Commitments and Contingencies

9 Months Ended

Sep. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 3. Commitments and Contingencies

Stock Price Guarantee

In connection with the Company’s advance royalties with a client, the Company guaranteed that shares of common stock would sell for at least $0.12 per share.  If the shares are not at the required $0.12 per share when they are sold, the Company has the option of issuing additional shares at their fair value or making a cash payment for the difference between the guaranteed price per share and the fair value of the stock.  As of September 30, 2015 and December 31, 2014, the stock price guarantee was $900,274 and $554,732, respectively, as the Company’s stock price was below $0.12 per share at September 30, 2015 and December 31, 2014, although any required payment would be disputed by the Company. For the three months ended September 30, 2015 and 2014, the Company recorded an unrealized loss on stock price guarantee of ($376,007) and ($157,939), respectively. For the nine months ended September 30, 2015 and 2014, the Company recorded an unrealized loss on stock price guarantee of ($345,542) and ($375,147), respectively.

Legal Matters

In the normal course of business, the Company periodically becomes involved in litigation. As of September 30, 2015, in the opinion of management, the Company had no pending litigation that would have a material adverse effect on the Company's financial position, results of operations, or cash flows.

The Company commenced on December 20, 2013 patent infringement litigation against eBay, Inc. (Paid, Inc. v. eBay, Inc.; CV No. 4:13-cv-40151-TSH) in the United States District Court for the District of Massachusetts Central Division.  On June 30, 2014, PAID and eBay, Inc. filed a joint motion to stay the district court litigation pending completion of eBay, Inc.’s petitions for covered business review that were filed with the Patent and Trial and Appeal Board (“PTAB”). On September 30, 2014, the PTAB announced that it had granted petitions filed by eBay, Inc. for covered business method review of PAID’s United States Patent Nos. 8,635,150, 8,521,642, 8,352,357, and 7,930,237, entitled “Method and System for Improved Online Auction.” On June 9, 2015, PAID and eBay, Inc. presented oral arguments to the Patent Trials Appeals Board. The results of the PTAB review were received on September 16, 2015 by PAID, Inc. and its counsel. The PTAB has entered a final ruling and has determined the claims have failed to claim patent eligible subject matter.

Indemnities and Guarantees

The Company has made certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party, in relation to certain actions or transactions. The Company indemnifies its directors, officers, employees and agents, as permitted under the laws of the State of Delaware. In connection with its facility lease, the Company has agreed to indemnify its lessor for certain claims arising from the use of the facilities. The duration of the guarantees and indemnities varies, and is generally tied to the life of the agreement. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated nor incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees in the accompanying condensed balance sheets.