DELAWARE | 73-1479833 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | ¨ | Accelerated Filer | ¨ |
Non-accelerated filer | ¨ | Smaller reporting company | x |
Part I Financial Information | | ||
| | | |
| Item 1. | Financial Statements | |
| | | |
| | Condensed Balance Sheets | |
| | September 30, 2013 (unaudited) and December 31, 2012 | 3 |
| | | |
| | Condensed Statements of Operations | |
| | Three and Nine months ended September 30, 2013 and 2012 (unaudited) | 4 |
| | | |
| | Condensed Statements of Cash Flows | |
| | Nine months ended September 30, 2013 and 2012 (unaudited) | 5 |
| | | |
| | Condensed Notes to Financial Statements | |
| | Nine months ended September 30, 2013 and 2012 | 6-15 |
| | | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15 |
| | | |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 19 |
| | | |
| Item 4. | Controls and Procedures | 19 |
| | | |
Part II Other Information | | ||
| | | |
| Item 1. | Legal Proceedings | 19 |
| | | |
| Item 1A. | Risk Factors | 20 |
| | | |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 20 |
| | | |
| Item 3. | Defaults Upon Senior Securities | 20 |
| | | |
| Item 4. | Mine Safety Disclosures | 20 |
| | | |
| Item 5. | Other Information | 20 |
| | | |
| Item 6. | Exhibits | 20 |
| | | |
| Signatures | 21 |
| | September 30, 2013 | | December 31, 2012 | | ||
| | (Unaudited) | | (Audited) | | ||
ASSETS | | | | | | | |
| | | | | | | |
Current assets: | | | | | | | |
Cash | | $ | 668,500 | | $ | 1,433,000 | |
Investments | | | 151,100 | | | 142,800 | |
Accounts receivable, net | | | 427,800 | | | 348,800 | |
Inventories | | | 23,700 | | | 420,700 | |
Prepaid expenses and other current assets | | | 511,600 | | | 310,200 | |
Advanced royalties | | | 316,100 | | | 329,800 | |
Total current assets | | | 2,098,800 | | | 2,985,300 | |
| | | | | | | |
Property and equipment, net | | | 151,500 | | | 212,900 | |
Intangible asset, net | | | 5,400 | | | 6,100 | |
Prepaid facility costs | | | 850,500 | | | 1,027,200 | |
| | | | | | | |
Total assets | | $ | 3,106,200 | | $ | 4,231,500 | |
| | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | |
| | | | | | | |
Current liabilities: | | | | | | | |
Accounts payable | | $ | 355,200 | | $ | 728,000 | |
Capital leases current portion | | | 23,800 | | | 26,300 | |
Accrued expenses | | | 920,400 | | | 1,512,800 | |
Deferred revenues | | | 91,200 | | | 230,500 | |
Total current liabilities | | | 1,390,600 | | | 2,497,600 | |
| | | | | | | |
Long-term liabilities: | | | | | | | |
Capital leases net of current | | | 30,700 | | | 48,600 | |
Total Liabilities | | | 1,421,300 | | | 2,546,200 | |
| | | | | | | |
Commitments and contingencies | | | | | | | |
| | | | | | | |
Shareholders’ equity: | | | | | | | |
Common stock, $0.001 par value, 350,000,000 shares authorized; 328,874,050 shares issued and outstanding at September 30, 2013 and December 31, 2012 | | | 328,900 | | | 328,900 | |
Additional paid-in capital | | | 52,618,700 | | | 52,376,500 | |
Accumulated other comprehensive loss | | | (86,500) | | | - | |
Accumulated deficit | | | (51,112,200) | | | (50,956,100) | |
Stock subscription receivable | | | (64,000) | | | (64,000) | |
Total shareholders' equity | | | 1,684,900 | | | 1,685,300 | |
| | | | | | | |
Total liabilities and shareholders' equity | | $ | 3,106,200 | | $ | 4,231,500 | |
3 | ||
| | Three Months Ended | | Nine Months Ended | | ||||||||
| | September 30, 2013 | | September 30, 2012 | | September 30, 2013 | | September 30, 2012 | | ||||
Revenues | | $ | 1,110,800 | | $ | 7,093,500 | | $ | 3,111,800 | | $ | 10,661,100 | |
Cost of revenues | | | 686,100 | | | 5,696,200 | | | 2,029,300 | | | 8,125,500 | |
Gross profit | | | 424,700 | | | 1,397,300 | | | 1,082,500 | | | 2,535,600 | |
| | | | | | | | | | | | | |
Operating expenses | | | 457,800 | | | 1,662,100 | | | 1,639,500 | | | 5,183,900 | |
Loss from operations | | | (33,100) | | | (264,800) | | | (557,000) | | | (2,648,300) | |
| | | | | | | | | | | | | |
Other income (expense): | | | | | | | | | | | | | |
Interest expense | | | (800) | | | (1,300) | | | (2,500) | | | (4,800) | |
Other income | | | - | | | 11,000 | | | - | | | 11,000 | |
Unrealized gain (loss) on investments | | | - | | | 27,100 | | | 94,800 | | | (24,400) | |
Unrealized gain (loss) on stock price guarantee | | | 160,400 | | | (683,300) | | | 308,600 | | | (919,500) | |
Total other income (expense), net | | | 159,600 | | | (646,500) | | | 400,900 | | | (937,700) | |
| | | | | | | | | | | | | |
Income (loss) before income taxes | | | 126,500 | | | (911,300) | | | (156,100) | | | (3,586,000) | |
Provision for income taxes | | | | | | | | | | | | | |
Net income (loss) | | | 126,500 | | | (911,300) | | | (156,100) | | | (3,586,000) | |
Net unrealized loss on investments | | | (86,500) | | | - | | | (86,500) | | | - | |
Total comprehensive income (loss) | | $ | 40,000 | | $ | (911,300) | | $ | (242,600) | | $ | (3,586,000) | |
Earnings (loss) per share | | | | | | | | | | | | | |
Basic | | $ | 0.00 | | $ | (0.00) | | $ | (0.00) | | $ | (0.01) | |
Diluted | | $ | 0.00 | | $ | (0.00) | | $ | (0.00) | | $ | (0.01) | |
Weighted average shares outstanding | | | | | | | | | | | | | |
Basic | | | 328,874,050 | | | 325,699,374 | | | 328,874,050 | | | 317,962,401 | |
Diluted | | | 336,848,737 | | | 325,699,374 | | | 328,874,050 | | | 317,962,401 | |
4 | ||
| | 2013 | | 2012 | | ||
Operating activities: | | | | | | | |
Net loss | | $ | (156,100) | | $ | (3,586,000) | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | |
Depreciation and amortization | | | 57,800 | | | 56,000 | |
Loss on disposal of assets | | | 4,300 | | | - | |
Unrealized (gain) loss on investment | | | (94,800) | | | 24,400 | |
Share-based compensation | | | 242,200 | | | 532,500 | |
Change in fair value of stock price guarantee | | | (308,600) | | | 919,500 | |
Amortization of prepaid facility costs | | | 176,700 | | | 287,400 | |
Fair value of stock options awarded to professionals and consultants in payment of fees for services provided | | | - | | | 2,126,800 | |
Fair value of stock options awarded to employees in payment of compensation | | | - | | | 40,000 | |
Changes in assets and liabilities: | | | | | | | |
Accounts receivable | | | (79,000) | | | (726,100) | |
Inventories | | | 397,000 | | | (134,600) | |
Prepaid expense and other current assets | | | (201,400) | | | 203,100 | |
Advanced royalties | | | 13,700 | | | (144,000) | |
Accounts payable | | | (372,800) | | | 165,300 | |
Accrued expenses | | | (283,800) | | | (91,200) | |
Deferred revenue | | | (139,300) | | | 43,300 | |
Net cash used in operating activities | | | (744,100) | | | (283,600) | |
Investing activities: | | | | | | | |
Property and equipment additions | | | - | | | (136,400) | |
Net cash used in investing activities | | | - | | | (136,400) | |
Financing activities: | | | | | | | |
Payments on capital leases | | | (20,400) | | | (14,600) | |
Proceeds from assignment of call options | | | - | | | 1,000 | |
Net cash used in financing activities | | | (20,400) | | | (13,600) | |
Net decrease in cash | | | (764,500) | | | (433,600) | |
| | | | | | | |
Cash, beginning of period | | | 1,433,000 | | | 996,000 | |
| | | | | | | |
Cash, end of period | | $ | 668,500 | | $ | 562,400 | |
| | | | | | | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | | | | | | | |
Cash paid during the period for: | | | | | | | |
Income taxes | | $ | | | $ | | |
Interest | | $ | 2,500 | | $ | 4,800 | |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION | | | | | | | |
Acquisition of property and equipment under capital lease | | $ | - | | $ | 61,600 | |
5 | ||
6 | ||
7 | ||
8 | ||
9 | ||
10 | ||
| | September 30, 2013 | | December 31, 2012 (audited) | | ||
Payroll and related costs | | $ | 5,600 | | $ | 18,100 | |
Professional and consulting fees | | | 10,500 | | | 77,400 | |
Royalties | | | 636,900 | | | 858,300 | |
Stock price guarantee liabilities | | | 134,600 | | | 443,200 | |
Other | | | 132,800 | | | 115,800 | |
Total | | $ | 920,400 | | $ | 1,512,800 | |
| | Number of shares | | Weighted average exercise price per share | | ||
Options outstanding at December 31, 2012 | | | 7,000,000 | | $ | 0.043 | |
Granted | | | 2,000,000 | | | 0.092 | |
Cancelled or Expired | | | - | | | - | |
Exercised | | | | | | | |
Options outstanding at September 30, 2013 | | | 9,000,000 | | $ | 0.054 | |
11 | ||
| | Number of shares | | Weighted average exercise price per share | | ||
Options outstanding at December 31, 2012 | | | 3,000,000 | | $ | 0.145 | |
Granted | | | 1,500,000 | | | 0.092 | |
Cancelled or Expired | | | (1,500,000) | | | 0.145 | |
Exercised | | | - | | | - | |
Options outstanding at September 30, 2013 | | | 3,000,000 | | $ | 0.118 | |
| Number of shares | | Weighted average exercise price per share | | ||
Options outstanding at December 31, 2012 | | 8,000,000 | | $ | 0.095 | |
Granted | | - | | | - | |
Cancelled or Expired | | - | | | - | |
Exercised | | - | | | - | |
Options outstanding at September 30, 2013 | | 8,000,000 | | $ | 0.095 | |
12 | ||
| | Number of shares | | Weighted average exercise price per share | | ||
Options outstanding at December 31, 2012 | | | 30,582 | | $ | 0.001 | |
Granted | | | - | | | - | |
Cancelled or Expired | | | - | | | - | |
Exercised | | | - | | | - | |
Options outstanding at September 30, 2013 | | | 30,582 | | $ | 0.001 | |
| | September 30, 2013 | | | September 30, 2012 | |
Expected term (based upon historical experience) | | 5-6 years | | | <1 week | |
Expected volatility | | 130.36 | % | | 118.33 | % |
Expected dividends | | None | | | None | |
Risk free interest rate | | 0.01 | % | | 0.06 | % |
Exercise Prices | | Number of Shares | | Weighted Average Remaining Contractual Life | | Aggregate Intrinsic Value* | | ||||
$ | 0.001 | | | 30,582 | | | 1.12 | | $ | 3,181 | |
$ | 0.041 | | | 5,000,000 | | | 9.05 | | $ | 320,000 | |
$ | 0.048 | | | 2,000,000 | | | 9.19 | | $ | 114,000 | |
$ | 0.065 | | | 5,000,000 | | | 8.86 | | $ | 200,000 | |
$ | 0.092 | | | 3,500,000 | | | 9.64 | | $ | 45,500 | |
$ | 0.145 | | | 4,500,000 | | | 8.12 | | $ | - | |
weighted | | | 20,030,582 | | | 8.90 | | $ | 682,681 | |
13 | ||
| | | | Weighted average | | |
| Number of Shares | | exercise price per share | | ||
Options outstanding at December 31, 2012 | | 18,030,582 | | $ | 0.083 | |
Granted | | 3,500,000 | | $ | 0.092 | |
Cancelled or Expired | | (1,500,000) | | $ | 0.145 | |
Exercised | | - | | $ | - | |
Options outstanding at September 30, 2013 | | 20,030,582 | | $ | 0.080 | |
14 | ||
| | Fair Value | | ||||||
| | Level | | September 30, 2013 | | December 31, 2012 (audited) | | ||
Investments | | 1 | | | 237,600 | | | 142,800 | |
Royalty guarantee | | 2 | | | (22,800) | | | (79,000) | |
Advance guarantee | | 2 | | | (111,800) | | | (364,200) | |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
15 | ||
| | Three Months Ended September 30, | | |||||||
| | 2013 | | 2012 | | % Change | | |||
Merchandising and fulfillment | | $ | 112,000 | | $ | 1,515,300 | | | (93) | % |
Client services | | | 12,600 | | | 58,900 | | | (79) | % |
Touring revenues | | | 986,200 | | | 5,519,300 | | | (82) | % |
Total revenues | | $ | 1,110,800 | | $ | 7,093,500 | | | (84) | % |
16 | ||
| | Nine months Ended September 30, | | |||||||
| | 2013 | | 2012 | | % Change | | |||
Merchandising and fulfillment | | $ | 957,400 | | $ | 2,840,800 | | | (66) | % |
Client services | | | 46,600 | | | 337,400 | | | (86) | % |
Touring revenues | | | 2,107,800 | | | 7,482,900 | | | (72) | % |
Total revenues | | $ | 3,111,800 | | $ | 10,661,100 | | | (71) | % |
17 | ||
| | 2013 | | 2012 | | ||
Net loss | | $ | (156,100) | | $ | (3,586,000) | |
Depreciation and amortization | | | 57,800 | | | 56,000 | |
Loss on disposal of assets | | | 4,300 | | | - | |
Unrealized (gain) loss on investment | | | (94,800) | | | 24,400 | |
Share based compensation | | | 242,200 | | | 532,500 | |
Change in fair value of stock price guarantee | | | (308,600) | | | 919,500 | |
Amortization of prepaid facility costs | | | 176,700 | | | 287,400 | |
Fair value of stock options awarded to professionals and consultants in payment of fees for services provided | | | - | | | 2,126,800 | |
Fair value of stock options awarded to employees in payment of compensation | | | - | | | 40,000 | |
Deferred revenue | | | (139,300) | | | 43,300 | |
Changes in current assets and liabilities | | | (526,300) | | | (727,500) | |
Net cash used in operating activities | | $ | (744,100) | | $ | (283,600) | |
18 | ||
19 | ||
10.1 | Second Amendment to Lease Agreement by and between the Company and Forty Washington LLC. |
31.1 | CEO Certification required under Section 302 of Sarbanes-Oxley Act of 2002 |
31.2 | CFO Certification required under Section 302 of Sarbanes-Oxley Act of 2002 |
32.1 and 32.2 | CEO and CFO Certification required under Section 906 of Sarbanes-Oxley Act of 2002 |
101.INS | XBRL Instance Document (furnished herewith) |
101.SCH | XBRL Taxonomy Extension Schema (furnished herewith) |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase (furnished herewith) |
101.DEF | XBRL Taxonomy Extension Definition Linkbase (furnished herewith) |
101.LAB | XBRL Taxonomy Extension Label Linkbase (furnished herewith) |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase (furnished herewith) |
20 | ||
| | PAID, INC. | |
| | Registrant | |
| | | |
Date: | November 14, 2013 | By: | /s/ W. Austin Lewis, IV |
| | | W. Austin Lewis, IV, President, CEO and CFO (Principal Executive, Financial and Accounting Officer) |
Exhibit No. | | Description |
| | |
10.1 | | Second Amendment to Lease Agreement by and between the Company and Forty Washington LLC. |
31.1 | | CEO Certification required under Section 302 of Sarbanes-Oxley Act of 2002 |
31.2 | | CFO Certification required under Section 302 of Sarbanes-Oxley Act of 2002 |
32.1 and 32.2 | | CEO and CFO Certification required under Section 906 of Sarbanes-Oxley Act of 2002 |
101.INS | | XBRL Instance Document (furnished herewith) |
101.SCH | | XBRL Taxonomy Extension Schema (furnished herewith) |
101.CAL | | XBRL Taxonomy Extension Calculation Linkbase (furnished herewith) |
101.DEF | | XBRL Taxonomy Extension Definition Linkbase (furnished herewith) |
101.LAB | | XBRL Taxonomy Extension Label Linkbase (furnished herewith) |
101.PRE | | XBRL Taxonomy Extension Presentation Linkbase (furnished herewith) |
21 | ||
SECOND AMENDMENT TO LEASE AGREEMENT
This Second Amendment to Lease Agreement (“Second Amendment”) is made and shall be effective for all purposes as of the 12th day of November, 2013 by and between FORTY WASHINGTON LLC (“Landlord”), a Massachusetts limited liability company, having a principal place of business at 116 Flanders Road, Suite 2000, Westborough, Massachusetts 01581 and PAID, INC. (“Tenant”) a duly organized and existing Delaware corporation, having a principal place of business at 40 Washington Street, Suite 3000, Westborough, Massachusetts.
W I T N E S S E T H
WHEREAS, Tenant and Landlord entered into a Lease (“Lease”) dated December 7, 2011 for a total of 26,061 square feet at 40 Washington Street, Westborough, Massachusetts, and where Tenant and Landlord by approval of the First Amendment to Lease Agreement dated June 13, 2012 amended the Lease, and
WHEREAS, Landlord and Tenant desire to terminate the Lease and amend the Lease as more fully described hereinafter.
NOW THEREFORE, in consideration of the mutual promises herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Lease shall be amended as follows:
1. | Landlord and Tenant hereby incorporate all terms and provisions of the Lease herein as is specifically set forth, except as said terms are modified herein. Capitalized terms not specifically defined in this amendment shall have the same meaning given to terms in the Lease. |
2. | FIRST AMENDMENT TO LEASE AGREEMENT: |
A. | Item 2B, Stated Expiration Date: |
Delete: “The Stated Expiration Date is March 31, 2017.”
Insert: “The Stated Expiration Date is November 30, 2013.”
B. | Item 2C, Basic Rent: |
Delete: “From March 15, 2012 to March 31, 2017: $166,269.18 per annum ($13,855.77 per month).”
Insert: “From March 15, 2012 to November 30, 2013: $166,269.18 per annum ($13,855.77 per month).”
C. | Tenant’s Share: |
Delete: “From March 15, 2012 to March 31, 2017: 46.40%.”
Insert: “From March 15, 2012 to November 30, 2013: 46.40%.”
3. | LEASE, ARTICLE 26, MISCELLANEOUS: |
A. | Article 26.03, Brokerage: |
Insert: | “Tenant warrants and represents to Landlord that it has had no dealings with any broker or agent in connection with this Second Amendment to Lease Agreement and covenants to defend, with counsel approved by Landlord, hold harmless and indemnify Landlord from and against any and all cost, expense or liability for any compensation, commissions and charges claimed by any broker or agent with whom Tenant has dealt with.” |
B. | Insert: “Article 26.11, Termination Fee: Tenant shall forfeit the Security Deposit equal to Eighty Three Thousand One Hundred Thirty Four Dollars and Sixty Two Cents ($83,134.62) and pay an additional fee equal to Two Hundred Sixteen Thousand Eight Hundred Sixty Five Dollars and Thirty Eight Cents ($216,865.38) (collectively the “Termination Fee”) that shall be due with the signing of this Second Amendment to Lease Agreement.” |
C. | Insert: “Article 26.12, Reduced Termination Fee. In the event Tenant and Landlord execute a lease for space at one of Carruth Capital, LLC’s associated entities Section 26.11 shall not be applicable and the Termination Fee shall be as follows: Tenant shall forfeit the Security Deposit equal to Eighty Three Thousand One Hundred Thirty Four Dollars and Sixty Two Cents ($83,134.62) and pay an additional fee equal to One Hundred Sixty Six Thousand Eight Hundred Sixty Five Dollars and Thirty Eight Cents ($166,865.38) (collectively the “Reduced Termination Fee”) that shall be due with the signing of this Second Amendment to Lease Agreement.” |
D. | Insert: “Article 26.13, Possession: Tenant shall deliver possession of the Premises, including all keys to the Premises in Tenant’s possession no later than November 30, 2013. However, Tenant shall allow Landlord and the new tenant early access to the Premises to start the alterations effective November 1, 2013.” |
E. | Insert: “Article 26.14, Effective Date: The effective date of the Termination Agreement shall be November 30, 2013. The Tenant shall be responsible for all Rent and Additional Rent to November 30, 2013.” |
F. | Insert: “Article 26.15, Condition of Premises: Tenant shall deliver the Premises to Landlord on or before November 30, 2013 in its AS IS condition with all cubicles belonging to Landlord to remain as presently installed and configured. |
In all other respects, the Lease dated December 7, 2011 and the First Amendment to Lease Agreement dated June 13, 2012 are hereby ratified, confirmed, and approved.
No representations, inducement, promises or agreements, oral or otherwise, between Landlord and Tenant or any of their respective brokers, employees or agents, not embodied herein, shall be of any force or effect.
The submission of this Second Amendment to Lease Agreement for examination, review, negotiation and/or signature shall not constitute an offer or an option to lease or a reservation of the Premises and is subject to withdrawal or modification at any time by either party. This Second Amendment to Lease Agreement shall become effective and binding only if and when it shall be executed and delivered by both Landlord and Tenant.
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to Lease Agreement as of the date set forth above.
LANDLORD: | ||
FORTY WASHINGTON LLC | ||
By: Carruth Capital, LLC | ||
Its Manager | ||
By: /s/Christopher F. Egan | ||
Christopher F. Egan, President and Managing Member of Carruth Capital, LLC not individually and without personal liability. | ||
TENANT: | ||
PAID, INC. | ||
By: /s/W. Austin Lewis | ||
Printed Name: W. Austin Lewis | ||
Title: Chairman & CEO |
EXHIBIT 31.1
CERTIFICATION
I, W. Austin Lewis, IV, certify that:
1. I have reviewed this quarterly report on Form 10-Q of PAID, INC.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4. The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 1a-15(f)) for the Registrant and have:
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
5. The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
Date: November 14, 2013 | /s/ W. Austin Lewis, IV |
W. Austin Lewis, IV, President and CEO | |
(Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION
I, W. Austin Lewis, IV, certify that:
1. I have reviewed this quarterly report on Form 10-Q of PAID, INC.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4. The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 1a-15(f)) for the Registrant and have:
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
5. The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
Date: November 14, 2013 | /s/ W. Austin Lewis, IV |
W. Austin Lewis, IV, Chief Financial Officer | |
(Principal Financial and Accounting Officer) |
EXHIBITS 32.1 AND 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of PAID, INC. (the “Company”) on Form 10-Q for the quarter ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in his capacities as President and CEO of the Company and as CFO of the Company, certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ W. Austin Lewis, IV
W. Austin Lewis, IV, President, CEO
and CFO
(Principal Executive, Financial and
Accounting Officer)
November 14, 2013
Organization and Significant Accounting Policies (Details Textual) (USD $)
|
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2013
|
Sep. 30, 2012
|
Sep. 30, 2013
|
Sep. 30, 2012
|
Dec. 31, 2012
|
|
Net loss | $ 126,500 | $ (911,300) | $ (156,100) | $ (3,586,000) | $ 4,146,200 |
Accumulated deficit | (51,112,200) | (51,112,200) | (50,956,100) | ||
Allowance for Doubtful Accounts Receivable | 53,300 | 53,300 | 53,300 | ||
Advertising Expense | 2,300 | 4,000 | |||
Net Cash Provided by (Used in) Operating Activities, Total | (744,100) | (283,600) | |||
FDIC Indemnification Asset | 250,000 | 250,000 | |||
FDIC Indemnification Asset, Period Increase (Decrease) | $ 151,000 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 653,000 | 6,030,000 | |||
Sales Revenue, Goods, Net [Member]
|
|||||
Concentration Risk, Customer | 63.00% | 72.00% | |||
Patents [Member]
|
|||||
Finite-Lived Intangible Asset, Useful Life | 17 years | ||||
Minimum [Member]
|
|||||
Property, Plant and Equipment, Useful Life | 3 years | ||||
Maximum [Member]
|
|||||
Property, Plant and Equipment, Useful Life | 5 years |
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