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 September 30, 2015

2016

COMMISSION FILE NUMBER 0-28720

(Exact Name of Registrant as Specified in its Charter)

DELAWARE
DELAWARE73-1479833
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)

200 Friberg Parkway, Westborough, Massachusetts 01581

(Address of Principal Executive Offices) (Zip Code)

(617) 861-6050

(Registrant’s Telephone Number, Including Area Code)

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.

Yesx ☒    No¨

☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405(Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yesx  ☒    No¨

☐

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

Large accelerated filer¨☐Accelerated Filer¨☐
Non-accelerated filer¨☐Smaller reporting company  x☒

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes¨ ☐     Nox

☒

As of November 10, 2015,2, 2016, the issuer had outstanding 343,774,04910,989,608 shares of its Common Stock, par value $0.001 per share.

Stock.


PAID, INC.
FORM 10-Q
TABLE OF CONTENTS
 

PAID, INC.

FORM 10-Q

TABLE OF CONTENTS

Part I – Financial Information
 
 
Item 1.
Financial Statements
 
    
  
Condensed Consolidated Balance Sheets September 30, 20152016 (unaudited) and December 31, 20142015 (audited)
3 1
    
  
Condensed Consolidated Statements of Operations Three and nineNine months ended September 30, 2016 and 2015 and 2014 (unaudited)
42
    
  
Condensed Consolidated Statements of Cash Flows Nine months ended September 30, 2016 and 2015 and 2014 (unaudited)
53
    
  
Notes to Condensed Consolidated Financial Statements (unaudited)
6-154-14 
    
 
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
15
    
 
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
19
Item 4.
Controls and Procedures
19
Part II – Other Information
Item 1.
Legal Proceedings
20
Item 1A.
Risk Factors
20
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
20
Item 3.
Defaults Upon Senior Securities
20
    
 
Item 4.
Controls and ProceduresMine Safety Disclosures
20
Part II – Other Information
Item 1.Legal Proceedings20
    
 
Item 1A.5.
Risk FactorsOther Information
20
Item 6.
Exhibits
21
    
 Item 2.
Signatures
Unregistered Sales of Equity Securities and Use of Proceeds21

 
Item 3.Defaults Upon Senior Securities21
Item 4.Mine Safety Disclosures21
Item 5.Other Information21
Item 6.Exhibits21
Signatures22

2 

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PART I – FINANCIALFINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

PAID, INC.

CONDENSED BALANCECONSOLIDATED BALANCE SHEETS

  September 30,
2015		  December 31,
2014		 
  (Unaudited)  (Audited) 
ASSETS        
Current assets:        
Cash and cash equivalents $313,673  $651,318 
Accounts receivable, net  91,647   91,574 
Other receivables, net  11,377   120,338 
Inventories  1,305   1,305 
Prepaid expenses and other current assets  16,606   42,567 
Advanced royalties, net  82,905   82,905 
Total current assets  517,513   990,007 
         
Property and equipment, net  9,532   18,489 
Intangible asset, net  3,537   4,242 
Deposits and other assets  12,332   23,387 
         
Total assets $542,914  $1,036,125 
         
LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY        
         
Current liabilities:        
Accounts payable $128,956  $215,707 
Capital leases – current portion  7,027   15,223 
Accrued expenses  1,015,790   674,019 
Deferred revenues  6,213   7,102 
Total current liabilities  1,157,986   912,051 
         
Long-term liabilities:        
Capital leases – net of current portion  -   3,095 
Total liabilities  1,157,986   915,146 
         
Commitments and contingencies  -   - 
         
Shareholders’ (deficit) equity:        

Common stock, $0.001 par value, 550,000,000 shares authorized; 343,774,049 shares and 339,374,050 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively

  343,774   339,374 
Common stock subscribed but not issued  -   25,000 
Additional paid-in capital  53,872,952   53,506,353 
Accumulated deficit  (54,831,798)  (53,749,748)
Total shareholders' (deficit) equity  (615,072)  120,979 
         
Total liabilities and shareholders' (deficit) equity $542,914  $1,036,125 

ASSETS
 
September 30,
 2016
 
 
December 31,
2015
 
 
 
(Unaudited)
 
 
(Unaudited)
 
Current assets:
 
 
 
 
 
 
Cash and cash equivalents
 $121,013 
 $123,913 
Accounts receivable, net
  22,850 
  26,696 
Prepaid expenses and other current assets
  14,192 
  57,394 
Advanced royalties, net
  - 
  5,000 
Total current assets
  158,055 
  213,003 
 
    
    
Property and equipment, net
  6,735 
  8,833 
Intangible assets, net
  201,797 
  276,878 
Total assets
 $366,587 
 $498,714 
 
    
    
LIABILITIES AND SHAREHOLDERS’ DEFICIT
    
    
 
    
    
Current liabilities:
    
    
Accounts payable
 $114,757 
 $95,441 
Note payable
  - 
  24,202 
Capital leases
  - 
  3,097 
Accrued expenses
  972,150 
  1,001,359 
Deferred revenues
  7,027 
  6,768 
Total liabilities
 $1,093,934 
 $1,130,867 
 
    
    
Shareholders’ deficit
    
    
Common stock, $0.001 par value, 11,000,000 shares authorized; 10,989,608 shares and 8,932,466 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively
  10,991 
  8,932 
Additional paid-in capital
  54,637,915 
  54,418,160 
Accumulated deficit
  (55,376,253)
  (55,059,245)
Total shareholders' deficit
  (727,347)
  (632,153)
 
    
    
Total liabilities and shareholders' deficit
 $366,587 
 $498,714 
See accompanying notes to condensed consolidated financial statements

3 

-1-
PAID, INC.

CONDENSED STATEMENTSCONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

  Three Months Ended  Nine Months Ended 
  September 30,
2015		  September 30,
2014		  September 30,
2015		  September 30,
2014		 
Revenues $46,191  $48,340  $139,593  $749,916 
Cost of revenues  12,676   10,502   32,470   485,018 
Gross profit  33,515   37,838   107,123   264,898 
                 
Operating expenses  218,377   213,645   733,062   781,160 
Loss from operations  (184,862)  (175,807)  (625,939)  (516,262)
                 
Other income (expense):                
Interest income (expense), net  (148)  (425)  (634)  1,418 
Other income  -   350   -   86,967 
Realized loss on investments in available-for-sale securities  -   -   -   (79,983)
Write down of other receivables  (108,961)  (50,561)  (108,961)  (278,089)
Gain on settlement of liabilities  -   -   -   34,759 
Unrealized loss on stock price guarantee  (376,007)  (157,939)  (345,542)  (375,147)
Total other expense, net  (485,116)  (208,575)  (455,137)  (610,075)
                 
Loss before provision for income taxes  (669,978)  (384,382)  (1,081,076)  (1,126,337)
Provision for income taxes  18   2,765   974   3,971 
Net loss $(669,996) $(387,147) $(1,082,050) $(1,130,308)
                 
Net loss per share – basic and diluted $(0.00) $(0.00) $(0.00) $(0.00)
Weighted average number of common shares outstanding - basic and diluted  343,774,049   328,874,050   342,972,218   328,874,050 

 
 
Three Months Ended
 
 
Nine Months Ended
 
 
 
September 30, 2016
 
 
September 30, 2015
 
 
September 30, 2016
 
 
September 30, 2015
 
Revenues
 $127,246 
 $46,191 
 $391,009 
 $139,593 
Cost of revenues
  6,023 
  12,676 
  18,231 
  32,470 
Gross profit
  121,223 
  33,515 
  372,778 
  107,123 
 
 
 
    
    
Operating expenses
  217,845 
  218,377 
  779,174 
  733,062 
Loss from operations
  (96,622)
  (184,862)
  (406,396)
  (625,939)
 
    
    
    
    
Other income (expense):
    
    
    
    
Interest expense
  (229)
  (148)
  (679)
  (634)
Other income
  4,345 
  - 
  62,333 
  - 
Write down of other receivables
  - 
  (108,961)
  - 
  (108,961)
Unrealized gain (loss) on stock price guarantee
  (12,812)
  (376,007)
  28,541 
  (345,542)
Total other income (expense), net
  (8,696)
  (485,116)
  90,195 
  (455,137)
 
    
    
    
    
Loss before provision for income taxes
  (105,318)
  (669,978)
  (316,201)
  (1,081,076)
Provision for income taxes
  - 
  18 
  807 
  974 
Net loss
 $(105,318)
 $(669,996)
 $(317,008)
 $(1,082,050)
 
    
    
    
    
Net loss per share – basic and diluted
 $(0.01)
 $(0.10)
 $(0.03)
 $(0.16)
Weighted average number of common shares outstanding - basic and diluted
  10,989,608 
  6,875,481 
  10,552,696 
  6,859,444 
See accompanying notes to condensed consolidated financial statements

4 

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PAID, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30,

(Unaudited)

  2015  2014 
Cash flows from operating activities:        
Net loss $(1,082,050) $(1,130,308)
Adjustments to reconcile net loss to cash and cash equivalents used in operating activities:        
Depreciation and amortization  9,662   20,620 
Realized loss on investments in available-for-sale securities  -   79,983 
Write down of other receivables  108,961   278,089 
Gain on settlement of liabilities  -   (34,759)
Share-based compensation  150,999   38,004 
Unrealized loss on stock price guarantee  345,542   375,147 
Changes in assets and liabilities:        
Accounts receivable  (73)  225,799 
Other receivables  -   214,759 
Prepaid expenses and other current assets  25,961   8,936 
Advanced royalties  -   (2,042)
Deposits and other assets  11,055   (17,072)
Accounts payable  (86,751)  (347,555)
Accrued expenses  (3,771)  (11,193)
Deferred revenues  (889)  (13,614)
Net cash and cash equivalents used in operating activities  (521,354)  (315,206)
Cash flows from investing activities:        
Proceeds from sale of investments in available-for-sale securities  -   157,650 
Net cash and cash equivalents provided by investing activities  -   157,650 
Cash flows from financing activities:        
Payments on capital leases  (11,291)  (18,104)
Proceeds from issuance of common stock  195,000   - 
Net cash and cash equivalents provided by (used in) financing activities  183,709   (18,104)
Net change in cash and cash equivalents  (337,645)  (175,660)
         
Cash and cash equivalents, beginning of period  651,318   463,285 
         
Cash and cash equivalents, end of period $313,673  $287,625 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION        
Income taxes paid $974  $3,971 
Interest paid $634  $920 
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES        
Issuance of previously subscribed common stock $25,000  $- 

 
 
2016
 
 
2015
 
Cash flows from operating activities:
 
 
 
 
 
 
Net loss
 $(317,008)
 $(1,082,050)
Adjustments to reconcile net loss to cash and cash equivalents used in operating activities:
    
    
Depreciation and amortization
  77,179 
  9,662 
Gain on sale of property and equipment
  (2,179)
  - 
Write down of other receivables
 - 
  108,961 
Share-based compensation
  41,814 
  150,999 
Unrealized gain or loss on stock price guarantee
  (28,541)
  345,542 
Changes in assets and liabilities:
    
    
Accounts receivable
  3,846 
  (73)
Prepaid expenses and other current assets
  43,202 
  25,961 
Advanced royalties
  5,000 
  - 
Deposits and other assets
  - 
  11,055 
Accounts payable
  19,316 
  (86,751)
Accrued expenses
  (668)
  (3,771)
Deferred revenues
  259 
  (889)
        Net cash and cash equivalents used in operating activities
  (157,780)
  (521,354)
Cash flow from investing activities
    
    
  Proceeds from the sale of property and equipment
  2,179 
  - 
                  Net cash and cash equivalents provided by investing activities
  2,179 
  - 
Cash flows from financing activities:
    
    
Payments on capital leases
  (3,097)
  (11,291)
Payments on note payable
  (24,202)
  - 
   Proceeds from the exercise of common stock warrants
  180,000 
  195,000 
 Net cash and cash equivalents provided by financing activities
  152,701 
  183,709 
Net change in cash and cash equivalents
  (2,900)
  (337,645)
 
    
    
Cash and cash equivalents, beginning of period
  123,913 
  651,318 
 
    
    
Cash and cash equivalents, end of period
 $121,013 
 $313,673 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
    
    
Income taxes paid
 $807 
 $974 
Interest paid
 $679 
 $634 
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES
    
    
   Issuance of previously subscribed common stock
 $- 
 $25,000 
See accompanying notes to condensed consolidated financial statements

5 

-3-
PAID, INC.

NOTES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2015

2016

Note 1. Organization and Significant Accounting Policies

PAID, Inc. (“PAID”, the “Company”, “we”, “us”, “our”) has developed AuctionInc, which is a suite of online shipping and tax management tools assisting e-commerce businesses with e-commerce storefronts, shipping solutions, tax calculation, inventory management, and auction processing. The product has tools to assist with other aspects of the fulfillment process, but the main purpose of thisthe product is to deliverprovide accurate shipping and tax calculations and packaging algorithms that provide customers with the best possible shipping and tax solutions.

BeerRun Software is a brewery management and Alcohol and Tobacco Tax and Trade Bureau tax reporting software. Small craft brewers utilize the product to manage brewery schedules, inventory, packaging, sales and purchasing. Tax reporting can be processed with a single click and is fully customizable by state or providence. The Company has five United States patents issuedsoftware is designed to integrate with QuickBooks accounting platforms by using our powerful sync engine. We currently offer two versions of the software BeerRun and BeerRun Light which excludes some of the enhanced features of BeerRun without disrupting the core functionality of the software. Additional features include Brewpad and Kegmaster and can be added on to the base product. Craft brewing is on the rise in the United States Patent and Trademark Office (USPTO)we feel that there is a large potential to grow this portion of our business.
SpiritRun is a product of BeerRun and one pending patent application. 

Previously, the Company's primary focusis designed specifically for distilleries. This product was to provide brand-related services to businesses, celebrity clientsrecently released and we feel that there with additional marketing and visibility in the entertainmentdistillery industry as well as charitable organizations. PAID's brand management, brand marketing, social media marketing, product design and merchandising, website design, development and hosting services were designedSpiritRun has the right core resources to grow each client's customer basebe a valuable tool in size, loyalty and revenue generation. We offered entertainers and business entities comprehensive web-presence and related services supporting and managing clients' official websites and fan-community services including e-commerce, VIP ticketing, live event fan experiences, user-generated content, client content publishing and distribution, fan forums, social network management, social media marketing, customer data capture, management and analysis.

distilleries around the United States.

General Presentation and Basis of Consolidated Financial Statements

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 20142015 that was filed on March 30, 2015.

2016.

In the opinion of management, the Company has prepared the accompanying unaudited condensed consolidated financial statements on the same basis as its audited consolidated financial statements, and these unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year 2016.
On October 7, 2015, the board of directors agreed to effectuate a reverse split of the Company’s common stock. The process was completed with FINRA on November 13, 2015.

As a result of the split every fifty shares of common stock outstanding prior to the reverse split were consolidated into one share, reducing the number of common shares outstanding on the effective date from 446,623,300 to 8,932,466. All share and per share information on this Form 10-Q has been retroactively adjusted to reflect the reverse stock split.

-4-
Going Concern and Management's Plan

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has continued to incur losses, although it has taken significant steps to reduce them. For the nine months ended September 30, 2015,2016, the Company reported a net loss of $1,082,050.$317,008. The Company has an accumulated deficit of $54,831,798$55,376,253 at September 30, 20152016 and used $521,354$157,780 of cash and cash equivalents in operations for the nine months ended September 30, 2015.2016. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

Management hasfeels that AuctionInc, BeerRun and SpiritRun will be a beneficial portion of our business and provide more opportunity for growth. The costs of doing business have been and will be significantly reduced in hopes of eliminating the Company’s losses in the musicnet loss and entertainment area and focusedproviding positive cash flow from operations.
On September 1, 2016 the Company entered into an amalgamation agreement with emergeIT. The amalgamation is contingent on its growing patent portfolio and its shipping calculator products. The Company has concluded its relationships within the music industry and is focusing allapproval of its attention towards growingcertain proposals by the AuctionInc business. We believe these changes to our business model will lead to improved efficiency, increased margins and a reductionshareholders of our operating costs.Going forward the primary focus of PAID is to sell our AuctionInc line of shipping calculator products. AuctionInc has recently added several new integrations with e-commerce platform providers in order to broaden its line of shipping calculator products and increase revenues.

6 

Company. See Note 6.

Although there can be no assurances, the Company believes that the above management plan will be sufficient to meet the Company's working capital requirements through the end of 2015.

2016.

Principles of Consolidation
The consolidated financial statements include the accounts of PAID, Inc. and its wholly owned subsidiary PAID Run, LLC. All intercompany accounts and transactions have been eliminated.
Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP 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 condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by the Company’s management include, but are not limited to the collectability of accounts receivables and other receivables, the valuation of inventories,receivable, the recoverability of long-lived assets, the valuation of deferred tax assets and liabilities, and the estimated fair value of the royalty and advance guaranteesguarantee, and share-based transactions. Actual results could materially differ from those estimates.

Fair Value Measurements

The Company measures the fair value of certain of its financial assets on a recurring basis. A fair value hierarchy is used to rank the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

-5-
At September 30, 20152016 and December 31, 2014,2015, the Company’s financial instruments include cash and cash equivalents, accounts receivable, other receivables, accounts payable, capital leases, note payable and accrued expenses. The carrying amount of cash and cash equivalents, accounts receivable, other receivables, accounts payable, capital leases, note payable and accrued expenses approximate fair value due to the short-term maturities of these instruments.

Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an initial maturity of three months or less to be cash equivalents.

Concentration of Credit Risk

The Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2015,2016, the Company had no amounts in these accounts in excess of the FDIC limit. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk related to these deposits. Management believes that it has invested in high credit quality institutions for which the Company has not experienced any loss in its accounts and believes it is not exposed to any significant credit risk related to these accounts.

7 

The Company extends credit based on an evaluation of the customer's financial condition, generally without requiring collateral. Exposure to losses on receivables is principally dependent on each customer's financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses. Although the Company expects to collect amounts due, actual collections may differ from the estimated amounts. At both September 30, 20152016 and December 31, 2014,2015, the Company has recorded an allowance for doubtful accounts of $38,609.

$40,609.

For the threenine months ended September 30, 2016, and September 30, 2015 no revenues from any one individual client accounted for more than 10% of total revenues. For the three months ended September 30, 2014, revenues from two clients accounted for approximately 96% of total revenues. For the nine months ended September 30, 2015, no revenues from any one individual client accounted for more than 10% of total revenues. For the nine months ended September 30, 2014, revenues from two clients accounted for approximately 85% of total revenues. These revenues were generated primarily from the sales of our line of AuctionInc products, tour merchandise, VIP services,brewery management software and merchandising and fulfillment services.

Other Receivables

Other receivables consisted of shares of our common stock held by the Company’s landlord, Carruth Capital which are considered available-for-sale. As of September 30, 2015 and December 31, 2014, 2,528,091 shares were held by Carruth Capital and were valued at $11,377 and $120,338, respectively, based on the market price of our common stock. The Company records an impairment of these shares when the market price decreases in the accompanying condensed statements of operations.  For the three months ended September 30, 2015 and 2014, the write down of other receivables was $108,961 and $50,561 respectively. For the nine months ended September 30, 2015 and 2014, the write down of other receivables was $108,961 and $278,089 respectively.

Inventories

Inventories consist of merchandise for sale and are stated at the lower of average cost or market determined on a first-in, first-out method. When a purchase contains multiple copies of the same item, they are stated at average cost.

At each balance sheet date, the Company evaluates its ending inventory quantities on hand and on order and records a provision for excess quantities and obsolescence. Among other factors, the Company considers historical demand and forecasted demand in relation to the inventory on hand, competitiveness of product offerings, market conditions and product life cycles when determining obsolescence and net realizable value. In addition, the Company considers changes in the market value of components in determining the net realizable value of its inventory. Provisions are made to reduce excess or obsolete inventories to their estimated net realizable values. Once established, write-downs are considered permanent adjustments to the cost basis of the excess or obsolete inventories.

Advanced Royalties

Advanced royalties represent amounts the Company has advanced to certain clients and are recoupable against future royalties earned by the clients. Advances are issued in either cash or shares of the Company’s common stock and advanced amounts are calculated based on the clients’ projected earning potential over a fixed period of time. Advances made by issuing stock or common stock options are recorded at their fair value on the date of issue. If the shares do not reach the required price per share, the Company has the option of issuing additional shares or making cash payment of the difference between the sales price and the fair value of the stock. The Company records a liability for the difference between the fair value of the stock and the guaranteed sales price amount.amount, which is included in accrued expenses in the accompanying condensed consolidated balance sheets. The change in fair value of the stock price guarantee is recorded in the accompanying condensed consolidated statements of operations.

8 

-6-
Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of 3 to 5 years. Any leasehold improvements are depreciated at the lesser of the useful life of the asset or the lease term. Equipment purchased under capital leases is amortized on a straight-line basis over the estimated useful life of the asset or the term of the lease, whichever is shorter.

Intangible Assets

Intangible assets consist of patents, client lists and brewery and distillery management software which are being amortized on a straight-line basis over their estimated useful life oflife. Currently there are intangible assets that are being amortized over 3 and 17 years.

Long-Lived Assets

The Company reviews the carrying values of its long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the expected future cash flow from the use of the asset and its eventual disposition is less than the carrying amount of the asset, an impairment loss is recognized and measured using the fair value of the related asset. No impairment charges were incurred during the nine months ended September 30, 20152016 and 2014.2015. There can be no assurance, however, that market conditions will not change or demand for the Company’s services will continue, which could result in impairment of long-lived assets in the future.

Revenue Recognition

The Company generates revenue principally from sales of shopping cart and shipping calculator subscriptions, brewery management software subscriptions, and other cliententertainment services.

The Company recognizes revenues in accordance with the FASB ASC Topic 605. Accordingly, the Company recognizes revenues when there is persuasive evidence that an arrangement exists, product delivery and acceptance have occurred, the sales price is fixed or determinable, and collectability of the resulting receivable is reasonably assured.

For shipping calculator revenues and brewery management software revenues the Company recognizes subscription revenue on a monthly basis. Customers’Shipping calculator customers’ renewal dates are based on their date of installation and registration of the shipping calculator line of products. PaymentsThe payments for shipping calculator services are made via credit card for the month preceding the service and are recorded as deferred revenues until the service has been provided.

Fan experience sales generally include tickets and related experiences Brewery management software subscribers are billed on a calendar month at concerts and other events conducted by performing artists. Revenues associated with these fan experiences are generally reported gross, rather than net, and are deferred until the related event has been concluded, at which time the revenues and related direct costs are recognized.

Fan club membership fees are recognized ratably over the termfirst of the related membership, generally one year.

For sales of merchandise owned and warehoused by the Company, the Company is responsible for conducting the sale, billing the customer, shipping the merchandise to the customer, processing customer returns and collecting accounts receivable. The Company recognizes revenue upon verification of themonth with payments processed via credit card transaction and shipment offor the merchandise, discharging all obligations of the Company with respect to the transaction. During 2013 the Company moved its merchandising operations to Music City Networks (“MCN”) in Nashville, TN. Under our agreement with MCN, revenues are recognized by means of a profit split calculation, payable as a commission due to the Company.

9 

month following.

Client

Entertainment services revenues include web development and design, creative services, marketing services and general business consulting services. For contracts that are of a short duration and fixed price, revenue is recognized when there are no significant obligations and upon acceptance by the customer of the completed project. Revenues on longer-term fixed price contracts are recognized using the percentage-of-completion method. Services that are performed on a time and material basis are recognized as the related services are performed.

Cost of Revenues

Cost of revenues includeincludes web hosting, data center costs, event tickets, ticketingstorage, and venue fees, shipping and handling fees associated with e-commerce sales, merchandise and royalties paid to clients.

commissions.

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Operating Expenses

Operating expenses include indirect related expenses, including credit card processing fees, payroll, travel, facility costs, and other general and administrative expenses.

Advertising

Advertising costs are charged to expense as incurred. For the three months endedending September 30, 20152016 and 2014,2015 advertising expense totaled $0 and $7,180, and $14, respectively, and for the nine months ended September 30, 20152016 and 2014,2015, advertising expense totaled $20,282$6,874 and $2,649,$20,282, respectively. These expenses are included in operating expenses in the accompanying condensed consolidated statements of operations.

Share-Based Compensation

The Company grants options to purchase the Company’s common stock to employees, directors and consultants under stock option plans. The benefits provided under these plans are share-based payments that the Company accounts for using the fair value method.

The fair value of each option award is estimated on the date of grant using a Black-Scholes-Merton option pricing model (“Black-Scholes model”) that uses assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, expected stock price volatility, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. Expected volatilities are based on the historical volatility of the Company’s common stock and other factors. The expected terms of options granted are based on analyses of historical employee termination rates and option exercises. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the grant. Since the Company does not expect to pay dividends on common stock in the foreseeable future, it estimated the dividend yield to be 0%.

Share-based compensation expense recognized during a period is based on the value of the portion of share-based payment awards that is ultimately expected to vest and is amortized under the straight-line attribution method. As share-based compensation expense recognized in the accompanying condensed consolidated statements of operations for the nine months ended September 30, 20152016 and 20142015 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. The estimated fair value method requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimates forfeitures based on historical experience. Changes to the estimated forfeiture rate are accounted for as a cumulative effect of change in the period the change occurred.

Since the Company has a net operating loss carry-forward as of September 30, 20152016 and 2014,2015, no excess tax benefits for tax deductions related to share-based awards were recognized from stock options exercised in the nine months ended September 30, 20152016 and 20142015 that would have resulted in a reclassification from cash flows from operating activities to cash flows from financing activities.

10 

Income Taxes

The Company accounts for income taxes and the related accounts under the liability method. Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the income tax bases of assets and liabilities. A valuation allowance is applied against any net deferred tax asset if, based on available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Therefore, the Company has recorded a full valuation allowance against the net deferred tax assets. The Company’s income tax provision consists of state minimum taxes.

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The Company recognizes any uncertain income tax positions on income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.

The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had $0 accrued for interest and penalties on the Company’s accompanying condensed consolidated balance sheets at September 30, 20152016 and December 31, 2014.

2015.

The Company is subject to taxation in the U.S. and various state jurisdictions. The Company’s tax years for 2012 and forward for federal and 2011 and forward for state purposes are subject to examination by the U.S., Massachusetts and New Jersey tax authorities due to the carry-forward of unutilized net operating losses. The Company does not foresee material changes to its gross uncertain income tax position liability within the next twelve months.
Earnings (Loss) Per Common Share

Basic earnings (loss) per share represent income (loss) available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income (loss) that would result from the assumed issuance. The potential common shares that may be issued by the Company relate to outstanding stock options and have been excluded from the computation of diluted earnings (loss) per share because they would reduce the reported loss per share and therefore have an anti-dilutive effect.

For the three months ended September 30, 2016 and 2015 and the nine months ended September 30, 2016 and 2015, there were approximately 400,000323,000 and 1,583,000,8,000 and 340,000 and 32,000, respectively, potentially dilutive shares using the treasury stock method that were excluded from the diluted earnings (loss) per share as their effect would have been antidilutive for the period then ended.

Segment Reporting

The Company reports information about segments of its business in its annual consolidated financial statements and reports selected segment information in its quarterly reports.reports issued to shareholders. The Company also reports on its entity-wide disclosures about the products and services it provides and reports revenues and its major customers. The Company’s twothree reportable segments entertainment services and shipping calculator services, are managed separately based on fundamental differences in their operations.

At September 30, 2016, the Company operated in the following three reportable segments (see below):

a. 
Entertainment services,
b. 
Shipping calculator services, and
c. 
Brewery management software.
The Company evaluates performance and allocates resources based upon operating income. The accounting policies of the reportable segments are the same as those described in this summary of significant accounting policies. The Company’s chief operating decision maker is the President, Chief Executive Officer and Chief Financial Officer.

11 

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The following table compares total revenue for the periods indicated.

  Three Months Ended  Nine Months Ended 
  September 30,
2015		  September 30,
2014		  September 30,
2015		  September 30,
2014		 
Entertainment $6,398  $11,346  $21,044  $636,979 
Shipping calculator  39,793   36,994   118,549   112,937 
Total revenue  46,191   48,340   139,593   749,916 

 
 
Three Months Ended
 
 
Nine Months Ended
 
 
 
September 30,
2016
 
 
September 30,
2015
 
 
September 30,
2016
 
 
September 30,
2015
 
Entertainment services
 $ 2,275 
 $6,398 
 $12,937 
 $21,044 
Shipping calculator services
  46,141 
  39,793 
  135,862 
  118,549 
Brewery management software
  78,830 
  - 
  242,210 
  - 
Total revenue
 $127,246 
 $46,191 
 $391,009 
 $139,593 
The following table compares total loss from operations for the periods indicated.

  Three Months Ended  Nine Months Ended 
  September 30,
2015		  September 30,
2014		  September 30,
2015		  September 30,
2014		 
Entertainment $4,572  $6,968  $15,078  $(337,778)
Shipping calculator  (189,434)  (182,775)  (641,017)  (178,484)
Total loss from operations  (184,862)  (175,807)  (625,939)  (516,262)

 
 
Three Months Ended
 
 
Nine Months Ended
 
 
 
September 30,
2016
 
 
September 30,
2015
 
 
September 30,
2016
 
 
September 30,
2015
 
Entertainment services
 $ 3,404 
 $4,572 
 $11,971 
 $15,078 
Shipping calculator services
  (110,655)
  (189,434)
  (442,629)
  (641,017)
Brewery management software
  10,629 
  - 
  24,262 
  - 
Total loss from operations
 $(96,622)
 $(184,862)
 $(406,396)
 $(625,939)
Recent Accounting Pronouncements

In May 2014,March 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers”. ASU 2014-09 supersedes the revenue recognition requirements in FASB Topic 605, "Revenue Recognition". The ASU implements a five-step process2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which addresses certain aspects of accounting for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is consideredshare-based payment award transactions. This guidance will be effective in the transaction price,first quarter of fiscal year 2017 and allowing estimates of variable considerationearly adoption is permitted. The Company is currently evaluating the impact that this guidance will have on its condensed consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases, which requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized before contingencies are resolved in certain circumstances. Entities can transition toas assets and liabilities on the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. In July 2015, the FASB approved amendments deferring thebalance sheet. ASU 2016-02 is effective date by one year to December 15, 2017 for annual reporting periods beginning after that date and permitting early adoption of the standard, but not before the original effective date for reporting periods beginning after December 15, 2016. Entities can transition to2018 with early adoption permitted. While the standard either retrospectively or as a cumulative –effect adjustment as ofCompany is still evaluating ASU 2016-02, the date of adoption. The Company has not selected a transition method and management is currently assessing the impactexpects the adoption of ASU 2014-092016-02 to have a material effect on the Company’s financial condition due to the recognition of the lease rights and obligations as assets and liabilities. The Company does not expect ASU 2016-02 to have a material effect on the Company’s results of operations and cash flows.
In January 2016, the FASB issued ASU 2016-01, Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation and disclosure of financial statements. This guidance will be effective in the first quarter of fiscal year 2019 and early adoption is not permitted. The Company is currently evaluating the impact that this guidance will have on our condensedits consolidated financial statements.

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In August 2014, the FASB issued ASU 2014-15, “PresentationPresentation of Financial Statements-Going Concern”.Concern. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the reporting periods beginningending after December 15, 2016 and early application is permitted. Management is currently assessing the impact the adoption of ASU 2014-15 will have on our condensed consolidated financial statements.

12 

Reclassifications

Certain reclassifications have been made to

In May 2014, the prior period financial statement presentation to conform toFASB issued ASU 2014-09, Revenue from Contracts with Customers. This updated guidance supersedes the current periodrevenue recognition guidance, including industry-specific guidance. The updated guidance introduces a five-step model to achieve its core principal of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The updated guidance is effective for interim and annual periods beginning after December 15, 2016, and early adoption is not permitted. In July 2015, the FASB decided to delay the effective date of ASU 2014-09 until December 15, 2017. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. The Company is currently evaluating which transition method it will adopt and the expected impact of the updated guidance, but does not believe the adoption of the updated guidance will have a significant impact on its condensed consolidated financial statement presentation. The reclassifications did not have any effect on reported net losses for any period presented.

statements.

Note 2. Accrued Expenses

Accrued expenses are comprised of the following:

   September 30,
2015
(unaudited)		  December 31, 
2014
(audited)		 
Payroll and related costs $1,755  $2,019 
Royalties  80,572   80,572 
Stock price guarantee  900,274   554,732 
Other  33,189   36,696 
Total $1,015,790  $674,019 
 
 
September 30,
2016
 
 
December 31,
2015
 
 
 
(unaudited)
 
 
(audited)
 
Payroll and related costs
 $3,018 
 $3,686 
Royalties
  51,838 
  51,838 
Stock price guarantee
  858,041 
  913,582 
Other
  32,252 
  32,253 
     Total
 $972,150 
 $1,001,359 

Note 3. Intangible Assets
The Company has a patent for the real-time calculation of shipping costs for items purchased through online auctions using a zip code as a destination location indicator. It includes shipping charge calculations across multiple carriers and accounts for additional characteristics of the item being shipped, such as weight, special packaging or handling, and insurance costs.
On January 29, 2008, the Company was granted a patent for a technique for facilitating advanced, rapid, accurate estimation of shipping costs across multiple shipping carriers and shipping options between buyer and seller in an online auction. Since that time the Company has received four additional patents. These patents help facilitate rapid and accurate estimation of shipping costs across multiple shipping carriers and also include real-time calculation of shipping. Further continuations include the addition of shipping calculation with taxes and enhanced shipping promotions.
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On October 7, 2015, the Company, through a newly formed limited liability company named PAID Run, LLC, entered into an asset purchase agreement to purchase assets related to BeerRun Software and SpiritRun Software and related intellectual property. The purchase price and additional development for these assets was $297,500, which include all of the client lists, along with all rights, benefits and privileges associated with the software and intellectual property, associated contracts, and books and records.
At September 30, 2016 and December 31, 2015, intangible assets consisted of the following:
 
 
September 30,
2016
 
 
December 31,
2015
 
Patents
 $16,000 
 $16,000 
Software
  83,750 
  83,750 
Client list
  213,750 
  213,750 
Accumulated amortization
  (111,703)
  (36,622)
 
 $201,797 
 $276,878 
Amortization expenses of intangible assets for the nine months ended September 30, 2016 were $75,801. Estimated future annual amortization expense is approximately $100,000 for each year through 2018 and $900 for 2019.

Note 3.4. Commitments and Contingencies

Note Payable
On October 2, 2015, the Company entered into a $35,677 note payable with a financial institution. The term of the note was for a period of one year and was payable in 10 monthly installments of $3,089 at an interest rate of 6.35%. The balance due on the note payable as of September 30, 2016 and December 31, 2015 was $0 and $24,202, respectively. The note payable was repaid in full during the third quarter of 2016.
Stock Price Guarantee

In connection with the Company’s advance royalties with a client, the Company guaranteed that shares of common stock would sell for at least $0.12$6.00 per share.share as adjusted for the reverse stock split.  If the shares are not at the required $0.12$6.00 per share when they are sold, the Company has the option of issuing additional shares at their fair value or making a cash payment for the difference between the guaranteed price per share and the fair value of the stock.  As of September 30, 20152016 and December 31, 2014,2015, the stock price guarantee was $900,274$885,041 and $554,732,$913,582, respectively, as the Company’s stock price was below $0.12$6.00 per share at September 30, 20152016 and December 31, 2014,2015, although some or all of the stock may already be sold and no longer subject to a guaranty and any required payment would be disputed by the Company. For the threenine months ended September 30, 2015 and 2014,2016 the Company recorded an unrealized lossgain on the stock price guarantee of ($376,007)$28,541 and ($157,939), respectively. Forfor the nine months ended September 30, 2015, and 2014, the Company recorded an unrealized loss on stock price guarantee of ($345,542) and ($375,147), respectively.

.

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Legal Matters

In the normal course of business, the Company periodically becomes involved in litigation. As ofSeptember 30, 2015,2016, in the opinion of management, the Company had no pending litigation that would have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows.

The Company commenced on December 20, 2013 patent infringement litigation against eBay, Inc. (Paid, Inc. v. eBay, Inc.; CV No. 4:13-cv-40151-TSH) in the United States District Court for the District of Massachusetts Central Division.  On June 30, 2014, PAIDThis litigation has been settled pursuant to a Confidential Settlement and eBay, Inc. filed a joint motion to stayLicense Agreement dated March 11, 2016.  Under the district court litigation pending completionagreement, the Company received $53,500, which has been recorded in other income in the condensed consolidated statements of eBay, Inc.’s petitionsoperations, after costs as full and final payment for covered business review that were filed with the Patent and Trial and Appeal Board (“PTAB”). On September 30, 2014, the PTAB announced that it had granted petitions filed by eBay, Inc. for covered business method review of PAID’s United States Patent Nos. 8,635,150, 8,521,642, 8,352,357, and 7,930,237, entitled “Method and System for Improved Online Auction.” On June 9, 2015, PAID and eBay, Inc. presented oral arguments to the Patent Trials Appeals Board. The resultssuch settlement of the PTAB review werelawsuit and non-exclusive licensing of the Company’s patents.  The payment was received on September 16, 2015 by PAID, Inc. and its counsel. The PTAB has entered a final ruling and has determined the claims have failed to claim patent eligible subject matter.

13 

in full in April 2016.

Indemnities and Guarantees

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

Note 4. 5. Shareholder’s Deficit
Common Stock

Common Stock

During the nine months ended

From January 1, 2016 through September 30, 2015,2016, the Company sold 3,900,000issued a total of 2,057,142 shares of common stock for gross proceeds of $195,000.

Subscribed and Issued Shares

During$180,000 from the year ended December 31, 2014, the Company sold 500,000 sharesexercise of common stock that had not been issued to a shareholder and accordingly, the unissued shares had been reflected as common stock subscribed but not issued in the amount of $25,000 in the accompanying condensed balance sheet as of December 31, 2014. In February 2015, the Company issued the 500,000 shares to the new shareholder.

warrants.

Share-based Incentive Plans

During the period ended September 30, 2015,2016, the Company had three stock option plans that include both incentive and non-qualified options to be granted to certain eligible employees, non-employee directors, or consultants of the Company. There were no90,000 stock options were granted exercised, canceled or expired duringto board members and an employee on April 1 and June 13, 2016.
During the nine monthsperiod ended September 30, 2015.

Active Plans:

2012 Plan

2016, the board of directors approved the repricing of outstanding stock options held by members of the board, management, employee and former employee to $0.0975 per share. The expense related to the repricing was not significant. In addition to the repricing of the outstanding options the board approved to vest any outstanding unvested options for two employees.

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Note 6. Amalgamation Agreement
On October 15, 2012,September 1, 2016, the Company adopted the 2012 Non-Qualified Stock Option Plan (the "2012 Plan"entered into an amalgamation agreement with emergeIT Inc., an Ontario corporation to acquire emergeIT and two new PAID subsidiaries (“Amalgamation Agreement”).  The purposeemergeIT (which does business as “ShipTime”) is a cloud-based shipping platform bringing individuals and small and medium sized businesses together with many of the 2012 Planworld’s leading carriers to save time and money. emergeIT generates monthly recurring revenue through transactions and “software as a service” offerings.  It currently serves in excess of 30,000 members in North America with plans to expand its services into Europe and then worldwide.  The amalgamation, or merger, requires shareholder approval and is expected to provide long-term incentives and rewards to those employeesclose, upon receipt of the Company, and any other individuals, whether directors, consultants or advisors who are in a position to contribute to the long-term success and growth of the Company. The options granted have a 10 year contractual term and vest one hundred percent on the date of grant. At September 30, 2015, there are 6,000,000 shares reserved for issuance under this plan.

2011 Plan

On February 1, 2011, the Company adopted the 2011 Non-Qualified Stock Option Plan (the "2011 Plan"), and has filed Registration Statements on Form S-8 to register 30,000,000 shares of its common stock. Under the 2011 Plan, employees and consultants may elect to receive their gross compensationapproval, in the formfourth quarter of options, exercisable at $0.001 per share, to acquire the number of shares of the Company's common stock equal to their gross compensation divided by the fair value of the stock on the date of grant. The options granted have a 10 year contractual term and have vesting periods that range from one hundred percent on the date of grant to one third immediately, one third vesting in 18 months and the final one third vesting in 36 months from the date of the grant. At September 30, 2015, there are no shares reserved for issuance under this plan.

14 

2016.  

2002 Plan

The 2002 Stock Option Plan (“2002 Plan”) provides for the award of qualified and non-qualified options for up to 30,000,000 shares. The options granted have a ten-year contractual term and have a vesting schedule of either immediately, two years, or four years from the date of grant. At September 30, 2015, there are currently no shares reserved for issuance under this plan.

Note 5.7. Subsequent Events

On October 7, 2015, the Company, through a newly formed limited liability company named PAID Run, LLC, entered into an asset purchase agreement to purchase assets related to BeerRun Software and SpiritRun Software and related intellectual property owned by SWK Technologies, Inc. and OpCenter LLC (unrelated third parties). The purchase price for the assets was $285,000 cash, which include all of the client lists, along with all rights, benefits and privileges associated with the software and intellectual property, associated contracts, and books and records.

On October 7, 2015, the Company amended its Certificate of Incorporation to affect a 50:1 reverse stock split, whereby every 50 shares of the Company’s common stock is converted automatically into 1 share. The amendment also reduced the total authorized shares of common stock from 550,000,000 to 11,000,000. As of the date of filing this Form 10-Q, the Company has not completed the process with FINRA to effectuate the reverse stock split.

From October 1, 2015 through the filing date of this quarterly report on Form 10-Q, the Company accepted stock subscription agreements from various investors for the purchase of 102,857,142 shares of common stock at $0.00175 per share, plus 5-year warrants for the purchase of 102,857,142 shares at $0.00175 per share each on a pre-reverse stock split basis, in a private placement. The Company received total proceeds of $180,000. These shares of common stock have not been issued due to our pending reverse stock split, as noted above.

The Company has evaluated subsequent events through the filing date of this Form 10-Q, and have determined that no subsequent events have occurred that would require recognition in the condensed consolidated financial statements or disclosure in the notes thereto, other than as disclosed herein.

On November 9, 2016, the Company submitted its proxy to solicit approval from its shareholders of the Amalgamation Agreement. The results of solicitation have not been determined as of the date of the filing of this Form 10-Q.
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ITEM 2.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.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 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, 20142015 that was filed on March 30, 2015.

15 

2016.

The

For example, the Company's ability to achieve 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 sites,site, the Company's inability to complete development of its sites,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.

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 AnnualQuarterly 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

The AuctionInc system was originally designed to assist and improve just the Company's sales, but management realized that there was a need for an order management system for individuals and businesses that sell on the Internet, specifically at auctions and sites with multiple sellers. In 2000 the Company's technology team focused its attention on the core fundamental piece of the system called the Shipping Calculator. The Company recognized the potential importance of the calculator and filed for a patent before launching it to the public in April 2002. The Company obtained its first patent on the shipping calculator in January 2008, the second patent in April 2011, the third patent in January 2013, the fourth patent in August 2013 and a fifth patent in January 2014. One additional patent is pending. The product is modular based and we continue to develop new tools and products for its customers.

Previously, the Company's primary focus was to provide brand-related services to businesses and celebrity clients in the entertainment industry as well as charitable organizations. PAID's brand management, brand marketing, social media marketing, product design and merchandising, website design, development and hosting services were designed to grow each client's customer base in size, loyalty and revenue generation. We offered entertainers and business entities comprehensive web-presence and related services supporting and managing clients' official websites and fan-community services including e-commerce, VIP ticketing, live event fan experiences, user-generated content, client content publishing and distribution, fan forums, social network management, social media marketing, customer data capture, management and analysis. PAID's brand support services also included design and production of print and promotion marketing materials for client branded products and events. In addition to sourcing, designing and marketing,

PAID, sold merchandise for celebrities and businesses, through official website stores and other web-based outlets as well as on-tour and retail outlets. Our celebrity services proprietary content management system and our use of both off-the-shelf best of class and proprietary software applications provided an opportunity for our clients to offer a Direct-To-Consumer solution enabling more information, merchandise and experiences directly to their customers and communities while optimizing our ability to capture customer data and build robust customer data-bases for them. We provided business management tools for online retailers, throughInc. (the “Company”) has developed AuctionInc, which is homea suite of online shipping and tax management tools assisting businesses with e-commerce storefronts, shipping solutions, tax calculation, inventory management, and auction processing. The product does have tools to assist with other aspects of the fulfillment process, but the main purpose of the product is to provide accurate shipping and tax calculations and packaging algorithms that provide customers with the best possible shipping and tax solutions.
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BeerRun Software is a brewery management and Alcohol and Tobacco Tax and Trade Bureau tax reporting software. Small craft brewers can utilize the product to manage brewery schedules, inventory, packaging, sales and purchasing. Tax reporting can be processed with a single click and is fully customizable by state or providence. The software is designed to integrate with QuickBooks accounting platforms by using our patented shipping calculatorpowerful sync engine. We currently offer two versions of the software BeerRun and automated auction checkoutBeerRun Light which excludes some of the enhanced features of BeerRun without disrupting the core functionality of the software. Additional features include Brewpad and order processing system. This system providesKegmaster and can be added on to the fundamental structure for our celebrity web hosting and development services, and for individuals seeking a professional and interactive presencebase product. Craft brewing is on the Internet.

16 

rise in the United States and we feel that there is a large potential to grow this portion of our business.

Significant Accounting Policies

Our significant accounting policies are more fully described in Note 3 to our consolidated financial statements included in our Form 10-K filed on March 30, 2015,2016, as updated and amended in Note 1 of the Notes to Condensed Consolidated Financial Statements included herein.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 and nine months ended September 30, 20152016 and 20142015.

The following discussion compares the Company's results of operations for the three months ended September 30, 20152016 with those for the three months ended September 30, 2014.2015. 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 revenue for the periods indicated.

  Three months Ended  September 30, 
  2015  2014  % Change 
Merchandising and fulfillment $6,297  $10,859   (42)%
Client services  101   487   (79)%
Shipping calculator services  39,793   36,994   8%
Total revenues $46,191  $48,340   (4)%

 
 
 Three months Ended
September 30, 
 
 
 
2016
 
 
 2016
 
 
 % Change
 
Entertainment services
 $2,275 
 $6,398 
  (64)%
Brewery management software
  78,830 
  - 
  100%
Shipping calculator services
  46,141 
  39,793 
  16%
      Total revenues
 $127,246 
 $46,191 
  175%
Revenues decreased 4%increased 175% in the third quarter primarily from the reduction in fulfillment revenues related to third party auction sales.

Merchandising and fulfillmentaddition of a new segment of the Company that provides brewery management software services.

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Entertainment service revenues decreased $4,562$4,123 or 42%64% to $6,297$2,275 in the third quarter of 20152016 compared to $10,859$6,398 in 2014.2015. This decrease is a result of our limitedreduced volume of movie poster auction sales in the third party auction sales.

Clientquarter.

Brewery management software revenues are a new addition to our revenue sources in 2016 resulting in an increase of revenues by $78,830.
Shipping calculator services revenues decreased $386revenue increased $6,348 or 79%16% to $101$46,141 in the third quarter of 20152016 compared to $487$39,793.  The increase was largely due to the second phase of our price increases that were implemented in 2014.2016.
Gross Profit
Gross profit increased $87,708 or 262% in the third quarter of 2016 to $121,223 compared to $33,515 in 2015. Gross margin increased 22 percentage points to 95% from 73% in the third quarter of 2015. The increase in gross margin was mainly due to the limited number of costs associated with our new brewery management software services and the decreased fees as a result of changing to a new hosting provider.
Operating Expenses
Total operating expenses in the third quarter 2016 were $217,845 compared to $218,377 in the third quarter 2015, a decrease of $532 or 0%.
Other Income (Expense), net
Net other income (expense) in the third quarter of 2016 was ($8,696) compared to ($485,116) in the same period of 2015, a decrease of $476,420 or 98%. This is primarily attributable to the changeunrealized loss on stock price guarantee of $12,812 in the third quarter of 2016 compared to $376,007 in the same period of 2015.
Net Loss
The Company realized a net loss in the third quarter of 2016 of ($105,318) compared to a net loss of ($669,996) for the same period in 2015. The loss for the third quarter of 2016 and 2015 represent ($0.10) per share.
Comparison of the nine months ended September 30, 2016 and 2015
The following discussion compares the Company's results of operations for the nine months ended September 30, 2016 with those for the nine months ended September 30, 2015. 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.
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Revenues
The following table compares total revenue for the periods indicated.
 
 
 Nine Months Ended
September 30,
 
 
 
2016
 
 
 2015
 
 
% Change
 
Entertainment services
 $12,937 
 $21,044 
  (39)%
Brewery management software
  242,210 
  - 
  100%
Shipping calculator services
  135,862 
  118,549 
  15%
Total revenues
 $391,009 
 $139,593 
  180%
Revenues increased 180% primarily from the additional revenue generated by the brewery management software services.
Entertainment service revenues decreased $8,107 or 39% to $12,937 compared to $21,044 in 2015. This decrease is a result of our business plan as it relateslower than average movie poster auctions.
Brewery management software revenues are a new addition to the services we have provided within the music industry.

our revenue sources in 2016 resulting in an increase of revenues by $242,210.

Shipping calculator services revenue increased $2,799$17,313 or 8%15% to $39,793 in the third quarter of 2015$135,862 compared to $36,994.$118,549.  The increase was largely due to the addition of newly developed products for the AuctionInc platform and a price increase for new products that went into effect on April 1, 2015.

in 2016.

Gross Profit

Gross profit decreased $4,323increased $265,655 or 11% in the third quarter of 2015248% to $33,515$372,778 compared to $37,838$107,123 in 2014.2015. Gross margin decreased 5increased 18 percentage points to 73%95% from 78%77% in the third quarter of 2014. The decrease in gross margin was mainly due to the increase in the data center expense allocation with regard to AuctionInc.

17 

Operating Expenses

Total operating expenses in the third quarter 2015 were $218,377 compared to $213,645 in the third quarter 2014, an increase of $4,732 or 2%. The increase is due to the additional marketing and advertising associated with the release of new products for AuctionInc.

Other Expense, net

Net other expense in the third quarter of 2015 was $485,116 compared to $208,575 in the same period of 2014, an increase of $276,541 or 133%. This is primarily attributable to the write-down of other receivables of $108,961 in the third quarter of 2015 compared to $50,561 in the same period of 2014 and the unrealized loss on stock price guarantee of $376,007 in the third quarter of 2015 compared to $157,939 in the same period of 2014. The additional expense related to the stock price guarantee recorded in the third quarter of 2015 is due to decreases in the market price of our common stock.

Net Loss

The Company realized a net loss in the third quarter of 2015 of ($669,996) compared to a net loss of ($387,147) for the same period in 2014. The loss for the third quarter of 2015 and 2014 each represent $0.00 per share.

Revenues

The following table compares total revenue for the periods indicated.

  Nine months Ended September 30, 
  2015  2014  % Change 
Merchandising and fulfillment $20,562  $108,581   (81)%
Client services  482   6,193   (92)%
Shipping calculator services  118,549   112,937   5%
Touring revenues  -   522,205   (100)%
Total revenues $139,593  $749,916   (81)%

Revenues decreased 81% primarily from the decreased client base and the withdrawal from the celebrity service industry.

Merchandising and fulfillment revenues decreased $88,019 or 81% to $20,562 compared to $108,581 in 2014. This decrease is a direct result of our withdrawal from the celebrity services industry.

Client services revenues decreased $5,711 or 92% to $482 compared to $6,193 in 2014. The decrease was attributable to the change in our business plan as it relates to the services we have provided within the music industry.

Shipping calculator services revenue increased $5,612 or 5% to $118,549 compared to $112,937 in 2014.  This increase is due to sales of the additional products developed for the AuctionInc platform and the increase in the client base.

Touring revenues decreased $522,205 or 100% to $0 compared to $522,205 in 2014. Due to our exit from the celebrity services industry there are no revenues recognized in 2015 when compared to 2014.

Gross Profit

Gross profit decreased $157,775 or 60% to $107,123 compared to $264,898 in 2014. Gross margin increased 42 percentage points to 77% from 35% in 2014.2015. The increase in gross margin was mainly due to the increase in the ratiorevenues and limited number of revenuescosts associated with regard to AuctionInc, which has a higher gross profit percentage.

18 

our new brewery management software services.

Operating Expenses

Total operating expenses in 20152016 were $733,062$779,174 compared to $781,160$733,062 in 2014, a decrease2015, an increase of $48,098 or 6%. ThisThe increase is largelypartly due to the withdrawal fromincreased expense associated with the celebrity service relationshipsoperations of the brewery management software segment and decreasesan increase in payroll, accountingprofessional fees consulting andin 2016 related costs.

to the amalgamation agreement with emergeIT.

Other Expense,Income (Expense), net

Net other expenseincome in 20152016 was $455,137$90,195 compared to $610,075an expense of ($455,137) in the same period of 2014, a decrease2015, an increase of $154,938 or 25%.$545,332. This is primarily attributable to the write-downwrite down of other receivables of $108,961 in 2015 compared to $278,089 in the same period of 2014 and the unrealized loss oneffects of the stock price recorded on the guarantee of $345,542 in 2015 compared to $375,147 in the same period of 2014. The decrease in other expense recorded in 2015 is due to decreases in the market price of our common stock without any offset of other income or gain on settlement of liabilities as was the case in 2014.

2015.

Net Loss

The Company realized a net loss in 20152016 of ($1,082,050)317,008) compared to a net loss of ($1,130,308)1,082,050) for the same period in 2014.2015. The loss for 2016 and 2015 represent ($0.03) and 2014 each represent $0.00($0.16) per share.

share, respectively.

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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 nine monthsended September 30, 20152016 and 20142015 is as follows:

  2015  2014 
Net loss $(1,082,050) $(1,130,308)
Depreciation and amortization  9,662   20,620 
Realized loss on investments in available-for-sale securities  -   79,983 
Write down of other receivables  108,961   278,089 
Gain on settlement of liabilities  -   (34,759)
Share-based compensation  150,999   38,004 
Unrealized loss on stock price guarantee  345,542   375,147 
Changes in current assets and liabilities  (54,468)  58,018 
Net cash used in operating activities $(521,354) $(315,206)

Cash Flows from Financing Activities

Cash and cash equivalents provided by (used in) financing activities were $183,709 and ($18,104) for the nine months ended September 30, 2015 and 2014, respectively. During 2015, the Company received proceeds of $195,000 from the issuance of common stock, offset by payments on capital lease obligations of $11,291. During 2014, the Company made payments on capital lease obligations of $18,104.

 
 
2016
 
 
2015
 
Net loss
 $(317,008)
 $(1,082,050)
Depreciation and amortization
  77,179 
  9,662 
Gain on sale of property and equipment
  (2,179)
  - 
Write down of other receivable
  - 
  108,961 
Share-based compensation
  41,814 
  150,999 
Unrealized gain on stock price guarantee
  (28,541)
  345,542 
Changes in current assets and liabilities
  70,955 
  (54,468)
Net cash used in operating activities
 $(157,780)
 $(521,354)
Working Capital and Liquidity

The Company had cash and cash equivalents of $313,673$121,013 atSeptember 30, 2015,2016, compared to $651,318$123,913 at December 31, 2014.2015. The Company had a negative working capital of ($640,473)935,879) at September 30, 2015,2016, a decrease of $718,429$18,015 compared to $77,956($917,864) at December 31, 2014.2015. The decrease in cash and cash equivalents on handworking capital is attributable to the decrease in revenues generated from the celebrity services.

19 

value of the stock price and its effect on the stock price guarantee liability.

From October 1, 2015 through the filing date of this quarterly report on Form 10-Q, the Company accepted stock subscription agreements from various investors for the purchase of 102,857,142 shares of common stock at $0.00175 per share, plus 5-year warrants for the purchase of 102,857,142 shares at $0.00175 per share on a pre-reverse stock split basis, in a private placement. The Company received total proceeds of $180,000. These shares of common stock have not been issued due to our pending 50:1 reverse stock split.

The Company may need an infusion of additional capital to fund anticipated operating costs over the next 12 months. ManagementAlthough there is substantial doubt about the Company’s ability to continue as a going concern, management believes that the Company has adequate cash resources to fund operations during the next 12 months. However, there can be no assurance that anticipated growth in new business will occur, and that the Company will be successful in monetizingsubstantially increasing its patents.revenues. Management continues to seek alternative sources of capital to support operations.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, the Company is not required to provide the information for this Item 3.

ITEM 4.CONTROLS AND PROCEDURES

ITEM 4.CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures

The Company's management, including the President and Chief Executive Officer of the Company, as its principal executive officer, and the Chief Financial Officer of the Company, as its principal financial officer, have evaluated the effectiveness of the Company's “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Based upon this evaluation, the President, Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2015,2016, the Company's disclosure controls and procedures were not effective, due to material weaknesses in internal control over financial reporting, for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time period specified by the Securities and Exchange Commission's rules and forms, and is accumulated and communicated to the Company's management, including its principal executive and financial officer, as appropriate to allow timely decisions regarding required disclosure.

-19-
The Company has identified fivesix material weaknesses in internal control over financial reporting as described in the Company's Form 10-K for the year ended December 31, 2014.

2015.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting during the quarter ended September 30, 20152016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

ITEM 1.     LEGAL PROCEEDINGS
In the normal course of business, the Company periodically becomes involved in litigation.  As ofSeptember 30, 2015,2016, in the opinion of management, the Company had no material pending litigation other than ordinary litigation incidental to the business.

The Company commenced on December 20, 2013 patent infringement litigation against eBay, Inc. (Paid, Inc. v. eBay, Inc.; CV No. 4:13-cv-40151-TSH) in the United States District Court for the District of Massachusetts Central Division.  On June 30, 2014,This litigation has been settled pursuant to a Confidential Settlement and License Agreement dated March 11, 2016.  Under the agreement, the Company received $53,500 after costs as full and eBay, Inc. filed a joint motion to stayfinal payment for such settlement of the district court litigation pending completion of eBay’s petitions for covered business review that were filed with the Patentlawsuit and Trial and Appeal Board (“PTAB”). On September 30, 2014 the PTAB announced that it had granted petitions filed by eBay, Inc. for covered business method reviewnon-exclusive licensing of the Company’s United States Patent Nos. 8,635,150, 8,521,642, 8,352,357, and 7,930,237, entitled “Method and System for Improved Online Auction.” On June 9, 2015, the Company and eBay, Inc. presented oral arguments to the Patent Trials Appeals Board.patents. The results of the PTAB review werepayment was received on September 16, 2015 by the Company and its counsel. The PTAB has entered a final ruling and has determined the claims have failed to claim patent eligible subject matter.

20 

in full in April 2016. 

ITEM 1A. RISK FACTORS

ITEM 1A.     RISK FACTORS
There are no material changes for the risk factors previously disclosed on Form 10-K for the year ended December 31, 2014.

2015.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES
None.

ITEM 4. MINE SAFETY DISCLOSURES

ITEM 4.     MINE SAFETY DISCLOSURES
Not Applicable.

ITEM 5.OTHER INFORMATION

ITEM 5.     OTHER INFORMATION
None.

-20-
ITEM 6.EXHIBITS

31.1CEO Certification required under Section 302 of Sarbanes-Oxley Act of 2002
31.2CFO Certification required under Section 302 of Sarbanes-Oxley Act of 2002
32CEO and CFO Certification required under Section 906 of Sarbanes-Oxley Act of 2002
101.INSXBRL Instance Document (filed herewith)
101.SCHXBRL Taxonomy Extension Schema (filed herewith)
101.CALXBRL Taxonomy Extension Calculation Linkbase (filed herewith)
101.DEFXBRL Taxonomy Extension Definition Linkbase (filed herewith)
101.LABXBRL Taxonomy Extension Label Linkbase (filed herewith)
101.PREXBRL Taxonomy Extension Presentation Linkbase (filed herewith)

21 

ITEM 6.     EXHIBITS
Exhibit No.

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. 

PAID, INC.
Registrant
Date:  November 10, 2015By:/s/ W. Austin Lewis, IV
W. Austin Lewis, IV, President, CEO and CFO
(Principal Executive, Financial and Accounting Officer)  

LIST OF EXHIBITS

Exhibit No. Description
31.1 CEO Certification required under Section 302 of Sarbanes-Oxley Act of 2002
31.2 CFO Certification required under Section 302 of Sarbanes-Oxley Act of 2002
32 CEO and CFO Certification required under Section 906 of Sarbanes-Oxley Act of 2002
101.INS
101.INS XBRL
 XBRL Instance Document (filed herewith)
101.SCH XBRL  XBRL Taxonomy Extension Schema (filed herewith)
101.CAL XBRL  XBRL Taxonomy Extension Calculation Linkbase (filed herewith)
101.DEF XBRL XBRL Taxonomy Extension Definition Linkbase (filed herewith)
101.LAB XBRL  XBRL Taxonomy Extension Label Linkbase (filed herewith)
101.PRE XBRL  XBRL Taxonomy Extension Presentation Linkbase (filed herewith)


-21-
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.
PAID, INC.   
Registrant   
Date: November 14, 2016
By:

/s/ W. Austin Lewis, IV
W. Austin Lewis, IV, President, CEO and CFO
(Principal Executive, Financial and Accounting Officer)
-22-
LIST OF EXHIBITS
Exhibit No.
Description
31.1CEO Certification required under Section 302 of Sarbanes-Oxley Act of 2002
31.2CFO Certification required under Section 302 of Sarbanes-Oxley Act of 2002
32CEO and CFO Certification required under Section 906 of Sarbanes-Oxley Act of 2002
101.INS XBRL
Instance Document (filed herewith)
101.SCH XBRL Taxonomy Extension Schema (filed herewith)
101.CAL XBRL Taxonomy Extension Calculation Linkbase (filed herewith)
 101.DEF XBRLTaxonomy Extension Definition Linkbase (filed herewith)
101.LAB XBRL Taxonomy Extension Label Linkbase (filed herewith)
101.PRE XBRL Taxonomy Extension Presentation Linkbase (filed herewith)
-23-