Three Months Ended September 30,
2010 2009 % Change
----------- ----------- ----------
Online merchandise and fulfillment $ 743,900 $ 525,300 42%
Film and video services 90,500 47,100 92%
Tour merchandise and VIP services 3,352,300 1,544,100 117%
----------- ----------- ----------
$ 4,186,700 $ 2,116,500 98%
=========== =========== ==========
Nine Months Ended September 30,
2010 2009 % Change
----------- ----------- ----------
Online merchandise and fulfillment $ 1,773,800 $ 1,299,100 37%
Film and video services 218,900 249,700 -12%
Tour merchandise and VIP services 4,466,600 2,515,500 78%
----------- ----------- ----------
$ 6,459,300 $ 4,064,300 59%
=========== =========== ==========
"Our revenue is reflecting the increased breadth and strength of our client
base that has resulted from our business development efforts," said
Christopher Culross, PAID Inc. CFO. "Greater percentages of our revenue
are now coming from multiple clients in each area, lessening our reliance
on any one client. Providing a broad range of services to a larger number
of clients is helping us create a solid base of revenue throughout the
year. In the third quarter we started to really see the efficiencies of
scale we had previously projected from our growing client base. We expect
that efficiencies of scale will further improve as our client base expands
and help us continue to move toward profitability. As we grow, we have
succeeded in our efforts to maintain the highest quality of service in
every area."
PAID CEO Greg Rotman noted, "PAID is continuing its attempts to monetize
its intellectual property through licensing and/or sale of its patent
assets. At this time, revenue generated from patent licensing is reported
under merchandise fulfillment. I believe our patent has value and we have
been pursuing approval on a related child patent application through the
U.S. Patent & Trademark Office. We are focusing substantial effort on
realizing the value of our patent assets for the benefit of PAID Inc. and
its shareholders."
PAID INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- --------------------------
2010 2009 2010 2009
------------ ------------- ------------ ------------
Revenues $ 4,186,737 $ 2,116,536 $ 6,459,282 $ 4,064,317
Cost of revenues 2,907,215 766,201 4,148,997 1,921,118
------------ ------------- ------------ ------------
Gross profit 1,279,522 1,350,335 2,310,285 2,143,199
Operation expenses 1,623,475 1,141,206 4,242,498 3,881,901
------------ ------------- ------------ ------------
Income (loss)
from operations (343,953) 209,129 (1,932,213) (1,738,702)
Other Income
(expense)
Interest expense (241) - (241) (2,500)
Other income - 677 50 5,376
------------ ------------- ------------ ------------
Total other
income
(expense), net (241) 677 (191) 2,876
Income (loss)
before taxes (344,194) 209,806 (1,932,404) (1,735,826)
Provision for
income taxes - - - -
------------ ------------- ------------ ------------
Net income (loss) $ (344,194) $ 209,806 $ (1,932,404) $ (1,735,826)
============ ============= ============ ============
Gross profit for the nine months ended September 30, 2010 was $2,310,000
compared to $2,143,000 for the comparable period in 2009. The overall gross
margin percentage decreased to 36% for the first three quarters of 2010,
compared to 53% for the first three quarters of 2009. This 17% decrease is
primarily the result of the Company generating non-recurring convenience
fee revenue associated with a tour cancellation in the third quarter of
2009 without all the typical expenses relating to touring. In contrast, in
the third quarter of 2010, as part of a fundraising event, PAID sold a very
large volume of merchandise that had narrower margins than typical for a
client.
Culross noted, "The extremely high volume coupled with the narrower margins
of the merchandise for this event was sufficient to squeeze gross margins
for 2010, particularly when compared against the margins recorded in 2009.
We are expecting improvements in gross margin for the remainder of 2010 and
thereafter. Improving margins and turning the corner to profitability is
definitely our focus."
He concluded, "PAID will continue to invest in business development, as
that is where our future lies. At the same time, we are working to contain
our costs and negotiate business contracts that are fair -- providing value
to the client, while enabling PAID to grow profitably, as every sound
business should."
PAID INC.
BALANCE SHEETS
September 30, December 31,
2010 2009
ASSETS (Unaudited) (Audited)
------------- -------------
Current assets:
Cash and cash equivalents $ 1,230,355 $ 730,433
Accounts receivable, net 524,738 182,266
Inventories, net 1,131,669 1,042,700
Prepaid expenses and other current assets 267,268 518,722
Prepaid royalties 755,414 439,879
Due from employees 87,185 19,640
------------- -------------
Total current assets 3,996,629 2,933,640
Property and equipment, net 52,180 40,517
Intangible asset, net 8,242 8,948
------------- -------------
Total assets $ 4,057,051 $ 2,983,105
============= =============
For the full third quarter 2010 10-Q financial report for PAID Inc., please
visit http://www.sec.gov
About PAID Inc.:
PAID Inc., publicly traded under the ticker PAYD, is a one-stop brand
management and marketing resource for music, entertainment and sports
personalities and organizations, and offers AuctionInc™
online shipping calculation and shopping cart software employing its
patented technology to streamline ecommerce. Known for quality and customer
service, PAID offers turnkey online, mobile, social media and traditional
marketing
campaigns, as well as award-winning video
& film production, VIP
ticketing, website
design, merchandising,
ecommerce and fan community management programs. More details are
available at www.paid.com.
Safe Harbor statement under the Private Securities Litigation Reform Act of
1995:
Statements in this news release looking forward in time involve risks and
uncertainties, including the risks associated with the effect of changing
economic conditions, trends in the markets, variations in the company's
cash flow, competition, celebrity programs, business development efforts,
technology availability and cost of materials and other risk factors.
Factors that could cause actual results to differ materially are discussed
in the Company's most recent filings with the Securities and Exchange
Commission.
Contact Information: Contacts: For PAID Inc.: Julie Shepherd Accentuate PR 815 479 1833