Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

This Quarterly Report on Form 10-Q contains certain forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) regarding PAID, Inc. (the "Company") and its business, financial condition, results of operations and prospects. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates", "could", "may", "should", "will", "would", and similar expressions or variations of such words are intended to identify forward-looking statements in this report. Additionally, statements concerning future matters such as the development of new services, technology enhancements, purchase of equipment, credit arrangements, possible changes in legislation and other statements regarding matters that are not historical are forward-looking statements.

Although forward-looking statements in this quarterly report reflect the good faith judgment of the Company's management, such statements can only be based on facts and factors currently known by the Company. Consequently, forward-looking statements are inherently subject to risks, contingencies and uncertainties, and actual results and outcomes may differ materially from results and outcomes discussed in this report. Although the Company believes that its plans, intentions and expectations reflected in these forward-looking statements are reasonable, the Company can give no assurance that its plans, intentions or expectations will be achieved. For a more complete discussion of these risk factors, see Item 1A, "Risk Factors", in the Company's Form 10-K for the fiscal year ended December 31, 2025, that was filed on March 31, 2026.

For example, the Company's ability to maintain positive cash flow and to become profitable may be adversely affected as a result of a number of factors that could thwart its efforts. These factors include the Company's inability to successfully implement the Company's business and revenue model, higher costs than anticipated, the Company's inability to sell its products and services to a sufficient number of customers, the introduction of competing products or services by others, the Company's failure to attract sufficient interest in, and traffic to, its site, the Company's inability to complete development of its products, the failure of the Company's operating systems, and the Company's inability to increase its revenues as rapidly as anticipated. If the Company is not profitable in the future, it will not be able to continue its business operations.

Except as required by applicable laws, we do not intend to publish updates or revisions of any forward-looking statements we make to reflect new information, future events or otherwise. Readers are urged to review carefully and to consider the various disclosures made by the Company in this Quarterly Report, which attempts to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

Overview

ShipTime Inc. has developed a SaaS based application, which focuses on the small to medium business segment. This offering allows members to quote, process, generate labels, insure, dispatch and track courier and LTL shipments all from a single interface. The application provides customers with a choice of today's leading couriers and freight carriers, all with discounted pricing allowing members to save on every shipment. ShipTime can also be integrated into on-line shopping carts to facilitate sales via e-commerce. We actively sell directly to small businesses and through long standing partnerships with selected associations throughout Canada. Our focus in 2025 will be to continue to grow this portion of our business.

Paid provides integrated technology solutions that support businesses through payment processing and logistics services across North America and international markets. The Company's platforms are designed to help businesses streamline operations, manage transactions, and optimize shipping and transportation workflows through centralized and scalable technology solutions. PaidPayments provides businesses with secure payment processing capabilities, including invoicing, virtual terminal functionality, subscription billing, hosted checkout pages, and point-of-sale solutions with support for USD, CAD, and EUR currencies. PaidShipping provides a multi-carrier logistics and transportation management platform that enables businesses to quote, process, generate labels, dispatch, and track shipments through a single interface. The platform supports parcel, Less-Than-Truckload (LTL), and Full Truckload (FTL) shipments through an extensive network of national and regional carriers and transportation partners. PaidShipping includes multi-carrier rate comparison tools, eCommerce platform integrations, branded tracking capabilities, shipping insurance solutions, shipment audit capabilities, and access to discounted shipping rates through strategic carrier partnerships.

Warehowz provides an on-demand warehousing and fulfillment marketplace that connects businesses with flexible storage, distribution, and fulfillment capacity through a network of certified warehouse partners across North America. With access to more than 2,500 warehouse facilities throughout the United States and Canada, Warehowz enables businesses to optimize inventory placement, improve delivery times, and scale fulfillment operations based on changing business requirements. The platform is designed to provide greater flexibility, visibility, and operational efficiency across the supply chain for both merchants and enterprise customers.

Significant Accounting Policies

Our significant accounting policies are more fully described in Note 3 to our consolidated financial statements for the years ended December 31, 2025 and 2024 included in our Form 10-K filed on March 31, 2026, as updated and amended in Note 1 of the Notes to Condensed Consolidated Financial Statements included herein. However, certain of our accounting policies, most notably with respect to revenue recognition, are particularly important to the portrayal of our financial position and results of operations and require the application of significant judgment by our management; as a result, they are subject to an inherent degree of uncertainty. In applying these policies, our management makes estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. Those estimates and judgments are based upon our historical experience, the terms of existing contracts, our observance of trends in the industry, information that we obtain from our customers and outside sources, and on various other assumptions that we believe to be reasonable and appropriate under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Results of Operations

Comparison of the three months ended March 31, 2026 and 2025.

The following discussion compares the Company's results of operations for the three months ended March 31, 2026, with those for the three months ending March 31, 2025. The Company's condensed consolidated financial statements and notes thereto included elsewhere in this quarterly report contain detailed information that should be referred to in conjunction with the following discussion.

Revenues

The following table compares total net revenue for the periods indicated.

		Three Months Ended March 31,
		2026				2025				% Change
Client services		$	-			$	2,034				(100	)%
Shipping coordination and label generation services			5,244,788				4,346,139				21	%
eCommerce services			5,750				29,617				(81	)%
Warehousing services			76,007				-				100	%
Total net revenues		$	5,326,545			$	4,377,790				22	%

Revenues increased 22% in the first quarter as a result of the shipping coordination and label generation segment of the business. Strategic sales initiatives and pricing strategies have contributed to the shipping volume increase of 22% in first quarter of 2026 in addition to the addition of the new warehousing segment which contributed to the overall revenue increase for 2026.

Client services revenues, which included brewery management software and shipping calculator services decreased $2,034 or 100% to $0 in the first quarter of 2026 compared to $2,034 in 2025. The decrease in revenues is due to the retirement of the brewery management software application and the online shipping calculation services. The Company announced the closing of this BeerRun Software in June of 2025.

Shipping coordination and label generation services revenues increased $898,649 or 21% to $5,244,788 in the first quarter of 2026 compared to $4,346,139 in 2025. The increase is primarily due to additional pricing and sales initiatives. Additional carriers and product enhancements continue to attract new clients to the platform.

eCommerce services are available to small businesses that process online payment and shipping transactions. These include payments and web hosting services. The Company has recognized revenues of $5,750, a decrease of $23,867 or 81% compared to $29,617 for the same period in 2025. The decrease is attributed to the loss of a client for the PaidPayments portion of this segment of the business in 2025.

Warehousing services is a new segment of the Company.

Gross Profit

Gross profit increased $40,512 in the first quarter of 2026 to $1,060,588 compared to $1,020,076 in 2025. Gross margin decreased 2% to 20% in the first quarter of 2026 compared to 22% for the same period in 2025.

Operating Expenses

Total operating expenses in the first quarter of 2026 were $1,178,309 compared to $1,179,205 in the first quarter of 2025, a decrease of $896 or less than 1%.

Other Income/Expense, net

Net other income in 2026 was $65,664 compared to $0 in 2025, an increase of $65,664 or 100%. The other income in the first quarter of 2026 was made up of several write offs of aged payables and accrued expenses.

Net Income (Loss)

The Company recorded a net loss in the first quarter of 2026 of ($41,531) compared to a net loss of ($148,773) for the same period in 2025. The net loss per share for the first quarter of 2026 was $0.00 and the net loss per share for 2025 was ($0.02).

Cash Flows from Operating Activities

A summarized reconciliation of the Company's net loss to cash and cash equivalents used in operating activities for the three months ended March 31, 2026 and 2025 is as follows:

		2026				2025
Net income (loss)		$	(41,531	)		$	(148,773	)
Depreciation and amortization			74,096				70,347
Amortization of operating lease right-of-use assets			7,963				7,377
Payment of accrued common stock bonus			124,709				-
Provision for bad debts			-				22,286
Share-based compensation			61,251				1,267
Interest income accrued on note receivable			(11,704	)			(7,315	)
Changes in assets and liabilities			(345,649	)			(422,757	)
Net cash used in operating activities		$	(130,865	)		$	(477,568	)

Working Capital and Liquidity

The Company had cash and cash equivalents of $951,698 at March 31, 2026, compared to $1,108,059 at December 31, 2025. The Company had a net working capital deficit of $353,993 at March 31, 2026, an increase of $49,781 compared to the deficit of $304,212 at December 31, 2025. The decrease in net working capital is primarily attributable to the cash on hand and the accounts receivable balance at the end of the first quarter in 2026.

The Company may need an infusion of additional capital to fund anticipated operating costs over the next 12 months, however, management believes that the Company has adequate cash resources to fund operations. There can be no assurance that anticipated growth will occur, and that the Company will be successful in launching new products and services. If necessary, management will seek alternative sources of capital to support operations.