PAYD's Revenue Climbs 16% Amidst Net Loss, Cash Concerns

TL;DR

**PAYD's revenue growth is overshadowed by a sharp turn to net loss and dwindling cash, making it a risky bet until they prove sustainable profitability.**

AI Summary

PAID INC (PAYD) reported a mixed financial performance for the nine months ended September 30, 2025. Revenue increased by 15.9% to $15,314,444 from $13,209,958 in the prior year, driven by its SaaS-based business services including PaidPayments, PaidCart, PaidShipping, and PaidWeb. Despite this revenue growth, the company posted a net loss of $513,965 for the nine-month period, a significant decline from a net income of $936,335 in the same period of 2024. This shift was largely due to a substantial decrease in 'Other income,' which fell from $1,049,882 in 2024 to $9,662 in 2025, primarily from the absence of a large accretion of discount on a note receivable. Share-based compensation also surged to $624,064 from $44,928. The company's cash and cash equivalents decreased to $1,149,384 from $1,284,965 at December 31, 2024, and it reported a working capital deficit of $434,040. Management believes adequate cash resources exist for the next 12 months, contingent on the repayment of the Embolx note receivable and cost reductions.

Why It Matters

For investors, PAYD's revenue growth is a positive signal for its SaaS platform, but the swing to a net loss and declining cash position raises red flags about profitability and liquidity. The significant drop in 'Other income' highlights a reliance on non-recurring gains in the prior year, making current operational losses more pronounced. Employees might face pressure for cost reductions, while customers could benefit from the expanding platform offerings. In a competitive SaaS market, PAYD's ability to convert revenue growth into sustainable profit and positive cash flow is crucial for long-term viability and market positioning against larger, more established players.

Risk Assessment

Risk Level: high — PAID INC exhibits high risk due to a net loss of $513,965 for the nine months ended September 30, 2025, compared to a net income of $936,335 in the prior year. The company also reported a working capital deficit of $434,040 and cash flows used in operations of $79,014, indicating ongoing liquidity challenges. Furthermore, management's reliance on the uncertain repayment of the Embolx note receivable to alleviate cash concerns adds to the financial instability.

Analyst Insight

Investors should exercise extreme caution and consider avoiding PAYD until there's clear evidence of sustained profitability and positive operational cash flow. Monitor the repayment status of the Embolx note and the impact of stated cost reduction efforts on the bottom line before considering any investment.

Financial Highlights

revenue

$15.3M

total Assets

$8.33M

total Debt

$3.18M

net Income

($0.51M)

eps

($0.06)

gross Margin

22.86%

cash Position

$1.15M

revenue Growth

+15.9%

Revenue Breakdown

Key Numbers

• $15.3M — Revenue, net (Increased by 15.9% for the nine months ended September 30, 2025, compared to $13.2M in 2024.)
• ($0.51M) — Net income (loss) (Shifted from a net income of $0.94M in 2024 to a net loss for the nine months ended September 30, 2025.)
• $1.15M — Cash and cash equivalents (Decreased from $1.28M at December 31, 2024, indicating declining liquidity.)
• ($0.43M) — Working capital deficit (Reported as of September 30, 2025, highlighting short-term liquidity issues.)
• $0.62M — Share-based compensation (Significantly increased from $0.04M in 2024, impacting profitability.)
• ($0.06) — Net loss per share – basic (Reported for the nine months ended September 30, 2025, compared to $0.12 net income per share in 2024.)
• $4.56M — Notes receivable, long term (Increased from $4.46M at December 31, 2024, with repayment uncertainty.)
• 99% — Revenue from Canada (Represents the vast majority of revenue for the nine months ended September 30, 2025.)

Key Players & Entities

• PAID INC (company) — Registrant
• ShipTime Canada Inc. (company) — Wholly owned subsidiary
• Embolx (company) — Debtor of note receivable
• $15,314,444 (dollar_amount) — Total revenues for nine months ended September 30, 2025
• $513,965 (dollar_amount) — Net loss for nine months ended September 30, 2025
• $936,335 (dollar_amount) — Net income for nine months ended September 30, 2024
• $1,149,384 (dollar_amount) — Cash and cash equivalents as of September 30, 2025
• $434,040 (dollar_amount) — Working capital deficit as of September 30, 2025
• $624,064 (dollar_amount) — Share-based compensation expense for nine months ended September 30, 2025
• SEC (regulator) — Securities and Exchange Commission

FAQ

Risk Factors

• Working Capital Deficit and Liquidity Concerns [high — financial]: The company reported a working capital deficit of $434,040 as of September 30, 2025. Cash and cash equivalents decreased to $1,149,384 from $1,284,965 at December 31, 2024. Management's belief in adequate cash resources for the next 12 months is contingent on the repayment of the Embolx note receivable and cost reductions.
• Dependence on Note Receivable Repayment [high — financial]: The company's liquidity is significantly dependent on the repayment of the Embolx note receivable. The absence of large accretion of discount on a note receivable in the current period led to a substantial decrease in 'Other income', contributing to the net loss.
• Significant Increase in Share-Based Compensation [medium — operational]: Share-based compensation surged to $624,064 for the nine months ended September 30, 2025, from $44,928 in the prior year. This substantial increase negatively impacted profitability.
• Revenue Concentration in Canada [medium — market]: The company generates approximately 99% of its revenue from Canada. This high concentration exposes the company to specific market risks and regulatory changes within Canada.
• Declining Profitability [high — financial]: Despite a 15.9% increase in revenue to $15.3M, the company reported a net loss of $513,965 for the nine months ended September 30, 2025, a significant shift from a net income of $936,335 in the prior year. This indicates a deterioration in the company's ability to translate revenue into profit.

Industry Context

PAID INC operates in the business services sector, with a focus on SaaS solutions for payments, e-commerce, and shipping. The competitive landscape likely includes numerous players offering similar digital solutions, requiring continuous innovation and customer acquisition. Industry trends favor digital transformation and cloud-based services, which PAID INC is leveraging.

Regulatory Implications

As a Canadian-based revenue generator, PAID INC is subject to Canadian tax laws and business regulations. Any changes in these regulations could impact the company's operations and profitability. Furthermore, the company's financial reporting must adhere to U.S. GAAP, as it is a U.S. publicly traded entity.

What Investors Should Do

1. Monitor note receivable repayment
2. Analyze cost reduction initiatives
3. Evaluate the sustainability of revenue growth
4. Assess the impact of increased share-based compensation

Glossary

Accretion of discount on a note receivable

The process of recognizing interest income on a note receivable that was originally issued at a discount (i.e., for less than its face value). This income is recognized over the life of the note. (A significant decrease in this income stream from $1,049,882 in 2024 to $9,662 in 2025 was a primary driver of the company's net loss.)

Working capital deficit

Occurs when a company's current liabilities exceed its current assets, indicating potential short-term liquidity issues. (PAID INC reported a working capital deficit of $434,040 as of September 30, 2025, highlighting potential challenges in meeting short-term obligations.)

Share-based compensation

Compensation provided to employees in the form of stock options, restricted stock units, or other equity-based awards. (This expense increased dramatically from $44,928 to $624,064, significantly impacting the company's net loss.)

SaaS

Software as a Service. A software licensing and delivery model where software is licensed on a subscription basis and is centrally hosted. (The company's revenue growth is attributed to its SaaS-based business services.)

Year-Over-Year Comparison

For the nine months ended September 30, 2025, PAID INC saw a revenue increase of 15.9% to $15.3M, up from $13.2M in the prior year. However, profitability has sharply declined, with a net loss of $0.51M compared to a net income of $0.94M. This reversal is largely due to a substantial drop in 'Other income' and a significant surge in share-based compensation, which rose from $0.04M to $0.62M. Liquidity has also weakened, with cash decreasing to $1.15M and a working capital deficit of $0.43M emerging.

Key Financial Figures

• $0.001 — ection 12(g) of the Act: Common Stock, $0.001 Par Value Indicate by check mark whet

Filing Documents

• payd20250930_10q.htm (10-Q) — 980KB
• ex_884054.htm (EX-31.1) — 10KB
• ex_884055.htm (EX-32) — 4KB
• logo.jpg (GRAPHIC) — 14KB
• 0001437749-25-035211.txt ( ) — 5149KB
• payd-20250930.xsd (EX-101.SCH) — 38KB
• payd-20250930_def.xml (EX-101.DEF) — 283KB
• payd-20250930_lab.xml (EX-101.LAB) — 287KB
• payd-20250930_pre.xml (EX-101.PRE) — 307KB
• payd-20250930_cal.xml (EX-101.CAL) — 38KB
• payd20250930_10q_htm.xml (XML) — 772KB

– Financial Information

Part I – Financial Information Item 1.

Financial Statements

Financial Statements Unaudited Condensed Consolidated Balance Sheets as of September 30, 2025, and December 31, 2024 3 Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2025, and 2024 4 Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025, and 2024 5 Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity for the Nine Months Ended September 30, 2025, and 2024 6 Notes to Unaudited Condensed Consolidated Financial Statements 8-17 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 17 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 21 Item 4.

Controls and Procedures

Controls and Procedures 21

– Other Information

Part II – Other Information Item 1.

Legal Proceedings

Legal Proceedings 21 Item 1A.

Risk Factors

Risk Factors 2 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 22 Item 3. Defaults Upon Senior Securities 22 Item 4. Mine Safety Disclosures 22 Item 5. Other Information 22 Item 6. Exhibits 22

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS PAID, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) September 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 1,149,384 $ 1,284,965 Accounts receivable, net 325,027 193,852 Prepaid expenses and other current assets 388,874 430,588 Total current assets 1,863,285 1,909,405 Property and equipment, net 4,827 4,370 Intangible assets, net 1,804,269 1,952,896 Operating lease right-of-use assets, net 96,125 115,150 Notes receivable, long term 4,557,672 4,458,237 Total assets $ 8,326,178 $ 8,440,058 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,357,963 $ 1,694,599 Accrued expenses 509,926 438,912 Contract liabilities 397,914 372,795 Operating lease obligations 31,522 32,566 Total current liabilities 2,297,325 2,538,872 Long-term liabilities: Deferred tax liability, net 447,366 420,128 Uncertain tax position liability 370,455 370,454 Operating lease obligation, net of current portion 67,770 85,437 Total liabilities 3,182,916 3,414,891 Commitments and contingencies (Note 5) Shareholders' equity: Series A Preferred stock, $ 0.001 par value, 5,000,000 shares authorized; no shares issued and outstanding at September 30, 2025, and December 31, 2024 - - Common stock, $ 0.001 par value, 25,000,000 shares authorized; 8,527,467 shares issued and 8,379,834 shares outstanding at September 30, 2025, and 8,213,533 shares issued and 8,065,900 shares outstanding at December 31, 2024 8,528 8,214 Accrued common stock bonus - 193,246 Additional paid-in capital 74,459,746 73,640,538 Accumulated other comprehensive income 231,816 226,031 Accumulated deficit ( 69,387,992 ) ( 68,874,026 ) Common stock in treasury, at cost, 147,633 shares at September 30, 2025 and December 31, 2024 ( 168,836 ) ( 168,836 ) Total shareholders' equity 5,143,262 5,0

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