PAID INC 10-Q

ITEM 1. LEGAL PROCEEDINGS From time to time we may be a party to various legal proceedings arising in the ordinary course of our business. Our management is not aware of any litigation outstanding, threatened or pending as of the date hereof by or against us or our properties which we believe would be material to our financial condition or results of operations, except with respect to a dispute related to its non-renewal of the employment agreement with Mr. Allan Pratt, the Company's former President and 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. In July 2022, Mr. Pratt amended the complaint to dispute the proper authorization of a stock bonus that was awarded to the Company’s CEO in March 2021. On November 9, 2023 the Delaware courts dismissed Mr. Pratt’s claim relating to the board reduction from five to three. 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. 18 ITEM 1A. RISK FACTORS There are no material changes for the risk factors previously disclosed on Form 10-K for the year ended December 31, 2024.