expenses and other current assets

3 unchanged sentences

Operating lease right-of-use assets, net

Note receivable, long term

Notes receivable, long term

LIABILITIES AND SHAREHOLDERS' EQUITY

13 unchanged sentences

Series A Preferred stock, $ 0.001 par value, 5,000,000 shares authorized;

no shares issued and outstanding

no shares issued and outstanding at March 31, 2025, and December 31, 2024

Common stock, $ 0.001 par value, 25,000,000 shares authorized;

8,209,033 shares issued and 8,061,400 shares outstanding at September 30, 2024 and 8,154,474 shares issued and 8,010,837 shares outstanding at December 31, 2023

8,277,467 shares issued and 8,129,834 shares outstanding at March 31, 2025, and 8,213,533 shares issued and 8,065,900 shares outstanding at December 31, 2024

Accrued common stock bonus

2 unchanged sentences

Accumulated deficit

Common stock in treasury, at cost, 147,633 shares at September 30, 2024 and 143,637 shares at December 31, 2023

Common stock in treasury, at cost, 147,633 shares at March 31, 2025, and 147,633 shares at December 31, 2024

Total shareholders' equity

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Nine Months Ended

September 30,

Revenues, net

6 unchanged sentences

Total operating expenses

Income (loss) from operations

Other income (expense):

Loss from Operations

Other income:

Interest income

Total other income

Income (loss) before income tax provision

12 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30,

FOR THE THREE MONTHS ENDED MARCH 31,

Cash flows from operating activities:

3 unchanged sentences

Amortization of operating lease right-of-use assets

Provision for bad debts

Accretion of discount on note receivable

8 unchanged sentences

Operating lease obligations

Net used in operating activities

Net cash used in operating activities

Cash flows from investing activities

5 unchanged sentences

Proceeds from option exercises

Net cash used in financing activities

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents

8 unchanged sentences

Issuance of common shares in settlement of accrued common stock bonus

Operating lease liabilities from obtaining lease right-of-use assets

See accompanying notes to condensed consolidated financial statements

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023

FOR THE THREE MONTHS ENDED MARCH 31, 2024

Treasury Stock

2 unchanged sentences

Foreign currency translation adjustment

Issuance of common stock in settlement of accrued common stock bonus

Issuance of common stock for signing bonus

Issuance of common stock for accrued bonus

Purchase of treasury stock

Share-based compensation expense

Balance, March 31, 2024

Foreign currency translation adjustment

Option exercise

Issuance of common stock for bonus

Share-based compensation expense

Balance, June 30, 2023

Foreign currency translation adjustment

Share-based compensation expense

Balance, September 30, 2023

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024

FOR THE THREE MONTHS ENDED MARCH 31, 2025

Treasury Stock

2 unchanged sentences

Foreign currency translation adjustment

Issuance of common stock in settlement of accrued common stock bonus

Purchase of treasury stock

Issuance of common stock for accrued bonus

Issuance of commons stock for stock options exercises

Share-based compensation expense

Balance, March 31, 2025

Foreign currency translation adjustment

Share-based compensation expense

Balance, June 30, 2024

Foreign currency translation adjustment

Share-based compensation expense

Balance, September 30, 2024

See accompanying notes to condensed consolidated financial statements

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENT

September 30, 2024

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

Organization and Significant Accounting Policies

23 unchanged sentences

Liquidity and Management ’ s Plans

At September 30, 2024, the Company reported cash and cash equivalents of $ 1,089,520 and net working capital of $ 3,803,180 and reported cash flows used from operations of $ 142,736 for the nine months ended September 30, 2024.

The Company has reported a net income of $ 936,335 for the nine months ended September 30, 2024 and has an accumulated deficit of $ 68,380,855 at September 30, 2024.

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company has continued to incur losses, although it has taken significant steps to reduce them.

At March 31, 2025, the Company reported cash and cash equivalents of $ 751,099 and working deficit of $ 761,825 and reported cash flows used from operations of $ 477,568 for the three months ended March 31, 2025.

The Company has reported a net loss of $ 148,773 for the three months ended March 31, 2025 and has an accumulated deficit of $ 69,022,799 at March 31, 2025.

These factors raise substantial doubt about the Company's ability to continue as a going concern.

Management believes that the Company has adequate cash resources to fund operations during the next 12 months after the filing of this quarterly report on Form 10-Q.

In addition, management continues to explore opportunities and has organized additional resources to grow the Paid platform.

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.

The repayment of the Embolx note receivable will alleviate the concern however the repayment date is uncertain.

Additionally, the costs of doing business can be significantly reduced in hopes of eliminating the net loss and providing positive cash flow from operations.

Management continues to explore opportunities and has organized additional resources to grow the Paid platform.

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 may 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 November 2025 and will have a positive impact on the Company for the foreseeable future.

Management feels that the repayments of the notes receivable will alleviate the concern however the repayment date is uncertain.

Additionally, the cost of doing business can be significantly reduced in hopes of eliminating the net loss and providing positive cash flow from 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 2026 and will have a positive impact on the Company for the foreseeable future.

Principles of Consolidation

5 unchanged sentences

Foreign currency denominated assets and liabilities are translated into U.S.

dollars using the exchange rates in effect at September 30, 2024 and December 31, 2023.

dollars using the exchange rates in effect at March 31, 2025 and December 31, 2024.

Results of operations and cash flows are translated using the average exchange rates throughout the period.

3 unchanged sentences

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 nine months ended September 30, 2024 and 2023.

At September 30, 2024, the Company maintained 100 % of its property and equipment, net of accumulated depreciation, in Canada.

during the three months ended March 31, 2025 and 2024.

At March 31, 2025, the Company maintained 100 % of its property and equipment, net of accumulated depreciation, in Canada.

Right of Use Assets

6 unchanged sentences

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 nine months ended September 30, 2024 and 2023.

No impairment charges were recognized during the three months ended March 31, 2025 and 2024.

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.

47 unchanged sentences

The Company maintains an allowance for doubtful accounts based on historical loss patterns, the number of days that billings are past due, and an evaluation of potential risk of loss associated with delinquent accounts.

The Company has evaluated the accounts receivable for first quarter and recorded an allowance for credit losses of $ 22,286 .

The Company has two notes receivable and is a senior secure lender with an absolute obligation for one of the notes.

The primary note was evaluated for credit losses as of September 30, 2024 by considering the contractual obligation, the valuation of the assets and the senior position of the repayment.

The primary note was evaluated for credit losses as of March 31, 2025 by considering the contractual obligation, the valuation of the assets and the senior position of the repayment.

Variable Consideration

8 unchanged sentences

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 $ 209,976 and $ 205,647 as of September 30, 2024 and December 31, 2023, respectively.

The Company has no customers that made up 10% of the accounts receivable balance at September 30, 2024 and one customer that made up 10% of the accounts receivable balance as of December 31, 2023.

Accordingly, the Company has only a small balance of accounts receivable, totaling $ 287,036 and $ 193,852 as of March 31, 2025 and December 31, 2024, respectively.

The Company has one customer that made up 10% of the accounts receivable balance at March 31, 2025 and one customer that made up 10% of the accounts receivable balance as of December 31, 2024.

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.

The Company has recorded a balance of $ 322,775 in contract assets as of March 31, 2025.

Contract Liabilities (Deferred Revenue)

Contract liabilities are recorded when cash payments are received in advance of the Company’s performance.

Contract liabilities were $ 260,546 and $ 15,382 at September 30, 2024 and December 31, 2023, respectively.

During the nine months ended September 30, 2024, the Company recognized revenues of $ 15,382 related to contract liabilities outstanding at the beginning of the period.

Contract liabilities were $ 318,399 and $ 372,795 at March 31, 2025 and December 31, 2024, respectively.

During the three months ended March 31, 2025, the Company recognized revenues of $ 372,795 related to contract liabilities outstanding at the beginning of the period.

Income (Loss) Per Common Share

2 unchanged sentences

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 income (loss) per share if they would reduce the reported loss per share and therefore have an anti-dilutive effect.

For the nine months ended September 30, 2023, there were approximately 7,800 of potentially dilutive shares excluded from the diluted loss per share calculation, as their effect would be anti-dilutive.

The following is a reconciliation of the numerators and denominators of the basic and diluted income (loss) per common share computations for the three months ended September 30, 2024 and 2023.

September 30, 2024

September 30, 2023

For the three months ended March 31, 2025, there were approximately 7,500 of potentially dilutive shares excluded from the diluted loss per share calculation, as their effect would be anti-dilutive.

The following is a reconciliation of the numerators and denominators of the basic and diluted income (loss) per common share computations for the three months ended March 31, 2025 and 2024.

March 31, 2025

March 31, 2024

Basic weighted-average shares outstanding

3 unchanged sentences

Diluted income (loss) per share

Nine Months Ended

September 30, 2024

Nine Months Ended

September 30, 2023

Net income (loss)

Basic weighted-average shares outstanding

Effect of dilutive securities

Diluted weighted-average shares outstanding

Basic income (loss) per share

Diluted income (loss) per share

Segment Reporting

2 unchanged sentences

The Company’s four reportable segments are managed separately based on fundamental differences in their operations.

At September 30, 2024, the Company operated in the following four reportable segments:

At March 31, 2025, the Company operated in the following four reportable segments:

Client services;

Merchant processing services;

eCommerce services;

Shipping coordination and label generation services;

5 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

March 31, 2025

March 31, 2024

Client services

Merchant processing services

eCommerce services

Shipping coordination and label generation services

2 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

March 31, 2025

March 31, 2024

Client services

Merchant processing services

eCommerce services

Shipping coordination and label generation services

6 unchanged sentences

These reclassifications had no effect on the reported results of operations.

An adjustment has been made to the segment reporting for the period ended September 30, 2023, to consolidate revenue reporting for smaller segments of the Company.

An adjustment has been made to the segment reporting for the period ended March 31, 2025, to consolidate revenue reporting for smaller segments of the Company.

Recent Accounting Pronouncements

3 unchanged sentences

The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the disclosure requirements related to the new standard .

The Company adopted this standard on January 1, 2025, without material impact on the financial condition or results of operations.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

11 unchanged sentences

Under the SPA, the Company has a right to purchase additional notes and receive warrants on the same terms for a total potential investment amount of $ 2,000,000 with an additional over-allotment option of $ 500,000 as defined in the SPA.

As additional consideration, the Company received a 5 -year warrant to purchase shares of common stock of the Embolx.

As additional consideration, the Company received a 5 -year warrant to purchase shares of common stock of Embolx.

The shares are subject to certain piggyback registration rights under a Registration Rights Agreement.

4 unchanged sentences

The terms on the amended note receivable include an additional investment of $ 500,000 with a 25 % original issue discount and is due on June 19, 2024.

The Company was granted a $ 50,000 increase to the debt owed by Embolx which was applied toward legal expenses incurred during the first quarter relating to the preparation of the note documentation.

For the nine months ended September 30, 2024, the Company has recognized $ 141,782 in other income related to the interest earned and $ 1,048,402 in other income related to the accretion of the discount on the Convertible Note compared to $ 270,833 of other income recorded as of September 30, 2023.

The note receivable is currently in default effective June 19, 2024 in the amount of $ 4,193,607 and the Company has elected to defer interest of $ 426,025 and default penalties of $ 838,721 .

On July 29, 2024, the Board of Directors approved an extension with Embolx which is currently being modified.

The extension includes a forbearance agreement with Embolx which extends the note receivable until June 1, 2025.

The Company does not believe there is any impairment to the note receivable due to its secured position on the assets of Embolx and its expectation that the amounts will be recoverable if and when Embolx consummates a financial or merger transaction which is expected to happen in 2025.

The Company was granted a $ 50,000 increase to the debt owed by Embolx which was applied toward legal expenses incurred during the first quarter of 2024 relating to the preparation of the note documentation.

The note receivable was in default effective June 19, 2024, in the amount of $ 4,193,607 and the Company has elected to defer interest of $ 1,171,822 and default penalties of $ 838,721 .

On July 29, 2024, the Board of Directors approved an extension with Embolx which was effective as of January 31, 2025.

The Forbearance and Loan Modification Agreement with Embolx extends the note receivable of $ 5,967,100 until September 30, 2025 and carries a 25 % interest rate.

Options to extend the note receivable may be considered as return on the note payable is favorable and Embolx may seek additional time to consummate a financial transaction.

Although the note is considered a short-term note, the full amount of the note receivable is not expected to be collected by March 31, 2026, and thus has been reclassed as long-term.

It is possible a payment will be received when the note comes due for the first time in September 2025, however, determining the approximate amount would be very difficult.

For the three months ended March 31, 2025, the Company has elected to defer $ 936,271 of additional income related to the interest earned on the Convertible Note compared to $ 141,780 in interest income and $ 201,209 of other income recorded as of March 31, 2024.

The Company entered into a $ 50,000 short term note with 5String Solutions LLC on April 4, 2024.

5 unchanged sentences

In the event that the Company elects to convert the noted they subsequently have the option to purchase the remaining 45 % ownership of 5String Solutions at a rate of 5-times EBITDA reported on December 31, 2026.

Interest of $ 11,918 has been recorded based on the outstanding balance of the $ 250,000 note for the period of July 3, 2024 to September 30, 2024.

Interest of $ 7,315 has been recorded based on the outstanding balance of the $ 250,000 note for the three-month period ending March 31, 2025.

Accrued Expenses

Accrued expenses are comprised of the following:

September 30,

Payroll and related costs

5 unchanged sentences

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

At September 30, 2024, intangible assets consisted of the following:

At March 31, 2025, intangible assets consisted of the following:

Relationships

5 unchanged sentences

Accumulated amortization

Amortization expense of intangible assets for the three months ended September 30, 2024 and 2023 was $ 73,443 and $ 74,678 , respectively.

Amortization expense of intangible assets for the three months ended March 31, 2025, and 2024 was $ 69,779 and $ 74,285 , respectively.

Commitments and Contingencies

15 unchanged sentences

On November 9, 2023, the courts dismissed the claim contesting the reduction of the board size.

The trial on the remaining claim was held before the Delaware court on December 5-6, 2024.

Post-trial briefing in the Delaware action was completed on March 21, 2025, and the Delaware court is scheduled to hear post-trial arguments at a hearing on June 10, 2025.

The Company has not recorded a reserve as the outcome of these matters cannot be determined.

On December 5, 2024 a trial is scheduled to begin on the claims made in the Delaware courts.

Indemnities and Guarantees

13 unchanged sentences

If purchased, redeemed, or otherwise acquired (other than conversion), the preferred stock may be reissued.

As of September 30, 2024 and December 31, 2023, there are no outstanding shares of Series A Preferred Stock.

As of March 31, 2025, and December 31, 2024, there are no outstanding shares of Series A Preferred 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.

In total, the Company has reserved for future issuance of 2,106,808 shares of PAID common stock with respect to the remaining 5,918 exchangeable shares to be issued as a result of the ShipTime acquisition which are considered issued and outstanding as of September 30, 2024 for financial reporting purposes.

Furthermore, because of the amended exchange rights, the Company reported 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.

The Company has had the option to force an exchange since December 2021.

In total, the Company has reserved for future issuance of 2,106,880 shares of PAID common stock with respect to the remaining 5,918 exchangeable shares to be issued as a result of the ShipTime acquisition which are considered issued and outstanding as of March 31, 2025 for financial reporting purposes.

On February 22, 2024, the Company’s Board of Directors authorized the issuance of 54,559 bonus shares of PAID common stock to the CEO/CFO, one additional officer and one employee for services rendered during 2023.

12 unchanged sentences

The Company recorded $ 25,000 of share-based compensation expense in connection with the additional compensation.

On March 7, 2025, the Company’s Board of Directors authorized the issuance of 62,502 bonus shares of PAID common stock to the CEO/CFO, one additional officer and two employees for services rendered during 2024.

This bonus was valued at $ 193,246 based on the closing price of the Company’s common stock at March 6, 2025 and was issued in March 2025.

This bonus was recorded in accrued common stock bonus in shareholders’ equity as of December 31, 2024.

Share Repurchase

In February 2024, the Company entered into an agreement to repurchase 3,996 shares of PAID common stock for a total amount of $ 3,996 .

There were no repurchase arrangements made in the first quarter of 2025.

Share-based Incentive Plans

3 unchanged sentences

On February 22, 2024, the Board of Directors voted to approve the issuance of options to purchase 45,360 shares of common stock to three board members and five employees.

The options have an exercise price of $ 1.55 per share and have vesting periods of 0 - 3 years and they expire if not exercised within ten years from grant date.

For the three-month and nine-month periods ended September 30, 2024, the Company recorded $ 3,266 and $ 44,928 , respectively, of share-based compensation expense related to the vesting of applicable options granted in 2024 and prior years.

For the three and nine-month periods ended September 30, 2023, the Company recorded $ 14,550 and $ 148,200 , respectively, of share-based compensation expense related to the vesting of applicable options granted in 2023 and prior years.

On July 2, 2024, the Company has entered into an operating lease for our corporate office located at 700 Dorval Drive in Oakville Ontario.

The options have an exercise price of $ 1.55 per share and have vesting periods of 0 - 3 years and they expire if not exercised within ten years from the grant date.

For the three-month period ended March 31, 2025 and 2024, the Company recorded $ 1,267 and $ 38,984 , respectively, of share-based compensation expense related to the vesting of applicable options granted in 2024 and prior years.

On July 2, 2024, the Company entered into an operating lease for our corporate office located at 700 Dorval Drive in Oakville Ontario.

The lease commences September 1, 2024 with a expiration date of August 31, 2028.

Our lease has a remaining lease term of forty-seven months.

Future renewal options that are not likely to be executed as of the balance sheet date and are excluded from right-of-use assets and related lease liabilities.

1 unchanged sentence

The components of lease expense were as follows:

September 30, 2024

September 30, 2023

Operating lease cost

Nine Months Ended

September 30, 2024

Nine Months Ended

September 30, 2023

March 31, 2025

March 31, 2024

Operating lease cost

Supplemental cash flow information related to leases was as follows:

Nine Months Ended

September 30, 2024

Nine Months Ended

September 30, 2023

Cash paid for amounts included in leases:

Operating cash flows from operating leases

Supplemental balance sheet information related to leases was as follows:

September 30, 2024

March 31, 2025

December 31, 2024

4 unchanged sentences

Total operating lease liabilities

September 30,

March 31, 2025

December 31, 2024

Weighted Average Remaining Lease Term Operating lease (in years)

Weighted Average Discount Rate Operating lease

A summary of future minimum payments under non-cancellable operating lease commitment as of September 30, 2024 is as follows:

Weighted Average Remaining Lease Term

Operating lease (in years)

Weighted Average Discount Rate

Operating lease

A summary of future minimum payments under non-cancellable operating lease commitment as of March 31, 2025 is as follows:

Years ending December 31,

8 unchanged sentences

(the “Company”) and its business, financial condition, results of operations and prospects.

Words such as "expects," "anticipates," "intends," "plans,"FnoteF "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.

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.

15 unchanged sentences

Our focus in 2024 will be to continue to grow this portion of our business.

(the “Company”) has developed a full line of SaaS-based business services including PaidPayments, PaidCart, PaidShipping and PaidWeb.

These solutions are developed to provide businesses with a streamlined experience for website creation, online sales, payment collection and shipping all in one platform.

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.

(the “Company”) includes the PaidPayment, PaidWeb, PaidCart and PaidShipping products that offers a robust platform enabling small and medium businesses to launch websites via our catalog of templates.

Our platform includes a wide array of features such as mobile editing, search engine optimization, collaboration tools, pre-designed templates, and can be integrated with multiple platforms.

PaidCart serves as a comprehensive solution for small and medium businesses looking to expand their online sales through multiple channels.

It provides a centralized system to manage sales across various platforms, with additional functionalities for currency and language management, promotional sales, and abandoned cart recovery.

PaidPayments and PaidShipping seamlessly interface with PaidCart to facilitate the checkout and shipping processes.

PaidPayments provides businesses with a secure and efficient way to conduct online transactions including a virtual terminal, invoicing capability, subscriptions processing, checkout pages, and a point-of-sale system with support for USD, CAD, and EUR currencies.

PaidShipping delivers a solution to quote, process, generate labels, dispatch and track courier and LTL shipments all from a single interface.

We offer savings through partnerships with leading carriers.

It includes a multi-courier comparison tool, integrations with eCommerce platforms and branded tracking.

Significant Accounting Policies

6 unchanged sentences

Results of Operations

Comparison of the three months ended September 30, 2024 and 2023.

The following discussion compares the Company's results of operations for the three months ended September 30, 2024 with those for the three months ended September 30, 2023.

Comparison of the three months ended March 31, 2025 and 2024.

The following discussion compares the Company's results of operations for the three months ended March 31, 2025 with those for the three months ending March 31, 2024.

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.

3 unchanged sentences

Shipping coordination and label generation services

Merchant processing services

eCommerce services

Total net revenues

Revenues increased 8% in the third quarter as a result of the shipping coordination and label generation segment of the business.

Revenues increased 5% in the first quarter as a result of the shipping coordination and label generation segment of the business.

Marketing efforts, pricing strategies and additional personnel have contributed to the shipping volume increase of 5% in 2025.

Client services revenues which include brewery management software and shipping calculator services decreased $5,554 or 69% to $2,495 in the third quarter of 2024 compared to $8,048 in 2023.

Client services revenues which include brewery management software and shipping calculator services decreased $5,226 or 72% to $2,034 in the first quarter of 2025 compared to $7,260 in 2024.

The decrease in revenues is primarily due to the cancellation of several brewery management software clients and the limited marketing of this segment of the business.

Shipping coordination and label generation services revenues increased $338,571 or 8% to $4,425,505 in the third quarter of 2024 compared to $4,086,934 in 2023.

The increase is attributable to the increase of the volume of labels generated, this is a result of the additional marketing and sales efforts in the third quarter of 2024.

Merchant processing services are available to businesses that process ecommerce online transactions.

Shipping coordination and label generation services revenues increased $206,294 or 5% to $4,346,139 in the first quarter of 2025 compared to $4,139,845 in 2024.

The increase is attributable to annual carrier pricing increases and the additional marketing efforts in the first quarter of 2025.

eCommerce services are available to small businesses that process online payment and shipping transactions.

These include shipping, payments and web hosting services.

The Company has recognized revenues of $17,910 and increase of $5,121 or 40% compared to $12,789 for the same period in 2023.

The Company has started to market this segment of the business in 2024.

Gross profit increased $139,562 or 15% in the third quarter of 2024 to $1,083,834 compared to $944,272 in 2023.

Gross margin improved 1% to 24% in the third quarter of 2024 compared to 23% for the same period in 2023.

The Company has recognized revenues of $29,617 an increase of $15,972 or 117% compared to $13,645 for the same period in 2024.

The Company has success with the PaidShipping portion of this segment of the business in 2025.

Gross profit increased $1,718 in the first quarter of 2025 to $1,020,076 compared to $1,018,358 in 2024.

Gross margin decreased 1% to 23% in the first quarter of 2025 compared to 24% for the same period in 2024.

Operating Expenses

Total operating expenses in the third quarter 2024 were $1,233,614 compared to $1,009,888 in the third quarter of 2023, an increase of $223,601 or 22%.

The increase is due to increased legal expenses and the addition of several new employees and consultants in combination with the additional marketing expenses in 2024 compared to those in 2023.

Total operating expenses in the first quarter 2025 were $1,179,205 compared to $1,056,185 in the first quarter of 2024, an increase of $123,020 or 12%.

The increase is related to the additional marketing expenses for the first quarter of 2025.

Other Income/Expense, net

Net other income in 2025 was $10,356 compared to $342,989 in 2024, a decrease of $332,633 or 97%.

The third quarter 2024 other income made up of gains on an interest-bearing savings account along with interest earned on notes receivable.

Net Income (Loss )

The Company recorded a net loss in the third quarter of 2024 of $133,679 compared to a net loss of $44,783 for the same period in 2023.

The net loss per share for the third quarter of 2024 was ($0.02) and the net loss for 2023 was ($0.01) per share.

Comparison of the nine months ended September 30, 2024 and 2023

The following discussion compares the Company's results of operations for the nine months ended September 30, 2024, with those for the nine months ended September 30, 2023.

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.

The following table compares total revenue for the periods indicated.

Nine months ended September 30,

Client services

Shipping coordination and label generation services

Merchant processing services

Total revenues

Revenues increased 10% in the first three quarters primarily from the marketing efforts and the increase in volume to our shipping coordination and label generation services.

Client services revenues decreased $10,512 or 41% to $15,020 in the first three quarters of 2024 compared to $25,532 in 2023.

This decrease is a result of the declining number of brewery management subscription clients active during the quarters.

Shipping coordination and label generation services revenues increased $1,178,736 or 10% to $13,144,624 in the first three quarters of 2024 compared to $11,965,888 in 2023.

The increase is attributable to increases in volume as a result of the additional sales and marketing efforts for the same period in 2023.

Merchant processing services is available to businesses that accept credit card processing online.

This segment has had limited marketing in the first three quarters and has shown a decrease of $2,693 or 5% from $53,007 in 2023 to $50,314 for the same period of 2024.

The Company continues to increase the product offerings in this segment of the business.

Gross profit increased $468,245 or 17% in the first three quarters of 2024 to $3,209,760 compared to $2,741,514 in 2023.

Gross margin increased from 23% in 2023 to 24% in 2024.

The increase in gross margin and increase in 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 three quarters of 2024 were $3,472,894 compared to $3,294,028 for the same period of 2023, an increase of $178,866 or 5%.

The increase is primarily due to the new personnel and consultants along with increased legal fees offset by the decrease in share-based compensation for same period of 2023.

The first quarter 2025 other income made up of gains on an interest-bearing savings account along with interest earned on notes receivable whereas the first quarter of 2024 contains interest and additional discounts related to the note receivable.

The Company is currently deferring the interest and penalties related to the note receivable.

Net Income (Loss )

The Company recorded a net income in the three quarters of 2024 of $936,335 compared to a net loss of $282,537 for the same period in 2023.

The increase of $1,218,872 in net income is primarily a result of Other Income recorded in the amounts of $1,048,402 for the discount and $141,780 in interest due on the note receivable.

The net income (loss) per share available to common shareholders for the first three quarters of 2024 and 2023 was $0.12 and $(0.04) per share, respectively.

The Company recorded a net loss in the first quarter of 2025 of $148,733 compared to a net income of $299,562 for the same period in 2024.

The net loss per share for the first quarter of 2025 was ($0.02) and the net income for 2024 was $0.04 per share.

Cash Flows from Operating Activities

A summarized reconciliation of the Company's net income (loss) to cash and cash equivalents used in operating activities for the nine months ended September 30, 2024 and 2023 is as follows:

A summarized reconciliation of the Company's net income (loss) to cash and cash equivalents used in operating activities for the three months ended March 31, 2025 and 2024 is as follows:

Net income (loss)

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Amortization of operating lease right-of-use assets

Provision for bad debts

Share-based compensation

Accretion of discount on note receivable

Interest and penalty income accrued on note receivable

Interest income accrued on note receivable

Changes in assets and liabilities

1 unchanged sentence

Working Capital and Liquidity

The Company had cash and cash equivalents of $1,089,520 at September 30, 2024, compared to $2,052,421 at December 31, 2023.

The Company had net working capital of $3,803,179 at September 30, 2024, an improvement of $890,229 compared to $2,912,950 at December 31, 2023.

The increase in net working capital is attributable to the accretion of discount and the interest and penalties accrued on the note receivable.

The Company had cash and cash equivalents of $751,099 at March 31, 2025, compared to $1,284,965 at December 31, 2024.

The Company had net working deficit of $761,825 at March 31, 2025, a decrease of $132,358 compared to the deficit of $629,467 at December 31, 2024.

The decrease in net working capital is primarily attributable to the accounts receivable balance at the end of the first quarter in 2025.

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.

4 unchanged sentences

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.

What changed 10-Q

Item 1. Financial Statements