0001683168-22-003473.txt : 20220512 0001683168-22-003473.hdr.sgml : 20220512 20220512090112 ACCESSION NUMBER: 0001683168-22-003473 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 54 CONFORMED PERIOD OF REPORT: 20220331 FILED AS OF DATE: 20220512 DATE AS OF CHANGE: 20220512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Paysign, Inc. CENTRAL INDEX KEY: 0001496443 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 954550154 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-38623 FILM NUMBER: 22915941 BUSINESS ADDRESS: STREET 1: 2615 ST. ROSE PARKWAY CITY: HENDERSON STATE: NV ZIP: 89052 BUSINESS PHONE: 702-453-2221 MAIL ADDRESS: STREET 1: 2615 ST. ROSE PARKWAY CITY: HENDERSON STATE: NV ZIP: 89052 FORMER COMPANY: FORMER CONFORMED NAME: 3PEA INTERNATIONAL, INC. DATE OF NAME CHANGE: 20100713 10-Q 1 paysign_i10q-033122.htm FORM 10-Q
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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2022

 

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to __________

 

Commission file number 001-38623

 

PAYSIGN, INC.

(Exact name of registrant as specified in its charter)

 

Nevada 95-4550154
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)

 

2615 St. Rose Parkway,

Henderson, Nevada 89052

(Address of principal executive offices)

 

(702) 453-2221

(Registrant’s telephone number, including area code)

 

                           N/A                           

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each Class Trading Symbol Name of each exchange on which registered
Common Stock, $0.001 par value per share PAYS

The NASDAQ Stock Market LLC

(The Nasdaq Capital Market)

  

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated Filer Accelerated Filer
Non-accelerated Filer Smaller reporting company
  Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 52,001,932 shares as of May 6, 2022.

 

 

 

   

 

 

PAYSIGN, INC.

 

FORM 10-Q REPORT

INDEX

 

PART I. FINANCIAL INFORMATION  
   
Item 1. Financial Statements. 3
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 15
   
Item 3. Quantitative and Qualitative Disclosures about Market Risk. 21
 
Item 4. Controls and Procedures. 21
   
PART II. OTHER INFORMATION.  
   
Item 1. Legal Proceedings. 22
   
Item 1A. Risk Factors. 22
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 22
   
Item 6. Exhibits. 22
   
SIGNATURES 23

 

 

 

 

 

 

 2 

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

PAYSIGN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

           
  

March 31,
2022

(Unaudited)

  

December 31,
2021

(Audited)

 
ASSETS          
Current assets          
Cash  $8,455,671   $7,387,156 
Restricted cash   64,677,683    61,283,914 
Accounts receivable   3,405,867    3,393,940 
Other receivables   1,019,218    1,019,218 
Prepaid expenses and other current assets   1,625,631    1,242,967 
Total current assets   79,184,070    74,327,195 
           
Fixed assets, net   1,519,799    1,642,981 
Intangible assets, net   4,205,833    4,086,962 
Operating lease right-of-use asset   3,900,851    3,993,655 
           
Total assets  $88,810,553   $84,050,793 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
Current liabilities          
Accounts payable and accrued liabilities  $6,954,565   $5,765,478 
Operating lease liability, current portion   345,544    340,412 
Customer card funding   64,677,683    61,283,914 
Total current liabilities   71,977,792    67,389,804 
           
Operating lease liability, long term portion   3,584,851    3,673,186 
           
Total liabilities   75,562,643    71,062,990 
Commitments and contingencies (Note 8)        
Stockholders' equity          
Preferred stock: $0.001 par value; 25,000,000 shares authorized; none issued and outstanding        
Common stock; $0.001 par value; 150,000,000 shares authorized, 52,218,382 and 52,095,382 issued at March 31, 2022 and December 31, 2021, respectively   52,218    52,095 
Additional paid-in capital   17,429,498    16,860,119 
Treasury stock at cost, 303,450 shares   (150,000)   (150,000)
Accumulated deficit   (4,083,806)   (3,774,411)
Total stockholders' equity   13,247,910    12,987,803 
           
Total liabilities and stockholders' equity  $88,810,553   $84,050,793 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

 

 

 3 

 

 

PAYSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

           
   Three Months Ended
March 31,
 
   2022   2021 
Revenues          
Plasma industry  $7,394,364   $5,383,151 
Pharma industry   806,568    882,830 
Other   19,707    13,447 
Total revenues   8,220,639    6,279,428 
           
Cost of revenues   3,222,390    3,447,622 
           
Gross profit   4,998,249    2,831,806 
           
Operating expenses          
Selling, general and administrative   4,640,912    3,864,986 
Depreciation and amortization   679,171    595,848 
Total operating expenses   5,320,083    4,460,834 
           
Loss from operations   (321,834)   (1,629,028)
           
Other income          
Interest income, net   14,336    7,101 
           
Loss before income tax provision   (307,498)   (1,621,927)
Income tax provision   1,897    1,600 
           
Net loss  $(309,395)  $(1,623,527)
           
Net loss per share          
Basic  $(0.01)  $(0.03)
Diluted  $(0.01)  $(0.03)
           
Weighted average common shares          
Basic   51,818,676    50,351,971 
Diluted   51,818,676    50,351,971 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

 

 

 

 

 4 

 

 

PAYSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

 

 

                               
   Common Stock   Additional
Paid-in
   Treasury
Stock
   Accumulated   Total Stockholders’ 
   Shares   Amount   Capital   Amount   Deficit   Equity 
Balance, December 31, 2021   52,095,382   $52,095   $16,860,119   $(150,000)  $(3,774,411)  $12,987,803 
                               
Stock issued upon vesting of restricted stock   123,000    123    (123)            
Stock-based compensation           569,502            569,502 
Net loss                   (309,395)   (309,395)
Balance, March 31, 2022   52,218,382   $52,218   $17,429,498   $(150,000)  $(4,083,806)  $13,247,910 

 

   Common Stock   Additional
Paid-in
   Treasury
Stock
   Accumulated   Total Stockholders’ 
   Shares   Amount   Capital   Amount   Deficit   Equity 
Balance, December 31, 2020   50,251,607   $50,252   $14,388,890   $(150,000)  $(1,053,077)  $13,236,065 
                               
Stock issued upon vesting of restricted stock   466,689    467    (467)            
Exercise of stock options   32,586    32    110,434             
Stock-based compensation           636,214            636,214 
Net loss                   (1,623,527)   (1,623,527)
Balance, March 31, 2021   50,750,882   $50,751   $15,135,071   $(150,000)  $(2,676,604)  $12,359,218 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

 

 

 

 

 5 

 

 

PAYSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

           
   Three Months Ended
March 31,
 
   2022   2021 
Cash flows from operating activities:          
Net loss  $(309,395)  $(1,623,527)
Adjustments to reconcile net loss to net cash provided by operating activities:          
Stock-based compensation expense   569,502    636,214 
Depreciation and amortization   679,171    595,848 
Noncash lease expense   92,804    105,704 
Changes in operating assets and liabilities:          
Accounts receivable   (11,927)   19,283 
Prepaid expenses and other current assets   (382,664)   (572,620)
Accounts payable and accrued liabilities   1,189,087    149,429 
Operating lease liability   (83,203)   (78,369)
Customer card funding   3,393,769    10,672,537 
Net cash provided by operating activities   5,137,144    9,904,499 
           
Cash flows from investing activities:          
Purchase of fixed assets   (12,787)   (124,696)
Capitalization of internally developed software   (635,325)   (473,996)
Purchase of intangible assets   (26,748)   (13,511)
Net cash used in investing activities   (674,860)   (612,203)
           
Cash flows from financing activities:          
Proceeds from exercise of stock options       110,466 
Net cash provided by financing activities       110,466 
           
Net change in cash and restricted cash   4,462,284    9,402,762 
Cash and restricted cash, beginning of period   68,671,070    55,930,404 
           
Cash and restricted cash, end of period  $73,133,354   $65,333,166 
           
Cash and restricted cash reconciliation:          
Cash   8,455,671    6,559,678 
Restricted cash   64,677,683    58,773,488 
Total cash and restricted cash  $73,133,354   $65,333,166 
Supplemental cash flow information:          
Non-cash financing activities          
Interest paid  $221   $ 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

 

 6 

 

 

PAYSIGN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

 

1.     BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES

 

The foregoing unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the disclosures required by GAAP for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended December 31, 2021. In the opinion of management, the unaudited interim condensed consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.

 

The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company’s financial position and results of operations.

 

Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

 

Impact of COVID-19 Pandemic

 

The coronavirus (COVID-19) pandemic, which started in late 2019 and reached the United States in early 2020, continues to significantly impact the economy of the United States and the rest of the world. While the disruption appears to be mitigating due to the availability of vaccines and other factors, the ultimate duration and severity of the pandemic remain uncertain, particularly given the development of new variants that continue to spread. The COVID-19 outbreak caused plasma center closures, and the stimulus packages signed into law during 2020 and 2021 reduced the incentive for individuals to donate plasma for supplementary income. Those developments have had and will continue to have an adverse impact on the Company’s results of operations. While we remain cautiously optimistic and have seen improvements in our operating results on an aggregated basis, we cannot foresee how long it may take the Company to attain pre-pandemic operating levels on a per plasma donation center basis as COVID-19 related labor shortages at plasma donation centers, border closures, and other effects continue to weigh on the Company’s results of operations. Given the uncertainty around the extent and timing of the potential future spread or mitigation of COVID-19 and variants and around the imposition or relaxation of protective measures, management cannot at this time estimate with reasonable accuracy COVID-19’s further impact on the Company’s results of operations, cash flows or financial condition.

 

Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law in 2020 and the subsequent extension of the CARES Act through September 30, 2021, the Company was eligible for a refundable employee retention credit subject to certain criteria. The Company has elected an accounting policy to recognize the government assistance when it is probable that the Company is eligible to receive the assistance and present the credit be as a reduction of the related expense. As of March 31, 2022 and December 31, 2021 the Company has recorded $876,456 in other receivables on the condensed consolidated balance sheet related to refunds filed in the fourth quarter of 2021.

 

 

 

 

 7 

 

 

About Paysign, Inc.

 

Paysign, Inc. (the “Company,” “Paysign,” “we” or “our”) was incorporated on August 24, 1995, and trades under the symbol PAYS on The Nasdaq Stock Market LLC. Paysign. is a provider of prepaid card programs, comprehensive patient affordability offerings, digital banking services and integrated payment processing designed for businesses, consumers and government institutions. Headquartered in Nevada, the company creates customized, innovative payment solutions for clients across all industries, including pharmaceutical, healthcare, hospitality and retail.

 

Principles of Consolidation – The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated.

 

Reclassifications – Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period financial statement presentations.

 

Use of Estimates – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and (iii) the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and Cash Equivalents – The Company considers all highly liquid investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents for the purposes of the statement of cash flows. The Company had no cash equivalents at March 31, 2022 and 2021.

 

Restricted Cash – At March 31, 2022 and December 31, 2021, restricted cash consisted of funds held specifically for our card product programs that are contractually restricted to use. The Company includes changes in restricted cash balances with cash and cash equivalents when reconciling the beginning and ending total amounts in our condensed consolidated statements of cash flows.

 

Concentrations of Credit Risk – Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and restricted cash. Paysign maintains its cash and cash equivalents and restricted cash in various bank accounts that, at times, may exceed federally insured limits. Paysign has not experienced, nor does it anticipate, any losses with respect to such accounts. At March 31, 2022 and December 31, 2021, the Company had approximately $29,195,396 and $31,828,826 in excess of federally insured bank account limits, respectively.

 

The Company also has a concentration of accounts receivable risk at March 31, 2022 as two Pharma program customers associated with our Pharma copay programs each individually represent 51% and 15% of our accounts receivable balance. Two Pharma program customers each individually represented 52% and 17% of our accounts receivable balance at December 31, 2021.

 

Fixed Assets – Fixed assets are stated at cost less accumulated depreciation. Depreciation is principally recorded on the straight-line method over the estimated useful life of the asset, which is generally 3 to 10 years. The cost of repairs and maintenance is charged to expense as incurred. Leasehold improvements are capitalized and depreciated over the shorter of the remaining lease term or the estimated useful life of the improvements. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).

 

The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.

 

 

 

 

 8 

 

 

Intangible Assets – For intangible assets, the Company recognizes an impairment loss if the carrying amount of the intangible asset is not recoverable and exceeds fair value. The carrying amount of the intangible asset is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset.

 

Intangible assets with a finite life are amortized on a straight-line basis over its estimated useful life.

 

Internally Developed Software Costs - Computer software development costs are expensed as incurred, except for internal use software or website development costs that qualify for capitalization as described below, and include compensation and related expenses, costs of hardware and software, and costs incurred in developing features and functionality.

  

For computer software developed or obtained for internal use, costs that are incurred in the preliminary project and post implementation stages of software development are expensed as incurred. Costs incurred during the application and development stage are capitalized. Capitalized costs are amortized using the straight-line method over a 3 to 5 year estimated useful life, beginning in the period in which the software is available for use.

 

Customer Card Funding – At March 31, 2022 and December 31, 2021, customer card funding represents funds loaded on our prepaid card programs.

 

Earnings Per Share – Basic earnings per share exclude any dilutive effects of options, warrants and convertible securities. Basic earnings per share is computed using the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is computed using the weighted average number of common and common stock equivalent shares outstanding during the period, using the treasury stock method. Common stock equivalent shares are excluded from the computation if their effect is anti-dilutive.

 

Revenue and Expense Recognition – In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contracts with customers; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

 

The Company generates revenues from Plasma card programs through fees generated from cardholder fees and interchange fees. Revenues from Pharma card programs are generated through card program management fees, interchange fees, and settlement income.

 

Plasma and Pharma card program revenues include both fixed and variable components. Cardholder fees represent an obligation to the cardholder based on a per transaction basis and recognized at a point in time when the performance obligation is fulfilled. Card program management fees include an obligation to our card program sponsors and are generally recognized when earned on a monthly basis and paid typically due within 30 days pursuant to the contract terms which are generally multi-year contracts. The Company uses the output method to recognize card program management fee revenue at the amount of consideration to which an entity has a right to invoice. The performance obligation is satisfied when the services are transferred to the customer which the Company determined to be monthly, as the customers simultaneously receives and consumes the benefit from the Company’s performance. Interchange fees are earned when customer-issued cards are processed through card payment networks as the nature of our promise to the customer is that we stand ready to process transactions at the customer’s requests on a daily basis over the contract term. Since the timing and quantity of transactions to be processed by us is not determinable, we view interchange fees to comprise an obligation to stand ready to process as many transactions as the customer requests. Accordingly, the promise to stand ready is accounted for as a single series performance obligation. The Company uses the right to invoice practical expedient and recognizes interchange fee revenue concurrent with the processing of card transactions. Interchange fees are settled in accordance with the card payment network terms and conditions, which is typically within a few days.

 

The Company utilizes the remote method of revenue recognition for settlement income whereby the unspent balances will be recognized as revenue at the expiration of the cards and the respective program. The Company records all revenue on a gross basis since it is the primary obligor and establishes the price in the contract arrangement with its customers. The Company is currently under no obligation for refunding any fees, and the Company does not currently have any obligations for disputed claim settlements. Given the nature of the Company’s services and contracts, it has no contract assets.

 

 

 

 

 9 

 

 

Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, and sales and commission expense. 

 

Operating leases – The Company determines if a contract is or contains a leasing element at contract inception or the date in which a modification of an existing contract occurs. In order for a contract to be considered a lease, the contract must transfer the right to control the use of an identified asset for a period of time in exchange for consideration. Control is determined to have occurred if the lessee has the right to (i) obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use and (ii) direct the use of the identified asset.

  

In determining the present value of lease payments at lease commencement date, the Company utilizes its incremental borrowing rate based on the information available, unless the rate implicit in the lease is readily determinable. The liability for operating leases is based on the present value of future lease payments. Operating lease expenses are recorded as rent expense, which is included within selling, general and administrative expenses within the consolidated statements of operations and presented as operating cash outflows within the consolidated statements of cash flows.

 

Leases with an initial term of 12 months or less are not recorded on the balance sheet, with lease expense for these leases recognized on a straight-line basis over the lease term.

 

Stock-Based Compensation – The Company recognizes compensation expense for all restricted stock awards and stock options. The fair value of restricted stock awards is measured using the grant date trading price of our stock. The fair value of stock options is estimated at the grant date using the Black-Scholes option-pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. We have elected to recognize compensation expense for all options with graded vesting on a straight-line basis over the vesting period of the entire option. The determination of fair value using the Black-Scholes pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility and the risk-free interest rate.

 

Recently Issued Accounting Pronouncements – In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which provides updated guidance on how an entity should measure credit losses on all financial instruments carried at amortized cost (including loans held for investment and held-to-maturity debt securities, as well as trade receivables, reinsurance recoverables, and receivables that relate to repurchase agreements and securities lending agreements), a lessor’s net investments in leases, and off-balance sheet credit exposures not accounted for as insurance or as derivatives, including loan commitments, standby letters of credit, and financial guarantees. Subsequently, in November 2018 the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments–Credit Losses (“ASU 2018-19”), which clarified that receivables arising from operating leases are not within the scope of Subtopic 326-20, but instead should be accounted for in accordance with Topic 842, Leases. In March 2022 the FASB issued ASU No. 2022-02, Financial Instruments—Credit Losses: Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) which clarified accounting treatment required for trouble debt restructurings by creditors and enhanced disclosures for write-offs. The new standard and related amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the impact of adopting this guidance on our Financial Statements; however, we do not expect it to have a material impact on the Company’s consolidated financial statements.

 

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). This ASU requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606). This guidance is effective for the Company beginning on January 1, 2023 and is not expected to have a material impact on the Company’s consolidated financial statements.

 

 

 

 

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2.     FIXED ASSETS, NET

 

Fixed assets consist of the following:

          
   March 31,
2022
   December 31,
2021
 
Equipment  $2,080,621   $2,067,834 
Software   315,855    315,855 
Furniture and fixtures   757,662    757,662 
Website costs   69,881    69,881 
Leasehold improvements   229,772    229,772 
    3,453,791    3,441,004 
Less: accumulated depreciation   1,933,992    1,798,023 
Fixed assets, net  $1,519,799   $1,642,981 

 

Depreciation expense for the three months ended March 31, 2022 and 2021 was $135,969 and $131,951, respectively.

 

3.     INTANGIBLE ASSETS, NET

  

Intangible assets consist of the following:

          
   March 31,
2022
   December 31,
2021
 
Patents and trademarks  $38,186   $38,186 
Platform   10,515,896    9,853,823 
Customer lists and contracts   1,177,200    1,177,200 
Licenses   209,282    209,282 
    11,940,564    11,278,491 
Less: accumulated amortization   7,734,731    7,191,529 
Intangible assets, net  $4,205,833   $4,086,962 

 

Amortization expense for the three months ended March 31, 2022 and 2021 was $543,202 and $463,897, respectively.

 

4.     LEASE

 

The Company entered into an operating lease for office space which became effective in June 2020. The lease term is 10 years from the effective date and allows for two optional extensions of five years each. The two optional extensions are not recognized as part of the right-of-use asset or lease liability since it is not reasonably certain that the Company will extend this lease. As of March 31, 2022, the remaining lease term was 8.2 years and the discount rate was 6%.

 

Operating lease cost included in selling, general and administrative expenses was $183,241 and $215,144 for the three months ended March 31, 2022 and 2021, respectively. Cash paid for the operating lease was $142,992 for both the three months ended March 31, 2022 and 2021.

 

 

 

 

 11 

 

 

The following is the lease maturity analysis of our operating lease as of March 31, 2022:

 

Twelve months ending March 31,

     
2023  $571,968 
2024   571,968 
2025   571,968 
2026   629,165 
2027   640,604 
Thereafter   2,028,580 
Total lease payments   5,014,253 
Less: Imputed interest   (1,083,858)
Present value of future lease payments   3,930,395 
Less: current portion of lease liability   (345,544)
Long-term portion of lease liability  $3,584,851 

 

5.     CUSTOMER CARD FUNDING LIABILITY

 

The Company issues prepaid cards with various provisions for cardholder fees or expiration. Revenue generated from cardholder transactions and interchange fees are recognized when the Company’s performance obligation is fulfilled. Unspent balances left on Pharma cards are recognized as settlement income at the expiration of the cards and the program. Contract liabilities related to prepaid cards represent funds on card and client funds held to be loaded to card before the amounts are ultimately spent by the cardholders or recognized as revenue by the Company. Contract liabilities related to prepaid cards are reported as Customer card funding liability on the condensed consolidated balance sheet.

 

The opening and closing balances of the Company's contract liabilities are as follows:

          
  

Three Months Ended

March 31,

 
   2022   2021 
Beginning balance  $61,283,914   $48,100,951 
Increase (decrease), net   3,393,769    10,672,537 
Ending balance  $64,677,683   $58,773,488 

 

The amount of revenue recognized during the three months ended March 31, 2022 and 2021 that was included in the opening contract liability for prepaid cards was $1,485,005 and $1,023,055, respectively.

  

6.     COMMON STOCK

 

At March 31, 2022, the Company's authorized capital stock was 150,000,000 shares of common stock, par value $0.001 per share, and 25,000,000 shares of preferred stock, par value $0.001 per share. On that date, the Company had 52,218,382 shares of common stock issued and 51,914,932 shares of common stock outstanding, and no shares of preferred stock outstanding.

 

 

 

 

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Stock-based compensation expense related to Company grants for the three months ended March 31, 2022 was $569,502. Stock-based compensation expense for the three months ended March 31, 2021 was $636,214.

 

2022 Transactions: During the three months ended March 31, 2022 the Company issued 123,000 shares of common stock for vested stock awards.

 

2021 Transactions: During the three months ended March 31, 2021 the Company issued 499,275 shares of common stock for vested stock awards and the exercise of stock options and received proceeds of $110,466.

 

7.        BASIC AND FULLY DILUTED NET LOSS PER COMMON SHARE

 

The following table sets forth the computation of basic and fully diluted net loss per common share for the three months ended March 31, 2022 and 2021: 

          
  

Three Months Ended

March 31,

 
   2022   2021 
Numerator:          
Net loss  $(309,395)  $(1,623,527)
Denominator:          
Weighted average common shares:          
Denominator for basic calculation   51,818,676    50,351,971 
Weighted average effects of potentially diluted common stock:          
Stock options (calculated using the treasury method)        
Unvested restricted stock grants        
Denominator for fully diluted calculation   51,818,676    50,351,971 
Net loss per common share:          
Basic  $(0.01)  $(0.03)
Fully diluted  $(0.01)  $(0.03)

 

Due to the net loss for the three months ended March 31, 2022, the effect of all potential common share equivalents was anti-dilutive, and therefore, all such shares were excluded from the computation of diluted weighted average shares outstanding for that period. For the three months ended March 31, 2022, the amount of potential common share equivalents excluded were 1,891,800 for stock options and 1,254,000 for unvested restricted stock awards. Due to the net loss for the three months ended March 31, 2021, the effect of all potential common share equivalents was anti-dilutive, and therefore, all such shares were excluded from the computation of diluted weighted average shares outstanding for that period. For the three months ended March 31, 2021, the amount of potential common share equivalents excluded were 2,241,014 for stock options and 1,975,000 for unvested restricted stock awards.

 

8.        COMMITMENTS AND CONTINGENCIES

 

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

 

 

 

 

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The Company has been named as a defendant in three complaints filed in the United States District Court for the District of Nevada: Yilan Shi v. Paysign, Inc. et. al., filed on March 19, 2020 (“Shi”), Lorna Chase v. Paysign, Inc. et. al., filed on March 25, 2020 (“Chase”), and Smith & Duvall v. Paysign, Inc. et. al., filed on April 2, 2020 (collectively, the “Complaints” or “Securities Class Action”). Smith & Duvall v. Paysign, Inc. et. al. was voluntarily dismissed on May 21, 2020. On May 18, 2020, the Shi plaintiffs and another entity called the Paysign Investor Group each filed a motion to consolidate the remaining Shi and Chase actions and to be appointed lead plaintiff. The Complaints are putative class actions filed on behalf of a class of persons who acquired the Company’s common stock from March 19, 2019 through March 31, 2020, inclusive. The Complaints generally allege that the Company, Mark Newcomer, and Mark Attinger violated Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), and that Messrs. Newcomer and Attinger violated Section 20(a) of the Exchange Act, by making materially false or misleading statements, or failing to disclose material facts, regarding the Company’s internal control over financial reporting and its financial statements. The Complaints seek class action certification, compensatory damages, and attorney’s fees and costs. On December 2, 2020, the Court consolidated Shi and Chase as In re Paysign, Inc. Securities Litigation and appointed the Paysign Investor Group as lead plaintiff. On January 12, 2021, Plaintiffs filed an Amended Complaint in the consolidated action. Defendants filed a Motion to Dismiss the Amended Complaint on March 15, 2021, which Plaintiffs opposed via an opposition brief filed on April 29, 2021, to which Defendants replied on June 1, 2021. Thus, the motion is now fully briefed. The Court has not set a hearing date on the motion, or informed the parties whether it intends to entertain oral argument or rule upon the papers filed. As of the date of this filing, Paysign cannot give any meaningful estimate of likely outcome or damages.

 

The Company has also been named as a nominal defendant in two stockholder derivative actions in the United States District Court for the District of Nevada. The first derivative action is entitled Andrzej Toczek, derivatively on behalf of Paysign, Inc. v. Mark R. Newcomer, et al. and was filed on September 17, 2020. This action alleges violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, and waste, largely in connection with the failure to correct information technology controls over financial reporting alleged in the Securities Class Action, thereby causing the Company to face exposure in the Securities Class Action. The complaint also alleges insider trading violations against certain individual defendants. On December 16, 2020, the Court approved a stipulation staying the action until the Court in the consolidated Securities Class Action issues a ruling on the Motion to Dismiss. The second derivative action is entitled John K. Gray, derivatively on behalf of Paysign, Inc. v. Mark Attinger, et al. and was filed on May 9, 2022. This action involves the same alleged conduct raised in the Toczek action and asserts claims for breach of fiduciary duty in connection with financial reporting, breach of fiduciary duty in connection with alleged insider trading against certain individual defendants, and unjust enrichment. The Gray action has not yet been served on the Company, and thus no response date is currently pending. As of the date of this filing, Paysign cannot give any meaningful estimate of likely outcome or damages.

 

9.        RELATED PARTY

 

A member of our Board of Directors is also a partner in a law firm that the Company engages for services to review regulatory filings and for various other legal matters. The Company incurred legal expense of $40,734 during the three months ended March 31, 2022 with the related party law firm. During the three months ended March 31, 2021 the Company incurred legal expense of $252,836, with the related party law firm.

 

10.        INCOME TAX PROVISION

 

The effective tax rate (income tax provision as a percentage of loss before income tax provision) was (0.6%) for the three months ended March 31, 2022, as compared to (0.1%) for the three months ended March 31, 2021. The effective tax rate for the three months ended March 31, 2022 varies from the three months ended March 31, 2021 primarily as a result of the full valuation on our deferred tax asset in both the current and prior period and the tax benefit related to our stock-based compensation and a pretax loss in the prior year period. As of March 31, 2022, management believes that its more-likely-than-not that the Company’s net deferred tax assets would not be realized in the near future, thus a full valuation allowance on its deferred tax assets remains in place.

 

11.        SUBSEQUENT EVENT

 

Except for the matter disclosed in Note 8, management has not identified any additional material subsequent events to disclose.

 

 

 

 

 

 

 

 

 

 

 

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Item 2. Management’s discussion and analysis of financial condition and results of operations.

 

Disclosure Regarding Forward-Looking Statements

 

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (“Forward-Looking Statements”). All statements other than statements of historical fact included in this report are Forward-Looking Statements. These Forward-Looking Statements are based on our current expectations, assumptions, estimates and projections about our business and our industry. Words such as "believe," "anticipate," "expect," "intend," "plan," “propose,” "may," and other similar expressions identify Forward-Looking statements. In the normal course of our business, we, in an effort to help keep our shareholders and the public informed about our operations, may from time-to-time issue certain statements, either in writing or orally, that contain, or may contain, Forward-Looking Statements. Although we believe that the expectations reflected in such Forward-Looking Statements are reasonable, we can give no assurance that such expectations will prove to have been correct. In addition, any statements that refer to expectations, projections, estimates, forecasts, or other characterizations of future events or circumstances are Forward-Looking Statements. These Forward-Looking Statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the Forward-Looking Statements. Such important factors (“Important Factors”) and other factors are disclosed in this report, including those factors discussed in “Part II - Item 1A. Risk Factors.” All prior and subsequent written and oral Forward-Looking Statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the Important Factors described below that could cause actual results to differ materially from our expectations as set forth in any Forward-Looking Statement made by or on behalf of us. You are cautioned not to place undue reliance on these Forward-Looking Statements, which relate only to events as of the date on which the statements are made. We undertake no obligation to publicly revise these Forward-Looking Statements to reflect events or circumstances that arise after the date hereof. You should refer to and carefully review the information in future documents we file with the Securities and Exchange Commission.

 

Overview

 

Paysign, Inc. (the “Company,” “Paysign,” “we” or “our”), headquartered in Nevada, was incorporated on August 24, 1995, and trades under the symbol PAYS on The Nasdaq Stock Market LLC. Paysign is a vertically integrated provider of prepaid card products and processing services for corporate, consumer and government applications. Our payment solutions are utilized by our corporate customers as a means to increase customer loyalty, increase patient adherence rates, reduce administration costs and streamline operations. Public sector organizations can utilize our payment solutions to disburse public benefits or for internal payments. We market our prepaid card solutions under our Paysign® brand. As we are a payment processor and prepaid card program manager, we derive our revenue from all stages of the prepaid card lifecycle.

 

We provide a card processing platform consisting of proprietary systems and software applications based on the unique needs of our clients. We have extended our processing business capabilities through our proprietary Paysign platform. Through the Paysign platform, we provide a variety of services including transaction processing, cardholder enrollment, value loading, cardholder account management, reporting, and customer service. The Paysign platform was built on modern cross-platform architecture and designed to be highly flexible, scalable and customizable. The platform’s flexibility and ease of customization has allowed us to expand our operational capabilities by facilitating our entry into new markets within the payments space. The Paysign platform delivers cost benefits and revenue building opportunities to our partners.

 

We have developed prepaid card programs for corporate incentive and rewards including, but not limited to, consumer rebates and rewards, donor compensation, clinical trials, healthcare reimbursement payments and pharmaceutical payment assistance. We have expanded our product offerings to include additional corporate incentive products and demand deposit accounts accessible with a debit card. In the future, we expect to further expand our product offerings into other prepaid card offerings such as payroll cards, travel cards, and expense reimbursement cards. Our cards are sponsored by our issuing bank partners.

 

 

 

 

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Our revenues include fees generated from cardholder fees, interchange, card program management fees, and settlement income. Revenue from cardholder fees, interchange and card program management fees is recorded when the performance obligation is fulfilled. Settlement income is recorded at the expiration of the card program.

 

We have two categories for our prepaid debit cards: (1) corporate and consumer reloadable cards, and (2) non-reloadable cards.

 

Reloadable Cards: These types of cards are generally classified as payroll or considered general purpose reloadable (“GPR”) cards. Payroll cards are issued by an employer to an employee in order to allow the employee to access payroll amounts that are deposited into an account linked to their card. GPR cards can also be issued to a consumer at a retail location or mailed to a consumer after completing an on-line application. GPR cards can be reloaded multiple times with a consumer’s payroll, government benefit, a federal or state tax refund or through cash reload networks located at retail locations. Reloadable cards are generally open-loop cards as described below.

  

Non-Reloadable Cards: These are generally one-time use cards that are only active until the funds initially loaded to the card are spent. These types of cards are generally used as gift or incentive cards. Normally these types of cards are used for purchase of goods or services at retail locations and cannot be used to receive cash.

 

Both reloadable and non-reloadable cards may be open-loop, closed-loop, or restricted-loop. Open-loop cards can be used to receive cash at ATM locations by PIN; or purchase goods or services by PIN or signature at retail locations virtually anywhere that the network brand (American Express, Discover, MasterCard, Visa, etc.) is accepted. Closed-loop cards can only be used at a specific merchant. Restricted-loop cards can be used at several merchants, or a defined group of merchants, such as all merchants at a specific shopping mall.

 

The prepaid card market in the U.S. has experienced significant growth in recent years due to consumers and merchants embracing improved technology, greater convenience, more product choices and greater flexibility. Prepaid cards have also proven to be an attractive alternative to traditional bank accounts for certain segments of the population, particularly those without, or who could not qualify for, a checking or savings account.

 

We manage all aspects of the prepaid card lifecycle, from managing the card design and approval processes with partners and networks, to production, packaging, distribution, and personalization. We also oversee inventory and security controls, renewals, lost and stolen card management, and replacement. We deploy a fully staffed, in-house customer service department which utilizes bilingual customer service representatives, Interactive Voice Response (“IVR”), and two-way short message service (“SMS”) messaging and text alerts.

 

Currently, we are focusing our marketing efforts on corporate incentive and expense prepaid card products in various market verticals including but not limited to general corporate expense, healthcare related markets including co-pay assistance, clinical trials and donor compensation, loyalty rewards, and incentive cards.

 

As part of our continuing platform expansion process, we evaluate current and emerging technologies for applicability to our existing and future software platform. To this end, we engage with various hardware and software vendors in evaluation of various infrastructure components. Where appropriate, we use third-party technology components in the development of our software applications and service offerings. Third-party software may be used for highly specialized business functions, which we may not be able to develop internally within time and budget constraints. Our principal target markets for processing services include prepaid card issuers, retail and private-label issuers, small third-party processors, and small and mid-size financial institutions in the United States and Mexico.

  

We have devoted more extensive resources to sales and marketing activities as we have added essential personnel to our marketing and sales team. We market our Paysign payment solutions through direct marketing by the Company’s sales team. Our primary market focus is on companies and municipalities that require a streamlined payment solution for rewards, rebates, payment assistance, and other payments to their customers, employees, agents and others. To reach these markets, we focus our sales efforts on direct contact with our target market and attendance at various industry specific conferences. We may, at times, utilize independent contractors who make direct sales and are paid on a commission basis only. We market our Paysign Premier product through existing communication channels to a targeted segment of our existing cardholders, as well as to a broad group of individuals, ranging from non-banked to fully banked consumers with a focus on long term users of our product.

 

 

 

 

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In 2022, we plan to continue to invest additional funds in technology improvements, sales and marketing, customer service, and regulatory compliance. From time to time, we evaluate raising capital to enable us to diversify into new market verticals. If we do not raise new capital, we believe that we will still be able to expand into new markets using internally generated funds.

 

The coronavirus (“COVID-19”) pandemic, which started in late 2019 and reached the United States in early 2020, continues to significantly impact the economy of the United States and the rest of the world. While the disruption appears to be mitigating due to the availability of vaccines and other factors, the ultimate duration and severity of the pandemic remain uncertain, particularly given the development of new variants that continue to spread. The COVID-19 outbreak caused plasma center closures, and the stimulus packages signed into law during 2020 and 2021 reduced the incentive for individuals to donate plasma for supplementary income. Those developments have had and will continue to have an adverse impact on the Company’s results of operations. While we remain cautiously optimistic and have seen improvements in our operating results on an aggregated basis, we cannot foresee how long it may take the Company to attain pre-pandemic operating levels on a per plasma donation center basis as COVID-19 related labor shortages at plasma donation centers, border closures, and other effects continue to weigh on the Company’s results of operations. Given the uncertainty around the extent and timing of the potential future spread or mitigation of COVID-19 and variants and around the imposition or relaxation of protective measures, management cannot at this time estimate with reasonable accuracy COVID-19’s further impact on the Company’s results of operations, cash flows or financial condition.

 

Results of Operations

 

Three Months Ended March 31, 2022 and 2021

 

The following table summarizes our consolidated financial results:

 

  

Three Months Ended

March 31,

(unaudited)

   Variance 
   2022   2021   $   % 
Revenues                    
Plasma industry  $7,394,364   $5,383,151   $2,011,213    37.4% 
Pharma industry   806,568    882,830    (76,262)   (8.6%)
Other   19,707    13,447    6,260    46.6% 
Total revenues   8,220,639    6,279,428    1,941,211    30.9% 
Cost of revenues   3,222,390    3,447,622    (225,232)   (6.5%)
Gross profit   4,998,249    2,831,806    2,166,443    76.5% 
Gross margin %   60.8%    45.1%           
                     
Operating expenses                    
Selling, general and administrative   4,640,912    3,864,986    775,926    20.1% 
Depreciation and amortization   679,171    595,848    83,323    14.0% 
Total operating expenses   5,320,083    4,460,834    859,249    19.3% 
Loss from operations  $(321,834)  $(1,629,028)  $1,307,194    (80.2%)
                     
Net loss  $(309,395)  $(1,623,527)  $1,314,132    (80.9%)
Net margin %   (3.8%)   (25.9%)          

 

 

 

 

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The increase in total revenues of $1,941,211 for the three months ended March 31, 2022 compared to the same period in the prior year consisted primarily of a $2,011,213 increase in Plasma revenue, offset by a $76,262 decrease in Pharma revenue. The increase in Plasma revenue was primarily due to an increase in plasma donations, and, consequently, dollars loaded to cards, cardholder fees, and interchange, as COVID-19 restrictions such as donation center closures, mobility restrictions and Federal government stimulus measures were relaxed compared to the prior year period. The decrease in Pharma revenue was primarily due to the end of a number of Pharma prepaid programs and the recognition of settlement income in 2021, offset by an increase in Pharma copay program revenue.

 

Cost of revenues for the three months ended March 31, 2022 decreased $225,232 compared to the same period in the prior year. Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, and sales and commission expense. Cost of revenues decreased primarily due to the renewal and restructuring of an agreement in the first quarter of 2022.

 

Gross profit for the three months ended March 31, 2022 increased $2,166,443 compared to the same period in the prior year resulting from the increase in Plasma revenue, the renewal and restructuring of an agreement mentioned above, and the beneficial impact of a variable cost structure as many of the Plasma transaction costs are variable in nature which are provided by third parties who charge us based on the number of transactions that occurred during the period. The increase in gross margin resulted from continued revenue growth, lower costs and operating leverage of our Plasma business, offset by lower Pharma prepaid revenue and related gross profit versus the prior year.

 

Selling, general and administrative expenses (“SG&A”) for the three months ended March 31, 2022 increased $775,924 or 20.1% compared to the same period in the prior year and consisted primarily of an increase in compensation and benefits of $84,100, a decrease in stock-based compensation of $66,700, a decrease in outside professional services for legal, tax, accounting and consultants of $94,500, an increase in legal settlements of $354,000, an increase in insurance of $110,500, an increase in technologies and telecom of $178,000, a decrease in rent, utilities, and maintenance of $30,000, an increase in travel and entertainment of $74,500, and an increase in other operating expenses of $165,500.

 

Depreciation and amortization expense for the three months ended March 31, 2022 increased $83,323 compared to the same period in the prior year. The increase in depreciation and amortization expense was primarily due to continued capitalization of new software and equipment, continued enhancements to our platform, and new furniture and fixtures and leasehold improvements associated with the new building we moved into in June 2020.

 

For the three months ended March 31, 2022 we recorded a loss from operations of $321,834 representing a net increase of $1,307,194 compared to the same period last year related to the aforementioned factors.

 

Other income for the three months ended March 31, 2022 increased $7,235 related to higher interest income received from our sponsor bank and lower interest expense related to the financing of insurance premiums.

 

We recorded an income tax expense of $1,897 for the three months ended March 31, 2022, which equates to an effective tax rate of (0.6%) percent primarily as a result of the full valuation on our deferred tax asset in both the current and prior period and the tax benefit related to our stock-based compensation and a pretax loss in the prior period. We recorded an income tax expense of $1,600 for the three months ended March 31, 2021 due to estimated state tax payments.

 

The net loss for the three months ended March 31, 2022 was $309,395, an improvement of $1,314,132 compared to the net loss of $1,623,527 for the three months ended March 31, 2021. The overall change in net loss relates to the aforementioned factors.

 

Key Performance Indicators and Non-GAAP Measures

 

Management reviews a number of metrics to help us monitor the performance of and identify trends affecting our business. We believe the following measures are the primary indicators of our quarterly and annual revenues:

 

 

 

 

 18 

 

 

Gross Dollar Volume Loaded on Cards – Represents the total dollar volume of funds loaded to all of our prepaid card programs. Our gross dollar volume loaded on cards increased 16.1% to $324 million for the three months ended March 31, 2022 versus $278.6 million during the same period last year. The year-over-year increase was due to more Plasma donations as well as an increase in the average dollar amounts loaded to cards, offset by a reduction in the total dollar volume of funds loaded to Pharma cards primarily due to the end of a number of Pharma prepaid programs. We use this metric to analyze the total amount of money moving into our prepaid card programs.

 

Conversion Rates on Gross Dollar Volume Loaded on Cards – Comprises of revenues, gross profit and net income conversion rates of gross dollar volume loaded on cards which are calculated by taking our total revenues, gross profit or net income (loss), respectively, as a numerator and dividing by the gross dollar volume loaded on cards as a denominator. As we derive a number of our financial results from cardholder fees, we utilize these metrics as an indication of the amount of money that is added to cards and will eventually be converted to revenues, gross profit and net income. Our total revenue conversion rates for the three months ended March 31, 2022 and 2021 were 2.54% or 254 basis points (“bps”), and 2.25% or 225 bps, respectively, of gross dollar volume loaded on cards. Our total gross profit conversion rates for the three months ended March 31, 2022 and 2021 were 1.54% or 154 bps, and 1.02% or 102 bps, respectively, of gross dollar volume loaded on cards. Our net income conversion rates for the three months ended March 31, 2022 and 2021 were (0.10)% or (10) bps, and (0.58)% or (58) bps, respectively, of gross dollar volume loaded on cards.

 

Management also reviews key performance indicators, such as revenues, gross profit, operational expenses as a percent of revenues, and cardholder participation. In addition, we consider certain non-GAAP (or “adjusted”) measures to be useful to management and investors evaluating our operating performance for the periods presented, and provide a financial tool for evaluating our ongoing operations, liquidity and management of assets. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment and investment in new card programs. These adjusted metrics are consistent with how management views our business and are used to make financial, operating and planning decisions. These metrics, however, are not measures of financial performance under GAAP and should not be considered a substitute for revenue, operating income, net income (loss), earnings (loss) per share (basic and diluted) or net cash from operating activities as determined in accordance with GAAP. We consider the following non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, to be key performance indicators:

 

“EBITDA” is defined as earnings before interest, income taxes, and depreciation and amortization expense and “Adjusted EBITDA” reflects the adjustment to EBITDA to exclude stock-based compensation expense, impairment of intangible asset, and loss on abandonment of assets. A reconciliation of net income (loss) to Adjusted EBITDA is provided in the table below.

 

  

Three Months Ended

March 31,

 
   2022   2021 
Reconciliation of EBITDA and Adjusted EBITDA to net loss:          
Net loss  $(309,395)  $(1,623,527)
Income tax provision    1,897    1,600 
Interest income, net   (14,336)   (7,101)
Depreciation and amortization   679,171    595,848 
EBITDA   357,337    (1,033,180)
Stock-based compensation   569,502    636,214 
Adjusted EBITDA  $926,839   $(396,966)

 

 

 

 

 19 

 

 

Liquidity and Capital Resources

 

The following table sets forth the major sources and uses of cash:

 

  

Three Months Ended March 31,

(unaudited)

 
   2022   2021 
Net cash provided by operating activities  $5,137,144   $9,904,499 
Net cash used in investing activities   (674,860)   (612,203)
Net cash provided by financing activities       110,466 
Net increase in cash and restricted cash  $4,462,284   $9,402,762 

  

Comparison of Three Months Ended March 31, 2022 and 2021

 

During the three months ended March 31, 2022 and 2021, we financed our operations through internally generated funds.

 

Cash provided by operating activities decreased $4,767,355 for the three months ended March 31, 2022, as compared to the same period in the prior year. The decrease is primarily due to changes in cash flows from operating assets and liabilities, particularly an improvement in net loss from operations of $1,341,132, prepaid expenses of $189,956, and accounts payable and accrued liabilities of $1,039,658 associated with the timing of a payment due to a third-party service provider, offset by decreases in other current liabilities of $7,278,768 primarily related to the return of restricted cash associated with the end of a number of Pharma prepaid programs.

 

Cash used in investing activities increased $62,657 for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. The change between periods was primarily attributed to an increase in the capitalization of internally developed software as we continue to invest in our technology platform.

 

Cash provided by financing activities was zero for the three months ended March 31, 2022 as compared to cash provided by financing activities of $110,466 for the three months ended March 31, 2021. Cash provided by financing activities in the 2021 period consisted of cash received from the exercise of employee stock options totaling $110,466.

  

Sources of Liquidity

 

We believe that our available cash on hand, excluding restricted cash, at March 31, 2022 of $8,455,671, along with our forecast for revenues and cash flows for the remainder of the year and for 2023, will be sufficient to sustain our operations for the next twelve months.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 

Critical Accounting Policies and Estimates

 

Our significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements and our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

 

 

 

 

 20 

 

 

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Our estimates are based on our experience and our interpretation of economic, political, regulatory, and other factors that affect our business prospects. Actual results may differ significantly from our estimates.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

Because we are a smaller reporting company, we are not required to provide the information called for by this Item.

  

Item 4. Controls and Procedures.

 

Disclosure Controls and Procedures.

 

Disclosure controls and procedures means controls and other procedures that are designed to ensure that the information we are required to disclose in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed by us in those reports is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our chief executive officer and chief financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of March 31, 2022. Based on that evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures were effective as of March 31, 2022, the end of the period covered by this Quarterly Report on Form 10-Q.

  

Changes in Internal Control over Financial Reporting

 

During the quarter ended March 31, 2022, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

 

 

 

 

 

 

 

 

 

 21 

 

 

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

  

The Company has been named as a defendant in three complaints filed in the United States District Court for the District of Nevada: Yilan Shi v. Paysign, Inc. et. al., filed on March 19, 2020 (“Shi”), Lorna Chase v. Paysign, Inc. et. al., filed on March 25, 2020 (“Chase”), and Smith & Duvall v. Paysign, Inc. et. al., filed on April 2, 2020 (collectively, the “Complaints” or “Securities Class Action”). Smith & Duvall v. Paysign, Inc. et. al. was voluntarily dismissed on May 21, 2020. On May 18, 2020, the Shi plaintiffs and another entity called the Paysign Investor Group each filed a motion to consolidate the remaining Shi and Chase actions and to be appointed lead plaintiff. The Complaints are putative class actions filed on behalf of a class of persons who acquired the Company’s common stock from March 19, 2019 through March 31, 2020, inclusive. The Complaints generally allege that the Company, Mark R. Newcomer, and Mark Attinger violated Section 10(b) of the Exchange Act, and that Messrs. Newcomer and Attinger violated Section 20(a) of the Exchange Act, by making materially false or misleading statements, or failing to disclose material facts, regarding the Company’s internal control over financial reporting and its financial statements. The Complaints seek class action certification, compensatory damages, and attorney’s fees and costs. On December 2, 2020, the Court consolidated Shi and Chase as In re Paysign, Inc. Securities Litigation and appointed the Paysign Investor Group as lead plaintiff. On January 12, 2021, Plaintiffs filed an Amended Complaint in the consolidated action. Defendants filed a Motion to Dismiss the Amended Complaint on March 15, 2021, which Plaintiffs opposed via an opposition brief filed on April 29, 2021, to which Defendants replied on June 1, 2021. Thus, the motion is now fully briefed. The Court has not set a hearing date on the motion, or informed the parties whether it intends to entertain oral argument or rule upon the papers filed.

 

The Company has also been named as a nominal defendant in two stockholder derivative actions in the United States District Court for the District of Nevada. The first derivative action is entitled Andrzej Toczek, derivatively on behalf of Paysign, Inc. v. Mark R. Newcomer, et al. and was filed on September 17, 2020. This action alleges violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, and waste, largely in connection with the failure to correct information technology controls over financial reporting alleged in the Securities Class Action, thereby causing the Company to face exposure in the Securities Class Action. The complaint also alleges insider trading violations against certain individual defendants. On December 16, 2020, the Court approved a stipulation staying the action until the Court in the consolidated Securities Class Action issues a ruling on the Motion to Dismiss. The second derivative action is entitled John K. Gray, derivatively on behalf of Paysign, Inc. v. Mark Attinger, et al. and was filed on May 9, 2022. This action involves the same alleged conduct raised in the Toczek action and asserts claims for breach of fiduciary duty in connection with financial reporting, breach of fiduciary duty in connection with alleged insider trading against certain individual defendants, and unjust enrichment. The Gray action has not yet been served on the Company, and thus no response date is currently pending.

 

Item 1A. Risk Factors.

 

There have been no material changes with respect to the risk factors disclosed in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2021.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

During the quarter ended March 31, 2022, we issued, pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, a total of 123,000 shares of common stock for restricted stock shares previously earned and vested.

 

Item 6. Exhibits.

 

31.1 Rule 13a-14(a)/15d-14(a) Certifications
31.2 Rule 13a-14(a)/15d-14(a) Certifications
32.1 Section 1350 Certifications
32.2 Section 1350 Certifications
101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (formatted in iXBRL, and included in exhibit 101).

 

 

 

 22 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  PAYSIGN, INC.
   
   
Date: May 12, 2022 /s/ Mark Newcomer
 

By: Mark Newcomer, Chief Executive Officer

(principal executive officer)

   
   
Date: May 12, 2022 /s/ Jeff Baker
 

By: Jeff Baker, Chief Financial Officer

(principal financial and accounting officer)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 23 

EX-31.1 2 paysign_ex3101.htm CERTIFICATION

Exhibit 31.1

 

CERTIFICATION

 

I, Mark Newcomer, certify that:

 

(1) I have reviewed this quarterly report on Form 10-Q for the period ended March 31, 2022 (the “report”) of Paysign, 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 13a-15(f) and 15d-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; and

 

(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: May 12, 2022 /s/ Mark Newcomer
 

Mark Newcomer

Chief Executive Officer

(principal executive officer)

 

 

EX-31.2 3 paysign_ex3102.htm CERTIFICATION

Exhibit 31.2

 

CERTIFICATION

 

I, Jeff Baker, certify that:

 

(1) I have reviewed this quarterly report on Form 10-Q for the period ended March 31, 2022 (the “report”) of Paysign, 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 13a-15(f) and 15d-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; and

 

(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: May 12, 2022 /s/ Jeff Baker
 

Jeff Baker

Chief Financial Officer

(principal financial and accounting officer)

 

EX-32.1 4 paysign_ex3201.htm CERTIFICATION

Exhibit 32.1

 

SECTION 1350 CERTIFICATIONS

 

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Mark Newcomer, the Chief Executive Officer of Paysign, Inc., a Nevada corporation (the "Company"), does hereby certify, to the best of my knowledge, that:

 

1. The Quarterly Report on Form 10-Q for the period ended March 31, 2022 (the "Report") of the Company 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/ Mark Newcomer                     

Mark Newcomer

Chief Executive Officer

(principal executive officer)

 

Date: May 12, 2022

 

EX-32.2 5 paysign_ex3202.htm CERTIFICATION

Exhibit 32.2

 

SECTION 1350 CERTIFICATIONS

 

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Jeff Baker, the Chief Financial Officer of Paysign, Inc., a Nevada corporation (the "Company"), does hereby certify, to the best of my knowledge, that:

 

1. The Quarterly Report on Form 10-Q for the period ended March 31, 2022 (the "Report") of the Company 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/ Jeff Baker                     

Jeff Baker

Chief Financial Officer

(principal financial and accounting officer)

 

Date: May 12, 2022

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and Equipment, Gross Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment Property, Plant and Equipment, Net Depreciation expense Schedule of Finite-Lived Intangible Assets [Table] Finite-Lived Intangible Assets [Line Items] Finite-Lived Intangible Assets, Gross Finite-Lived Intangible Assets, Accumulated Amortization Intangible Assets, Net (Excluding Goodwill) Amortization expense 2023 2024 2025 2026 2027 Thereafter Total lease payments Less: Imputed interest Present value of future lease payments Less: current portion of lease liability Long-term portion of lease liability Lease term Lease term option to extend Remaining lease term Discount rate Operating lease cost Cash paid for operating lease Beginning balance Increase (decrease), net Ending balance Revenue recognized in current year previously included in contract liabilities Schedule of Share-Based Compensation Arrangements by Share-Based Payment Award [Table] Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] Share-based Payment Arrangement, Noncash Expense Number of shares vested Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross Proceeds Form Vested Stock Awards And Stock Options Numerator: Denominator: Weighted average common shares: Denominator for basic calculation Weighted average effects of potentially diluted common stock: Stock options (calculated using the treasury method) Unvested restricted stock grants Denominator for fully diluted calculation Net loss per common share: Fully diluted Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table] Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] Potential common share equivalents excluded from computation Legal expense Effective income tax rate Net income per common share [Abstract] Assets, Current Assets Liabilities, Current Liabilities Treasury Stock, Value Stockholders' Equity Attributable to Parent Liabilities and Equity Gross Profit Operating Expenses Operating Income (Loss) Net Income (Loss), Including Portion Attributable to Noncontrolling Interest Shares, Outstanding Increase (Decrease) in Accounts Receivable Increase (Decrease) in Prepaid Expense and Other Assets Increase (Decrease) in Accounts Payable and Accrued Liabilities Net Cash Provided by (Used in) Operating Activities Payments to Acquire Property, Plant, and Equipment Payments to Develop Software Payments to Acquire Intangible Assets Net Cash Provided by (Used in) Investing Activities Net Cash Provided by (Used in) Financing Activities Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Period Increase (Decrease), Excluding Exchange Rate Effect Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents Operating Leases, Future Minimum Payments Due LessImputedInterest Contract with Customer, Liability EX-101.PRE 10 pays-20220331_pre.xml XBRL PRESENTATION FILE XML 11 R1.htm IDEA: XBRL DOCUMENT v3.22.1
Cover - shares
3 Months Ended
Mar. 31, 2022
May 06, 2022
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Mar. 31, 2022  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2022  
Current Fiscal Year End Date --12-31  
Entity File Number 001-38623  
Entity Registrant Name PAYSIGN, INC.  
Entity Central Index Key 0001496443  
Entity Tax Identification Number 95-4550154  
Entity Incorporation, State or Country Code NV  
Entity Address, Address Line One 2615 St. Rose Parkway  
Entity Address, City or Town Henderson  
Entity Address, State or Province NV  
Entity Address, Postal Zip Code 89052  
City Area Code (702)  
Local Phone Number 453-2221  
Title of 12(b) Security Common Stock, $0.001 par value per share  
Trading Symbol PAYS  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Elected Not To Use the Extended Transition Period false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   52,001,932
XML 12 R2.htm IDEA: XBRL DOCUMENT v3.22.1
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)
Mar. 31, 2022
Dec. 31, 2021
Current assets    
Cash $ 8,455,671 $ 7,387,156
Restricted cash 64,677,683 61,283,914
Accounts receivable 3,405,867 3,393,940
Other receivables 1,019,218 1,019,218
Prepaid expenses and other current assets 1,625,631 1,242,967
Total current assets 79,184,070 74,327,195
Fixed assets, net 1,519,799 1,642,981
Intangible assets, net 4,205,833 4,086,962
Operating lease right-of-use asset 3,900,851 3,993,655
Total assets 88,810,553 84,050,793
Current liabilities    
Accounts payable and accrued liabilities 6,954,565 5,765,478
Operating lease liability, current portion 345,544 340,412
Customer card funding 64,677,683 61,283,914
Total current liabilities 71,977,792 67,389,804
Operating lease liability, long term portion 3,584,851 3,673,186
Total liabilities 75,562,643 71,062,990
Commitments and contingencies (Note 8)
Stockholders' equity    
Preferred stock: $0.001 par value; 25,000,000 shares authorized; none issued and outstanding 0 0
Common stock; $0.001 par value; 150,000,000 shares authorized, 52,218,382 and 52,095,382 issued at March 31, 2022 and December 31, 2021, respectively 52,218 52,095
Additional paid-in capital 17,429,498 16,860,119
Treasury stock at cost, 303,450 shares (150,000) (150,000)
Accumulated deficit (4,083,806) (3,774,411)
Total stockholders' equity 13,247,910 12,987,803
Total liabilities and stockholders' equity $ 88,810,553 $ 84,050,793
XML 13 R3.htm IDEA: XBRL DOCUMENT v3.22.1
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares
Mar. 31, 2022
Dec. 31, 2021
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 25,000,000 25,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 150,000,000 150,000,000
Common stock, shares issued 52,218,382 52,095,382
Treasury stock shares 303,450 303,450
XML 14 R4.htm IDEA: XBRL DOCUMENT v3.22.1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Revenues    
Total revenues $ 8,220,639 $ 6,279,428
Cost of revenues 3,222,390 3,447,622
Gross profit 4,998,249 2,831,806
Operating expenses    
Selling, general and administrative 4,640,912 3,864,986
Depreciation and amortization 679,171 595,848
Total operating expenses 5,320,083 4,460,834
Loss from operations (321,834) (1,629,028)
Other income    
Interest income, net 14,336 7,101
Loss before income tax provision (307,498) (1,621,927)
Income tax provision 1,897 1,600
Net loss $ (309,395) $ (1,623,527)
Net loss per share    
Basic $ (0.01) $ (0.03)
Diluted $ (0.01) $ (0.03)
Weighted average common shares    
Basic 51,818,676 50,351,971
Diluted 51,818,676 50,351,971
Plasma Industry [Member]    
Revenues    
Total revenues $ 7,394,364 $ 5,383,151
Pharmaceutical industry [Member]    
Revenues    
Total revenues 806,568 882,830
Other Revenue [Member]    
Revenues    
Total revenues $ 19,707 $ 13,447
XML 15 R5.htm IDEA: XBRL DOCUMENT v3.22.1
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) (UNAUDITED) - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Treasury Stock [Member]
Retained Earnings [Member]
Total
Beginning balance, value at Dec. 31, 2020 $ 50,252 $ 14,388,890 $ (150,000) $ (1,053,077) $ 13,236,065
Beginning balance, shares at Dec. 31, 2020 50,251,607        
Stock issued upon vesting of restricted stock $ 467 (467)
Stock issued upon vesting of restricted stock, shares 466,689        
Stock-based compensation 636,214 636,214
Net loss (1,623,527) (1,623,527)
Exercise of stock options 32 110,434
Ending balance, value at Mar. 31, 2021 $ 50,751 15,135,071 (150,000) (2,676,604) 12,359,218
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period 32,586        
Ending balance, shares at Mar. 31, 2021 50,750,882        
Beginning balance, value at Dec. 31, 2021 $ 52,095 16,860,119 (150,000) (3,774,411) 12,987,803
Beginning balance, shares at Dec. 31, 2021 52,095,382        
Stock issued upon vesting of restricted stock $ 123 (123)
Stock issued upon vesting of restricted stock, shares 123,000        
Stock-based compensation 569,502 569,502
Net loss (309,395) (309,395)
Ending balance, value at Mar. 31, 2022 $ 52,218 $ 17,429,498 $ (150,000) $ (4,083,806) $ 13,247,910
Ending balance, shares at Mar. 31, 2022 52,218,382        
XML 16 R6.htm IDEA: XBRL DOCUMENT v3.22.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Cash flows from operating activities:    
Net loss $ (309,395) $ (1,623,527)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Stock-based compensation expense 569,502 636,214
Depreciation and amortization 679,171 595,848
Noncash lease expense 92,804 105,704
Changes in operating assets and liabilities:    
Accounts receivable (11,927) 19,283
Prepaid expenses and other current assets (382,664) (572,620)
Accounts payable and accrued liabilities 1,189,087 149,429
Operating lease liability (83,203) (78,369)
Customer card funding 3,393,769 10,672,537
Net cash provided by operating activities 5,137,144 9,904,499
Cash flows from investing activities:    
Purchase of fixed assets (12,787) (124,696)
Capitalization of internally developed software (635,325) (473,996)
Purchase of intangible assets (26,748) (13,511)
Net cash used in investing activities (674,860) (612,203)
Cash flows from financing activities:    
Proceeds from exercise of stock options 0 110,466
Net cash provided by financing activities 0 110,466
Net change in cash and restricted cash 4,462,284 9,402,762
Cash and restricted cash, beginning of period 68,671,070 55,930,404
Cash and restricted cash, end of period 73,133,354 65,333,166
Cash and restricted cash reconciliation:    
Cash 8,455,671 6,559,678
Restricted Cash 64,677,683 58,773,488
Restricted Cash and Cash Equivalents 73,133,354 65,333,166
Non-cash financing activities    
Interest paid $ 221 $ 0
XML 17 R7.htm IDEA: XBRL DOCUMENT v3.22.1
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES
3 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES

1.     BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES

 

The foregoing unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the disclosures required by GAAP for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended December 31, 2021. In the opinion of management, the unaudited interim condensed consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.

 

The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company’s financial position and results of operations.

 

Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

 

Impact of COVID-19 Pandemic

 

The coronavirus (COVID-19) pandemic, which started in late 2019 and reached the United States in early 2020, continues to significantly impact the economy of the United States and the rest of the world. While the disruption appears to be mitigating due to the availability of vaccines and other factors, the ultimate duration and severity of the pandemic remain uncertain, particularly given the development of new variants that continue to spread. The COVID-19 outbreak caused plasma center closures, and the stimulus packages signed into law during 2020 and 2021 reduced the incentive for individuals to donate plasma for supplementary income. Those developments have had and will continue to have an adverse impact on the Company’s results of operations. While we remain cautiously optimistic and have seen improvements in our operating results on an aggregated basis, we cannot foresee how long it may take the Company to attain pre-pandemic operating levels on a per plasma donation center basis as COVID-19 related labor shortages at plasma donation centers, border closures, and other effects continue to weigh on the Company’s results of operations. Given the uncertainty around the extent and timing of the potential future spread or mitigation of COVID-19 and variants and around the imposition or relaxation of protective measures, management cannot at this time estimate with reasonable accuracy COVID-19’s further impact on the Company’s results of operations, cash flows or financial condition.

 

Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law in 2020 and the subsequent extension of the CARES Act through September 30, 2021, the Company was eligible for a refundable employee retention credit subject to certain criteria. The Company has elected an accounting policy to recognize the government assistance when it is probable that the Company is eligible to receive the assistance and present the credit be as a reduction of the related expense. As of March 31, 2022 and December 31, 2021 the Company has recorded $876,456 in other receivables on the condensed consolidated balance sheet related to refunds filed in the fourth quarter of 2021.

 

About Paysign, Inc.

 

Paysign, Inc. (the “Company,” “Paysign,” “we” or “our”) was incorporated on August 24, 1995, and trades under the symbol PAYS on The Nasdaq Stock Market LLC. Paysign. is a provider of prepaid card programs, comprehensive patient affordability offerings, digital banking services and integrated payment processing designed for businesses, consumers and government institutions. Headquartered in Nevada, the company creates customized, innovative payment solutions for clients across all industries, including pharmaceutical, healthcare, hospitality and retail.

 

Principles of Consolidation – The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated.

 

Reclassifications – Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period financial statement presentations.

 

Use of Estimates – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and (iii) the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and Cash Equivalents – The Company considers all highly liquid investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents for the purposes of the statement of cash flows. The Company had no cash equivalents at March 31, 2022 and 2021.

 

Restricted Cash – At March 31, 2022 and December 31, 2021, restricted cash consisted of funds held specifically for our card product programs that are contractually restricted to use. The Company includes changes in restricted cash balances with cash and cash equivalents when reconciling the beginning and ending total amounts in our condensed consolidated statements of cash flows.

 

Concentrations of Credit Risk – Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and restricted cash. Paysign maintains its cash and cash equivalents and restricted cash in various bank accounts that, at times, may exceed federally insured limits. Paysign has not experienced, nor does it anticipate, any losses with respect to such accounts. At March 31, 2022 and December 31, 2021, the Company had approximately $29,195,396 and $31,828,826 in excess of federally insured bank account limits, respectively.

 

The Company also has a concentration of accounts receivable risk at March 31, 2022 as two Pharma program customers associated with our Pharma copay programs each individually represent 51% and 15% of our accounts receivable balance. Two Pharma program customers each individually represented 52% and 17% of our accounts receivable balance at December 31, 2021.

 

Fixed Assets – Fixed assets are stated at cost less accumulated depreciation. Depreciation is principally recorded on the straight-line method over the estimated useful life of the asset, which is generally 3 to 10 years. The cost of repairs and maintenance is charged to expense as incurred. Leasehold improvements are capitalized and depreciated over the shorter of the remaining lease term or the estimated useful life of the improvements. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).

 

The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.

 

Intangible Assets – For intangible assets, the Company recognizes an impairment loss if the carrying amount of the intangible asset is not recoverable and exceeds fair value. The carrying amount of the intangible asset is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset.

 

Intangible assets with a finite life are amortized on a straight-line basis over its estimated useful life.

 

Internally Developed Software Costs - Computer software development costs are expensed as incurred, except for internal use software or website development costs that qualify for capitalization as described below, and include compensation and related expenses, costs of hardware and software, and costs incurred in developing features and functionality.

  

For computer software developed or obtained for internal use, costs that are incurred in the preliminary project and post implementation stages of software development are expensed as incurred. Costs incurred during the application and development stage are capitalized. Capitalized costs are amortized using the straight-line method over a 3 to 5 year estimated useful life, beginning in the period in which the software is available for use.

 

Customer Card Funding – At March 31, 2022 and December 31, 2021, customer card funding represents funds loaded on our prepaid card programs.

 

Earnings Per Share – Basic earnings per share exclude any dilutive effects of options, warrants and convertible securities. Basic earnings per share is computed using the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is computed using the weighted average number of common and common stock equivalent shares outstanding during the period, using the treasury stock method. Common stock equivalent shares are excluded from the computation if their effect is anti-dilutive.

 

Revenue and Expense Recognition – In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contracts with customers; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

 

The Company generates revenues from Plasma card programs through fees generated from cardholder fees and interchange fees. Revenues from Pharma card programs are generated through card program management fees, interchange fees, and settlement income.

 

Plasma and Pharma card program revenues include both fixed and variable components. Cardholder fees represent an obligation to the cardholder based on a per transaction basis and recognized at a point in time when the performance obligation is fulfilled. Card program management fees include an obligation to our card program sponsors and are generally recognized when earned on a monthly basis and paid typically due within 30 days pursuant to the contract terms which are generally multi-year contracts. The Company uses the output method to recognize card program management fee revenue at the amount of consideration to which an entity has a right to invoice. The performance obligation is satisfied when the services are transferred to the customer which the Company determined to be monthly, as the customers simultaneously receives and consumes the benefit from the Company’s performance. Interchange fees are earned when customer-issued cards are processed through card payment networks as the nature of our promise to the customer is that we stand ready to process transactions at the customer’s requests on a daily basis over the contract term. Since the timing and quantity of transactions to be processed by us is not determinable, we view interchange fees to comprise an obligation to stand ready to process as many transactions as the customer requests. Accordingly, the promise to stand ready is accounted for as a single series performance obligation. The Company uses the right to invoice practical expedient and recognizes interchange fee revenue concurrent with the processing of card transactions. Interchange fees are settled in accordance with the card payment network terms and conditions, which is typically within a few days.

 

The Company utilizes the remote method of revenue recognition for settlement income whereby the unspent balances will be recognized as revenue at the expiration of the cards and the respective program. The Company records all revenue on a gross basis since it is the primary obligor and establishes the price in the contract arrangement with its customers. The Company is currently under no obligation for refunding any fees, and the Company does not currently have any obligations for disputed claim settlements. Given the nature of the Company’s services and contracts, it has no contract assets.

 

Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, and sales and commission expense. 

 

Operating leases – The Company determines if a contract is or contains a leasing element at contract inception or the date in which a modification of an existing contract occurs. In order for a contract to be considered a lease, the contract must transfer the right to control the use of an identified asset for a period of time in exchange for consideration. Control is determined to have occurred if the lessee has the right to (i) obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use and (ii) direct the use of the identified asset.

  

In determining the present value of lease payments at lease commencement date, the Company utilizes its incremental borrowing rate based on the information available, unless the rate implicit in the lease is readily determinable. The liability for operating leases is based on the present value of future lease payments. Operating lease expenses are recorded as rent expense, which is included within selling, general and administrative expenses within the consolidated statements of operations and presented as operating cash outflows within the consolidated statements of cash flows.

 

Leases with an initial term of 12 months or less are not recorded on the balance sheet, with lease expense for these leases recognized on a straight-line basis over the lease term.

 

Stock-Based Compensation – The Company recognizes compensation expense for all restricted stock awards and stock options. The fair value of restricted stock awards is measured using the grant date trading price of our stock. The fair value of stock options is estimated at the grant date using the Black-Scholes option-pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. We have elected to recognize compensation expense for all options with graded vesting on a straight-line basis over the vesting period of the entire option. The determination of fair value using the Black-Scholes pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility and the risk-free interest rate.

 

Recently Issued Accounting Pronouncements – In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which provides updated guidance on how an entity should measure credit losses on all financial instruments carried at amortized cost (including loans held for investment and held-to-maturity debt securities, as well as trade receivables, reinsurance recoverables, and receivables that relate to repurchase agreements and securities lending agreements), a lessor’s net investments in leases, and off-balance sheet credit exposures not accounted for as insurance or as derivatives, including loan commitments, standby letters of credit, and financial guarantees. Subsequently, in November 2018 the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments–Credit Losses (“ASU 2018-19”), which clarified that receivables arising from operating leases are not within the scope of Subtopic 326-20, but instead should be accounted for in accordance with Topic 842, Leases. In March 2022 the FASB issued ASU No. 2022-02, Financial Instruments—Credit Losses: Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) which clarified accounting treatment required for trouble debt restructurings by creditors and enhanced disclosures for write-offs. The new standard and related amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the impact of adopting this guidance on our Financial Statements; however, we do not expect it to have a material impact on the Company’s consolidated financial statements.

 

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). This ASU requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606). This guidance is effective for the Company beginning on January 1, 2023 and is not expected to have a material impact on the Company’s consolidated financial statements.

 

XML 18 R8.htm IDEA: XBRL DOCUMENT v3.22.1
FIXED ASSETS, NET
3 Months Ended
Mar. 31, 2022
Property, Plant and Equipment [Abstract]  
FIXED ASSETS, NET

2.     FIXED ASSETS, NET

 

Fixed assets consist of the following:

          
   March 31,
2022
   December 31,
2021
 
Equipment  $2,080,621   $2,067,834 
Software   315,855    315,855 
Furniture and fixtures   757,662    757,662 
Website costs   69,881    69,881 
Leasehold improvements   229,772    229,772 
    3,453,791    3,441,004 
Less: accumulated depreciation   1,933,992    1,798,023 
Fixed assets, net  $1,519,799   $1,642,981 

 

Depreciation expense for the three months ended March 31, 2022 and 2021 was $135,969 and $131,951, respectively.

 

XML 19 R9.htm IDEA: XBRL DOCUMENT v3.22.1
INTANGIBLE ASSETS, NET
3 Months Ended
Mar. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
INTANGIBLE ASSETS, NET

3.     INTANGIBLE ASSETS, NET

  

Intangible assets consist of the following:

          
   March 31,
2022
   December 31,
2021
 
Patents and trademarks  $38,186   $38,186 
Platform   10,515,896    9,853,823 
Customer lists and contracts   1,177,200    1,177,200 
Licenses   209,282    209,282 
    11,940,564    11,278,491 
Less: accumulated amortization   7,734,731    7,191,529 
Intangible assets, net  $4,205,833   $4,086,962 

 

Amortization expense for the three months ended March 31, 2022 and 2021 was $543,202 and $463,897, respectively.

 

XML 20 R10.htm IDEA: XBRL DOCUMENT v3.22.1
LEASE
3 Months Ended
Mar. 31, 2022
Leases [Abstract]  
LEASE

4.     LEASE

 

The Company entered into an operating lease for office space which became effective in June 2020. The lease term is 10 years from the effective date and allows for two optional extensions of five years each. The two optional extensions are not recognized as part of the right-of-use asset or lease liability since it is not reasonably certain that the Company will extend this lease. As of March 31, 2022, the remaining lease term was 8.2 years and the discount rate was 6%.

 

Operating lease cost included in selling, general and administrative expenses was $183,241 and $215,144 for the three months ended March 31, 2022 and 2021, respectively. Cash paid for the operating lease was $142,992 for both the three months ended March 31, 2022 and 2021.

 

The following is the lease maturity analysis of our operating lease as of March 31, 2022:

 

Twelve months ending March 31,

     
2023  $571,968 
2024   571,968 
2025   571,968 
2026   629,165 
2027   640,604 
Thereafter   2,028,580 
Total lease payments   5,014,253 
Less: Imputed interest   (1,083,858)
Present value of future lease payments   3,930,395 
Less: current portion of lease liability   (345,544)
Long-term portion of lease liability  $3,584,851 

 

XML 21 R11.htm IDEA: XBRL DOCUMENT v3.22.1
CUSTOMER CARD FUNDING LIABILITY
3 Months Ended
Mar. 31, 2022
Revenue from Contract with Customer [Abstract]  
CUSTOMER CARD FUNDING LIABILITY

5.     CUSTOMER CARD FUNDING LIABILITY

 

The Company issues prepaid cards with various provisions for cardholder fees or expiration. Revenue generated from cardholder transactions and interchange fees are recognized when the Company’s performance obligation is fulfilled. Unspent balances left on Pharma cards are recognized as settlement income at the expiration of the cards and the program. Contract liabilities related to prepaid cards represent funds on card and client funds held to be loaded to card before the amounts are ultimately spent by the cardholders or recognized as revenue by the Company. Contract liabilities related to prepaid cards are reported as Customer card funding liability on the condensed consolidated balance sheet.

 

The opening and closing balances of the Company's contract liabilities are as follows:

          
  

Three Months Ended

March 31,

 
   2022   2021 
Beginning balance  $61,283,914   $48,100,951 
Increase (decrease), net   3,393,769    10,672,537 
Ending balance  $64,677,683   $58,773,488 

 

The amount of revenue recognized during the three months ended March 31, 2022 and 2021 that was included in the opening contract liability for prepaid cards was $1,485,005 and $1,023,055, respectively.

  

XML 22 R12.htm IDEA: XBRL DOCUMENT v3.22.1
COMMON STOCK
3 Months Ended
Mar. 31, 2022
Equity [Abstract]  
COMMON STOCK

6.     COMMON STOCK

 

At March 31, 2022, the Company's authorized capital stock was 150,000,000 shares of common stock, par value $0.001 per share, and 25,000,000 shares of preferred stock, par value $0.001 per share. On that date, the Company had 52,218,382 shares of common stock issued and 51,914,932 shares of common stock outstanding, and no shares of preferred stock outstanding.

 

Stock-based compensation expense related to Company grants for the three months ended March 31, 2022 was $569,502. Stock-based compensation expense for the three months ended March 31, 2021 was $636,214.

 

2022 Transactions: During the three months ended March 31, 2022 the Company issued 123,000 shares of common stock for vested stock awards.

 

2021 Transactions: During the three months ended March 31, 2021 the Company issued 499,275 shares of common stock for vested stock awards and the exercise of stock options and received proceeds of $110,466.

 

XML 23 R13.htm IDEA: XBRL DOCUMENT v3.22.1
BASIC AND FULLY DILUTED NET LOSS PER COMMON SHARE
3 Months Ended
Mar. 31, 2022
Earnings Per Share [Abstract]  
BASIC AND FULLY DILUTED NET LOSS PER COMMON SHARE

7.        BASIC AND FULLY DILUTED NET LOSS PER COMMON SHARE

 

The following table sets forth the computation of basic and fully diluted net loss per common share for the three months ended March 31, 2022 and 2021: 

          
  

Three Months Ended

March 31,

 
   2022   2021 
Numerator:          
Net loss  $(309,395)  $(1,623,527)
Denominator:          
Weighted average common shares:          
Denominator for basic calculation   51,818,676    50,351,971 
Weighted average effects of potentially diluted common stock:          
Stock options (calculated using the treasury method)        
Unvested restricted stock grants        
Denominator for fully diluted calculation   51,818,676    50,351,971 
Net loss per common share:          
Basic  $(0.01)  $(0.03)
Fully diluted  $(0.01)  $(0.03)

 

Due to the net loss for the three months ended March 31, 2022, the effect of all potential common share equivalents was anti-dilutive, and therefore, all such shares were excluded from the computation of diluted weighted average shares outstanding for that period. For the three months ended March 31, 2022, the amount of potential common share equivalents excluded were 1,891,800 for stock options and 1,254,000 for unvested restricted stock awards. Due to the net loss for the three months ended March 31, 2021, the effect of all potential common share equivalents was anti-dilutive, and therefore, all such shares were excluded from the computation of diluted weighted average shares outstanding for that period. For the three months ended March 31, 2021, the amount of potential common share equivalents excluded were 2,241,014 for stock options and 1,975,000 for unvested restricted stock awards.

 

XML 24 R14.htm IDEA: XBRL DOCUMENT v3.22.1
COMMITMENTS AND CONTINGENCIES
3 Months Ended
Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

8.        COMMITMENTS AND CONTINGENCIES

 

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

 

The Company has been named as a defendant in three complaints filed in the United States District Court for the District of Nevada: Yilan Shi v. Paysign, Inc. et. al., filed on March 19, 2020 (“Shi”), Lorna Chase v. Paysign, Inc. et. al., filed on March 25, 2020 (“Chase”), and Smith & Duvall v. Paysign, Inc. et. al., filed on April 2, 2020 (collectively, the “Complaints” or “Securities Class Action”). Smith & Duvall v. Paysign, Inc. et. al. was voluntarily dismissed on May 21, 2020. On May 18, 2020, the Shi plaintiffs and another entity called the Paysign Investor Group each filed a motion to consolidate the remaining Shi and Chase actions and to be appointed lead plaintiff. The Complaints are putative class actions filed on behalf of a class of persons who acquired the Company’s common stock from March 19, 2019 through March 31, 2020, inclusive. The Complaints generally allege that the Company, Mark Newcomer, and Mark Attinger violated Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), and that Messrs. Newcomer and Attinger violated Section 20(a) of the Exchange Act, by making materially false or misleading statements, or failing to disclose material facts, regarding the Company’s internal control over financial reporting and its financial statements. The Complaints seek class action certification, compensatory damages, and attorney’s fees and costs. On December 2, 2020, the Court consolidated Shi and Chase as In re Paysign, Inc. Securities Litigation and appointed the Paysign Investor Group as lead plaintiff. On January 12, 2021, Plaintiffs filed an Amended Complaint in the consolidated action. Defendants filed a Motion to Dismiss the Amended Complaint on March 15, 2021, which Plaintiffs opposed via an opposition brief filed on April 29, 2021, to which Defendants replied on June 1, 2021. Thus, the motion is now fully briefed. The Court has not set a hearing date on the motion, or informed the parties whether it intends to entertain oral argument or rule upon the papers filed. As of the date of this filing, Paysign cannot give any meaningful estimate of likely outcome or damages.

 

The Company has also been named as a nominal defendant in two stockholder derivative actions in the United States District Court for the District of Nevada. The first derivative action is entitled Andrzej Toczek, derivatively on behalf of Paysign, Inc. v. Mark R. Newcomer, et al. and was filed on September 17, 2020. This action alleges violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, and waste, largely in connection with the failure to correct information technology controls over financial reporting alleged in the Securities Class Action, thereby causing the Company to face exposure in the Securities Class Action. The complaint also alleges insider trading violations against certain individual defendants. On December 16, 2020, the Court approved a stipulation staying the action until the Court in the consolidated Securities Class Action issues a ruling on the Motion to Dismiss. The second derivative action is entitled John K. Gray, derivatively on behalf of Paysign, Inc. v. Mark Attinger, et al. and was filed on May 9, 2022. This action involves the same alleged conduct raised in the Toczek action and asserts claims for breach of fiduciary duty in connection with financial reporting, breach of fiduciary duty in connection with alleged insider trading against certain individual defendants, and unjust enrichment. The Gray action has not yet been served on the Company, and thus no response date is currently pending. As of the date of this filing, Paysign cannot give any meaningful estimate of likely outcome or damages.

 

XML 25 R15.htm IDEA: XBRL DOCUMENT v3.22.1
RELATED PARTY
3 Months Ended
Mar. 31, 2022
Related Party Transactions [Abstract]  
RELATED PARTY

9.        RELATED PARTY

 

A member of our Board of Directors is also a partner in a law firm that the Company engages for services to review regulatory filings and for various other legal matters. The Company incurred legal expense of $40,734 during the three months ended March 31, 2022 with the related party law firm. During the three months ended March 31, 2021 the Company incurred legal expense of $252,836, with the related party law firm.

 

XML 26 R16.htm IDEA: XBRL DOCUMENT v3.22.1
INCOME TAX PROVISION
3 Months Ended
Mar. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAX PROVISION

10.        INCOME TAX PROVISION

 

The effective tax rate (income tax provision as a percentage of loss before income tax provision) was (0.6%) for the three months ended March 31, 2022, as compared to (0.1%) for the three months ended March 31, 2021. The effective tax rate for the three months ended March 31, 2022 varies from the three months ended March 31, 2021 primarily as a result of the full valuation on our deferred tax asset in both the current and prior period and the tax benefit related to our stock-based compensation and a pretax loss in the prior year period. As of March 31, 2022, management believes that its more-likely-than-not that the Company’s net deferred tax assets would not be realized in the near future, thus a full valuation allowance on its deferred tax assets remains in place.

 

XML 27 R17.htm IDEA: XBRL DOCUMENT v3.22.1
SUBSEQUENT EVENT
3 Months Ended
Mar. 31, 2022
Subsequent Events [Abstract]  
SUBSEQUENT EVENT

11.        SUBSEQUENT EVENT

 

Except for the matter disclosed in Note 8, management has not identified any additional material subsequent events to disclose.

 

 

 

 

XML 28 R18.htm IDEA: XBRL DOCUMENT v3.22.1
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Policies)
3 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
Impact of COVID-19 Pandemic

Impact of COVID-19 Pandemic

 

The coronavirus (COVID-19) pandemic, which started in late 2019 and reached the United States in early 2020, continues to significantly impact the economy of the United States and the rest of the world. While the disruption appears to be mitigating due to the availability of vaccines and other factors, the ultimate duration and severity of the pandemic remain uncertain, particularly given the development of new variants that continue to spread. The COVID-19 outbreak caused plasma center closures, and the stimulus packages signed into law during 2020 and 2021 reduced the incentive for individuals to donate plasma for supplementary income. Those developments have had and will continue to have an adverse impact on the Company’s results of operations. While we remain cautiously optimistic and have seen improvements in our operating results on an aggregated basis, we cannot foresee how long it may take the Company to attain pre-pandemic operating levels on a per plasma donation center basis as COVID-19 related labor shortages at plasma donation centers, border closures, and other effects continue to weigh on the Company’s results of operations. Given the uncertainty around the extent and timing of the potential future spread or mitigation of COVID-19 and variants and around the imposition or relaxation of protective measures, management cannot at this time estimate with reasonable accuracy COVID-19’s further impact on the Company’s results of operations, cash flows or financial condition.

 

Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law in 2020 and the subsequent extension of the CARES Act through September 30, 2021, the Company was eligible for a refundable employee retention credit subject to certain criteria. The Company has elected an accounting policy to recognize the government assistance when it is probable that the Company is eligible to receive the assistance and present the credit be as a reduction of the related expense. As of March 31, 2022 and December 31, 2021 the Company has recorded $876,456 in other receivables on the condensed consolidated balance sheet related to refunds filed in the fourth quarter of 2021.

 

About Paysign, Inc

About Paysign, Inc.

 

Paysign, Inc. (the “Company,” “Paysign,” “we” or “our”) was incorporated on August 24, 1995, and trades under the symbol PAYS on The Nasdaq Stock Market LLC. Paysign. is a provider of prepaid card programs, comprehensive patient affordability offerings, digital banking services and integrated payment processing designed for businesses, consumers and government institutions. Headquartered in Nevada, the company creates customized, innovative payment solutions for clients across all industries, including pharmaceutical, healthcare, hospitality and retail.

 

Principles of Consolidation

Principles of Consolidation – The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated.

 

Reclassifications

Reclassifications – Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period financial statement presentations.

 

Use of Estimates

Use of Estimates – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and (iii) the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

Cash and Cash Equivalents – The Company considers all highly liquid investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents for the purposes of the statement of cash flows. The Company had no cash equivalents at March 31, 2022 and 2021.

 

Restricted Cash

Restricted Cash – At March 31, 2022 and December 31, 2021, restricted cash consisted of funds held specifically for our card product programs that are contractually restricted to use. The Company includes changes in restricted cash balances with cash and cash equivalents when reconciling the beginning and ending total amounts in our condensed consolidated statements of cash flows.

 

Concentrations of Credit Risk

Concentrations of Credit Risk – Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and restricted cash. Paysign maintains its cash and cash equivalents and restricted cash in various bank accounts that, at times, may exceed federally insured limits. Paysign has not experienced, nor does it anticipate, any losses with respect to such accounts. At March 31, 2022 and December 31, 2021, the Company had approximately $29,195,396 and $31,828,826 in excess of federally insured bank account limits, respectively.

 

The Company also has a concentration of accounts receivable risk at March 31, 2022 as two Pharma program customers associated with our Pharma copay programs each individually represent 51% and 15% of our accounts receivable balance. Two Pharma program customers each individually represented 52% and 17% of our accounts receivable balance at December 31, 2021.

 

Fixed Assets

Fixed Assets – Fixed assets are stated at cost less accumulated depreciation. Depreciation is principally recorded on the straight-line method over the estimated useful life of the asset, which is generally 3 to 10 years. The cost of repairs and maintenance is charged to expense as incurred. Leasehold improvements are capitalized and depreciated over the shorter of the remaining lease term or the estimated useful life of the improvements. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).

 

The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.

 

Intangible Assets

Intangible Assets – For intangible assets, the Company recognizes an impairment loss if the carrying amount of the intangible asset is not recoverable and exceeds fair value. The carrying amount of the intangible asset is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset.

 

Intangible assets with a finite life are amortized on a straight-line basis over its estimated useful life.

 

Internally Developed Software Costs - Computer software development costs are expensed as incurred, except for internal use software or website development costs that qualify for capitalization as described below, and include compensation and related expenses, costs of hardware and software, and costs incurred in developing features and functionality.

  

For computer software developed or obtained for internal use, costs that are incurred in the preliminary project and post implementation stages of software development are expensed as incurred. Costs incurred during the application and development stage are capitalized. Capitalized costs are amortized using the straight-line method over a 3 to 5 year estimated useful life, beginning in the period in which the software is available for use.

 

Customer Card Funding

Customer Card Funding – At March 31, 2022 and December 31, 2021, customer card funding represents funds loaded on our prepaid card programs.

 

Earnings Per Share

Earnings Per Share – Basic earnings per share exclude any dilutive effects of options, warrants and convertible securities. Basic earnings per share is computed using the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is computed using the weighted average number of common and common stock equivalent shares outstanding during the period, using the treasury stock method. Common stock equivalent shares are excluded from the computation if their effect is anti-dilutive.

 

Revenue and Expense Recognition

Revenue and Expense Recognition – In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contracts with customers; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

 

The Company generates revenues from Plasma card programs through fees generated from cardholder fees and interchange fees. Revenues from Pharma card programs are generated through card program management fees, interchange fees, and settlement income.

 

Plasma and Pharma card program revenues include both fixed and variable components. Cardholder fees represent an obligation to the cardholder based on a per transaction basis and recognized at a point in time when the performance obligation is fulfilled. Card program management fees include an obligation to our card program sponsors and are generally recognized when earned on a monthly basis and paid typically due within 30 days pursuant to the contract terms which are generally multi-year contracts. The Company uses the output method to recognize card program management fee revenue at the amount of consideration to which an entity has a right to invoice. The performance obligation is satisfied when the services are transferred to the customer which the Company determined to be monthly, as the customers simultaneously receives and consumes the benefit from the Company’s performance. Interchange fees are earned when customer-issued cards are processed through card payment networks as the nature of our promise to the customer is that we stand ready to process transactions at the customer’s requests on a daily basis over the contract term. Since the timing and quantity of transactions to be processed by us is not determinable, we view interchange fees to comprise an obligation to stand ready to process as many transactions as the customer requests. Accordingly, the promise to stand ready is accounted for as a single series performance obligation. The Company uses the right to invoice practical expedient and recognizes interchange fee revenue concurrent with the processing of card transactions. Interchange fees are settled in accordance with the card payment network terms and conditions, which is typically within a few days.

 

The Company utilizes the remote method of revenue recognition for settlement income whereby the unspent balances will be recognized as revenue at the expiration of the cards and the respective program. The Company records all revenue on a gross basis since it is the primary obligor and establishes the price in the contract arrangement with its customers. The Company is currently under no obligation for refunding any fees, and the Company does not currently have any obligations for disputed claim settlements. Given the nature of the Company’s services and contracts, it has no contract assets.

 

Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, and sales and commission expense. 

 

Operating leases

Operating leases – The Company determines if a contract is or contains a leasing element at contract inception or the date in which a modification of an existing contract occurs. In order for a contract to be considered a lease, the contract must transfer the right to control the use of an identified asset for a period of time in exchange for consideration. Control is determined to have occurred if the lessee has the right to (i) obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use and (ii) direct the use of the identified asset.

  

In determining the present value of lease payments at lease commencement date, the Company utilizes its incremental borrowing rate based on the information available, unless the rate implicit in the lease is readily determinable. The liability for operating leases is based on the present value of future lease payments. Operating lease expenses are recorded as rent expense, which is included within selling, general and administrative expenses within the consolidated statements of operations and presented as operating cash outflows within the consolidated statements of cash flows.

 

Leases with an initial term of 12 months or less are not recorded on the balance sheet, with lease expense for these leases recognized on a straight-line basis over the lease term.

 

Stock-Based Compensation

Stock-Based Compensation – The Company recognizes compensation expense for all restricted stock awards and stock options. The fair value of restricted stock awards is measured using the grant date trading price of our stock. The fair value of stock options is estimated at the grant date using the Black-Scholes option-pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. We have elected to recognize compensation expense for all options with graded vesting on a straight-line basis over the vesting period of the entire option. The determination of fair value using the Black-Scholes pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility and the risk-free interest rate.

 

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements – In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which provides updated guidance on how an entity should measure credit losses on all financial instruments carried at amortized cost (including loans held for investment and held-to-maturity debt securities, as well as trade receivables, reinsurance recoverables, and receivables that relate to repurchase agreements and securities lending agreements), a lessor’s net investments in leases, and off-balance sheet credit exposures not accounted for as insurance or as derivatives, including loan commitments, standby letters of credit, and financial guarantees. Subsequently, in November 2018 the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments–Credit Losses (“ASU 2018-19”), which clarified that receivables arising from operating leases are not within the scope of Subtopic 326-20, but instead should be accounted for in accordance with Topic 842, Leases. In March 2022 the FASB issued ASU No. 2022-02, Financial Instruments—Credit Losses: Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) which clarified accounting treatment required for trouble debt restructurings by creditors and enhanced disclosures for write-offs. The new standard and related amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the impact of adopting this guidance on our Financial Statements; however, we do not expect it to have a material impact on the Company’s consolidated financial statements.

 

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). This ASU requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606). This guidance is effective for the Company beginning on January 1, 2023 and is not expected to have a material impact on the Company’s consolidated financial statements.

 

XML 29 R19.htm IDEA: XBRL DOCUMENT v3.22.1
FIXED ASSETS, NET (Tables)
3 Months Ended
Mar. 31, 2022
Property, Plant and Equipment [Abstract]  
Schedule of fixed assets
          
   March 31,
2022
   December 31,
2021
 
Equipment  $2,080,621   $2,067,834 
Software   315,855    315,855 
Furniture and fixtures   757,662    757,662 
Website costs   69,881    69,881 
Leasehold improvements   229,772    229,772 
    3,453,791    3,441,004 
Less: accumulated depreciation   1,933,992    1,798,023 
Fixed assets, net  $1,519,799   $1,642,981 
XML 30 R20.htm IDEA: XBRL DOCUMENT v3.22.1
INTANGIBLE ASSETS, NET (Tables)
3 Months Ended
Mar. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of intangible assets
          
   March 31,
2022
   December 31,
2021
 
Patents and trademarks  $38,186   $38,186 
Platform   10,515,896    9,853,823 
Customer lists and contracts   1,177,200    1,177,200 
Licenses   209,282    209,282 
    11,940,564    11,278,491 
Less: accumulated amortization   7,734,731    7,191,529 
Intangible assets, net  $4,205,833   $4,086,962 
XML 31 R21.htm IDEA: XBRL DOCUMENT v3.22.1
LEASE (Tables)
3 Months Ended
Mar. 31, 2022
Leases [Abstract]  
Schedule of operating lease liabilities
     
2023  $571,968 
2024   571,968 
2025   571,968 
2026   629,165 
2027   640,604 
Thereafter   2,028,580 
Total lease payments   5,014,253 
Less: Imputed interest   (1,083,858)
Present value of future lease payments   3,930,395 
Less: current portion of lease liability   (345,544)
Long-term portion of lease liability  $3,584,851 
XML 32 R22.htm IDEA: XBRL DOCUMENT v3.22.1
CUSTOMER CARD FUNDING LIABILITY (Tables)
3 Months Ended
Mar. 31, 2022
Revenue from Contract with Customer [Abstract]  
Schedule of contract liabilities
          
  

Three Months Ended

March 31,

 
   2022   2021 
Beginning balance  $61,283,914   $48,100,951 
Increase (decrease), net   3,393,769    10,672,537 
Ending balance  $64,677,683   $58,773,488 
XML 33 R23.htm IDEA: XBRL DOCUMENT v3.22.1
BASIC AND FULLY DILUTED NET LOSS PER COMMON SHARE (Tables)
3 Months Ended
Mar. 31, 2022
Earnings Per Share [Abstract]  
Computation of earnings per share
          
  

Three Months Ended

March 31,

 
   2022   2021 
Numerator:          
Net loss  $(309,395)  $(1,623,527)
Denominator:          
Weighted average common shares:          
Denominator for basic calculation   51,818,676    50,351,971 
Weighted average effects of potentially diluted common stock:          
Stock options (calculated using the treasury method)        
Unvested restricted stock grants        
Denominator for fully diluted calculation   51,818,676    50,351,971 
Net loss per common share:          
Basic  $(0.01)  $(0.03)
Fully diluted  $(0.01)  $(0.03)
XML 34 R24.htm IDEA: XBRL DOCUMENT v3.22.1
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Details Narrative) - USD ($)
3 Months Ended 12 Months Ended
Mar. 31, 2022
Dec. 31, 2021
Product Information [Line Items]    
Cash equivalents $ 0  
Fdic insured $ 29,195,396 $ 31,828,826
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Customer [Member]    
Product Information [Line Items]    
Concentration Risk, Percentage 51.00% 52.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Another Customer [Member]    
Product Information [Line Items]    
Concentration Risk, Percentage 15.00% 17.00%
Other Receivable [Member]    
Product Information [Line Items]    
Other receivable $ 876,456  
XML 35 R25.htm IDEA: XBRL DOCUMENT v3.22.1
FIXED ASSETS, NET (Details) - USD ($)
Mar. 31, 2022
Dec. 31, 2021
Property, Plant and Equipment [Line Items]    
Property, Plant and Equipment, Gross $ 3,453,791 $ 3,441,004
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment 1,933,992 1,798,023
Property, Plant and Equipment, Net 1,519,799 1,642,981
Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Property, Plant and Equipment, Gross 2,080,621 2,067,834
Software Development [Member]    
Property, Plant and Equipment [Line Items]    
Property, Plant and Equipment, Gross 315,855 315,855
Furniture and Fixtures [Member]    
Property, Plant and Equipment [Line Items]    
Property, Plant and Equipment, Gross 757,662 757,662
Website Costs [Member]    
Property, Plant and Equipment [Line Items]    
Property, Plant and Equipment, Gross 69,881 69,881
Leasehold Improvements [Member]    
Property, Plant and Equipment [Line Items]    
Property, Plant and Equipment, Gross $ 229,772 $ 229,772
XML 36 R26.htm IDEA: XBRL DOCUMENT v3.22.1
FIXED ASSETS, NET (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Property, Plant and Equipment [Abstract]    
Depreciation expense $ 135,969 $ 131,951
XML 37 R27.htm IDEA: XBRL DOCUMENT v3.22.1
INTANGIBLE ASSETS, NET (Details) - USD ($)
Mar. 31, 2022
Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross $ 11,940,564 $ 11,278,491
Finite-Lived Intangible Assets, Accumulated Amortization 7,734,731 7,191,529
Intangible Assets, Net (Excluding Goodwill) 4,205,833 4,086,962
Trademarks and Trade Names [Member]    
Finite-Lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross 38,186 38,186
Platform [Member]    
Finite-Lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross 10,515,896 9,853,823
Customer lists and contracts [Member]    
Finite-Lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross 1,177,200 1,177,200
Licenses [Member]    
Finite-Lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross $ 209,282 $ 209,282
XML 38 R28.htm IDEA: XBRL DOCUMENT v3.22.1
INTANGIBLE ASSETS, NET (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]    
Amortization expense $ 543,202 $ 463,897
XML 39 R29.htm IDEA: XBRL DOCUMENT v3.22.1
LEASE (Details) - USD ($)
Mar. 31, 2022
Dec. 31, 2021
Leases [Abstract]    
2023 $ 571,968  
2024 571,968  
2025 571,968  
2026 629,165  
2027 640,604  
Thereafter 2,028,580  
Total lease payments 5,014,253  
Less: Imputed interest 1,083,858  
Present value of future lease payments 3,930,395  
Less: current portion of lease liability (345,544) $ (340,412)
Long-term portion of lease liability $ 3,584,851 $ 3,673,186
XML 40 R30.htm IDEA: XBRL DOCUMENT v3.22.1
LEASE (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Leases [Abstract]    
Lease term 10 years  
Lease term option to extend two optional extensions of five years each  
Remaining lease term 8 years 2 months 12 days  
Discount rate 6.00%  
Operating lease cost $ 183,241 $ 215,144
Cash paid for operating lease $ 142,992 $ 142,992
XML 41 R31.htm IDEA: XBRL DOCUMENT v3.22.1
CUSTOMER CARD FUNDING LIABILITY (Details) - USD ($)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Revenue from Contract with Customer [Abstract]    
Beginning balance $ 61,283,914 $ 48,100,951
Increase (decrease), net 3,393,769 10,672,537
Ending balance $ 64,677,683 $ 58,773,488
XML 42 R32.htm IDEA: XBRL DOCUMENT v3.22.1
CUSTOMER CARD FUNDING LIABILITY (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Revenue from Contract with Customer [Abstract]    
Revenue recognized in current year previously included in contract liabilities $ 1,485,005 $ 1,023,055
XML 43 R33.htm IDEA: XBRL DOCUMENT v3.22.1
COMMON STOCK (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Share-based Payment Arrangement, Noncash Expense $ 569,502 $ 636,214
Number of shares vested 123,000  
Proceeds Form Vested Stock Awards And Stock Options   $ 110,466
Equity Option [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross   499,275
XML 44 R34.htm IDEA: XBRL DOCUMENT v3.22.1
BASIC AND FULLY DILUTED NET LOSS PER COMMON SHARE (Details) - USD ($)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Numerator:    
Net loss $ (309,395) $ (1,623,527)
Weighted average common shares:    
Denominator for basic calculation 51,818,676 50,351,971
Weighted average effects of potentially diluted common stock:    
Stock options (calculated using the treasury method) 0 0
Unvested restricted stock grants 0 0
Denominator for fully diluted calculation 51,818,676 50,351,971
Basic $ (0.01) $ (0.03)
Fully diluted $ (0.01) $ (0.03)
XML 45 R35.htm IDEA: XBRL DOCUMENT v3.22.1
BASIC AND FULLY DILUTED NET LOSS PER COMMON SHARE (Details Narrative) - shares
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Stock Options [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potential common share equivalents excluded from computation 1,891,800 2,241,014
Unvested Restricted Stock Awards [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potential common share equivalents excluded from computation 1,254,000 1,975,000
XML 46 R36.htm IDEA: XBRL DOCUMENT v3.22.1
RELATED PARTY (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Related Party Transactions [Abstract]    
Legal expense $ 40,734 $ 252,836
XML 47 R37.htm IDEA: XBRL DOCUMENT v3.22.1
INCOME TAX PROVISION (Details Narrative)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Income Tax Disclosure [Abstract]    
Effective income tax rate 0.60% 0.10%
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NV 95-4550154 2615 St. Rose Parkway Henderson NV 89052 (702) 453-2221 Common Stock, $0.001 par value per share PAYS NASDAQ Yes Yes Non-accelerated Filer true true false false 52001932 8455671 7387156 64677683 61283914 3405867 3393940 1019218 1019218 1625631 1242967 79184070 74327195 1519799 1642981 4205833 4086962 3900851 3993655 88810553 84050793 6954565 5765478 345544 340412 64677683 61283914 71977792 67389804 3584851 3673186 75562643 71062990 0.001 0.001 25000000 25000000 0 0 0 0 0 0 0.001 0.001 150000000 150000000 52218382 52095382 52218 52095 17429498 16860119 303450 303450 150000 150000 -4083806 -3774411 13247910 12987803 88810553 84050793 7394364 5383151 806568 882830 19707 13447 8220639 6279428 3222390 3447622 4998249 2831806 4640912 3864986 679171 595848 5320083 4460834 -321834 -1629028 14336 7101 -307498 -1621927 1897 1600 -309395 -1623527 -0.01 -0.03 -0.01 -0.03 51818676 50351971 51818676 50351971 52095382 52095 16860119 -150000 -3774411 12987803 123000 123 -123 569502 569502 -309395 -309395 52218382 52218 17429498 -150000 -4083806 13247910 50251607 50252 14388890 -150000 -1053077 13236065 466689 467 -467 32586 32 110434 636214 636214 -1623527 -1623527 50750882 50751 15135071 -150000 -2676604 12359218 -309395 -1623527 569502 636214 679171 595848 92804 105704 11927 -19283 382664 572620 1189087 149429 -83203 -78369 3393769 10672537 5137144 9904499 12787 124696 635325 473996 26748 13511 -674860 -612203 0 110466 0 110466 4462284 9402762 68671070 55930404 73133354 65333166 8455671 6559678 64677683 58773488 73133354 65333166 221 0 <p id="xdx_809_eus-gaap--BasisOfPresentationAndSignificantAccountingPoliciesTextBlock_zM3I2LqUMDBh" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">1.     <span style="text-decoration: underline"><span id="xdx_822_zQS9narvGlVa">BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The foregoing unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the disclosures required by GAAP for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended December 31, 2021. In the opinion of management, the unaudited interim condensed consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company’s financial position and results of operations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_845_ecustom--ImpactOfCovid19PandemicPoliciesTextBlock_zrdV1NgXSZ8d" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_862_zcxLL9PHVFZb">Impact of COVID-19 Pandemic</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The coronavirus (COVID-19) pandemic, which started in late 2019 and reached the United States in early 2020, continues to significantly impact the economy of the United States and the rest of the world. While the disruption appears to be mitigating due to the availability of vaccines and other factors, the ultimate duration and severity of the pandemic remain uncertain, particularly given the development of new variants that continue to spread. The COVID-19 outbreak caused plasma center closures, and the stimulus packages signed into law during 2020 and 2021 reduced the incentive for individuals to donate plasma for supplementary income. Those developments have had and will continue to have an adverse impact on the Company’s results of operations. While we remain cautiously optimistic and have seen improvements in our operating results on an aggregated basis, we cannot foresee how long it may take the Company to attain pre-pandemic operating levels on a per plasma donation center basis as COVID-19 related labor shortages at plasma donation centers, border closures, and other effects continue to weigh on the Company’s results of operations. Given the uncertainty around the extent and timing of the potential future spread or mitigation of COVID-19 and variants and around the imposition or relaxation of protective measures, management cannot at this time estimate with reasonable accuracy COVID-19’s further impact on the Company’s results of operations, cash flows or financial condition.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law in 2020 and the subsequent extension of the CARES Act through September 30, 2021, the Company was eligible for a refundable employee retention credit subject to certain criteria. The Company has elected an accounting policy to recognize the government assistance when it is probable that the Company is eligible to receive the assistance and present the credit be as a reduction of the related expense. As of March 31, 2022 and December 31, 2021 the Company has recorded $<span id="xdx_902_ecustom--RefundReceivable_c20220331__us-gaap--BalanceSheetLocationAxis__custom--OtherReceivableMember_pp0p0" title="Other receivable">876,456</span> in other receivables on the condensed consolidated balance sheet related to refunds filed in the fourth quarter of 2021.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_844_eus-gaap--BusinessDescriptionAndAccountingPoliciesTextBlock_z82pGEKahTve" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_864_zcCHZGusK9ki">About Paysign, Inc</span>.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Paysign, Inc. (the “Company,” “Paysign,” “we” or “our”) was incorporated on August 24, 1995, and trades under the symbol PAYS on The Nasdaq Stock Market LLC. Paysign. is a provider of prepaid card programs, comprehensive patient affordability offerings, digital banking services and integrated payment processing designed for businesses, consumers and government institutions. Headquartered in Nevada, the company creates customized, innovative payment solutions for clients across all industries, including pharmaceutical, healthcare, hospitality and retail.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_848_eus-gaap--ConsolidationPolicyTextBlock_zBJF1XwHeDPd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86A_zSJosMrIoID4">Principles of Consolidation</span></span> – The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_849_eus-gaap--PriorPeriodReclassificationAdjustmentDescription_z68lVZqQjy83" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86A_zmwpOCpSpa42">Reclassifications</span></span> – Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period financial statement presentations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_844_eus-gaap--UseOfEstimates_zoxtc0vaGD55" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86A_zWB24qsdqeLh">Use of Estimates</span></span> – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and (iii) the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84B_eus-gaap--CashAndCashEquivalentsPolicyTextBlock_zWXEACN43Ufd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_864_zV1n6aFd42t1">Cash and Cash Equivalents</span></span> – The Company considers all highly liquid investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents for the purposes of the statement of cash flows. The Company had <span id="xdx_90A_eus-gaap--CashEquivalentsAtCarryingValue_iI_pp0p0_do_c20220331_zu9irsQvpMqd" title="Cash equivalents"><span id="xdx_902_eus-gaap--CashEquivalentsAtCarryingValue_iI_pp0p0_do_c20220331_zFdtCM9vu9Gd" title="Cash equivalents">no</span></span> cash equivalents at March 31, 2022 and 2021.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_840_eus-gaap--CashAndCashEquivalentsRestrictedCashAndCashEquivalentsPolicy_zORWljaKd2X3" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86F_zBrY3Mbpt2H1">Restricted Cash</span></span> – At March 31, 2022 and December 31, 2021, restricted cash consisted of funds held specifically for our card product programs that are contractually restricted to use. The Company includes changes in restricted cash balances with cash and cash equivalents when reconciling the beginning and ending total amounts in our condensed consolidated statements of cash flows.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_844_eus-gaap--ConcentrationRiskCreditRisk_zOu9iHOgqKr6" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_867_zzAqt3mt6U7g">Concentrations of Credit Risk</span></span> – Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and restricted cash. Paysign maintains its cash and cash equivalents and restricted cash in various bank accounts that, at times, may exceed federally insured limits. Paysign has not experienced, nor does it anticipate, any losses with respect to such accounts. At March 31, 2022 and December 31, 2021, the Company had approximately $<span id="xdx_904_eus-gaap--CashUninsuredAmount_iI_pp0p0_c20220331_zxe3lyMdkVYg" title="Fdic insured">29,195,396</span> and $<span id="xdx_907_eus-gaap--CashUninsuredAmount_iI_pp0p0_c20211231_zRiVGWOhOXzf" title="Fdic insured">31,828,826</span> in excess of federally insured bank account limits, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company also has a concentration of accounts receivable risk at March 31, 2022 as two Pharma program customers associated with our Pharma copay programs each individually represent <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--OneCustomerMember_zdFl5RpChppi" title="Concentration Risk, Percentage">51</span>% and <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--AnotherCustomerMember_zgBI3UGXvr4f" title="Concentration Risk, Percentage">15</span>% of our accounts receivable balance. Two Pharma program customers each individually represented <span id="xdx_903_eus-gaap--ConcentrationRiskPercentage1_dp_c20210101__20211231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--OneCustomerMember_zPNQiRI5XCG6">52</span>% and <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_dp_c20210101__20211231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--AnotherCustomerMember_zqAHIP90A269">17</span>% of our accounts receivable balance at December 31, 2021.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_840_eus-gaap--PropertyPlantAndEquipmentPolicyTextBlock_zVHbnJMFpvf1" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_868_z6qvcuV5pWIa">Fixed Assets</span></span> – Fixed assets are stated at cost less accumulated depreciation. Depreciation is principally recorded on the straight-line method over the estimated useful life of the asset, which is generally 3 to 10 years. The cost of repairs and maintenance is charged to expense as incurred. Leasehold improvements are capitalized and depreciated over the shorter of the remaining lease term or the estimated useful life of the improvements. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_844_eus-gaap--IntangibleAssetsFiniteLivedPolicy_z4SnYGTzcSSh" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_860_zhHwxmSj0mHi">Intangible Assets</span></span> – For intangible assets, the Company recognizes an impairment loss if the carrying amount of the intangible asset is not recoverable and exceeds fair value. The carrying amount of the intangible asset is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Intangible assets with a finite life are amortized on a straight-line basis over its estimated useful life.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Internally Developed Software Costs - </i>Computer software development costs are expensed as incurred, except for internal use software or website development costs that qualify for capitalization as described below, and include compensation and related expenses, costs of hardware and software, and costs incurred in developing features and functionality.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For computer software developed or obtained for internal use, costs that are incurred in the preliminary project and post implementation stages of software development are expensed as incurred. Costs incurred during the application and development stage are capitalized. Capitalized costs are amortized using the straight-line method over a 3 to 5 year estimated useful life, beginning in the period in which the software is available for use.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_848_ecustom--CustomerCardFundingPolicyTextBlock_zFrGz5DdK2Ak" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86E_zSA1Rm6Ehh5j">Customer Card Funding</span></span> – At March 31, 2022 and December 31, 2021, customer card funding represents funds loaded on our prepaid card programs.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p id="xdx_848_eus-gaap--EarningsPerSharePolicyTextBlock_zVzVoNRW5Xcj" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86C_zPPbN5dU8h7h">Earnings Per Share</span></span> – Basic earnings per share exclude any dilutive effects of options, warrants and convertible securities. Basic earnings per share is computed using the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is computed using the weighted average number of common and common stock equivalent shares outstanding during the period, using the treasury stock method. Common stock equivalent shares are excluded from the computation if their effect is anti-dilutive.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84C_eus-gaap--RevenueRecognitionPolicyTextBlock_zTFBMVOIzQR4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86F_ziefVe9CyT6f">Revenue and Expense Recognition</span></span> – In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contracts with customers; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company generates revenues from Plasma card programs through fees generated from cardholder fees and interchange fees. Revenues from Pharma card programs are generated through card program management fees, interchange fees, and settlement income.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Plasma and Pharma card program revenues include both fixed and variable components. Cardholder fees represent an obligation to the cardholder based on a per transaction basis and recognized at a point in time when the performance obligation is fulfilled. Card program management fees include an obligation to our card program sponsors and are generally recognized when earned on a monthly basis and paid typically due within 30 days pursuant to the contract terms which are generally multi-year contracts. The Company uses the output method to recognize card program management fee revenue at the amount of consideration to which an entity has a right to invoice. The performance obligation is satisfied when the services are transferred to the customer which the Company determined to be monthly, as the customers simultaneously receives and consumes the benefit from the Company’s performance. Interchange fees are earned when customer-issued cards are processed through card payment networks as the nature of our promise to the customer is that we stand ready to process transactions at the customer’s requests on a daily basis over the contract term. Since the timing and quantity of transactions to be processed by us is not determinable, we view interchange fees to comprise an obligation to stand ready to process as many transactions as the customer requests. Accordingly, the promise to stand ready is accounted for as a single series performance obligation. The Company uses the right to invoice practical expedient and recognizes interchange fee revenue concurrent with the processing of card transactions. Interchange fees are settled in accordance with the card payment network terms and conditions, which is typically within a few days.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company utilizes the remote method of revenue recognition for settlement income whereby the unspent balances will be recognized as revenue at the expiration of the cards and the respective program. The Company records all revenue on a gross basis since it is the primary obligor and establishes the price in the contract arrangement with its customers. The Company is currently under no obligation for refunding any fees, and the Company does not currently have any obligations for disputed claim settlements. Given the nature of the Company’s services and contracts, it has no contract assets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, and sales and commission expense. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84D_eus-gaap--LesseeLeasesPolicyTextBlock_zUxnll54W7C4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86E_z0xGxdH4e9ma">Operating leases</span></span> – The Company determines if a contract is or contains a leasing element at contract inception or the date in which a modification of an existing contract occurs. In order for a contract to be considered a lease, the contract must transfer the right to control the use of an identified asset for a period of time in exchange for consideration. Control is determined to have occurred if the lessee has the right to (i) obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use and (ii) direct the use of the identified asset.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In determining the present value of lease payments at lease commencement date, the Company utilizes its incremental borrowing rate based on the information available, unless the rate implicit in the lease is readily determinable. The liability for operating leases is based on the present value of future lease payments. Operating lease expenses are recorded as rent expense, which is included within selling, general and administrative expenses within the consolidated statements of operations and presented as operating cash outflows within the consolidated statements of cash flows.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Leases with an initial term of 12 months or less are not recorded on the balance sheet, with lease expense for these leases recognized on a straight-line basis over the lease term.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_842_eus-gaap--CompensationRelatedCostsPolicyTextBlock_zIkkndoShV3e" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_862_zGiRBC7HUEUl">Stock-Based Compensation</span></span> – The Company recognizes compensation expense for all restricted stock awards and stock options. The fair value of restricted stock awards is measured using the grant date trading price of our stock. The fair value of stock options is estimated at the grant date using the Black-Scholes option-pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. We have elected to recognize compensation expense for all options with graded vesting on a straight-line basis over the vesting period of the entire option. The determination of fair value using the Black-Scholes pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility and the risk-free interest rate.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_849_eus-gaap--NewAccountingPronouncementsPolicyPolicyTextBlock_zr2bLMVPIQW8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_867_zmF96vSNs6A2">Recently Issued Accounting Pronouncements</span></span> – In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, <i>Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), </i>which provides updated guidance on how an entity should measure credit losses on all financial instruments carried at amortized cost (including loans held for investment and held-to-maturity debt securities, as well as trade receivables, reinsurance recoverables, and receivables that relate to repurchase agreements and securities lending agreements), a lessor’s net investments in leases, and off-balance sheet credit exposures not accounted for as insurance or as derivatives, including loan commitments, standby letters of credit, and financial guarantees. Subsequently, in November 2018 the FASB issued ASU No. 2018-19, <i>Codification Improvements to Topic 326, Financial Instruments–Credit Losses (“ASU 2018-19”), </i>which clarified that receivables arising from operating leases are not within the scope of Subtopic 326-20, but instead should be accounted for in accordance with Topic 842, Leases. In March 2022 the FASB issued ASU No. 2022-02, <i>Financial Instruments—Credit Losses: Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) </i>which clarified accounting treatment required for trouble debt restructurings by creditors and enhanced disclosures for write-offs. The new standard and related amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the impact of adopting this guidance on our Financial Statements; however, we do not expect it to have a material impact on the Company’s consolidated financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In October 2021, the FASB issued ASU No. 2021-08, <i>Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers</i> (“ASU 2021-08”). This ASU requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASU No. 2016-10, <i>Revenue from Contracts with Customers (Topic 606)</i>. This guidance is effective for the Company beginning on January 1, 2023 and is not expected to have a material impact on the Company’s consolidated financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p id="xdx_845_ecustom--ImpactOfCovid19PandemicPoliciesTextBlock_zrdV1NgXSZ8d" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_862_zcxLL9PHVFZb">Impact of COVID-19 Pandemic</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The coronavirus (COVID-19) pandemic, which started in late 2019 and reached the United States in early 2020, continues to significantly impact the economy of the United States and the rest of the world. While the disruption appears to be mitigating due to the availability of vaccines and other factors, the ultimate duration and severity of the pandemic remain uncertain, particularly given the development of new variants that continue to spread. The COVID-19 outbreak caused plasma center closures, and the stimulus packages signed into law during 2020 and 2021 reduced the incentive for individuals to donate plasma for supplementary income. Those developments have had and will continue to have an adverse impact on the Company’s results of operations. While we remain cautiously optimistic and have seen improvements in our operating results on an aggregated basis, we cannot foresee how long it may take the Company to attain pre-pandemic operating levels on a per plasma donation center basis as COVID-19 related labor shortages at plasma donation centers, border closures, and other effects continue to weigh on the Company’s results of operations. Given the uncertainty around the extent and timing of the potential future spread or mitigation of COVID-19 and variants and around the imposition or relaxation of protective measures, management cannot at this time estimate with reasonable accuracy COVID-19’s further impact on the Company’s results of operations, cash flows or financial condition.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law in 2020 and the subsequent extension of the CARES Act through September 30, 2021, the Company was eligible for a refundable employee retention credit subject to certain criteria. The Company has elected an accounting policy to recognize the government assistance when it is probable that the Company is eligible to receive the assistance and present the credit be as a reduction of the related expense. As of March 31, 2022 and December 31, 2021 the Company has recorded $<span id="xdx_902_ecustom--RefundReceivable_c20220331__us-gaap--BalanceSheetLocationAxis__custom--OtherReceivableMember_pp0p0" title="Other receivable">876,456</span> in other receivables on the condensed consolidated balance sheet related to refunds filed in the fourth quarter of 2021.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> 876456 <p id="xdx_844_eus-gaap--BusinessDescriptionAndAccountingPoliciesTextBlock_z82pGEKahTve" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_864_zcCHZGusK9ki">About Paysign, Inc</span>.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Paysign, Inc. (the “Company,” “Paysign,” “we” or “our”) was incorporated on August 24, 1995, and trades under the symbol PAYS on The Nasdaq Stock Market LLC. Paysign. is a provider of prepaid card programs, comprehensive patient affordability offerings, digital banking services and integrated payment processing designed for businesses, consumers and government institutions. Headquartered in Nevada, the company creates customized, innovative payment solutions for clients across all industries, including pharmaceutical, healthcare, hospitality and retail.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_848_eus-gaap--ConsolidationPolicyTextBlock_zBJF1XwHeDPd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86A_zSJosMrIoID4">Principles of Consolidation</span></span> – The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_849_eus-gaap--PriorPeriodReclassificationAdjustmentDescription_z68lVZqQjy83" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86A_zmwpOCpSpa42">Reclassifications</span></span> – Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period financial statement presentations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_844_eus-gaap--UseOfEstimates_zoxtc0vaGD55" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86A_zWB24qsdqeLh">Use of Estimates</span></span> – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and (iii) the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84B_eus-gaap--CashAndCashEquivalentsPolicyTextBlock_zWXEACN43Ufd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_864_zV1n6aFd42t1">Cash and Cash Equivalents</span></span> – The Company considers all highly liquid investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents for the purposes of the statement of cash flows. The Company had <span id="xdx_90A_eus-gaap--CashEquivalentsAtCarryingValue_iI_pp0p0_do_c20220331_zu9irsQvpMqd" title="Cash equivalents"><span id="xdx_902_eus-gaap--CashEquivalentsAtCarryingValue_iI_pp0p0_do_c20220331_zFdtCM9vu9Gd" title="Cash equivalents">no</span></span> cash equivalents at March 31, 2022 and 2021.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> 0 0 <p id="xdx_840_eus-gaap--CashAndCashEquivalentsRestrictedCashAndCashEquivalentsPolicy_zORWljaKd2X3" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86F_zBrY3Mbpt2H1">Restricted Cash</span></span> – At March 31, 2022 and December 31, 2021, restricted cash consisted of funds held specifically for our card product programs that are contractually restricted to use. The Company includes changes in restricted cash balances with cash and cash equivalents when reconciling the beginning and ending total amounts in our condensed consolidated statements of cash flows.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_844_eus-gaap--ConcentrationRiskCreditRisk_zOu9iHOgqKr6" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_867_zzAqt3mt6U7g">Concentrations of Credit Risk</span></span> – Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and restricted cash. Paysign maintains its cash and cash equivalents and restricted cash in various bank accounts that, at times, may exceed federally insured limits. Paysign has not experienced, nor does it anticipate, any losses with respect to such accounts. At March 31, 2022 and December 31, 2021, the Company had approximately $<span id="xdx_904_eus-gaap--CashUninsuredAmount_iI_pp0p0_c20220331_zxe3lyMdkVYg" title="Fdic insured">29,195,396</span> and $<span id="xdx_907_eus-gaap--CashUninsuredAmount_iI_pp0p0_c20211231_zRiVGWOhOXzf" title="Fdic insured">31,828,826</span> in excess of federally insured bank account limits, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company also has a concentration of accounts receivable risk at March 31, 2022 as two Pharma program customers associated with our Pharma copay programs each individually represent <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--OneCustomerMember_zdFl5RpChppi" title="Concentration Risk, Percentage">51</span>% and <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_dp_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--AnotherCustomerMember_zgBI3UGXvr4f" title="Concentration Risk, Percentage">15</span>% of our accounts receivable balance. Two Pharma program customers each individually represented <span id="xdx_903_eus-gaap--ConcentrationRiskPercentage1_dp_c20210101__20211231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--OneCustomerMember_zPNQiRI5XCG6">52</span>% and <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_dp_c20210101__20211231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--AnotherCustomerMember_zqAHIP90A269">17</span>% of our accounts receivable balance at December 31, 2021.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> 29195396 31828826 0.51 0.15 0.52 0.17 <p id="xdx_840_eus-gaap--PropertyPlantAndEquipmentPolicyTextBlock_zVHbnJMFpvf1" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_868_z6qvcuV5pWIa">Fixed Assets</span></span> – Fixed assets are stated at cost less accumulated depreciation. Depreciation is principally recorded on the straight-line method over the estimated useful life of the asset, which is generally 3 to 10 years. The cost of repairs and maintenance is charged to expense as incurred. Leasehold improvements are capitalized and depreciated over the shorter of the remaining lease term or the estimated useful life of the improvements. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_844_eus-gaap--IntangibleAssetsFiniteLivedPolicy_z4SnYGTzcSSh" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_860_zhHwxmSj0mHi">Intangible Assets</span></span> – For intangible assets, the Company recognizes an impairment loss if the carrying amount of the intangible asset is not recoverable and exceeds fair value. The carrying amount of the intangible asset is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Intangible assets with a finite life are amortized on a straight-line basis over its estimated useful life.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Internally Developed Software Costs - </i>Computer software development costs are expensed as incurred, except for internal use software or website development costs that qualify for capitalization as described below, and include compensation and related expenses, costs of hardware and software, and costs incurred in developing features and functionality.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For computer software developed or obtained for internal use, costs that are incurred in the preliminary project and post implementation stages of software development are expensed as incurred. Costs incurred during the application and development stage are capitalized. Capitalized costs are amortized using the straight-line method over a 3 to 5 year estimated useful life, beginning in the period in which the software is available for use.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_848_ecustom--CustomerCardFundingPolicyTextBlock_zFrGz5DdK2Ak" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86E_zSA1Rm6Ehh5j">Customer Card Funding</span></span> – At March 31, 2022 and December 31, 2021, customer card funding represents funds loaded on our prepaid card programs.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p id="xdx_848_eus-gaap--EarningsPerSharePolicyTextBlock_zVzVoNRW5Xcj" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86C_zPPbN5dU8h7h">Earnings Per Share</span></span> – Basic earnings per share exclude any dilutive effects of options, warrants and convertible securities. Basic earnings per share is computed using the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is computed using the weighted average number of common and common stock equivalent shares outstanding during the period, using the treasury stock method. Common stock equivalent shares are excluded from the computation if their effect is anti-dilutive.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84C_eus-gaap--RevenueRecognitionPolicyTextBlock_zTFBMVOIzQR4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86F_ziefVe9CyT6f">Revenue and Expense Recognition</span></span> – In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contracts with customers; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company generates revenues from Plasma card programs through fees generated from cardholder fees and interchange fees. Revenues from Pharma card programs are generated through card program management fees, interchange fees, and settlement income.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Plasma and Pharma card program revenues include both fixed and variable components. Cardholder fees represent an obligation to the cardholder based on a per transaction basis and recognized at a point in time when the performance obligation is fulfilled. Card program management fees include an obligation to our card program sponsors and are generally recognized when earned on a monthly basis and paid typically due within 30 days pursuant to the contract terms which are generally multi-year contracts. The Company uses the output method to recognize card program management fee revenue at the amount of consideration to which an entity has a right to invoice. The performance obligation is satisfied when the services are transferred to the customer which the Company determined to be monthly, as the customers simultaneously receives and consumes the benefit from the Company’s performance. Interchange fees are earned when customer-issued cards are processed through card payment networks as the nature of our promise to the customer is that we stand ready to process transactions at the customer’s requests on a daily basis over the contract term. Since the timing and quantity of transactions to be processed by us is not determinable, we view interchange fees to comprise an obligation to stand ready to process as many transactions as the customer requests. Accordingly, the promise to stand ready is accounted for as a single series performance obligation. The Company uses the right to invoice practical expedient and recognizes interchange fee revenue concurrent with the processing of card transactions. Interchange fees are settled in accordance with the card payment network terms and conditions, which is typically within a few days.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company utilizes the remote method of revenue recognition for settlement income whereby the unspent balances will be recognized as revenue at the expiration of the cards and the respective program. The Company records all revenue on a gross basis since it is the primary obligor and establishes the price in the contract arrangement with its customers. The Company is currently under no obligation for refunding any fees, and the Company does not currently have any obligations for disputed claim settlements. Given the nature of the Company’s services and contracts, it has no contract assets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, and sales and commission expense. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84D_eus-gaap--LesseeLeasesPolicyTextBlock_zUxnll54W7C4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86E_z0xGxdH4e9ma">Operating leases</span></span> – The Company determines if a contract is or contains a leasing element at contract inception or the date in which a modification of an existing contract occurs. In order for a contract to be considered a lease, the contract must transfer the right to control the use of an identified asset for a period of time in exchange for consideration. Control is determined to have occurred if the lessee has the right to (i) obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use and (ii) direct the use of the identified asset.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In determining the present value of lease payments at lease commencement date, the Company utilizes its incremental borrowing rate based on the information available, unless the rate implicit in the lease is readily determinable. The liability for operating leases is based on the present value of future lease payments. Operating lease expenses are recorded as rent expense, which is included within selling, general and administrative expenses within the consolidated statements of operations and presented as operating cash outflows within the consolidated statements of cash flows.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Leases with an initial term of 12 months or less are not recorded on the balance sheet, with lease expense for these leases recognized on a straight-line basis over the lease term.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_842_eus-gaap--CompensationRelatedCostsPolicyTextBlock_zIkkndoShV3e" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_862_zGiRBC7HUEUl">Stock-Based Compensation</span></span> – The Company recognizes compensation expense for all restricted stock awards and stock options. The fair value of restricted stock awards is measured using the grant date trading price of our stock. The fair value of stock options is estimated at the grant date using the Black-Scholes option-pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. We have elected to recognize compensation expense for all options with graded vesting on a straight-line basis over the vesting period of the entire option. The determination of fair value using the Black-Scholes pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility and the risk-free interest rate.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_849_eus-gaap--NewAccountingPronouncementsPolicyPolicyTextBlock_zr2bLMVPIQW8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_867_zmF96vSNs6A2">Recently Issued Accounting Pronouncements</span></span> – In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, <i>Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), </i>which provides updated guidance on how an entity should measure credit losses on all financial instruments carried at amortized cost (including loans held for investment and held-to-maturity debt securities, as well as trade receivables, reinsurance recoverables, and receivables that relate to repurchase agreements and securities lending agreements), a lessor’s net investments in leases, and off-balance sheet credit exposures not accounted for as insurance or as derivatives, including loan commitments, standby letters of credit, and financial guarantees. Subsequently, in November 2018 the FASB issued ASU No. 2018-19, <i>Codification Improvements to Topic 326, Financial Instruments–Credit Losses (“ASU 2018-19”), </i>which clarified that receivables arising from operating leases are not within the scope of Subtopic 326-20, but instead should be accounted for in accordance with Topic 842, Leases. In March 2022 the FASB issued ASU No. 2022-02, <i>Financial Instruments—Credit Losses: Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) </i>which clarified accounting treatment required for trouble debt restructurings by creditors and enhanced disclosures for write-offs. The new standard and related amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the impact of adopting this guidance on our Financial Statements; however, we do not expect it to have a material impact on the Company’s consolidated financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In October 2021, the FASB issued ASU No. 2021-08, <i>Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers</i> (“ASU 2021-08”). This ASU requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASU No. 2016-10, <i>Revenue from Contracts with Customers (Topic 606)</i>. This guidance is effective for the Company beginning on January 1, 2023 and is not expected to have a material impact on the Company’s consolidated financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p id="xdx_809_eus-gaap--PropertyPlantAndEquipmentDisclosureTextBlock_zY5BSpU2qr4c" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">2.     <span style="text-decoration: underline"><span id="xdx_829_zRfBOEJzqiDf">FIXED ASSETS, NET</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Fixed assets consist of the following:</p> <table cellpadding="0" cellspacing="0" id="xdx_88E_eus-gaap--PropertyPlantAndEquipmentTextBlock_z3hWF3GgENFj" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - FIXED ASSETS, NET (Details)"> <tr style="vertical-align: bottom; background-color: White"> <td><span id="xdx_8B5_zgKZUnX2J85h" style="display: none">Schedule of fixed assets</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: center"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">March 31, <br/> 2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, <br/> 2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 66%">Equipment</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98B_eus-gaap--PropertyPlantAndEquipmentGross_c20220331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--EquipmentMember_pp0p0" style="width: 13%; text-align: right">2,080,621</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--PropertyPlantAndEquipmentGross_c20211231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--EquipmentMember_pp0p0" style="width: 13%; text-align: right">2,067,834</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Software</td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--PropertyPlantAndEquipmentGross_c20220331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--SoftwareDevelopmentMember_pp0p0" style="text-align: right">315,855</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--PropertyPlantAndEquipmentGross_c20211231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--SoftwareDevelopmentMember_pp0p0" style="text-align: right">315,855</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Furniture and fixtures</td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--PropertyPlantAndEquipmentGross_c20220331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember_pp0p0" style="text-align: right">757,662</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--PropertyPlantAndEquipmentGross_c20211231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember_pp0p0" style="text-align: right">757,662</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Website costs</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--PropertyPlantAndEquipmentGross_c20220331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--WebsiteCostsMember_pp0p0" style="text-align: right">69,881</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--PropertyPlantAndEquipmentGross_c20211231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--WebsiteCostsMember_pp0p0" style="text-align: right">69,881</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Leasehold improvements</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_986_eus-gaap--PropertyPlantAndEquipmentGross_c20220331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--LeaseholdImprovementsMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right">229,772</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_eus-gaap--PropertyPlantAndEquipmentGross_c20211231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--LeaseholdImprovementsMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right">229,772</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--PropertyPlantAndEquipmentGross_c20220331_pp0p0" style="text-align: right">3,453,791</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_eus-gaap--PropertyPlantAndEquipmentGross_c20211231_pp0p0" style="text-align: right">3,441,004</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Less: accumulated depreciation</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_988_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_c20220331_pp0p0" style="border-bottom: Black 1pt solid; text-align: right">1,933,992</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98B_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_c20211231_pp0p0" style="border-bottom: Black 1pt solid; text-align: right">1,798,023</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Fixed assets, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_987_eus-gaap--PropertyPlantAndEquipmentNet_c20220331_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right">1,519,799</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_984_eus-gaap--PropertyPlantAndEquipmentNet_c20211231_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right">1,642,981</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Depreciation expense for the three months ended March 31, 2022 and 2021 was $<span id="xdx_90F_eus-gaap--Depreciation_c20220101__20220331_pp0p0" title="Depreciation expense">135,969</span> and $<span id="xdx_901_eus-gaap--Depreciation_pp0p0_c20210101__20210331_zfU3OPym6Gcf" title="Depreciation expense">131,951</span>, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" cellspacing="0" id="xdx_88E_eus-gaap--PropertyPlantAndEquipmentTextBlock_z3hWF3GgENFj" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - FIXED ASSETS, NET (Details)"> <tr style="vertical-align: bottom; background-color: White"> <td><span id="xdx_8B5_zgKZUnX2J85h" style="display: none">Schedule of fixed assets</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: center"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">March 31, <br/> 2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, <br/> 2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 66%">Equipment</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98B_eus-gaap--PropertyPlantAndEquipmentGross_c20220331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--EquipmentMember_pp0p0" style="width: 13%; text-align: right">2,080,621</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--PropertyPlantAndEquipmentGross_c20211231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--EquipmentMember_pp0p0" style="width: 13%; text-align: right">2,067,834</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Software</td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--PropertyPlantAndEquipmentGross_c20220331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--SoftwareDevelopmentMember_pp0p0" style="text-align: right">315,855</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--PropertyPlantAndEquipmentGross_c20211231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--SoftwareDevelopmentMember_pp0p0" style="text-align: right">315,855</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Furniture and fixtures</td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--PropertyPlantAndEquipmentGross_c20220331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember_pp0p0" style="text-align: right">757,662</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--PropertyPlantAndEquipmentGross_c20211231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember_pp0p0" style="text-align: right">757,662</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Website costs</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--PropertyPlantAndEquipmentGross_c20220331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--WebsiteCostsMember_pp0p0" style="text-align: right">69,881</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--PropertyPlantAndEquipmentGross_c20211231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--WebsiteCostsMember_pp0p0" style="text-align: right">69,881</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Leasehold improvements</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_986_eus-gaap--PropertyPlantAndEquipmentGross_c20220331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--LeaseholdImprovementsMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right">229,772</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_eus-gaap--PropertyPlantAndEquipmentGross_c20211231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--LeaseholdImprovementsMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right">229,772</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--PropertyPlantAndEquipmentGross_c20220331_pp0p0" style="text-align: right">3,453,791</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_eus-gaap--PropertyPlantAndEquipmentGross_c20211231_pp0p0" style="text-align: right">3,441,004</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Less: accumulated depreciation</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_988_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_c20220331_pp0p0" style="border-bottom: Black 1pt solid; text-align: right">1,933,992</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98B_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_c20211231_pp0p0" style="border-bottom: Black 1pt solid; text-align: right">1,798,023</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Fixed assets, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_987_eus-gaap--PropertyPlantAndEquipmentNet_c20220331_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right">1,519,799</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_984_eus-gaap--PropertyPlantAndEquipmentNet_c20211231_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right">1,642,981</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 2080621 2067834 315855 315855 757662 757662 69881 69881 229772 229772 3453791 3441004 1933992 1798023 1519799 1642981 135969 131951 <p id="xdx_800_eus-gaap--IntangibleAssetsDisclosureTextBlock_zWxEdZwU5N83" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">3.     <span style="text-decoration: underline"><span id="xdx_82A_zvdVC93hwKXi">INTANGIBLE ASSETS, NET</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Intangible assets consist of the following:</p> <table cellpadding="0" cellspacing="0" id="xdx_886_eus-gaap--ScheduleOfFiniteLivedIntangibleAssetsTableTextBlock_z83Ggqf5wSl8" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - INTANGIBLE ASSETS, NET (Details)"> <tr style="vertical-align: bottom; background-color: White"> <td><span id="xdx_8B4_z8GXQ5v3tYdf" style="display: none">Schedule of intangible assets</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">March 31, <br/> 2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, <br/> 2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 66%; text-align: left">Patents and trademarks</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--FiniteLivedIntangibleAssetsGross_c20220331__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--TrademarksAndTradeNamesMember_pp0p0" style="width: 13%; text-align: right">38,186</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_987_eus-gaap--FiniteLivedIntangibleAssetsGross_c20211231__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--TrademarksAndTradeNamesMember_pp0p0" style="width: 13%; text-align: right">38,186</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Platform</td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--FiniteLivedIntangibleAssetsGross_c20220331__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--PlatformMember_pp0p0" style="text-align: right">10,515,896</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--FiniteLivedIntangibleAssetsGross_c20211231__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--PlatformMember_pp0p0" style="text-align: right">9,853,823</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Customer lists and contracts</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--FiniteLivedIntangibleAssetsGross_c20220331__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--CustomerListsAndContractsMember_pp0p0" style="text-align: right">1,177,200</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--FiniteLivedIntangibleAssetsGross_c20211231__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--CustomerListsAndContractsMember_pp0p0" style="text-align: right">1,177,200</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Licenses</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98A_eus-gaap--FiniteLivedIntangibleAssetsGross_c20220331__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--LicensesMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right">209,282</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_eus-gaap--FiniteLivedIntangibleAssetsGross_c20211231__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--LicensesMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right">209,282</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--FiniteLivedIntangibleAssetsGross_c20220331_pp0p0" style="text-align: right">11,940,564</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--FiniteLivedIntangibleAssetsGross_c20211231_pp0p0" style="text-align: right">11,278,491</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Less: accumulated amortization</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_988_eus-gaap--FiniteLivedIntangibleAssetsAccumulatedAmortization_c20220331_pp0p0" style="border-bottom: Black 1pt solid; text-align: right">7,734,731</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_987_eus-gaap--FiniteLivedIntangibleAssetsAccumulatedAmortization_c20211231_pp0p0" style="border-bottom: Black 1pt solid; text-align: right">7,191,529</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 2.5pt">Intangible assets, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98B_eus-gaap--IntangibleAssetsNetExcludingGoodwill_c20220331_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right">4,205,833</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98A_eus-gaap--IntangibleAssetsNetExcludingGoodwill_c20211231_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right">4,086,962</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Amortization expense for the three months ended March 31, 2022 and 2021 was $<span id="xdx_902_eus-gaap--AdjustmentForAmortization_c20220101__20220331_pp0p0" title="Amortization expense">543,202</span> and $<span id="xdx_901_eus-gaap--AdjustmentForAmortization_pp0p0_c20210101__20210331_zpFJLMNCeda" title="Amortization expense">463,897</span>, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" id="xdx_886_eus-gaap--ScheduleOfFiniteLivedIntangibleAssetsTableTextBlock_z83Ggqf5wSl8" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - INTANGIBLE ASSETS, NET (Details)"> <tr style="vertical-align: bottom; background-color: White"> <td><span id="xdx_8B4_z8GXQ5v3tYdf" style="display: none">Schedule of intangible assets</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">March 31, <br/> 2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, <br/> 2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 66%; text-align: left">Patents and trademarks</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--FiniteLivedIntangibleAssetsGross_c20220331__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--TrademarksAndTradeNamesMember_pp0p0" style="width: 13%; text-align: right">38,186</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_987_eus-gaap--FiniteLivedIntangibleAssetsGross_c20211231__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--TrademarksAndTradeNamesMember_pp0p0" style="width: 13%; text-align: right">38,186</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Platform</td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--FiniteLivedIntangibleAssetsGross_c20220331__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--PlatformMember_pp0p0" style="text-align: right">10,515,896</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--FiniteLivedIntangibleAssetsGross_c20211231__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--PlatformMember_pp0p0" style="text-align: right">9,853,823</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Customer lists and contracts</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--FiniteLivedIntangibleAssetsGross_c20220331__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--CustomerListsAndContractsMember_pp0p0" style="text-align: right">1,177,200</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--FiniteLivedIntangibleAssetsGross_c20211231__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--CustomerListsAndContractsMember_pp0p0" style="text-align: right">1,177,200</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Licenses</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98A_eus-gaap--FiniteLivedIntangibleAssetsGross_c20220331__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--LicensesMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right">209,282</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_eus-gaap--FiniteLivedIntangibleAssetsGross_c20211231__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--LicensesMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right">209,282</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--FiniteLivedIntangibleAssetsGross_c20220331_pp0p0" style="text-align: right">11,940,564</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--FiniteLivedIntangibleAssetsGross_c20211231_pp0p0" style="text-align: right">11,278,491</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Less: accumulated amortization</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_988_eus-gaap--FiniteLivedIntangibleAssetsAccumulatedAmortization_c20220331_pp0p0" style="border-bottom: Black 1pt solid; text-align: right">7,734,731</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_987_eus-gaap--FiniteLivedIntangibleAssetsAccumulatedAmortization_c20211231_pp0p0" style="border-bottom: Black 1pt solid; text-align: right">7,191,529</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 2.5pt">Intangible assets, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98B_eus-gaap--IntangibleAssetsNetExcludingGoodwill_c20220331_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right">4,205,833</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98A_eus-gaap--IntangibleAssetsNetExcludingGoodwill_c20211231_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right">4,086,962</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 38186 38186 10515896 9853823 1177200 1177200 209282 209282 11940564 11278491 7734731 7191529 4205833 4086962 543202 463897 <p id="xdx_80A_eus-gaap--LeasesOfLessorDisclosureTextBlock_zMpNq64Mdz6e" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">4.     <span style="text-decoration: underline"><span id="xdx_825_z6ytdButqXNk">LEASE</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company entered into an operating lease for office space which became effective in June 2020. The lease term is <span id="xdx_90D_eus-gaap--LessorOperatingLeaseTermOfContract_iI_dtY_c20220331_zD7mstU51wDl" title="Lease term">10</span> years from the effective date and allows for <span id="xdx_909_eus-gaap--LessorOperatingLeaseOptionToExtend_c20220101__20220331" title="Lease term option to extend">two optional extensions of five years each</span>. The two optional extensions are not recognized as part of the right-of-use asset or lease liability since it is not reasonably certain that the Company will extend this lease. As of March 31, 2022, the remaining lease term was <span id="xdx_903_eus-gaap--OperatingLeaseWeightedAverageRemainingLeaseTerm1_iI_dtY_c20220331_znlJZl3QaBU9" title="Remaining lease term">8.2</span> years and the discount rate was <span id="xdx_90D_eus-gaap--OperatingLeaseWeightedAverageDiscountRatePercent_iI_dp_c20220331_z2bsHeqsldYe" title="Discount rate">6</span>%.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Operating lease cost included in selling, general and administrative expenses was $<span id="xdx_908_eus-gaap--OperatingLeaseCost_pp0p0_c20220101__20220331_zTC3ujOqwdV3" title="Operating lease cost">183,241</span> and $<span id="xdx_90E_eus-gaap--OperatingLeaseCost_pp0p0_c20210101__20210331_zPxLYRoVIeBh" title="Operating lease cost">215,144</span> for the three months ended March 31, 2022 and 2021, respectively. Cash paid for the operating lease was $<span id="xdx_906_eus-gaap--OperatingLeasePayments_pp0p0_c20220101__20220331_z1bJQyietJ9a" title="Cash paid for operating lease"><span id="xdx_907_eus-gaap--OperatingLeasePayments_pp0p0_c20210101__20210331_zNUarHw52bVk" title="Cash paid for operating lease">142,992</span></span> for both the three months ended March 31, 2022 and 2021.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following is the lease maturity analysis of our operating lease as of March 31, 2022:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Twelve months ending March 31,</p> <table cellpadding="0" cellspacing="0" id="xdx_88F_eus-gaap--LeaseCostTableTextBlock_zdQQGYR959W4" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - LEASE (Details)"> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 10pt"><span id="xdx_8BC_zTtFZfci2ib4" style="display: none">Schedule of operating lease liabilities</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_496_20220331_zPeTl70Z8Gi4" style="text-align: center"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueCurrent_iI_pp0p0_maOLFMPz4eA_zZrwfEo6LPz5" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 83%; text-align: left; padding-left: 10pt">2023</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">571,968</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueInTwoYears_iI_pp0p0_maOLFMPz4eA_z7ZhpboojYDf" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 10pt">2024</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">571,968</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueInThreeYears_iI_pp0p0_maOLFMPz4eA_zfHzG4ZZDuM8" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-left: 10pt">2025</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">571,968</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueInFourYears_iI_pp0p0_maOLFMPz4eA_zwhu77jCUXn" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 10pt">2026</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">629,165</td><td style="text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueInFiveYears_iI_pp0p0_maOLFMPz4eA_zh2ShrDLFf9f" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-left: 10pt">2027</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">640,604</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueThereafter_iI_pp0p0_maOLFMPz4eA_zxhtU8wYfPvb" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; padding-left: 10pt">Thereafter</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,028,580</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--OperatingLeasesFutureMinimumPaymentsDue_iTI_pp0p0_mtOLFMPz4eA_zzySKbZHhRle" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Total lease payments</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">5,014,253</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_ecustom--LessImputedInterest_iNI_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Less: Imputed interest</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,083,858</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40F_eus-gaap--OperatingLeaseLiability_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Present value of future lease payments</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,930,395</td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--OperatingLeaseLiabilityCurrent_iNI_pp0p0_di_zd1S1kDX3peh" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Less: current portion of lease liability</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(345,544</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40C_eus-gaap--OperatingLeaseLiabilityNoncurrent_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 2.5pt">Long-term portion of lease liability</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,584,851</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> P10Y two optional extensions of five years each P8Y2M12D 0.06 183241 215144 142992 142992 <table cellpadding="0" cellspacing="0" id="xdx_88F_eus-gaap--LeaseCostTableTextBlock_zdQQGYR959W4" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - LEASE (Details)"> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 10pt"><span id="xdx_8BC_zTtFZfci2ib4" style="display: none">Schedule of operating lease liabilities</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_496_20220331_zPeTl70Z8Gi4" style="text-align: center"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueCurrent_iI_pp0p0_maOLFMPz4eA_zZrwfEo6LPz5" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 83%; text-align: left; padding-left: 10pt">2023</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">571,968</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueInTwoYears_iI_pp0p0_maOLFMPz4eA_z7ZhpboojYDf" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 10pt">2024</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">571,968</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueInThreeYears_iI_pp0p0_maOLFMPz4eA_zfHzG4ZZDuM8" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-left: 10pt">2025</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">571,968</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueInFourYears_iI_pp0p0_maOLFMPz4eA_zwhu77jCUXn" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 10pt">2026</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">629,165</td><td style="text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueInFiveYears_iI_pp0p0_maOLFMPz4eA_zh2ShrDLFf9f" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-left: 10pt">2027</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">640,604</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueThereafter_iI_pp0p0_maOLFMPz4eA_zxhtU8wYfPvb" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; padding-left: 10pt">Thereafter</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,028,580</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--OperatingLeasesFutureMinimumPaymentsDue_iTI_pp0p0_mtOLFMPz4eA_zzySKbZHhRle" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Total lease payments</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">5,014,253</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_ecustom--LessImputedInterest_iNI_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Less: Imputed interest</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,083,858</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40F_eus-gaap--OperatingLeaseLiability_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Present value of future lease payments</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,930,395</td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--OperatingLeaseLiabilityCurrent_iNI_pp0p0_di_zd1S1kDX3peh" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Less: current portion of lease liability</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(345,544</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40C_eus-gaap--OperatingLeaseLiabilityNoncurrent_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 2.5pt">Long-term portion of lease liability</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,584,851</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 571968 571968 571968 629165 640604 2028580 5014253 -1083858 3930395 345544 3584851 <p id="xdx_80F_eus-gaap--RevenueFromContractWithCustomerTextBlock_zKu0PL49rCCf" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">5.     <span style="text-decoration: underline"><span id="xdx_82A_zalAnEzBWfZc">CUSTOMER CARD FUNDING LIABILITY</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company issues prepaid cards with various provisions for cardholder fees or expiration. Revenue generated from cardholder transactions and interchange fees are recognized when the Company’s performance obligation is fulfilled. Unspent balances left on Pharma cards are recognized as settlement income at the expiration of the cards and the program. Contract liabilities related to prepaid cards represent funds on card and client funds held to be loaded to card before the amounts are ultimately spent by the cardholders or recognized as revenue by the Company. Contract liabilities related to prepaid cards are reported as Customer card funding liability on the condensed consolidated balance sheet.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The opening and closing balances of the Company's contract liabilities are as follows:</p> <table cellpadding="0" cellspacing="0" id="xdx_884_eus-gaap--ContractWithCustomerAssetAndLiabilityTableTextBlock_zVhbnXXGeX9b" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - CUSTOMER CARD FUNDING LIABILITY (Details)"> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span id="xdx_8BD_zpTdvZ9Q1kS3" style="display: none">Schedule of contract liabilities</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_49C_20220101__20220331_zW12Oh8mmZu9" style="text-align: center"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: center"> </td><td id="xdx_491_20210101__20210331_zJRyJh0A3Dbc" style="text-align: center"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; text-align: center"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Three Months Ended</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>March 31, </b></p></td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr id="xdx_40B_eus-gaap--ContractWithCustomerLiability_iS_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 68%; text-align: left">Beginning balance</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">61,283,914</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">48,100,951</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--IncreaseDecreaseInContractWithCustomerLiability_i_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Increase (decrease), net</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">3,393,769</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">10,672,537</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--ContractWithCustomerLiability_iE_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt">Ending balance</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">64,677,683</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">58,773,488</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The amount of revenue recognized during the three months ended March 31, 2022 and 2021 that was included in the opening contract liability for prepaid cards was $<span id="xdx_908_eus-gaap--ContractWithCustomerLiabilityRevenueRecognized_c20220101__20220331_pp0p0" title="Revenue recognized in current year previously included in contract liabilities">1,485,005</span> and $<span id="xdx_907_eus-gaap--ContractWithCustomerLiabilityRevenueRecognized_pp0p0_c20210101__20210331_zWzMxOEJhF94" title="Revenue recognized in current year previously included in contract liabilities">1,023,055</span>, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p> <table cellpadding="0" cellspacing="0" id="xdx_884_eus-gaap--ContractWithCustomerAssetAndLiabilityTableTextBlock_zVhbnXXGeX9b" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - CUSTOMER CARD FUNDING LIABILITY (Details)"> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span id="xdx_8BD_zpTdvZ9Q1kS3" style="display: none">Schedule of contract liabilities</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_49C_20220101__20220331_zW12Oh8mmZu9" style="text-align: center"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: center"> </td><td id="xdx_491_20210101__20210331_zJRyJh0A3Dbc" style="text-align: center"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; text-align: center"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Three Months Ended</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>March 31, </b></p></td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr id="xdx_40B_eus-gaap--ContractWithCustomerLiability_iS_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 68%; text-align: left">Beginning balance</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">61,283,914</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">48,100,951</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--IncreaseDecreaseInContractWithCustomerLiability_i_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Increase (decrease), net</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">3,393,769</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">10,672,537</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--ContractWithCustomerLiability_iE_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt">Ending balance</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">64,677,683</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">58,773,488</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 61283914 48100951 3393769 10672537 64677683 58773488 1485005 1023055 <p id="xdx_805_eus-gaap--StockholdersEquityNoteDisclosureTextBlock_zBHUpkHohkBd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">6.     <span style="text-decoration: underline"><span id="xdx_827_zUXnjOwmwxFk">COMMON STOCK</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At March 31, 2022, the Company's authorized capital stock was 150,000,000 shares of common stock, par value $0.001 per share, and 25,000,000 shares of preferred stock, par value $0.001 per share. On that date, the Company had 52,218,382 shares of common stock issued and 51,914,932 shares of common stock outstanding, and no shares of preferred stock outstanding.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Stock-based compensation expense related to Company grants for the three months ended March 31, 2022 was $<span id="xdx_904_eus-gaap--ShareBasedCompensation_c20220101__20220331_pp0p0" title="Share-based Payment Arrangement, Noncash Expense">569,502</span>. Stock-based compensation expense for the three months ended March 31, 2021 was $<span id="xdx_90A_eus-gaap--ShareBasedCompensation_pp0p0_c20210101__20210331_zqqEJbrcKWkb" title="Share-based Payment Arrangement, Noncash Expense">636,214</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>2022 Transactions: </i>During the three months ended March 31, 2022 the Company issued <span id="xdx_90D_ecustom--StockIssuedForVestedStockAwardsAndExerciseOfStockOptionsShares_c20220101__20220331_zHsX8F899Ly3" title="Number of shares vested">123,000</span> shares of common stock for vested stock awards.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>2021 Transactions: </i>During the three months ended March 31, 2021 the Company issued <span id="xdx_90D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_c20210101__20210331__us-gaap--AwardTypeAxis__us-gaap--StockOptionMember_pdd" title="Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross">499,275</span> shares of common stock for vested stock awards and the exercise of stock options and received proceeds of $<span id="xdx_908_ecustom--ProceedsFormVestedStockAwardsAndStockOptions_pp0p0_c20210101__20210331_zh7R5NXdJCi3" title="Proceeds Form Vested Stock Awards And Stock Options">110,466</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> 569502 636214 123000 499275 110466 <p id="xdx_800_eus-gaap--EarningsPerShareTextBlock_zckLWhwXJuXb" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">7.        <span style="text-decoration: underline"><span id="xdx_821_zG85CnbBtzAk">BASIC AND FULLY DILUTED NET LOSS PER COMMON SHARE</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth the computation of basic and fully diluted net loss per common share for the three months ended March 31, 2022 and 2021: </p> <table cellpadding="0" cellspacing="0" id="xdx_882_eus-gaap--ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock_zHsAoBiRjKf2" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - BASIC AND FULLY DILUTED NET LOSS PER COMMON SHARE (Details)"> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-left: 10pt"><span id="xdx_8BC_zblcE5mN35A3" style="display: none">Computation of earnings per share</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_493_20220101__20220331_zeqzg37O3vdk" style="text-align: center"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_492_20210101__20210331_z8wv7RJRntJa" style="text-align: center"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; text-align: center"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Three Months Ended</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>March 31,</b></p></td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr id="xdx_40E_eus-gaap--EarningsPerShareReconciliationAbstract_iB" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: justify">Numerator:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--NetIncomeLoss_i01_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="width: 68%; text-align: justify; padding-left: 10pt">Net loss</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">(309,395</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">(1,623,527</td><td style="width: 1%; text-align: left">)</td></tr> <tr id="xdx_402_eus-gaap--NetIncomeLossAvailableToCommonStockholdersDilutedAbstract_iB" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: justify">Denominator:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--WeightedAverageNumberOfSharesOutstandingAbstract_i01B" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-left: 10pt">Weighted average common shares:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_i02_pdd" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: justify; padding-left: 20pt">Denominator for basic calculation</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">51,818,676</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">50,351,971</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--WeightedAverageNumberDilutedSharesOutstandingAdjustmentAbstract_iB" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-left: 10pt">Weighted average effects of potentially diluted common stock:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--IncrementalCommonSharesAttributableToCallOptionsAndWarrants_i01_d0_zCxjzu8MI0G7" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: justify; padding-left: 20pt">Stock options (calculated using the treasury method)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--IncrementalCommonSharesAttributableToShareBasedPaymentArrangements_i01_d0_zWVorQiv54Ke" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1pt; padding-left: 20pt">Unvested restricted stock grants</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--WeightedAverageNumberOfDilutedSharesOutstanding_i01_zvW6vLU3oGj1" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 30pt">Denominator for fully diluted calculation</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">51,818,676</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">50,351,971</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--NetIncomePerCommonShareAbstract_iB" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Net loss per common share:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--EarningsPerShareBasic_i01_pdd" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 10pt">Basic</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.01</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.03</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_400_eus-gaap--EarningsPerShareDiluted_i01_z27FQsv4Gz01" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 10pt">Fully diluted</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.01</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.03</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Due to the net loss for the three months ended March 31, 2022, the effect of all potential common share equivalents was anti-dilutive, and therefore, all such shares were excluded from the computation of diluted weighted average shares outstanding for that period. For the three months ended March 31, 2022, the amount of potential common share equivalents excluded were <span id="xdx_90A_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20220101__20220331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--StockOptionsMember_pdd" title="Potential common share equivalents excluded from computation">1,891,800</span> for stock options and <span id="xdx_90A_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20220101__20220331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--UnvestedRestrictedStockAwardsMember_pdd" title="Potential common share equivalents excluded from computation">1,254,000</span> for unvested restricted stock awards. Due to the net loss for the three months ended March 31, 2021, the effect of all potential common share equivalents was anti-dilutive, and therefore, all such shares were excluded from the computation of diluted weighted average shares outstanding for that period. For the three months ended March 31, 2021, the amount of potential common share equivalents excluded were <span id="xdx_908_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20210101__20210331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--StockOptionsMember_pdd" title="Potential common share equivalents excluded from computation">2,241,014</span> for stock options and <span id="xdx_907_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20210101__20210331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--UnvestedRestrictedStockAwardsMember_pdd" title="Potential common share equivalents excluded from computation">1,975,000</span> for unvested restricted stock awards.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" id="xdx_882_eus-gaap--ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock_zHsAoBiRjKf2" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - BASIC AND FULLY DILUTED NET LOSS PER COMMON SHARE (Details)"> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-left: 10pt"><span id="xdx_8BC_zblcE5mN35A3" style="display: none">Computation of earnings per share</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_493_20220101__20220331_zeqzg37O3vdk" style="text-align: center"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_492_20210101__20210331_z8wv7RJRntJa" style="text-align: center"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; text-align: center"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Three Months Ended</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>March 31,</b></p></td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr id="xdx_40E_eus-gaap--EarningsPerShareReconciliationAbstract_iB" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: justify">Numerator:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--NetIncomeLoss_i01_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="width: 68%; text-align: justify; padding-left: 10pt">Net loss</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">(309,395</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">(1,623,527</td><td style="width: 1%; text-align: left">)</td></tr> <tr id="xdx_402_eus-gaap--NetIncomeLossAvailableToCommonStockholdersDilutedAbstract_iB" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: justify">Denominator:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--WeightedAverageNumberOfSharesOutstandingAbstract_i01B" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-left: 10pt">Weighted average common shares:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_i02_pdd" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: justify; padding-left: 20pt">Denominator for basic calculation</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">51,818,676</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">50,351,971</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--WeightedAverageNumberDilutedSharesOutstandingAdjustmentAbstract_iB" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-left: 10pt">Weighted average effects of potentially diluted common stock:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--IncrementalCommonSharesAttributableToCallOptionsAndWarrants_i01_d0_zCxjzu8MI0G7" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: justify; padding-left: 20pt">Stock options (calculated using the treasury method)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--IncrementalCommonSharesAttributableToShareBasedPaymentArrangements_i01_d0_zWVorQiv54Ke" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1pt; padding-left: 20pt">Unvested restricted stock grants</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--WeightedAverageNumberOfDilutedSharesOutstanding_i01_zvW6vLU3oGj1" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 30pt">Denominator for fully diluted calculation</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">51,818,676</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">50,351,971</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--NetIncomePerCommonShareAbstract_iB" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Net loss per common share:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--EarningsPerShareBasic_i01_pdd" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 10pt">Basic</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.01</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.03</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_400_eus-gaap--EarningsPerShareDiluted_i01_z27FQsv4Gz01" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 10pt">Fully diluted</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.01</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.03</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> </table> -309395 -1623527 51818676 50351971 0 0 0 0 51818676 50351971 -0.01 -0.03 -0.01 -0.03 1891800 1254000 2241014 1975000 <p id="xdx_80E_eus-gaap--CommitmentsAndContingenciesDisclosureTextBlock_zlaHNz5ja3Zg" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">8.        <span style="text-decoration: underline"><span id="xdx_826_zcSTgCxe7iF8">COMMITMENTS AND CONTINGENCIES</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has been named as a defendant in three complaints filed in the United States District Court for the District of Nevada: Yilan Shi v. Paysign, Inc. et. al., filed on March 19, 2020 (“Shi”), Lorna Chase v. Paysign, Inc. et. al., filed on March 25, 2020 (“Chase”), and Smith &amp; Duvall v. Paysign, Inc. et. al., filed on April 2, 2020 (collectively, the “Complaints” or “Securities Class Action”). Smith &amp; Duvall v. Paysign, Inc. et. al. was voluntarily dismissed on May 21, 2020. On May 18, 2020, the Shi plaintiffs and another entity called the Paysign Investor Group each filed a motion to consolidate the remaining Shi and Chase actions and to be appointed lead plaintiff. The Complaints are putative class actions filed on behalf of a class of persons who acquired the Company’s common stock from March 19, 2019 through March 31, 2020, inclusive. The Complaints generally allege that the Company, Mark Newcomer, and Mark Attinger violated Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), and that Messrs. Newcomer and Attinger violated Section 20(a) of the Exchange Act, by making materially false or misleading statements, or failing to disclose material facts, regarding the Company’s internal control over financial reporting and its financial statements. The Complaints seek class action certification, compensatory damages, and attorney’s fees and costs. On December 2, 2020, the Court consolidated Shi and Chase as In re Paysign, Inc. Securities Litigation and appointed the Paysign Investor Group as lead plaintiff. On January 12, 2021, Plaintiffs filed an Amended Complaint in the consolidated action. Defendants filed a Motion to Dismiss the Amended Complaint on March 15, 2021, which Plaintiffs opposed via an opposition brief filed on April 29, 2021, to which Defendants replied on June 1, 2021. Thus, the motion is now fully briefed. The Court has not set a hearing date on the motion, or informed the parties whether it intends to entertain oral argument or rule upon the papers filed. As of the date of this filing, Paysign cannot give any meaningful estimate of likely outcome or damages.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has also been named as a nominal defendant in two stockholder derivative actions in the United States District Court for the District of Nevada. The first derivative action is entitled Andrzej Toczek, derivatively on behalf of Paysign, Inc. v. Mark R. Newcomer, et al. and was filed on September 17, 2020. This action alleges violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, and waste, largely in connection with the failure to correct information technology controls over financial reporting alleged in the Securities Class Action, thereby causing the Company to face exposure in the Securities Class Action. The complaint also alleges insider trading violations against certain individual defendants. On December 16, 2020, the Court approved a stipulation staying the action until the Court in the consolidated Securities Class Action issues a ruling on the Motion to Dismiss. The second derivative action is entitled John K. Gray, derivatively on behalf of Paysign, Inc. v. Mark Attinger, et al. and was filed on May 9, 2022. This action involves the same alleged conduct raised in the Toczek action and asserts claims for breach of fiduciary duty in connection with financial reporting, breach of fiduciary duty in connection with alleged insider trading against certain individual defendants, and unjust enrichment. The Gray action has not yet been served on the Company, and thus no response date is currently pending. As of the date of this filing, Paysign cannot give any meaningful estimate of likely outcome or damages.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_80C_eus-gaap--RelatedPartyTransactionsDisclosureTextBlock_zYNWp2RsWc1b" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">9.        <span style="text-decoration: underline"><span id="xdx_822_z7hkLxBvheae">RELATED PARTY</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A member of our Board of Directors is also a partner in a law firm that the Company engages for services to review regulatory filings and for various other legal matters. The Company incurred legal expense of $<span id="xdx_904_eus-gaap--ProfessionalFees_pp0p0_c20220101__20220331_zH7R9qPESFgc" title="Legal expense">40,734</span> during the three months ended March 31, 2022 with the related party law firm. During the three months ended March 31, 2021 the Company incurred legal expense of $<span id="xdx_904_eus-gaap--ProfessionalFees_pp0p0_c20210101__20210331_zOcx7uvrgRLi" title="Legal expense">252,836</span>, with the related party law firm.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> 40734 252836 <p id="xdx_80E_eus-gaap--IncomeTaxDisclosureTextBlock_zGBeTuOVPLJc" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">10.        <span style="text-decoration: underline"><span id="xdx_82A_zIWJaY8GIXf3">INCOME TAX PROVISION</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The effective tax rate (income tax provision as a percentage of loss before income tax provision) was (<span id="xdx_90A_eus-gaap--EffectiveIncomeTaxRateContinuingOperations_dp_c20220101__20220331_zGOxVrj6qj2c" title="Effective income tax rate">0.6</span>%) for the three months ended March 31, 2022, as compared to (<span id="xdx_901_eus-gaap--EffectiveIncomeTaxRateContinuingOperations_dp_c20210101__20210331_zQoHjG0IOn47" title="Effective income tax rate">0.1</span>%) for the three months ended March 31, 2021. The effective tax rate for the three months ended March 31, 2022 varies from the three months ended March 31, 2021 primarily as a result of the full valuation on our deferred tax asset in both the current and prior period and the tax benefit related to our stock-based compensation and a pretax loss in the prior year period. As of March 31, 2022, management believes that its more-likely-than-not that the Company’s net deferred tax assets would not be realized in the near future, thus a full valuation allowance on its deferred tax assets remains in place.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> 0.006 0.001 <p id="xdx_805_eus-gaap--SubsequentEventsTextBlock_zvS3owGGh0c3" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">11.        <span style="text-decoration: underline"><span id="xdx_827_zXGRl6mgiIR2">SUBSEQUENT EVENT</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Except for the matter disclosed in Note 8, management has not identified any additional material subsequent events to disclose.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> EXCEL 49 Financial_Report.xlsx IDEA: XBRL DOCUMENT begin 644 Financial_Report.xlsx M4$L#!!0 ( "1(K%0'04UB@0 +$ 0 9&]C4')O<',O87!P+GAM M;$V./0L",1!$_\IQO;=!P4)B0-!2L+(/>QLOD&1#LD)^OCG!CVX>;QA&WPIG M*N*I#BV&5(_C(I(/ !47BK9.7:=N')=HI6-Y #OGDK7A.YNJQ<&4GPZ4A!0W_J=0U[R;UEA_6\#MI7E!+ P04 M " D2*Q4Q%UR0>X K @ $0 &1O8U!R;W!S+V-O&ULS9+! 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