What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-03-31 compared with 2025-04-15 · 153 added, 154 removed, 914 unchanged (25% of the section changed)

29 unchanged sentences

Entity Level Controls

Ineffective control environment, including lack of corporate governance

Ineffective communication of information

2 unchanged sentences

Lack of procedures and control documentation

Lack of procedures for contract asset and contract liability reporting

Lack of documentation for cost of goods sold

Lack of reconciliation of cash held in reserve

1 unchanged sentence

Inadequate Entity Level Controls

Ineffective Control Environment, Including Lack of Corporate Governance

The Control Environment is the tone of an organization and how the tone influences the control consciousness of its people.

Control Environment factors include the integrity, ethical values, and competence of the entity’s people;

management’s philosophy and operating style;

the way management assigns authority and responsibility;

the way management organizes and develops its people;

and the attention and direction provided by the audit committee and board of directors.

The Control Environment includes the Company’s Corporate Governance which is made up of a set of practices, policies, laws, and principals, designed to provide guidance and structure to directors, managers, and employees with a clear view of corporate goals and business objectives.

These processes and procedures need to be clearly defined, presented and administered to each participant in the organization, and should document the distribution of rights and responsibilities among employees, management, clients and customers.

Steps taken towards Remediation for an Ineffective Control Environment:

Management continues to focus on the Company culture with engagement between the employees and senior management.

Culture and values have been added to the company handbook which is reviewed annually.

and the communication of goals for the products and services that the company offers.

The CEO/CFO communicates to the Board of Directors all new products and goals that on the technology roadmap.

These items are reviewed by senior management and the COO on a weekly basis to ensure that all members of the Company are aligned on the Company’s vision.

Ineffective Communication of Information

2 unchanged sentences

Steps taken towards Remediation of Ineffective Communication of Information:

The IT department has created new positions in order to implement technology controls and oversee work development activity that could have a direct impact on the Company.

Human Resources has implemented an annual review process for all employees which assures that goals are set to assist the Company in communicating the business objectives.

The Company has hired a CTO to oversee the IT environment and controls.

Steps have been taken to implement backup and redundancies to reduce risk.

Additional testing environments have been created along with adding new hires to create a stronger IT environment.

Business objectives are communicated throughout the company with the addition of a new President who will be in the Canadian office on a regular basis.

Company town hall meetings and weekly senior management meeting have shown significant improvement in aligning the business objectives.

Ineffective Monitoring of Activities

1 unchanged sentence

Steps taken towards Remediation of Ineffective Monitoring of Activities:

The COO and VP of Finance meet weekly to review risk, discuss strategy and create policies and procedures to monitor the day-to-day operations.

Third party services have been engaged with to monitor fraud, reduce risk and prevent malicious behavior to our website and on our platform.

Additional internal controls regarding fraud and risk have been implemented using our merchant processing software.

The Company continuously monitors these areas to mitigate any impacts of fraudulent behavior.

The Company has automated reporting to monitor activity, members of senior management receive daily reporting on the revenue, margins and new customers visiting our site and using our services.

The Company believes improvements have been made to remediate its material weakness in the internal controls over financial reporting at the entity level but does not have the appropriate documentation to support its efforts.

3 unchanged sentences

The Company has taken significant steps to reduce risks associated with information technology controls and documentation.

Our information technology department has worked toward cross training and redundancies to assure that no one single person has the ability to make changes to the core operating systems of our products.

Our information technology department has implemented multi-factor authentication, segregated the duties between developers and performs periodic information technology risk assessments to strengthen our IT environment.

We used cloud-based solutions, tokenization to remove the need to capture and site confidential financial data in addition to encryption to protect personal data.

In addition to the ongoing increase of documentation of the policies and procedures the Company has added increased internal controls with regard to the segregation of duties.

As the Company grows and adds additional management level personnel it is increasingly easier to segregate duties.

We have also added internal spending and approval limits to monitor activities.

Inadequate Activity Level Controls

3 unchanged sentences

Steps taken towards Remediation of Revenue Recognition:

The Company continues to use automation to support its financial reporting.

Our internal software produces real-time transactional based reporting that is tied to our cash transactions.

This automation eliminated the risk of human error for these tasks and created a more concise audit trail in the revenue recognition process.

Reconciliations to contract assets and contracts liabilities have been created to establish cutoff periods for system generated reports.

The Company continues to evaluate the use of technology to automate reports that are used for financial reporting.

Monthly reconciliations are performed to analyze the contract liabilities and technology has been improved to assist in reducing the risks associate with human errors.

Steps taken towards Remediation of Financial Closing:

The Company closes its books and reconciles all accounts monthly and provides management with a comprehensive set of financial and operating reports and analysis of results.

All transactions are audited on a quarterly basis.

The CEO/CFO receives daily cash balances and monthly financial updates on each segment of the Company.

The Company has migrated the accounting software to cloud based technology.

This will assist the finance team with additional segregation of duties and will allow the SVP of Finance more time to produce financial statements.

Improvements in this area will continue through 2026.

Steps taken towards Remediation of Cash held in Reserve:

The Company will implement a reconciliation process to review and record cash held in reserve at month end.

Improvements to the reconciliations for the cash held in reserve have been effective in reducing variances.

Regular monthly reconciliations have been implemented to monitor for any significant changes.

The Company has made improvements to the activity level controls specifically with regard to the deficiencies with the financial close.

26 unchanged sentences

Laurie Bradley

David Ogden (resigned October 2025)

Andrew Pilaro was elected as of September 19, 2000, for a term expiring at the 2001 Annual Meeting of Stockholders and until their successors are elected and qualified .

10 unchanged sentences

After this transitional arrangement, the Directors will serve for three-year terms, with one class being elected each year.

On October 15, 2025 David Ogden submitted a resignation from the Board of Directors, the Company is currently conducting a search to fill the open position.

Andrew Pilaro has served as a Director of PAID since September 2000.

14 unchanged sentences

Recently, he has been involved with e-commerce ventures from around the world.

As of October 15, 2025 Mr.

Ogden has resigned from the Board of Directors.

Laurie Bradley is the Chief Executive Officer of Flexible Support Group providing funding, accounting, and payroll services to small and mid-size businesses across North America.

21 unchanged sentences

The Audit Committee reviewed and discussed our audited consolidated financial statements for the year ended December 31, 2025, with our management.

The Audit Committee also reviewed and discussed our audited consolidated financial statements, and the matters required to be discussed, by the Public Company Accounting Oversight Board (“PCAOB”), including material weaknesses and other internal control deficiencies with KMJ Corbin & Company LLP and dbbmckennon, our independent registered public accounting firm.

The Audit Committee received from KMJ Corbin & Company LLP and dbbmckennon the written disclosures and letter required by applicable requirements of the PCAOB regarding the independent accountant's communications with the audit committee concerning independence and has discussed with the independent accountant the independent accountant's independence.

The Audit Committee also reviewed and discussed our audited consolidated financial statements, and the matters required to be discussed, by the Public Company Accounting Oversight Board (“PCAOB”), including material weaknesses and other internal control deficiencies with dbbmckennon, our independent registered public accounting firm.

The Audit Committee received from dbbmckennon the written disclosures and letter required by applicable requirements of the PCAOB regarding the independent accountant's communications with the audit committee concerning independence and has discussed with the independent accountant the independent accountant's independence.

Based on the reviews and discussions referred to above, the Audit Committee recommended to our Board of Directors that our audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2025.

4 unchanged sentences

A written copy of the Company's Code of Ethics will be provided to anyone, free of charge, upon request to:

Austin Lewis, CEO and CFO, PAID, Inc., 225 Cedar Hill Street, Marlborough, Massachusetts 01752.

Austin Lewis, CEO and CFO, PAID, Inc., P.O.

Box 17, Southborough, MA 01772.

Any waiver of the code of business conduct and ethics for directors or executive officers, or any amendment to the code that applies to directors or executive officers, may only be made by the board of directors.

5 unchanged sentences

To the Company's knowledge, based solely on a review of the copies of such reports furnished to the Company and representations that no other reports were required, all Section 16(a) filing requirements applicable to its officers and directors and beneficial owners of more than 10% of the Company's stock, have been complied with for the period which this Form 10-K relates.

Corporate Disclosure and Insider Trading Policy

The Company’s Corporate Disclosure and Insider Trading Policy ensures that communications to the investing public are timely, factual and accurate, and consistently and broadly disseminated in accordance with law.

The insider trading policy extends to directors, executive officers, certain designated employees, and their applicable family members.

The policy restricts disclosure of Material Information (as defined in the policy) until the same information is generally disseminated to the public.

The policy states that it is illegal for anyone to purchase or sell securities with knowledge of Material Information that has not been publicly disclosed, and describes the penalties associated with the violation.

The policy provides for pre-clearance of trades, trading blackout periods, and suspension of trading, as applicable.

A copy of the policy is attached as Exhibit 19.

Executive Compensation

15 unchanged sentences

Lewis shall receive an annualized salary of $321,000 and may qualify for a bonus.

Lewis also received 250,000 shares of the Company’s common stock of which 125,000 shares may be repurchased at $0.01 per share in the event that Mr.

Lewis also received 250,000 shares of the Company’s common stock of which 125,000 shares may be repurchased at $0.01 per share if Mr.

Lewis terminated his employment agreement prior to January 1, 2024.

2 unchanged sentences

Scott shall receive an annualized salary of $214,000 CAD and may qualify for a bonus.

Scott also received $25,000 USD shares of the Company’s common stock which may be repurchased at $0.01 per share in the event that Mr.

Scott also received $25,000 USD shares of the Company’s common stock which may be repurchased at $0.01 per share if Mr.

Scott terminated his employment agreement prior to April 1, 2024.

Scott has received merit increases for the years ending 2024 and 2025.

On May 15, 2025, the Company’s Board of Directors authorized the issuance of 250,000 bonus shares of PAID common stock to the CEO/CFO as a renewal bonus valued at $747,500.

The issuance was based upon the $2.99 closing price of the Company’s stock on May 15, 2025.

Compensation to the Named Executive Officers

17 unchanged sentences

12,755 shares were valued at $3.03 per share based on the close price of the Company’s common stock at March 06, 2025.

Lewis received 250,000 shares on May 15, 2025 valued at $2.99 per share.

Lewis’s bonus for 2025 includes $88,973 to be paid out in 2026 in shares, which was approved by the Board of Directors on February 27, 2026.

37,072 shares were valued at $2.40 per share based on the close price of the Company’s common stock at February 26, 2026.

Scott’s bonus for 2025 includes $51,160 to be paid out in 2026 in cash and shares, which was approved by the Board of Directors on February 27, 2026.

5,329 shares were valued at $2.40 per share based on the close price of the Company’s common stock at February 26, 2026.

The following tables set forth certain information related to outstanding equity awards as of December 31, 2025 for our executive officers.

Option Awards

Underlying Unexercised

Options (#) Unexercisable

Unexercisable

Equity Incentive

Underlying Unexercised

On August 13, 2020, the Board of Directors approved cash compensation to board members equal to $4,000, payable in equal installments quarterly, plus an additional $6,000 for each chairperson payable in equal installments quarterly.

6 unchanged sentences

Options were granted at an exercise price of $1.55 per share and vested immediately.

On May 15, 2025 the Board of Directors approved stock option awards of 5,000 for board members and an additional 10,000 shares for committee chairmen.

The Company recorded $126,500 of share-based compensation with relation to the options granted to the Board.

The following table provides compensation information for the one-year period ended December 31, 2024 for the only non-employee members of our Board of Directors.

The following table provides compensation information for the one-year period ended December 31, 2025 for the non-employee members of our Board of Directors.

Director Compensation in 2025

14 unchanged sentences

Includes options to purchase 80,000 shares of the Company’s common stock

To the knowledge of the management of the Company, based solely on our review of SEC filings, three shareholders are the beneficial owner of more than five percent of the Company’s common stock.

7 unchanged sentences

The Company has a majority of independent directors with Laurie Bradley as the sole member of the compensation committee and Andrew Pilaro is the sole member of the audit committee.

Our board of directors currently consists of three members.

Our board of directors determined that the three directors, Andrew Pilaro, Laurie Bradley and David Ogden, are independent under the standards of the “Nasdaq Global Market” pursuant to Nasdaq Listing Rule 5605.

Our board of directors currently consists of two members.

Our board of directors determined that the directors, Andrew Pilaro and Laurie Bradley, are independent under the standards of the “Nasdaq Global Market” pursuant to Nasdaq Listing Rule 5605.

Principal Accountant Fees and Services

dbbmckennon is our independent registered public accounting firm for the period of May 29, 2024 through current, KMJ Corbin & Company LLP (“KMJ”) was our independent registered public accounting firm through May 29, 2024 and for year ended December 31, 2023.

The following is a summary of the fees billed to the Company by KMJ and dbbmckennon for professional services rendered for the years ended December 31, 2025 and 2024.

53 unchanged sentences

(incorporated by reference to Exhibit 10.17 to Form 10-K filed April 1, 2024)

Insider Trading Policy

CFO Certification required under Section 302 of Sarbanes-Oxley Act of 2002

11 unchanged sentences

Austin Lewis, IV

April 15, 2025

Austin Lewis, IV, Chief Executive Officer, Chief Financial Officer

March 31, 2026

Austin Lewis, IV, Chief Executive Officer, Chief

Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

1 unchanged sentence

Andrew Pilaro

April 15, 2025

March 31, 2026

/s/ Laurie Bradley

Laurie Bradley

April 15, 2025

March 31, 2026

& SUBSIDIARIES

2 unchanged sentences

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2025 and 2024

6 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Paid, Inc.

and subsidiaries (collectively the “Company”) as of December 31, 2024, the related consolidated statements of operations, shareholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Paid, Inc.

and subsidiaries (collectively the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of income and comprehensive income, changes in shareholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

1 unchanged sentence

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current year audit of the financial statements that was communicated, or required to be communicated, to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

1 unchanged sentence

Description of the Matter:

As discussed in Notes 4 and 5 to the financial statements, the Company has a note receivable from a third party.

As discussed in Note 5 to the financial statements, the Company has a note receivable from a third party.

Management’s assessment of the recoverability of the note receivable involves significant judgment and estimates related to the borrowers’ financial condition and future sources of cash flows.

6 unchanged sentences

San Diego, California

April 15, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of PAID, Inc.

and subsidiaries (the “Company”) as of December 31, 2023, the related consolidated statements of income and comprehensive income, changes in shareholders’ equity and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ KMJ Corbin & Company LLP

We served as the Company’s auditor from 2013 to 2024.

Glendora, California

April 1, 2024 (except for the “Prior Period Corrections” section of Note 3, as to which the date is April 15, 2025)

March 31, 2026

& SUBSIDIARIES

10 unchanged sentences

Operating lease right-of-use assets

Notes receivable, long term

Note receivable, long term

LIABILITIES AND SHAREHOLDERS’ EQUITY

15 unchanged sentences

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

8,213,533 shares issued and 8,067,333 shares outstanding and December 31, 2024, 8,154,474 shares issued and 8,010,837 shares outstanding at December 31, 2023

8,527,467 shares issued and 8,379,834 shares outstanding December 31, 2025 and 8,213,533 shares issued and 8,067,333 shares outstanding and December 31, 2024

Accrued common stock bonus

17 unchanged sentences

Total operating expenses

Income (loss) from operations

Loss from operations

Other income (expense):

1 unchanged sentence

Total other income

Income before income tax (benefit) provision

Income before income (loss) tax (benefit) provision

Income tax (benefit) provision

Net income per share – basic

Net income per share – diluted

Net income (loss)

Net income (loss) per share – basic

Net income (loss) per share – diluted

Weighted average number of common shares outstanding – basic

1 unchanged sentence

Consolidated statements of comprehensive income:

Net income (loss)

Other comprehensive income (loss):

Foreign currency translation adjustments

Comprehensive income

Comprehensive income (loss)

See accompanying notes to consolidated financial statements

2 unchanged sentences

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Other Comprehensive

Comprehensive

Treasury Stock

2 unchanged sentences

Issuance of common stock for accrued bonus

Issuance of common stock for signing bonus

Share-based compensation expense

1 unchanged sentence

Option exercise

Purchase of treasury stock

Balance December 31, 2024

1 unchanged sentence

Issuance of common stock for accrued bonus

Issuance of common stock for signing bonus

Share-based compensation expense

Option exercise

Purchase of treasury stock

Balance December 31, 2025

4 unchanged sentences

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization

4 unchanged sentences

Interest and default income accrued on note receivable

Provision for bad debts

Changes in assets and liabilities:

2 unchanged sentences

Accounts payable

Uncertain tax position liability

Accrued expenses

19 unchanged sentences

Increase in note receivable for discount

Adjustment to operating lease right-of-use assets and operating lease obligations due to lease amendment.

Issuance of common shares in settlement of accrued common stock bonus

23 unchanged sentences

As of December 31, 2025, the Company reported cash and cash equivalents of $ 1,108,059 and had working deficit of ($ 304,212 ).

The Company has reported a net operating loss of ($ 493,382 ), but generated cash flows from operations of $ 447,643 for the year ended December 31, 2024.

The Company has reported a net operating loss of ($ 368,243 ), and used cash from operations of ($ 53,171 ) for the year ended December 31, 2025.

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

2 unchanged sentences

They may also 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 plan will be sufficient to meet the Company’s working capital requirements through April 15, 2026 and will have a positive impact on the Company for the foreseeable future.

Although there can be no assurances, the Company believes that the above management plan will be sufficient to meet the Company’s working capital requirements through March 31, 2027 and will have a positive impact on the Company for the foreseeable future.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

21 unchanged sentences

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods.

Significant estimates made by the Company’s management include, but are not limited to, the collectability of notes receivable.

Actual results could materially differ from those estimates.

Fair Value Measurements

17 unchanged sentences

Although the Company expects to collect amounts due, actual collections may differ from the estimated amounts.

As of the years ended December 31, 2024 and 2023, the Company recorded an allowance for credit losses of $ 11,134 and $ 0 , respectively however the Company has not reserved for any additional credit losses.

As of December 31, 2024 and 2023, there was one customer that accounted for more than 10% of the accounts receivable balance for the year.

As of December 31, 2025 and 2024, the Company recorded an allowance for credit losses of $ 50,742 and $ 11,134 , respectively.

The Company evaluates the reserve for additional credit losses on a quarterly basis.

As of December 31, 2025 there were no customers that accounted for more than 10% and as of December 31, 2024 there was one customer that accounted for more than 10%, of the accounts receivable balance for the year.

The loss of this customer would not have a significant impact on our operations.

12 unchanged sentences

Intangible assets consist of patents, client lists, trade names and customer relationships, which are being amortized on a straight-line basis over their estimated useful lives.

Currently the only intangible assets remaining is customer relationships with an estimated life of seven years.

Currently the only intangible assets remaining is customer relationships which are being amortized over 15 years.

Long-Lived Assets

14 unchanged sentences

The benefits provided under these plans are share-based payments that the Company accounts for using the fair value method.

During the year ended December 31, 2024 the Company recorded $ 193,246 for share-based bonus payments related to 2024 which were approved by the Board of Directors on March 07, 2025.

The Company recorded $ 84,576 for share-based bonus payments related to 2023 which were approved by the Board of Directors on February 22, 2024 during the year ended December 31, 2023.

The shares of common stock were issued to the CEO/CFO, one additional officer and two employees.

During the year ended December 31, 2025 the Company recorded $ 124,709 for share-based bonus payments related to 2025 which were approved by the Board of Directors on February 27, 2026.

The Company recorded $ 193,246 for share-based bonus payments related to 2024 which were approved by the Board of Directors on March 07, 2025 during the year ended December 31, 2024.

The shares of common stock were issued to the CEO/CFO, one additional officer and three employees.

The fair value of each option award is estimated on the date of grant using a Black-Scholes-Merton option pricing model (“Black-Scholes-Merton model”) that uses assumptions regarding a number of complex and subjective variables.

25 unchanged sentences

The following is a reconciliation of the numerators and denominators of the basic and diluted income per share computations for the years ended December 31:

Net income (loss)

Basic weighted-average shares outstanding

1 unchanged sentence

Diluted weighted-average shares outstanding

Net income per share – basic

Net income per share – diluted

Net income (loss) per share – basic

Net income (loss) per share – diluted

Segment Reporting

26 unchanged sentences

During 2025 and 2024, the Company recorded depreciation and amortization expense of $ 286,785 and $ 304,797 , respectively, which was solely related to the shipping coordination and label generations service segment of the Company.

Prior Period Corrections

Following an analysis of quantitative and qualitative factors in accordance with SEC Staff Accounting Bulletin 99, Materiality , the Company concluded that the errors below were immaterial to the previously issued consolidated financial statements, and thus, no restatement of any of the Company’s previously issued financial statements is necessary.

The Company revised the reported balances to correct for the immaterial errors accordingly.

During the fourth quarter of 2024, the Company identified and corrected immaterial errors impacting the December 31, 2023 balances previously reported related to cash and cash equivalents.

These revisions resulted in an adjustment to the opening accumulated deficit balance as of January 1, 2023 of $ 320,428 , and a decrease in cash and cash equivalents of $ 320,428 .

Recent Accounting Pronouncements

3 unchanged sentences

The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively.

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 standard was effective for fiscal years beginning after December 15, 2024.

We adopted this guidance for the annual period ending December 31, 2025.

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

Improvements to Reportable Segment Disclosures which provides guidance to improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about reportable segment’s expenses.

The new guidance must be adopted for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted, and retrospective application is required for all periods presented.

We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

The new guidance was adopted for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The adoption of this guidance did not have an impact on our consolidated financial statements.

REVENUE FROM CONTRACTS WITH CUSTOMERS

47 unchanged sentences

Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the anticipated performance and all information (historical, current and forecasted) that is reasonably available.

Revenues are recorded net of variable consideration, such as rebates, refunds and cancellations.

Revenues are recorded net of variable considerations, such as rebates, refunds and cancellations.

The Company’s products and services are provided on an “as is” basis and no warranties are included in the contracts with customers.

2 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 $ 193,852 , and $ 205,647 and $ 169,074 at December 31, 2024 and 2023 and 2022, respectively.

Accordingly, the Company has a balance of accounts receivable, totaling $ 302,894 , $ 193,852 , and $ 205,647 at December 31, 2025 and 2024 and 2023, respectively.

The Company has recorded a balance of $ 234,972 in contract assets as of December 31, 2025.

20 unchanged sentences

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 year ended December 31, 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 $ 203,425 in interest and $ 645,833 for the discount and penalty for the year ended December 31, 2023.

The note receivable was in default effective June 19, 2024 in the amount of $ 4,193,607 and the Company has elected to defer the recording of interest of $ 806,551 and default penalties of $ 838,721 .

The note receivable was in default effective June 19, 2024, in the amount of $ 4,193,607 and the Company ceased recording of interest and penalties of $ 2,299,849 and default penalties of $ 838,721 .

The total due on the note as of December 31, 2025 was $ 7,332,177 .

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.

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.

The Loan Modification carries the same terms as the original note with a 25% OID and 20% interest and penalties.

Although the note is considered a short term note, the full amount of the note receivable is not expected to be collected by December 31, 2025 and thus should be reflected 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.

The Company entered into a Forbearance and Loan Modification Agreement with Embolx which extended the note receivable of $ 5,967,100 until September 30, 2025 and carried a 25% interest rate.

On September 30, 2025 the Company amended the Forbearance Agreement to expire on August 31, 2026.

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

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 or 2026.

3 unchanged sentences

The new note includes an additional $ 198,500 investment carrying a 12 % interest rate.

The short term note of $ 50,000 plus $ 1,500 interest calculated from April 4, 2024 to July 3, 2024, along with a $ 198,500 additional investment results in a $ 250,000 long term note due on or before April 30, 2027.

The short term note of $ 50,000 plus $ 1,500 interest calculated from April 4, 2024 to July 3, 2024, along with the $ 198,500 additional investment results in a $ 250,000 long term note due on or before April 30, 2027.

On April 30, 2027 the Company has the option to convert the balance of the $ 400,000 note receivable into 55 % ownership of 5String Solutions.

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 $ 16,130 has been recorded based on the outstanding balance of the $ 250,000 note for the period of July 3, 2024 to December 31, 2025.

On July 1, 2025 and October 10, 2025, the Company made an additional investment of $ 75,000 per occurrence and in accordance with the original terms of the July 3, 2024 amendment.

Interest of $ 36,123 has been recorded based on the outstanding balance of the $ 400,000 note for the year ending December 31, 2025.

PROPERTY AND EQUIPMENT

25 unchanged sentences

Payroll and related costs

Professional and consulting fees

Accrued cost of revenues

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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 May 14, 2025.

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

Post-trial briefing in the Delaware action was completed on March 21, 2025, followed by a post-trial hearing on May 14, 2025.

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

Indemnities and Guarantees

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On March 21, 2023, the Company’s Board of Directors authorized the issuance of 46,961 bonus shares of PAID common stock to the CEO/CFO, one additional officer and one employee for services rendered during 2022.

This bonus was valued at $ 82,180 based on the closing price of the Company’s common stock at March 20, 2023 and was issued in March 2023.

This bonus was recorded in accrued common stock bonus in shareholders’ equity as of December 31, 2022.

This bonus was valued at $ 82,180 based on the closing price of the Company’s common stock at March 20, 2023 and was issued in March 2023 and recorded in accrued common stock bonus in shareholders’ equity as of December 31, 2022.

The Board of Directors also authorized the issuance of an additional 250,000 shares to the CEO/CFO as a renewal bonus valued at $ 437,500 .

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

On March 21, 2023, the Company’s Board of Directors approved the terms of the employment agreement for David Scott, the Company’s COO.

Per the terms of the agreement, the Company issued 13,889 shares of PAID common stock to the COO.

This compensation was valued at $ 25,000 based on the closing price of the Company’s common stock at March 31, 2023 and the shares were issued on April 10, 2023.

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

See Note 14 for discussion of 2026 issuances.

Share-Based Incentive Plans

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On November 10, 2020, the board voted to increase the 2018 Stock Option Plan from 450,000 options to 900,000 options.

On May 12, 2023, the Company received a notice of exercise of options to purchase 3,500 common shares of the Company’s stock from one board member and one employee.

The options were exercised at $ 0.975 per share and the Company received proceeds of $ 3,412 .

On November 15, 2024, the Company received a notice of exercise of options to purchase 4,500 common shares of the Company’s stock.

The options were exercised at $ 0.975 per share and the Company received proceeds of $ 4,387.50 .

On February 24,2025, the Company received a notice of exercise of options to purchase 1,433 common shares of the Company’s stock from one employee.

The options were exercised at $ 2.90 per share and the Company received proceeds of $ 2,212 .

Active Plans:

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Income tax (benefit) provision

A reconciliation of income taxes computed by applying the statutory U.S.

income tax rate to the Company’s income (loss) before income tax (benefit) provision to the income tax (benefit) provision is as follows for the years ended December 31:

A reconciliation of the expected income tax (benefit) provision at the federal statutory rate of 21% for the years ended December 31, 2025, and the income tax (benefit) provision reported in the financial statements is as follows:

December 31, 2025

As a % of net income before taxes

Net income (loss) before taxes

federal statutory tax rate

State and local income taxes, net of federal income tax effect*

Foreign tax effects

Foreign rate differential

Prior period adjustments

Effect of cross-border tax laws

Global intangible low-taxed income

Changes in valuation allowances

Non-taxable or non-deductible items

Section 162(m) disallowance

Stock compensation

Changes in unrecognized tax benefits

Attributes expirations

Prior period adjustments

Effective income tax rate

* State taxes in Massachusetts made up the majority (greater than 50 percent) of the tax effect in this category.

As previously disclosed for the periods ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows:

federal statutory tax rate

State tax benefit, net

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Unrecognized tax benefit

Interest and penalties

Section 162(m) disallowance

Valuation allowance

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Stock based compensation expense

Lease liability

Total deferred tax assets

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federal and state on each of the Company’s consolidated balance sheets at December 31, 2025 and 2024.

The One Big Beautiful Bill Act of 2025 (the “2025 Tax Act”) was signed into law on July 4, 2025.

The 2025 Tax Act, among other things, extends certain provisions of 2017 U.S.

federal tax legislation relating to federal bonus depreciation and immediate expensing for domestic research and development expenditures.

These provisions did not have a material effect on the Company's consolidated financial statements for the year ended December 31, 2025.

The evaluation of uncertainty in a tax position is a two-step process.

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Long term portion

RISKS AND UNCERTAINTIES

Trade discussions and arrangements between the U.S.

and various of its trading partners are unpredictable, and existing and future trade agreements are, and are expected to continue to be, subject to several uncertainties, including the imposition of new tariffs or adjustments and changes to existing tariff policies.

The impact of new laws, regulations and policies or decisions or interpretations by authorities applying those laws and regulations, cannot be predicted.

The Company is currently evaluating the accounts receivable for reserves for unpaid tariffs, however the amounts cannot be calculated as the trade agreements have yet to be settled by the U.S.

SUBSEQUENT EVENTS

On March 07, 2025, the Board of Directors approved the allocation of the 2024 bonus accrual to be paid out in cash and shares of which $ 189,380 have been recorded as share-based compensation expense for the year ended December 31, 2024.

A total of 62,502 shares of common stock were issued to officers and two employees in March 2025.

The Board approved an extension of the 2023 Agreement for W.

Austin Lewis, IV, for an additional 2 years on the same terms and conditions, other than Mr.

Lewis’s salary will increase to $ 346,680 effective January 1, 2025.

On January 31, 2025 the Company amended its Note with Embolx to a forbearance agreement which is in effect until September 2025.

On February 27, 2026, the Board of Directors approved the allocation of the 2025 bonus accrual to be paid out in cash and shares of which $ 124,709 have been recorded as share-based compensation expense for the year ended December 31, 2025.

A total of 50,974 shares of common stock were issued to two officers and three employees in March 2026.

On January 30, 2026 the Company acquired an approximate 80 % shareholder interest in Warehowz, Inc., a Virgina corporation.

As part of the acquisition, the Company will repay approximately $ 102,000 in indebtedness on or around February 28, 2026 in shares of restricted common stock of the Company, based on the 30-day prior average, and will pay off an additional $ 75,000 convertible note within 120 days of closing.

The total consideration for the acquisition is $ 177,000 plus any earnouts described below, which are based on a percentage of net revenue and net income contributed by Warehowz, Inc.

In addition, after subtracting certain costs and debts from the payment requirement, the Company will pay those shareholders who transferred shares to the Company two payments based on each shareholder’s percentage ownership of Warehowz, Inc., which payment shall equal 8.5% of net revenue plus 40% of the net income, for each of the 12 months ended December 31, 2026 and 2027.

The earnout cash payments will be due on April 15, 2027 and April 15, 2028 respectively.

Payments are subject to offset against any indemnity claims and any liabilities related to Warehowz, Inc.

that were not expressly assumed.

The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K and determined that there have been no events that have occurred that would require adjustment to or additional disclosure in the consolidated financial statements, except as disclosed herein.

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-K

Item 9A. Controls and Procedures