PAYS Paysign Inc

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended June 30, 2024

 

or

 

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

 

For the transition period from ___________ to __________

 

Commission file number 001-38623

 

PAYSIGN, INC.

(Exact name of registrant as specified in its charter)

 

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

 

2615 St. Rose Parkway,

Henderson, Nevada 89052

(Address of principal executive offices) (Zip code)

 

(702) 453-2221

(Registrant’s telephone number, including area code)

 

                           N/A                           

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

 

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

 

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

  

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

 

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

 

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

 

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

 

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

 

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

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 53,138,374 shares as of July 25, 2024.

 

 

 

 

PAYSIGN, INC.

 

FORM 10-Q REPORT

 

INDEX

 

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	24
Item 4. Controls and Procedures	24
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	25
Item 1A. Risk Factors	26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 5. Other Information	26
Item 6. Exhibits	26
SIGNATURES	27

 

 

 

 

 

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

PAYSIGN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

		June 30, 2024 (Unaudited)				December 31, 2023 (Audited)
ASSETS
Current assets
Cash		$	31,290,865			$	16,994,705
Restricted cash			102,240,796				92,356,308
Accounts receivable, net			25,750,319				16,222,341
Other receivables			1,650,201				1,585,983
Prepaid expenses and other current assets			2,474,716				2,020,781
Total current assets			163,406,897				129,180,118
Fixed assets, net			1,107,852				1,089,649
Intangible assets, net			10,710,142				8,814,327
Operating lease right-of-use asset			3,006,844				3,215,025
Deferred tax asset, net			4,077,175				4,299,730
Total assets		$	182,308,910			$	146,598,849
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities		$	50,254,617			$	26,517,567
Operating lease liability, current portion			401,075				383,699
Customer card funding			102,079,826				92,282,124
Total current liabilities			152,735,518				119,183,390
Operating lease liability, long-term portion			2,721,724				2,928,078
Total liabilities			155,457,242				122,111,468
Commitments and contingencies (Note 8)			–				–
Stockholders’ equity
Preferred stock: $0.001 par value; 25,000,000 shares authorized; none issued and outstanding			–				–
Common stock; $0.001 par value; 150,000,000 shares authorized, 53,782,382 and 53,452,382 issued at June 30, 2024 and December 31, 2023, respectively			53,782				53,452
Additional paid-in capital			23,357,481				21,999,722
Treasury stock at cost, 698,008 shares			(1,277,884	)			(1,277,884	)
Retained earnings			4,718,289				3,712,091
Total stockholders’ equity			26,851,668				24,487,381
Total liabilities and stockholders’ equity		$	182,308,910			$	146,598,849

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

 

 

 

PAYSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Revenues
Plasma industry		$	11,273,262			$	10,014,461			$	21,641,296			$	19,374,528
Pharma industry			2,674,901				729,236				5,063,545				1,318,798
Other			383,436				297,354				816,832				491,015
Total revenues			14,331,599				11,041,051				27,521,673				21,184,341
Cost of revenues			6,745,836				5,425,311				12,996,659				10,520,932
Gross profit			7,585,763				5,615,740				14,525,014				10,663,409
Operating expenses
Selling, general and administrative			6,020,464				5,304,625				11,931,662				10,250,075
Depreciation and amortization			1,439,622				958,001				2,726,027				1,803,017
Total operating expenses			7,460,086				6,262,626				14,657,689				12,053,092
Income (loss) from operations			125,677				(646,886	)			(132,675	)			(1,389,683	)
Other income
Interest income, net			813,357				600,867				1,544,701				1,185,064
Income (loss) before income tax provision			939,034				(46,019	)			1,412,026				(204,619	)
Income tax provision			241,932				58,137				405,828				59,667
Net income (loss)		$	697,102			$	(104,156	)		$	1,006,198			$	(264,286	)
Net income (loss) per share
Basic		$	0.01			$	(0.00	)		$	0.02			$	(0.01	)
Diluted		$	0.01			$	(0.00	)		$	0.02			$	(0.01	)
Weighted average common shares
Basic			53,008,286				52,259,002				52,926,462				52,330,829
Diluted			55,861,786				52,259,002				55,374,336				52,330,829

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

 

 

 

PAYSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

 

 

		Common Stock								Additional Paid-in				Treasury Stock								Retained				Total Stockholders’
		Shares				Amount				Capital				Shares				Amount				Earnings				Equity
Balance, December 31, 2023			53,452,382			$	53,452			$	21,999,722				(698,008	)		$	(1,277,884	)		$	3,712,091			$	24,487,381
Stock issued upon vesting of restricted stock			214,000				214				(214	)			–				–				–				–
Stock-based compensation			–				–				663,951				–				–				–				663,951
Net income			–				–				–				–				–				309,096				309,096
Balance, March 31, 2024			53,666,382			$	53,666			$	22,663,459				(698,008	)		$	(1,277,884	)		$	4,021,187			$	25,460,428
Stock issued upon vesting of restricted stock			106,000				106				(106	)			–				–				–				–
Exercise of stock options			10,000				10				23,990				–				–				–				24,000
Stock-based compensation			–				–				670,138				–				–				–				670,138
Net income			–				–				–				–				–				697,102				697,102
Balance, June 30, 2024			53,782,382			$	53,782			$	23,357,481				(698,008	)		$	(1,277,884	)		$	4,718,289			$	26,851,668

 

 

		Common Stock								Additional Paid-in				Treasury Stock								Accumulated				Total Stockholders’
		Shares				Amount				Capital				Shares				Amount				Deficit				Equity
Balance, December 31, 2022			52,650,382			$	52,650			$	19,137,281				(303,450	)		$	(150,000	)		$	(2,746,636	)		$	16,293,295
Stock issued upon vesting of restricted stock			118,000				118				(118	)			–				–				–				–
Stock-based compensation			–				–				618,244				–				–				–				618,244
Repurchase of common stock			–				–				–				(200,000	)			(666,018	)			–				(666,018	)
Net loss			–				–				–				–				–				(160,130	)			(160,130	)
Balance, March 31, 2023			52,768,382				52,768				19,755,407				(503,450	)			(816,018	)			(2,906,766	)			16,085,391
Stock issued upon vesting of restricted stock			70,000				70				(70	)			–				–				–				–
Exercise of stock options			4,000				4				9,596				–				–				–				9,600
Stock-based compensation			–				–				830,426				–				–				–				830,426
Repurchase of common stock			–				–				–				(119,558	)			(311,649	)			–				(311,649	)
Net loss			–				–				–				–				–				(104,156	)			(104,156	)
Balance, June 30, 2023			52,842,382			$	52,842			$	20,595,359				(623,008	)		$	(1,127,667	)		$	(3,010,922	)		$	16,509,612

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

 

 

PAYSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

		Six Months Ended June 30,
		2024				2023
Cash flows from operating activities:
Net income (loss)		$	1,006,198			$	(264,286	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Gain on disposal assets			–				(4,862	)
Stock-based compensation expense			1,334,089				1,448,670
Depreciation and amortization			2,726,027				1,803,017
Noncash lease expense			208,181				197,203
Deferred income taxes, net			222,555				–
Changes in operating assets and liabilities:
Accounts receivable			(9,527,978	)			(3,068,460	)
Other receivables			(64,218	)			201,231
Prepaid expenses and other current assets			(453,935	)			(590,984	)
Accounts payable and accrued liabilities			23,737,050				2,431,087
Operating lease liability			(188,978	)			(178,000	)
Customer card funding			9,797,702				(1,823,268	)
Net cash provided by operating activities			28,796,693				151,348
Cash flows from investing activities:
Purchase of fixed assets			(196,126	)			(84,911	)
Capitalization of internally developed software			(4,321,319	)			(2,959,199	)
Purchase of intangible assets			(122,600	)			–
Net cash used in investing activities			(4,640,045	)			(3,044,110	)
Cash flows from financing activities:
Proceeds from exercise of options			24,000				9,600
Repurchase of common stock			–				(977,667	)
Net cash provided by (used in) financing activities			24,000				(968,067	)
Net change in cash and restricted cash			24,180,648				(3,860,829	)
Cash and restricted cash, beginning of period			109,351,013				89,897,351
Cash and restricted cash, end of period		$	133,531,661			$	86,036,522
Cash and restricted cash reconciliation:
Cash		$	31,290,865			$	7,670,677
Restricted cash			102,240,796				78,365,845
Total cash and restricted cash		$	133,531,661			$	86,036,522
Supplemental cash flow information:
Non-cash financing activities
Cash paid for taxes		$	75,198			$	159,510

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

 

 

PAYSIGN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

 

1.     BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES

 

The foregoing unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the disclosures required by GAAP for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended December 31, 2023. In the opinion of management, the unaudited interim condensed consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.

 

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

 

Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

 

About Paysign, Inc.

 

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

 

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

 

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

 

Cash and Cash Equivalents – The Company considers all highly liquid investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents for the purposes of the statement of cash flows. The Company had no cash equivalents at June 30, 2024 and December 31, 2023.

 

Restricted Cash – At June 30, 2024 and December 31, 2023, restricted cash consisted of funds held specifically for our card product and pharma programs that are regulatory required or contractually restricted to use. The Company includes changes in restricted cash balances with cash and cash equivalents when reconciling the beginning and ending total amounts in our condensed consolidated statements of cash flows.

 

 

 

 

7

 

 

Concentrations of Credit Risk – Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and restricted cash. The Company maintains its cash and cash equivalents and restricted cash in various bank accounts primarily with one financial institution in the United States which at times, may exceed federally insured limits. If this financial institution were to be placed into receivership, we may be unable to access the cash we have on deposit. If we are unable to access our cash and cash equivalents as needed, our financial position and ability to operate our business could be adversely affected. The Company has not experienced, nor does it anticipate any losses with respect to such accounts. At June 30, 2024 and December 31, 2023, the Company had approximately $179,881 and $59,958,918 in excess of federally insured bank account limits, respectively. In February of 2024, the Company initiated a program with one of our financial institution called deposit swapping, where the financial institution utilizes a third-party who is participating in reciprocal deposit networks. This program is an alternative way for our financial institution to offer us full Federal Deposit Insurance Corporation (“FDIC”) insurance on deposits over $250,000. Under this program, deposit networks divide uninsured deposits into smaller units and distribute these monies among participating banks in the network, where the monies are fully FDIC insured.

 

As of June 30, 2024, the Company also had a concentration of accounts receivable risk. Three pharma program customers associated with our pharma patient affordability programs each individually represented 23%, 14%, and 11% of our accounts receivable balance. Two pharma program customers each individually represented 30% and 12% of our accounts receivable balance on December 31, 2023. These accounts receivable balances relate to passthrough claim reimbursements that have been paid on behalf of the pharma program customers.

 

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

 

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

 

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

 

Intangible assets with a finite life are amortized on a straight-line basis over its estimated useful life, which is generally 3 to 15 years.

 

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

 

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

 

Contract Assets – Incremental costs to obtain or fulfill a contract with a customer are capitalized. The Company determines the costs that are incremental by confirming the costs (i) are directly related to a customer’s contract, (ii) generate or enhance resources to fulfill contract performance obligations in the future, and (iii) are recoverable. Amortization is on a straight-line basis generally over three to five years, beginning when goods and services are transferred to the customer or group of customers.

 

 

 

8

 

 

Hosting Implementation – Costs to implement the cloud computing arrangements (the “hosting site”) are accounted for by following the same model as internally developed software costs. Costs that are incurred in the preliminary project and post implementation stages of hosting development are expensed when they are incurred. Costs incurred during the application and development stage are capitalized. Capitalized costs are amortized using the straight-line method over a three-year estimated useful life, beginning in the period when the hosting site is available for use.

 

Customer Card Funding – As of June 30, 2024 and December 31, 2023, customer card funding represents funds loaded or available to be loaded on cards for the Company’s card product programs.

 

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

 

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

 

The Company generates revenues from plasma card programs through fees generated from cardholder fees and interchange fees. Revenues from pharma card programs are generated through card program management fees, transaction claims processing fees, interchange fees, and settlement income. Other revenues are generated through cardholder fees, interchange fees, program management fees, load fees and breakage.

 

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

 

The portion of the dollar value of prepaid-stored value cards that consumers do not ultimately redeem are referred to as breakage. In certain card programs where we hold the cardholder funds and expect to be entitled to a breakage amount, we recognize revenue using estimated breakage rates ratably over the estimated card life; provided that a significant reversal of the amount of breakage revenue recognized is not probable, and record adjustments to such estimates when redemption is remote or we are legally defeased of the obligation, if applicable. For each program, we utilize a third party to estimate breakage rates based on historical redemption patterns, market-specific trends, escheatment rules and existing economic conditions. The Company accounts for breakage in accordance with Accounting Standards Update (“ASU”) 2016-04, Liabilities—Extinguishment of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Cards for the recognition of such revenue. Breakage revenue is recorded in other revenue on the consolidated statements of operations and was $33,995 and $86,786 for the three and six months ended June 30, 2024, respectively. Breakage revenue was $0 for the three and six months ended June 30, 2023.

 

 

 

9

 

 

The Company utilizes the remote method of revenue recognition for settlement income whereby the unspent balances will be recognized as revenue at the expiration of the cards or the respective card program. This has primarily been associated with the pharma prepaid business which ended in 2022. The Company records all revenue on a gross basis since it is the primary obligor and establishes the price in the contract arrangement with its customers. The Company is currently under no obligation to refund any fees, and the Company does not currently have any obligations for disputed claim settlements. Given the nature of the Company’s services and contracts, generally it has no contract assets. Settlement income was $0 for the three and six months ended June 30, 2024 and $211 for the three and six months ended June 30, 2023.

 

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

 

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

  

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

 

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

 

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

 

Recently Issued Accounting Pronouncement – In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, “Income Taxes – Improvements to Income Tax Disclosures”, requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. We are currently evaluating the impact of the adoption of this standard.

 

In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures”, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in the ASU require, among other things, disclosure of significant segment expenses that are regularly provided to an entity's chief operating decision maker (“CODM”) and a description of other segment items by reportable segment, as well as disclosure of the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Annual disclosures are required for fiscal years beginning after December 15, 2023 and interim disclosures are required for periods within fiscal years beginning after December 15, 2024. Retrospective application is required, and early adoption is permitted. These requirements had no material impact on our financial statements.

 

 

 

 

10

 

 

2.     FIXED ASSETS, NET

 

Fixed assets consist of the following: 

Schedule of fixed assets
		June 30, 2024				December 31, 2023
Equipment		$	2,504,196			$	2,399,243
Software			433,004				345,057
Furniture and fixtures			762,144				757,662
Website costs			69,881				69,881
Leasehold improvements			236,904				236,904
			4,006,129				3,808,747
Less: accumulated depreciation			(2,898,277	)			(2,719,098	)
Fixed assets, net		$	1,107,852			$	1,089,649

 

Depreciation expense for the three months ended June 30, 2024 and 2023 was $86,823 and $107,615, respectively. Depreciation expense for the six months ended June 30, 2024 and 2023 was $177,923 and $215,961, respectively

 

3.     INTANGIBLE ASSETS, NET

  

Intangible assets consist of the following: 

Schedule of intangible assets
		June 30, 2024				December 31, 2023
Patents and trademarks		$	38,186			$	38,186
Platform			24,712,437				20,391,118
Customer lists and contracts			1,177,200				1,177,200
Licenses			216,901				216,901
Hosting implementation			43,400				43,400
Contract assets			272,600				150,000
			26,460,724				22,016,805
Less: accumulated amortization			(15,750,582	)			(13,202,478	)
Intangible assets, net		$	10,710,142			$	8,814,327

 

Intangible assets are amortized over their useful lives ranging from periods of 3 to 15 years. Amortization expense for the three months ended June 30, 2024 and 2023 was $1,352,799 and $850,386, respectively. Amortization expense for the six months ended June 30, 2024 and 2023 was $2,548,104 and $1,587,056, respectively.

 

 

 

 

 

11

 

 

4.     LEASE

 

The Company entered into an operating lease for an office space which became effective in June 2020. The lease term is 10 years from the effective date and allows for two optional extensions of five years each. The two optional extensions are not recognized as part of the right-of-use asset or lease liability since it is not reasonably certain that the Company will extend this lease. As of June 30, 2024, the remaining lease term was 5.9 years and the discount rate was 6%.

 

Operating lease cost included in selling, general and administrative expenses was $189,020 and $378,039 for the three and six months ended June 30, 2024, respectively. Operating lease cost included in selling, general and administrative expenses was $196,214 and $379,435 for the three and six months ended June 30, 2023, respectively.

 

The following is the lease maturity analysis of our operating lease as of June 30, 2024:

 

Year ending December 31,

Schedule of lease maturity
2024 (excluding the six months ended June 30, 2024)		$	285,984
2025			612,006
2026			640,604
2027			640,604
2028			640,604
Thereafter			907,523
Total lease payments			3,727,325
Less: Imputed interest			(604,526	)
Present value of future lease payments			3,122,799
Less: current portion of lease liability			(401,075	)
Long-term portion of lease liability		$	2,721,724

 

5.     CUSTOMER CARD FUNDING LIABILITY

 

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

  

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

Schedule of contract liabilities
		Six Months Ended June,
		2024				2023
Beginning balance		$	92,282,124			$	80,189,113
Increase (decrease), net			9,797,702				(1,823,268	)
Ending balance		$	102,079,826			$	78,365,845

 

The amount of revenue recognized during the six months ended June 30, 2024 and 2023 that was included in the opening contract liability for prepaid cards was $2,319,630 and $2,020,224, respectively.

 

 

 

12

 

 

6.     COMMON STOCK

 

At June 30, 2024, the Company's authorized capital stock was 150,000,000 shares of common stock, par value $0.001 per share, and 25,000,000 shares of preferred stock, par value $0.001 per share. On that date, the Company had 53,782,382 shares of common stock issued and 53,084,374 shares of common stock outstanding, and no shares of preferred stock outstanding.

 

Stock-based compensation expense related to Company grants for the three and six months ended June 30, 2024 was $670,138 and $1,334,089, respectively. Stock-based compensation expense related to Company grants for the three and six months ended June 30, 2023 was $830,426 and $1,448,670, respectively.

 

2024 Transactions – During the three and six months ended June 30, 2024, the Company issued 116,000 and 330,000 shares of common stock for vested stock awards and the exercise of stock options. The Company received proceeds of $24,000 for the exercise of stock options.

 

The Company granted 180,000 restricted stock awards during the three months ended June 30, 2024; the weighted average grant date fair value was $4.44. The Company granted 480,000 restricted stock awards during the six months ended June 30, 2024; the weighted average grant date fair value was $3.53. The restricted stock awards granted vest over a period of five years.

 

2023 Transactions – During the three and six months ended June 30, 2023 the Company issued 74,000 and 192,000 shares of common stock for vested stock awards and the exercise of stock options. The Company received proceeds of $9,600 for the exercise of stock options.

 

During the three and six months ended June 30, 2023 the Company repurchased 119,558 and 319,558 shares of its common stock at a cost of $311,649 or weighted average price of $2.61 and $977,667 or weighted average price of $3.06 per share, respectively.

 

The Company granted 80,000 restricted stock awards during the three months ended June 30, 2023; the weighted average grant date fair value was $3.40. The Company granted 350,000 restricted stock awards during the six months ended June 30, 2023; the weighted average grant date fair value was $2.96. The restricted stock awards granted vest over a period of two months to five years.

 

7.     BASIC AND FULLY DILUTED NET INCOME (LOSS) PER COMMON SHARE

 

The following table sets forth the computation of basic and fully diluted net income (loss) per common share for the three and six months ended June 30, 2024 and 2023:

Schedule of computation of earning per share
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Numerator:
Net income (loss)		$	697,102			$	(104,156	)		$	1,006,198			$	(264,286	)
Denominator:
Weighted average common shares:
Denominator for basic calculation			53,008,286				52,259,002				52,926,462				52,330,829
Weighted average effects of potentially diluted common stock:
Stock options (calculated using the treasury method)			1,068,682				–				941,642				–
Unvested restricted stock grants			1,784,818				–				1,506,232				–
Denominator for fully diluted calculation			55,861,786				52,259,002				55,374,336				52,330,829
Net income (loss) per common share:
Basic		$	0.01			$	(0.00	)		$	0.02			$	(0.01	)
Fully diluted		$	0.01			$	(0.00	)		$	0.02			$	(0.01	)
Anti-dilutive shares:
Stock options			–				1,815,000				–				1,815,000
Unvested restricted stock options			–				3,652,000				–				3,652,000

 

The potential common share equivalents are not added to the denominator for three and six months ended June 30, 2023 because the inclusion was anti-dilutive, and therefore, all such shares were excluded from the computation of diluted weighted average shares outstanding for both periods.

 

 

 

13

 

 

8.     COMMITMENTS AND CONTINGENCIES

 

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

 

The Company has been named as a defendant in three securities class action complaints filed in the United States District Court for the District of Nevada: Yilan Shi v. Paysign, Inc. et al., filed on March 19, 2020 (“Shi”), Lorna Chase v. Paysign, Inc. et al., filed on March 25, 2020 (“Chase”), and Smith & Duvall v. Paysign, Inc. et al., filed on April 2, 2020 (collectively, the “Complaints” or “Securities Class Action”). Smith & Duvall v. Paysign, Inc. et al. was voluntarily dismissed on May 21, 2020. On May 18, 2020, the Shi plaintiffs and another entity called the Paysign Investor Group each filed a motion to consolidate the remaining Shi and Chase actions and to be appointed lead plaintiff. The Complaints are putative class actions filed on behalf of a class of persons who acquired the Company’s common stock from March 19, 2019 through March 31, 2020, inclusive. The Complaints generally allege that the Company, Mark R. Newcomer, and Mark Attinger violated Section 10(b) of the Exchange Act, and that Messrs. Newcomer and Attinger violated Section 20(a) of the Exchange Act, by making materially false or misleading statements, or failing to disclose material facts, regarding the Company’s internal control over financial reporting and its financial statements. The Complaints seek class action certification, compensatory damages, and attorney’s fees and costs. On December 2, 2020, the Court consolidated Shi and Chase as In re Paysign, Inc. Securities Litigation and appointed the Paysign Investor Group as lead plaintiff. On January 12, 2021, Plaintiffs filed an Amended Complaint in the consolidated action. Defendants filed a Motion to Dismiss the Amended Complaint on March 15, 2021. On February 9, 2023, the Court granted in part and denied in part Defendants’ Motion to Dismiss. On May 22, 2023, Defendants filed an Answer to the Amended Complaint. On December 15, 2023, the parties agreed in principle to a proposed settlement of the Securities Class Action and Plaintiffs filed a Consented Motion for Preliminary Approval of Settlement. On January 4, 2024, the Court preliminarily approved a settlement in the amount of $3,750,000, the entirety of which came from the Company’s directors-and-officers insurance policy, for the referenced class of purchasers, and scheduled a final approval hearing for April 17, 2024. On April 17, 2024, the Court conducted the final approval hearing and approved the settlement and, on April 18, 2024, issued an order and final judgment thereon.

 

The Company has also been named as a nominal defendant in four stockholder derivative actions currently pending in the United States District Court for the District of Nevada. The first-filed derivative action is entitled Andrzej Toczek, derivatively on behalf of Paysign, Inc. v. Mark R. Newcomer, et al. and was filed on September 17, 2020. This action alleges violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, and waste, largely in connection with the failure to correct information technology controls over financial reporting alleged in the Securities Class Action, thereby causing the Company to face exposure in the Securities Class Action. The complaint also alleges insider trading violations against certain individual defendants. The second-filed derivative action is entitled John K. Gray, derivatively on behalf of Paysign, Inc. v. Mark Attinger, et al. and was filed on May 9, 2022. This action involves the same alleged conduct raised in the Toczek action and asserts claims for breach of fiduciary duty in connection with financial reporting, breach of fiduciary duty in connection with alleged insider trading against certain individual defendants, and unjust enrichment. On June 3, 2022, the Court approved a stipulation staying the action until the Court in the consolidated Securities Class Action issued a ruling on the Motion to Dismiss. On May 10, 2023, the Toczek and Gray actions were consolidated.

 

The Company has also been named as a nominal defendant in a third stockholder derivative action initially filed in state court in Clark County, Nevada, on October 2, 2023, entitled Simone Blanchette, derivatively on behalf of Paysign, Inc. v. Mark Newcomer, et al, which the defendants subsequently removed to federal district court in Nevada pursuant to a Notice of Removal filed on October 10, 2023. That complaint makes substantially the same allegations as made in the consolidated Toczek and Gray actions, and also contains a claim that the individual defendants violated Section 10(b) and Rule 10b-5 promulgated thereunder. On December 7, 2023, the parties requested that the action be stayed for sixty days due to the settlement negotiations in the consolidated Toczek and Gray actions, and the Court granted the sixty-day stay on December 11, 2023. Subsequently, the Court extended that deadline to March 29, 2024 and then to May 29, 2024 based upon the parties’ stipulations.

 

The Company has also been named as a nominal defendant in a fourth stockholder derivative action in the United States District Court for the District of Nevada, filed on December 27, 2023, entitled Mo Jeewa, derivatively on behalf of Paysign, Inc. v. Mark R. Newcomer, et al. That complaint makes substantially the same allegations as made in the consolidated Toczek and Gray actions and the Blanchette action discussed above, and alleges breach of fiduciary duty and unjust enrichment.

 

If the derivative cases do not settle, it is the Company’s intention to file motions to dismiss. As of the date of this filing, the Company cannot give any meaningful estimate of likely outcome or damages.

 

 

 

14

 

 

9.    INCOME TAX

 

The effective tax rates for the three months and six months ended June 30, 2024 and 2023 were based on the Company’s forecasted annualized effective tax rates and were adjusted for discrete items that occurred within the periods presented. The effective tax rate for the three months and six months ended June 30, 2024 varies from the three months and six months ended June 30, 2023 primarily as a result of tax benefits related to our stock-based compensation and changes to the Company’s valuation allowance recorded on its net deferred tax assets.

 

Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law in 2020 and the subsequent extension of the CARES Act through September 30, 2021, the Company was eligible for a refundable employee retention credit subject to certain criteria. The Company has elected an accounting policy to recognize the government assistance when it is probable that the Company is eligible to receive the assistance and present the credit as a reduction of the related expense. As of June 30, 2024 and December 31, 2023, the Company recorded $1,129,164 in other receivables on the condensed consolidated balance sheet related to U.S. Federal Government refunds.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Disclosure Regarding Forward-Looking Statements

 

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

 

Overview

 

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

 

We operate on a powerful, high-availability payments platform with cutting-edge fintech capabilities that can be seamlessly integrated with our clients’ systems. This distinctive positioning allows us to provide end-to-end technologies that securely manage transaction processing, cardholder enrollment, value loading, account management, data and analytics, and customer service. Our architecture is known for its cross-platform compatibility, flexibility, and scalability – allowing our clients and partners to leverage these advantages for cost savings and revenue opportunities.

 

Our suite of product offerings includes solutions for corporate rewards, prepaid gift cards, general purpose reloadable debit cards, employee incentives, consumer rebates, donor compensation, clinical trials, healthcare reimbursement payments and pharmaceutical payment assistance, and demand deposit accounts accessible with a debit card. In the future, we expect to further expand our product into other prepaid card offerings such as travel cards and expense reimbursement cards. Our cards are sponsored by our issuing bank partners.

 

Our revenues include fees generated from cardholder fees, interchange, card program management fees, transaction claims processing fees, breakage, and settlement income. Revenue from cardholder fees, interchange, card program management fees, and transaction claims processing fees is recorded when the performance obligation is fulfilled. Breakage is recorded ratably over the estimated card life based on historical redemption patterns, market-specific trends, escheatment rules, and existing economic conditions and relates solely to our open-loop gift card business which began at the end of 2022. Settlement income is recorded at the expiration of the card or card program and relates primarily to our pharma prepaid business which ended in 2022.

 

 

 

 

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

 

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

 

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

 

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

 

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

 

We manage all aspects of the prepaid card lifecycle, from managing the card design and approval processes with partners and networks, to production, packaging, distribution, and personalization. We also oversee inventory and security controls, renewals, lost and stolen card management, and replacement. We employ a 24/7/365 fully staffed, in-house customer service department which utilizes bilingual customer service representatives, Interactive Voice Response, and two-way short message service messaging and text alerts.

 

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

 

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

 

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

 

In 2024, we plan to continue to invest additional funds in technology improvements, sales and marketing, cybersecurity, fraud, customer service, and regulatory compliance. From time to time, we evaluate raising capital to enable us to diversify into new market verticals. If we do not raise new capital, we believe that we will still be able to support our existing business and expand into new vertical markets using internally generated funds.

 

 

 

 

Results of Operations

 

Comparison of the Three Months Ended June 30, 2024 to the Three Months Ended June 30, 2023

 

The following table summarizes our consolidated financial results for the three months ended June 30, 2024 in comparison to the three months ended June 30, 2023:

 

		Three Months Ended June 30, (Unaudited)								Variance
		2024				2023				$				%
Revenues
Plasma industry		$	11,273,262			$	10,014,461			$	1,258,801				12.6%
Pharma industry			2,674,901				729,236				1,945,665				266.8%
Other			383,436				297,354				86,082				28.9%
Total revenues			14,331,599				11,041,051				3,290,548				29.8%
Cost of revenues			6,745,836				5,425,311				1,320,525				24.3%
Gross profit			7,585,763				5,615,740				1,970,023				35.1%
Gross margin %			52.9%				50.9%
Operating expenses
Selling, general and administrative			6,020,464				5,304,625				715,839				13.5%
Depreciation and amortization			1,439,622				958,001				481,621				50.3%
Total operating expenses			7,460,086				6,262,626				1,197,460				19.1%
Income (loss) from operations		$	125,677			$	(646,886	)		$	772,563				NM
Net income (loss)		$	697,102			$	(104,156	)		$	801,258				NM
Net margin %			4.9%				(0.9%	)

 

The increase in total revenues of $3,290,548 for the three months ended June 30, 2024 compared to the same period in the prior year consisted primarily of a $1,258,801 increase in plasma revenue, a $1,945,665 increase in pharma revenue, and a $86,082 increase in other revenue. The increase in plasma revenue was primarily due to the addition of 35 new plasma centers since June 30, 2023 and rise in the number of donations at existing plasma centers, and, consequently, dollars loaded to cards, cardholder fees, and interchange, as there continues to be an increase in demand for plasma driven by global increases in plasma protein therapies. The increase in pharma revenue was primarily due to the launch of 30 net new pharma patient affordability programs since June 30, 2023 and the subsequent growth in monthly management and setup fees, claim processing fees, and other billable services such as call center support. The increase in other revenue was primarily due to the growth and usage in the number of cardholders of our payroll, retail, and corporate incentive programs.

 

 

 

 

 

 

Cost of revenues for the three months ended June 30, 2024 increased $1,320,525 compared to the same period in the prior year. Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, fraud charges, and sales and commission expense. Cost of revenues increased during the second quarter primarily due to increases in cardholder usage activity and associated network expenses, such as interchange and ATM costs, network expenses and sales commissions related to the growth in our pharma patient affordability business, fraud charges, postage, and customer service expenses associated with wage inflation pressures and the overall growth in our business, offset by a decline in plastics and collateral.

 

Gross profit for the three months ended June 30, 2024 increased $1,970,023 compared to the same period in the prior year, resulting primarily from the increase in plasma revenue and the beneficial impact of a variable cost structure, as many of the plasma transaction costs are variable in nature and are provided by third-parties who charge us based on the number of active cards outstanding and transactions that occurred during the period. Gross profit also benefited from the growth in our pharma patient affordability business. The increase in gross profit was offset by price increases from many of our third-party service providers, and an increase in customer service expenses mentioned above. The increase in gross margin resulted from the aforementioned factors.

 

Selling, general  and administrative expenses for the three months ended June 30, 2024 increased $715,839 compared to the same period in the prior year and consisted primarily of an increase in (i) compensation and benefits of approximately $1,301,000 due to continued hiring to support the Company’s growth, a tight labor market, and increased benefit costs; (ii) technologies and telecom of approximately $372,000 primarily related to ongoing platform security investments; and (iii) all other operating expenses of approximately $12,000. This increase was offset by a decrease in stock compensation of approximately $160,000, a decrease in outside professional services of approximately $162,000, and an increase of $647,000 in the amount of capitalized platform development costs.

 

Depreciation and amortization expense for the three months ended June 30, 2024 increased $481,621 compared to the same period in the prior year. The increase in depreciation and amortization expense was primarily due to continued capitalization of new software development costs and equipment purchases related to continued enhancements to our processing platform and employment growth.

 

For the three months ended June 30, 2024, we recorded income from operations of $125,677 representing an improvement of $772,563 compared to loss from operations of $646,886 during the same period in the prior year, related to the aforementioned factors.

 

Other income for the three months ended June 30, 2024 increased $212,490 primarily related to an increase in interest rates and the associated interest income received on higher average bank account balances at our sponsor bank.

 

At June 30, 2024, our income tax expense was $241,932, which equates to an effective tax rate of 25.8% primarily as a result of tax benefits related to our stock-based compensation and changes to the Company’s valuation allowance recorded on its net deferred tax assets. We recorded an income tax expense of $58,137 for the three months ended June 30, 2023, which equates to an effective tax rate of (126.3%) primarily as a result of state taxes, a pretax loss, and full valuation on our deferred tax asset.

 

The net income for the three months ended June 30, 2024 was $697,102, an improvement of $801,258 compared to the net loss of $104,156 for the three months ended June 30, 2023. The overall change in net income relates to the aforementioned factors.

 

 

 

 

 

 

Comparison of the Six Months Ended June 30, 2024 to the Six Months Ended June 30, 2023

 

The following table summarizes our consolidated financial results for the six months ended June 30, 2024 in comparison to the six months ended June 30, 2023:

 

		Six Months Ended June 30, (Unaudited)								Variance
		2024				2023				$				%
Revenues
Plasma industry		$	21,641,296			$	19,374,528			$	2,266,768				11.7%
Pharma industry			5,063,545				1,318,798				3,744,747				284.0%
Other			816,832				491,015				325,817				66.4%
Total revenues			27,521,673				21,184,341				6,337,332				29.9%
Cost of revenues			12,996,659				10,520,932				2,475,727				23.5%
Gross profit			14,525,014				10,663,409				3,861,605				36.2%
Gross margin %			52.8%				50.3%
Operating expenses
Selling, general and administrative			11,931,662				10,250,075				1,681,587				16.4%
Depreciation and amortization			2,726,027				1,803,017				923,010				51.2%
Total operating expenses			14,657,689				12,053,092				2,604,597				21.6%
Loss from operations		$	(132,675	)		$	(1,389,683	)		$	1,257,008				NM
Net income (loss)		$	1,006,198			$	(264,286	)		$	1,270,484				NM
Net margin %			3.7%				(1.2%	)

 

The increase in total revenues of $6,337,332 for the six months ended June 30, 2024 compared to the same period in the prior year consisted primarily of a $2,266,768 increase in plasma revenue, a $3,744,747 increase in pharma revenue, and a $325,817 increase in other revenue. The increase in plasma revenue was primarily due to the addition of 35 new plasma centers since June 30, 2023 and rise in the number of donations at existing plasma centers, and, consequently, dollars loaded to cards, cardholder fees, and interchange, as there continues to be an increase in demand for plasma driven by global increases in plasma protein therapies. The increase in pharma revenue was primarily due to the launch of 30 net new pharma patient affordability programs since June 30, 2023 and the subsequent growth in monthly management and setup fees, claim processing fees, and other billable services such as call center support. The increase in other revenue was primarily due to the growth and usage in the number of cardholders of our payroll, retail, and corporate incentive programs.

 

Cost of revenues for the six months ended June 30, 2024 increased $2,475,727 compared to the same period in the prior year. Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, fraud charges, and sales and commission expense. Cost of revenues increased during the second quarter primarily due to increases in cardholder usage activity and associated network expenses such as interchange and ATM costs, network expenses and sales commissions related to the growth in our pharma patient affordability business, fraud charges, postage, and customer service expenses associated with wage inflation pressures and the overall growth in our business, offset by a decline in plastics and collateral.

 

 

 

 

Gross profit for the six months ended June 30, 2024 increased $3,861,605 compared to the same period in the prior year resulting primarily from the increase in plasma revenue and the beneficial impact of a variable cost structure, as many of the plasma transaction costs are variable in nature and are provided by third parties who charge us based on the number of active cards outstanding and transactions that occurred during the period. Gross profit also benefited from the growth in our pharma patient affordability business. The increase in gross profit was offset by price increases from many of our third-party service providers, and an increase in customer service expenses mentioned above. The increase in gross margin resulted from the aforementioned factors.

 

Selling, general  and administrative expenses for the six months ended June 30, 2024 increased $1,681,587 compared to the same period in the prior year and consisted primarily of an increase in (i) compensation and benefits of approximately $2,191,000 due to continued hiring to support the Company’s growth, a tight labor market, and increased benefit costs; (ii) technologies and telecom expense of approximately $684,000 primarily related to ongoing platform security investments; and (iii) all other operating expenses of approximately $38,000. This increase was offset by a decrease in non-IT professional audit and legal services of approximately $251,000, a decrease in stock compensation of approximately $115,000 and an $865,000 increase in the amount of capitalized platform development costs.

 

Depreciation and amortization expense for the six months ended June 30, 2024 increased $923,010 compared to the same period in the prior year. The increase in depreciation and amortization expense was primarily due to continued capitalization of new software development costs and equipment purchases related to continued enhancements to our processing platform and employment growth.

 

For the six months ended June 30, 2024, we recorded a loss from operations of $132,675 representing an improvement of $1,257,008 compared to loss from operations of $1,389,683 during the same period in the prior year related to the aforementioned factors.

 

Other income for the six months ended June 30, 2024 increased $359,637 primarily related to an increase in interest rates and the associated interest income received on higher average bank account balances at our sponsor bank.

 

At June 30, 2024, our income tax expense was $405,828, which equates to an effective tax rate of 28.7% primarily as a result of tax benefits related to our stock-based compensation and changes to the Company’s valuation allowance recorded on its net deferred tax assets. We recorded an income tax expense of $59,667 for the six months ended June 30, 2023, which equates to an effective tax rate of (29.2%) primarily as a result of state taxes, a pretax loss, and full valuation on our deferred tax asset.

 

The net income for the six months ended June 30, 2024 was $1,006,198, an improvement of $1,270,484 compared to the net loss of $264,286 for the six months ended June 30, 2023. The overall change in net income relates to the aforementioned factors.

 

Key Performance Indicators and Non-GAAP Measures

 

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

 

Gross Dollar Volume Loaded on Cards: Represents the total dollar volume of funds loaded to all of our prepaid card programs. Our gross dollar volume loaded on cards was $456 million and $405 million for the three months ended June 30, 2024 and 2023, respectively. Our gross dollar volume loaded on cards was $882 million and $783 million for the six months ended June 30, 2024 and 2023, respectively. We use this metric to analyze the total amount of money moving into our prepaid card programs.

 

 

 

 

Conversion Rates on Gross Dollar Volume Loaded on Cards: Represents revenues, gross profit or net income (loss) conversion rates of gross dollar volume loaded on cards which are calculated by taking our total revenues, gross profit or net income (loss), respectively, as a numerator and dividing by the gross dollar volume loaded on cards as a denominator. As we derive a number of our financial results from cardholder fees, we utilize these metrics as an indication of the amount of money that is added to cards and will eventually be converted to revenues, gross profit and net income (loss). Our total revenue conversion rates for the three months ended June 30, 2024 and 2023 were 3.14% or 314 basis points (“bps”), and 2.73% or 273 bps, respectively, of gross dollar volume loaded on cards. Our total gross profit conversion rates for the three months ended June 30, 2024 and 2023 were 1.66% or 166 bps, and 1.39% or 139 bps, respectively, of gross dollar volume loaded on cards. Our net income (loss) conversion rates for the three months ended June 30, 2024 and 2023 were 0.14% or 14 bps, and (0.03)% or (3) bps, respectively, of gross dollar volume loaded on cards. Our total revenue conversion rates for the six months ended June 30, 2024 and 2023 were 3.12% or 312 basis points bps, and 2.70% or 270 bps, respectively, of gross dollar volume loaded on cards. Our total gross profit conversion rates for the six months ended June 30, 2024 and 2023 were 1.65% or 165 bps, and 1.36% or 136 bps, respectively, of gross dollar volume loaded on cards. Our net income (loss) conversion rates for the six months ended June 30, 2024 and 2023 were 0.11% or 11 bps, and (0.03)% or (3) bps, respectively, of gross dollar volume loaded on cards.

 

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

 

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

  

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Reconciliation of Adjusted EBITDA to net income (loss):
Net income (loss)		$	697,102			$	(104,156	)		$	1,006,198			$	(264,286	)
Income tax provision			241,932				58,137				405,828				59,667
Interest income, net			(813,357	)			(600,867	)			(1,544,701	)			(1,185,064	)
Depreciation and amortization			1,439,622				958,001				2,726,027				1,803,017
EBITDA			1,565,299				311,115				2,593,352				413,334
Stock-based compensation			670,138				830,426				1,334,089				1,448,670
Adjusted EBITDA		$	2,235,437			$	1,141,541			$	3,927,441			$	1,862,004

 

Liquidity and Capital Resources

 

Capital Resources

 

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

 

		Six Months Ended June 30, (Unaudited)
		2024				2023
Net cash provided by operating activities		$	28,796,693			$	151,348
Net cash used in investing activities			(4,640,045	)			(3,044,110	)
Net cash provided by (used in) financing activities			24,000				(968,067	)
Net increase (decrease) in cash and restricted cash		$	24,180,648			$	(3,860,829	)

 

 

 

 

Comparison of Six Months Ended June 30, 2024 and 2023

 

During the six months ended June 30, 2024 and 2023, we financed our operations through internally generated funds.

 

Operating activities provided $28,796,693 of cash as of June 30, 2024, an increase of $28,645,345 compared to the same period last year. This change in cash flow is primarily due to increases in operating assets and liabilities. The changes in accounts receivable, accounts payable, and customer card funding are primarily related to the growth in our pharma patient affordability business and timing of payments as we are invoiced by third-party service providers at the end of the period and are due monies from our pharma patient affordability customers to cover these third-party payables. The increase in cash flows from operating activities was also impacted by net income and non-cash adjustments for depreciation and amortization, deferred income taxes, stock-based compensation, and lease expenses.

 

We used net cash in investing activities during the six months ended June 30, 2024 and 2023 of $4,640,045 and $3,044,110, respectively. Cash used for investing activities was primarily attributed to an increase in the capitalization of internally developed software as we continue to invest in our technology platform.

 

Finance activities provided cash of $24,000 during the six months ended June 30, 2024, related to the proceeds received for the exercise of stock options. Financing activities during the six months ended June 30,2023 used $968,067 in cash, attributable to the repurchase of 319,558 shares of the Company’s common stock at a weighted average price of $3.06 per share offset by proceeds received of $9,600 for the exercise of stock options.

 

Our significant contractual cash requirements also include ongoing payments for lease liabilities. For additional information regarding our cash commitments and contractual obligations, see “Note 5 – LEASE” in the notes to the accompanying consolidated financial statements.

  

Sources of Liquidity

 

Unrestricted cash was $31,290,865 as of June 30, 2024, an increase of $23,620,188 compared to the same period in the prior year. The increase resulted primarily from the improvement in our operating results and payment timing on passthrough claim reimbursement receivables and related payables associated with our patient affordability business, in the amount of $22,708,655. We believe that our available cash on hand, excluding restricted cash, at June 30, 2024 of $31,290,865, along with our forecast for revenues and cash flows for the remainder of 2024 and through the second quarter of 2026, will be sufficient to sustain our operations for the next twenty-four months. In light of the elevated interest rates and increased refinancing risks related to commercial real estate holdings on bank balance sheets, we continue to monitor the health and soundness of our bank relationships through publicly available information. Based on recent SEC filings, we have not discovered any issues that would cause us to alter our bank relationships.

 

Critical Accounting Policies and Estimates

 

Our significant accounting policies are described in Note 2 of the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

 

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

 

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

 

 

 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

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

 

Item 4. Controls and Procedures.

 

Disclosure Controls and Procedures

 

Disclosure controls and procedures means controls and other procedures that are designed to ensure that the information we are required to disclose in the reports that we file or submit under the  Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed by us in those reports is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our chief executive officer and chief financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2024. Based on that evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures were effective as of June 30, 2024, the end of the period covered by this Quarterly Report on Form 10-Q.

  

Changes in Internal Control over Financial Reporting

 

During the quarter ended June 30, 2024, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

 

 

 

 

 

 

 

 

 

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

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

 

The Company has been named as a defendant in three securities class action complaints filed in the United States District Court for the District of Nevada: Yilan Shi v. Paysign, Inc. et al., filed on March 19, 2020 (“Shi”), Lorna Chase v. Paysign, Inc. et al., filed on March 25, 2020 (“Chase”), and Smith & Duvall v. Paysign, Inc. et al., filed on April 2, 2020 (collectively, the “Complaints” or “Securities Class Action”). Smith & Duvall v. Paysign, Inc. et al. was voluntarily dismissed on May 21, 2020. On May 18, 2020, the Shi plaintiffs and another entity called the Paysign Investor Group each filed a motion to consolidate the remaining Shi and Chase actions and to be appointed lead plaintiff. The Complaints are putative class actions filed on behalf of a class of persons who acquired the Company’s common stock from March 19, 2019 through March 31, 2020, inclusive. The Complaints generally allege that the Company, Mark R. Newcomer, and Mark Attinger violated Section 10(b) of the Exchange Act, and that Messrs. Newcomer and Attinger violated Section 20(a) of the Exchange Act, by making materially false or misleading statements, or failing to disclose material facts, regarding the Company’s internal control over financial reporting and its financial statements. The Complaints seek class action certification, compensatory damages, and attorney’s fees and costs. On December 2, 2020, the Court consolidated Shi and Chase as In re Paysign, Inc. Securities Litigation and appointed the Paysign Investor Group as lead plaintiff. On January 12, 2021, Plaintiffs filed an Amended Complaint in the consolidated action. Defendants filed a Motion to Dismiss the Amended Complaint on March 15, 2021. On February 9, 2023, the Court granted in part and denied in part Defendants’ Motion to Dismiss. On May 22, 2023, Defendants filed an Answer to the Amended Complaint. On December 15, 2023, the parties agreed in principle to a proposed settlement of the Securities Class Action and Plaintiffs filed a Consented Motion for Preliminary Approval of Settlement. On January 4, 2024, the Court preliminarily approved a settlement in the amount of $3,750,000, the entirety of which came from the Company’s directors-and-officers insurance policy, for the referenced class of purchasers, and scheduled a final approval hearing for April 17, 2024. On April 17, 2024, the Court conducted the final approval hearing and approved the settlement and, on April 18, 2024, issued an order and final judgment thereon.

 

The Company has also been named as a nominal defendant in four stockholder derivative actions currently pending in the United States District Court for the District of Nevada. The first-filed derivative action is entitled Andrzej Toczek, derivatively on behalf of Paysign, Inc. v. Mark R. Newcomer, et al. and was filed on September 17, 2020. This action alleges violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, and waste, largely in connection with the failure to correct information technology controls over financial reporting alleged in the Securities Class Action, thereby causing the Company to face exposure in the Securities Class Action. The complaint also alleges insider trading violations against certain individual defendants. The second-filed derivative action is entitled John K. Gray, derivatively on behalf of Paysign, Inc. v. Mark Attinger, et al. and was filed on May 9, 2022. This action involves the same alleged conduct raised in the Toczek action and asserts claims for breach of fiduciary duty in connection with financial reporting, breach of fiduciary duty in connection with alleged insider trading against certain individual defendants, and unjust enrichment. On June 3, 2022, the Court approved a stipulation staying the action until the Court in the consolidated Securities Class Action issued a ruling on the Motion to Dismiss. On May 10, 2023, the Toczek and Gray actions were consolidated.

 

The Company has also been named as a nominal defendant in a third stockholder derivative action initially filed in state court in Clark County, Nevada, on October 2, 2023, entitled Simone Blanchette, derivatively on behalf of Paysign, Inc. v. Mark Newcomer, et al, which the defendants subsequently removed to federal district court in Nevada pursuant to a Notice of Removal filed on October 10, 2023. That complaint makes substantially the same allegations as made in the consolidated Toczek and Gray actions, and also contains a claim that the individual defendants violated Section 10(b) and Rule 10b-5 promulgated thereunder. On December 7, 2023, the parties requested that the action be stayed for sixty days due to the settlement negotiations in the consolidated Toczek and Gray actions, and the Court granted the sixty-day stay on December 11, 2023. Subsequently, the Court extended that deadline to March 29, 2024 and then to May 29, 2024 based upon the parties’ stipulations.

 

The Company has also been named as a nominal defendant in a fourth stockholder derivative action in the United States District Court for the District of Nevada, filed on December 27, 2023, entitled Mo Jeewa, derivatively on behalf of Paysign, Inc. v. Mark R. Newcomer, et al. That complaint makes substantially the same allegations as made in the consolidated Toczek and Gray actions and the Blanchette action discussed above, and alleges breach of fiduciary duty and unjust enrichment.

 

If the derivative cases do not settle, it is the Company’s intention to file motions to dismiss. As of the date of this filing, the Company cannot give any meaningful estimate of likely outcome or damages.

 

 

 

Item 1A. Risk Factors.

 

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

 

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

 

Issuer Purchases of Equity Securities

 

During the quarter ended June 30, 2024, we issued, pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, a total of 116,000 shares of common stock for restricted stock awards previously earned and vested to certain directors, consultants and employees and the exercise of stock options.

 

The following table sets forth certain information relating to the purchases of our common stock by us and any affiliated purchasers within the meaning of Rule 10b-18(a)(3) under the Exchange Act during the three months ended June 30, 2024.

 

Period

Total Number of Shares Purchased

Weighted Average Price Paid Per Share

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)

Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs

April 1, 2024 – April 30, 2024

–

–

–

$

3,872,116

May 1, 2024 – May 31, 2024

–

–

–

3,872,116

June 1, 2024 – June 30, 2024

–

–

–

3,872,116

Total

–

–

–

$

3,872,116

 

(1) On March 21, 2023, our Board authorized a stock repurchase program to repurchase up to $5 million of our common stock, subject to certain conditions, in the open market, in privately negotiated transactions, or by other means in compliance with Rule 10b-18 under the Exchange Act. The program is expected to be completed within 36 months from the commencement date. As of June 30, 2024, the Company repurchased 394,558 shares of common stock for $1,127,884 at a weighted average price of $2.86 per share.

 

Item 5. Other Information.

 

During the quarter ended June 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408 of Regulation S-K).

 

Item 6. Exhibits.

 

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

______________

*	Filed herewith.

 

 

 

SIGNATURES

 

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

 

	PAYSIGN, INC.
Date: August 1, 2024	/s/ Mark Newcomer
	By: Mark Newcomer, President and Chief Executive Officer (Principal Executive Officer)
Date: August 1, 2024	/s/ Jeff Baker
	By: Jeff Baker, Chief Financial Officer (Principal Financial and Accounting Officer)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 31.1

 

CERTIFICATIONS

 

I, Mark Newcomer, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2024 (the “report”) of Paysign, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 1, 2024	/s/ Mark Newcomer
	Mark Newcomer, President and Chief Executive Officer (Principal Executive Officer)

 

Exhibit 31.2

 

CERTIFICATIONS

 

I, Jeff Baker, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2024 (the “report”) of Paysign, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 1, 2024	/s/ Jeff Baker
	Jeff Baker Chief Financial Officer (Principal Financial and Accounting Officer)

 

 

Exhibit 32.1

 

SECTION 1350 CERTIFICATIONS

 

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

 

1. The Quarterly Report on Form 10-Q for the period ended June 30, 2024 (the “Report”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Mark Newcomer
Mark Newcomer, President and Chief Executive Officer (Principal Executive Officer)

 

Date: August 1, 2024

 

 

This certification accompanies the Quarterly Report on Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Paysign, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Quarterly Report on Form 10-Q), irrespective of any general incorporation language contained in such filing.

 

Exhibit 32.2

 

SECTION 1350 CERTIFICATIONS

 

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

 

1. The Quarterly Report on Form 10-Q for the period ended June 30, 2024 (the “Report”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Jeff Baker
Jeff Baker Chief Financial Officer (Principal Financial and Accounting Officer)

 

Date: August 1, 2024

 

 

This certification accompanies the Quarterly Report on Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Paysign, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Quarterly Report on Form 10-Q), irrespective of any general incorporation language contained in such filing.

 

v3.24.2.u1

Cover - shares	6 Months Ended
	Jun. 30, 2024	Jul. 25, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-38623
Entity Registrant Name	PAYSIGN, INC.
Entity Central Index Key	0001496443
Entity Tax Identification Number	95-4550154
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	2615 St. Rose Parkway
Entity Address, City or Town	Henderson
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89052
City Area Code	702
Local Phone Number	453-2221
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	PAYS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		53,138,374

v3.24.2.u1

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Current assets
Cash	$ 31,290,865	$ 16,994,705
Restricted cash	102,240,796	92,356,308
Accounts receivable, net	25,750,319	16,222,341
Other receivables	1,650,201	1,585,983
Prepaid expenses and other current assets	2,474,716	2,020,781
Total current assets	163,406,897	129,180,118
Fixed assets, net	1,107,852	1,089,649
Intangible assets, net	10,710,142	8,814,327
Operating lease right-of-use asset	3,006,844	3,215,025
Deferred tax asset, net	4,077,175	4,299,730
Total assets	182,308,910	146,598,849
Current liabilities
Accounts payable and accrued liabilities	50,254,617	26,517,567
Operating lease liability, current portion	401,075	383,699
Customer card funding	102,079,826	92,282,124
Total current liabilities	152,735,518	119,183,390
Operating lease liability, long-term portion	2,721,724	2,928,078
Total liabilities	155,457,242	122,111,468
Commitments and contingencies (Note 8)
Stockholders’ equity
Preferred stock: $0.001 par value; 25,000,000 shares authorized; none issued and outstanding	0	0
Common stock; $0.001 par value; 150,000,000 shares authorized, 53,782,382 and 53,452,382 issued at June 30, 2024 and December 31, 2023, respectively	53,782	53,452
Additional paid-in capital	23,357,481	21,999,722
Treasury stock at cost, 698,008 shares	(1,277,884)	(1,277,884)
Retained earnings	4,718,289	3,712,091
Total stockholders’ equity	26,851,668	24,487,381
Total liabilities and stockholders’ equity	$ 182,308,910	$ 146,598,849

v3.24.2.u1

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	53,782,382	53,452,382
Treasury stock shares	698,008	698,008

v3.24.2.u1

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenues
Total revenues	$ 14,331,599	$ 11,041,051	$ 27,521,673	$ 21,184,341
Cost of revenues	6,745,836	5,425,311	12,996,659	10,520,932
Gross profit	7,585,763	5,615,740	14,525,014	10,663,409
Operating expenses
Selling, general and administrative	6,020,464	5,304,625	11,931,662	10,250,075
Depreciation and amortization	1,439,622	958,001	2,726,027	1,803,017
Total operating expenses	7,460,086	6,262,626	14,657,689	12,053,092
Income (loss) from operations	125,677	(646,886)	(132,675)	(1,389,683)
Other income
Interest income, net	813,357	600,867	1,544,701	1,185,064
Income (loss) before income tax provision	939,034	(46,019)	1,412,026	(204,619)
Income tax provision	241,932	58,137	405,828	59,667
Net income (loss)	$ 697,102	$ (104,156)	$ 1,006,198	$ (264,286)
Net income (loss) per share
Basic	$ 0.01	$ (0.00)	$ 0.02	$ (0.01)
Diluted	$ 0.01	$ (0.00)	$ 0.02	$ (0.01)
Weighted average common shares
Basic	53,008,286	52,259,002	52,926,462	52,330,829
Diluted	55,861,786	52,259,002	55,374,336	52,330,829
Plasma Industry [Member]
Revenues
Total revenues	$ 11,273,262	$ 10,014,461	$ 21,641,296	$ 19,374,528
Pharma Industry [Member]
Revenues
Total revenues	2,674,901	729,236	5,063,545	1,318,798
Other Revenue [Member]
Revenues
Total revenues	$ 383,436	$ 297,354	$ 816,832	$ 491,015

v3.24.2.u1

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock, Common [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2022	$ 52,650	$ 19,137,281	$ (150,000)	$ (2,746,636)	$ 16,293,295
Beginning balance, shares at Dec. 31, 2022	52,650,382		(303,450)
Stock issued upon vesting of restricted stock	$ 118	(118)
Stock issued upon vesting of restricted stock, shares	118,000
Stock-based compensation		618,244			618,244
Repurchase of common stock			$ (666,018)		(666,018)
Repurchase of common stock, shares			(200,000)
Net loss				(160,130)	(160,130)
Ending balance, value at Mar. 31, 2023	$ 52,768	19,755,407	$ (816,018)	(2,906,766)	16,085,391
Ending balance, shares at Mar. 31, 2023	52,768,382		(503,450)
Beginning balance, value at Dec. 31, 2022	$ 52,650	19,137,281	$ (150,000)	(2,746,636)	16,293,295
Beginning balance, shares at Dec. 31, 2022	52,650,382		(303,450)
Net loss					(264,286)
Ending balance, value at Jun. 30, 2023	$ 52,842	20,595,359	$ (1,127,667)	(3,010,922)	16,509,612
Ending balance, shares at Jun. 30, 2023	52,842,382		(623,008)
Beginning balance, value at Mar. 31, 2023	$ 52,768	19,755,407	$ (816,018)	(2,906,766)	16,085,391
Beginning balance, shares at Mar. 31, 2023	52,768,382		(503,450)
Stock issued upon vesting of restricted stock	$ 70	(70)
Stock issued upon vesting of restricted stock, shares	70,000
Stock-based compensation		830,426			830,426
Repurchase of common stock			$ (311,649)		(311,649)
Repurchase of common stock, shares			(119,558)
Net loss				(104,156)	(104,156)
Exercise of stock options, shares	4,000
Exercise of stock options	$ 4	9,596			9,600
Ending balance, value at Jun. 30, 2023	$ 52,842	20,595,359	$ (1,127,667)	(3,010,922)	16,509,612
Ending balance, shares at Jun. 30, 2023	52,842,382		(623,008)
Beginning balance, value at Dec. 31, 2023	$ 53,452	21,999,722	$ (1,277,884)	3,712,091	24,487,381
Beginning balance, shares at Dec. 31, 2023	53,452,382		(698,008)
Stock issued upon vesting of restricted stock	$ 214	(214)
Stock issued upon vesting of restricted stock, shares	214,000
Stock-based compensation		663,951			663,951
Net loss				309,096	309,096
Ending balance, value at Mar. 31, 2024	$ 53,666	22,663,459	$ (1,277,884)	4,021,187	25,460,428
Ending balance, shares at Mar. 31, 2024	53,666,382		(698,008)
Beginning balance, value at Dec. 31, 2023	$ 53,452	21,999,722	$ (1,277,884)	3,712,091	24,487,381
Beginning balance, shares at Dec. 31, 2023	53,452,382		(698,008)
Net loss					1,006,198
Ending balance, value at Jun. 30, 2024	$ 53,782	23,357,481	$ (1,277,884)	4,718,289	26,851,668
Ending balance, shares at Jun. 30, 2024	53,782,382		(698,008)
Beginning balance, value at Mar. 31, 2024	$ 53,666	22,663,459	$ (1,277,884)	4,021,187	25,460,428
Beginning balance, shares at Mar. 31, 2024	53,666,382		(698,008)
Stock issued upon vesting of restricted stock	$ 106	(106)
Stock issued upon vesting of restricted stock, shares	106,000
Stock-based compensation		670,138			670,138
Net loss				697,102	697,102
Exercise of stock options, shares	10,000
Exercise of stock options	$ 10	23,990			24,000
Ending balance, value at Jun. 30, 2024	$ 53,782	$ 23,357,481	$ (1,277,884)	$ 4,718,289	$ 26,851,668
Ending balance, shares at Jun. 30, 2024	53,782,382		(698,008)

v3.24.2.u1

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities:
Net income (loss)	$ 1,006,198	$ (264,286)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Gain on disposal assets	0	(4,862)
Stock-based compensation expense	1,334,089	1,448,670
Depreciation and amortization	2,726,027	1,803,017
Noncash lease expense	208,181	197,203
Deferred income taxes, net	222,555	0
Changes in operating assets and liabilities:
Accounts receivable	(9,527,978)	(3,068,460)
Other receivables	(64,218)	201,231
Prepaid expenses and other current assets	(453,935)	(590,984)
Accounts payable and accrued liabilities	23,737,050	2,431,087
Operating lease liability	(188,978)	(178,000)
Customer card funding	9,797,702	(1,823,268)
Net cash provided by operating activities	28,796,693	151,348
Cash flows from investing activities:
Purchase of fixed assets	(196,126)	(84,911)
Capitalization of internally developed software	(4,321,319)	(2,959,199)
Purchase of intangible assets	(122,600)	0
Net cash used in investing activities	(4,640,045)	(3,044,110)
Cash flows from financing activities:
Proceeds from exercise of options	24,000	9,600
Repurchase of common stock	0	(977,667)
Net cash provided by (used in) financing activities	24,000	(968,067)
Net change in cash and restricted cash	24,180,648	(3,860,829)
Cash and restricted cash, beginning of period	109,351,013	89,897,351
Cash and restricted cash, end of period	133,531,661	86,036,522
Cash and restricted cash reconciliation:
Cash	31,290,865	7,670,677
Restricted cash	102,240,796	78,365,845
Total cash and restricted cash	133,531,661	86,036,522
Non-cash financing activities
Cash paid for taxes	$ 75,198	$ 159,510

v3.24.2.u1

Pay vs Performance Disclosure - USD ($)	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ 697,102	$ 309,096	$ (104,156)	$ (160,130)	$ 1,006,198	$ (264,286)

v3.24.2.u1

Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2024
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

v3.24.2.u1

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES	6 Months Ended
	Jun. 30, 2024
Accounting Policies [Abstract]
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES	1.     BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES   The foregoing unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the disclosures required by GAAP for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended December 31, 2023. In the opinion of management, the unaudited interim condensed consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.   The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company’s financial position and results of operations.   Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.   About Paysign, Inc.   Paysign, Inc. (the “Company,” “Paysign,” “we” or “our”) was incorporated on August 24, 1995, and trades under the symbol PAYS on The Nasdaq Stock Market LLC. Paysign is a provider of prepaid card programs, comprehensive patient affordability offerings, digital banking services and integrated payment processing designed for businesses, consumers and government institutions. Headquartered in Nevada, the company creates customized, innovative payment solutions for clients across all industries, including pharmaceutical, healthcare, hospitality and retail.   Principles of Consolidation – The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated.   Use of Estimates – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and (iii) the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.   Cash and Cash Equivalents – The Company considers all highly liquid investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents for the purposes of the statement of cash flows. The Company had no cash equivalents at June 30, 2024 and December 31, 2023.   Restricted Cash – At June 30, 2024 and December 31, 2023, restricted cash consisted of funds held specifically for our card product and pharma programs that are regulatory required or contractually restricted to use. The Company includes changes in restricted cash balances with cash and cash equivalents when reconciling the beginning and ending total amounts in our condensed consolidated statements of cash flows.   Concentrations of Credit Risk – Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and restricted cash. The Company maintains its cash and cash equivalents and restricted cash in various bank accounts primarily with one financial institution in the United States which at times, may exceed federally insured limits. If this financial institution were to be placed into receivership, we may be unable to access the cash we have on deposit. If we are unable to access our cash and cash equivalents as needed, our financial position and ability to operate our business could be adversely affected. The Company has not experienced, nor does it anticipate any losses with respect to such accounts. At June 30, 2024 and December 31, 2023, the Company had approximately $179,881 and $59,958,918 in excess of federally insured bank account limits, respectively. In February of 2024, the Company initiated a program with one of our financial institution called deposit swapping, where the financial institution utilizes a third-party who is participating in reciprocal deposit networks. This program is an alternative way for our financial institution to offer us full Federal Deposit Insurance Corporation (“FDIC”) insurance on deposits over $250,000. Under this program, deposit networks divide uninsured deposits into smaller units and distribute these monies among participating banks in the network, where the monies are fully FDIC insured.   As of June 30, 2024, the Company also had a concentration of accounts receivable risk. Three pharma program customers associated with our pharma patient affordability programs each individually represented 23%, 14%, and 11% of our accounts receivable balance. Two pharma program customers each individually represented 30% and 12% of our accounts receivable balance on December 31, 2023. These accounts receivable balances relate to passthrough claim reimbursements that have been paid on behalf of the pharma program customers.   Fixed Assets – Fixed assets are stated at cost less accumulated depreciation. Depreciation is principally recorded using the straight-line method over the estimated useful life of the asset, which is generally 3 to 10 years. The cost of repairs and maintenance is charged to expense as incurred. Leasehold improvements are capitalized and depreciated over the shorter of the remaining lease term or the estimated useful life of the improvements. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).   The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.   Intangible Assets – For intangible assets, the Company recognizes an impairment loss if the carrying amount of the intangible asset is not recoverable and exceeds its fair value. The carrying amount of the intangible asset is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset.   Intangible assets with a finite life are amortized on a straight-line basis over its estimated useful life, which is generally 3 to 15 years.   Internally Developed Software Costs – Computer software development costs are expensed as incurred, except for internal use software or website development costs that qualify for capitalization as described below, and include compensation and related expenses, costs of hardware and software, and costs incurred in developing features and functionality.   For computer software developed or obtained for internal use, costs that are incurred in the preliminary project and post implementation stages of software development are expensed as incurred. Costs incurred during the application and development stage are capitalized. Capitalized costs are amortized using the straight-line method over a three year estimated useful life, beginning in the period in which the software is available for use.   Contract Assets – Incremental costs to obtain or fulfill a contract with a customer are capitalized. The Company determines the costs that are incremental by confirming the costs (i) are directly related to a customer’s contract, (ii) generate or enhance resources to fulfill contract performance obligations in the future, and (iii) are recoverable. Amortization is on a straight-line basis generally over three to five years, beginning when goods and services are transferred to the customer or group of customers.   Hosting Implementation – Costs to implement the cloud computing arrangements (the “hosting site”) are accounted for by following the same model as internally developed software costs. Costs that are incurred in the preliminary project and post implementation stages of hosting development are expensed when they are incurred. Costs incurred during the application and development stage are capitalized. Capitalized costs are amortized using the straight-line method over a three-year estimated useful life, beginning in the period when the hosting site is available for use.   Customer Card Funding – As of June 30, 2024 and December 31, 2023, customer card funding represents funds loaded or available to be loaded on cards for the Company’s card product programs.   Earnings Per Share – Basic earnings per share exclude any dilutive effects of options, warrants, and convertible securities. Basic earnings per share is computed using the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is computed using the weighted-average number of common and common stock equivalent shares outstanding during the period using the treasury stock method. Common stock equivalent shares are excluded from the computation if their effect on the diluted earnings per share calculation is anti-dilutive.   Revenue and Expense Recognition – In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contracts with customers; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.   The Company generates revenues from plasma card programs through fees generated from cardholder fees and interchange fees. Revenues from pharma card programs are generated through card program management fees, transaction claims processing fees, interchange fees, and settlement income. Other revenues are generated through cardholder fees, interchange fees, program management fees, load fees and breakage.   Plasma and pharma card program revenues include both fixed and variable components. Cardholder fees represent an obligation to the cardholder based on a per transaction basis and are recognized at a point in time when the performance obligation is fulfilled. Card program management fees and transaction claims processing fees include an obligation to our card program sponsors and are generally recognized when earned on a monthly basis and are typically due within 30 days pursuant to the contract terms which are generally multi-year contracts. The Company uses the output method to recognize card program management fee revenue at the amount of consideration to which an entity has a right to invoice. The performance obligation is satisfied when the services are transferred to the customer which the Company determined to be monthly, as the customer simultaneously receives and consumes the benefit from the Company’s performance. Interchange fees are earned when customer-issued cards are processed through card payment networks as the nature of our promise to the customer is that we stand ready to process transactions at the customer’s requests on a daily basis over the contract term. Since the timing and quantity of transactions to be processed by us are not determinable, we view interchange fees to comprise an obligation to stand ready to process as many transactions as the customer requests. Accordingly, the promise to stand ready is accounted for as a single series performance obligation. The Company uses the right to invoice practical expedient and recognizes interchange fee revenue concurrent with the processing of card transactions. Interchange fees are settled in accordance with the card payment network terms and conditions, which is typically within a few days.   The portion of the dollar value of prepaid-stored value cards that consumers do not ultimately redeem are referred to as breakage. In certain card programs where we hold the cardholder funds and expect to be entitled to a breakage amount, we recognize revenue using estimated breakage rates ratably over the estimated card life; provided that a significant reversal of the amount of breakage revenue recognized is not probable, and record adjustments to such estimates when redemption is remote or we are legally defeased of the obligation, if applicable. For each program, we utilize a third party to estimate breakage rates based on historical redemption patterns, market-specific trends, escheatment rules and existing economic conditions. The Company accounts for breakage in accordance with Accounting Standards Update (“ASU”) 2016-04, Liabilities—Extinguishment of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Cards for the recognition of such revenue. Breakage revenue is recorded in other revenue on the consolidated statements of operations and was $33,995 and $86,786 for the three and six months ended June 30, 2024, respectively. Breakage revenue was $0 for the three and six months ended June 30, 2023.   The Company utilizes the remote method of revenue recognition for settlement income whereby the unspent balances will be recognized as revenue at the expiration of the cards or the respective card program. This has primarily been associated with the pharma prepaid business which ended in 2022. The Company records all revenue on a gross basis since it is the primary obligor and establishes the price in the contract arrangement with its customers. The Company is currently under no obligation to refund any fees, and the Company does not currently have any obligations for disputed claim settlements. Given the nature of the Company’s services and contracts, generally it has no contract assets. Settlement income was $0 for the three and six months ended June 30, 2024 and $211 for the three and six months ended June 30, 2023.   Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, fraud charges, and sales and commission expense.    Operating Leases – The Company determines if a contract is or contains a leasing element at contract inception or the date in which a modification of an existing contract occurs. In order for a contract to be considered a lease, the contract must transfer the right to control the use of an identified asset for a period of time in exchange for consideration. Control is determined to have occurred if the lessee has the right to (i) obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use and (ii) direct the use of the identified asset.    In determining the present value of lease payments at lease commencement date, the Company utilizes its incremental borrowing rate based on the information available, unless the rate implicit in the lease is readily determinable. The liability for operating leases is based on the present value of future lease payments. Operating lease expenses are recorded as rent expense, which is included within selling, general and administrative expenses within the consolidated statements of operations and presented as operating cash outflows within the consolidated statements of cash flows.   Leases with an initial term of 12 months or less are not recorded on the balance sheet, with lease expense for these leases recognized on a straight-line basis over the lease term.   Stock-Based Compensation – The Company recognizes compensation expense for all restricted stock awards and stock options. The fair value of restricted stock awards is measured using the grant date trading price of our stock. The fair value of stock options is estimated at the grant date using the Black-Scholes option-pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. We have elected to recognize compensation expense for all options with graded vesting on a straight-line basis over the vesting period of the entire option. The determination of fair value using the Black-Scholes pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility and the risk-free interest rate.   Recently Issued Accounting Pronouncement – In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, “Income Taxes – Improvements to Income Tax Disclosures”, requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. We are currently evaluating the impact of the adoption of this standard.   In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures”, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in the ASU require, among other things, disclosure of significant segment expenses that are regularly provided to an entity's chief operating decision maker (“CODM”) and a description of other segment items by reportable segment, as well as disclosure of the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Annual disclosures are required for fiscal years beginning after December 15, 2023 and interim disclosures are required for periods within fiscal years beginning after December 15, 2024. Retrospective application is required, and early adoption is permitted. These requirements had no material impact on our financial statements.

v3.24.2.u1

FIXED ASSETS, NET	6 Months Ended
	Jun. 30, 2024
Property, Plant and Equipment [Abstract]
FIXED ASSETS, NET	2.     FIXED ASSETS, NET   Fixed assets consist of the following:  Schedule of fixed assets                 June 30, 2024     December 31, 2023   Equipment   $ 2,504,196     $ 2,399,243   Software     433,004       345,057   Furniture and fixtures     762,144       757,662   Website costs     69,881       69,881   Leasehold improvements     236,904       236,904         4,006,129       3,808,747   Less: accumulated depreciation     (2,898,277 )     (2,719,098 ) Fixed assets, net   $ 1,107,852     $ 1,089,649     Depreciation expense for the three months ended June 30, 2024 and 2023 was $86,823 and $107,615, respectively. Depreciation expense for the six months ended June 30, 2024 and 2023 was $177,923 and $215,961, respectively

v3.24.2.u1

INTANGIBLE ASSETS, NET	6 Months Ended
	Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS, NET	3.     INTANGIBLE ASSETS, NET    Intangible assets consist of the following:  Schedule of intangible assets                 June 30, 2024     December 31, 2023   Patents and trademarks   $ 38,186     $ 38,186   Platform     24,712,437       20,391,118   Customer lists and contracts     1,177,200       1,177,200   Licenses     216,901       216,901   Hosting implementation     43,400       43,400   Contract assets     272,600       150,000         26,460,724       22,016,805   Less: accumulated amortization     (15,750,582 )     (13,202,478 ) Intangible assets, net   $ 10,710,142     $ 8,814,327     Intangible assets are amortized over their useful lives ranging from periods of 3 to 15 years. Amortization expense for the three months ended June 30, 2024 and 2023 was $1,352,799 and $850,386, respectively. Amortization expense for the six months ended June 30, 2024 and 2023 was $2,548,104 and $1,587,056, respectively.

v3.24.2.u1

LEASE	6 Months Ended
	Jun. 30, 2024
Lease
LEASE	4.     LEASE   The Company entered into an operating lease for an office space which became effective in June 2020. The lease term is 10 years from the effective date and allows for two optional extensions of five years each. The two optional extensions are not recognized as part of the right-of-use asset or lease liability since it is not reasonably certain that the Company will extend this lease. As of June 30, 2024, the remaining lease term was 5.9 years and the discount rate was 6%.   Operating lease cost included in selling, general and administrative expenses was $189,020 and $378,039 for the three and six months ended June 30, 2024, respectively. Operating lease cost included in selling, general and administrative expenses was $196,214 and $379,435 for the three and six months ended June 30, 2023, respectively.   The following is the lease maturity analysis of our operating lease as of June 30, 2024:   Year ending December 31, Schedule of lease maturity       2024 (excluding the six months ended June 30, 2024)   $ 285,984   2025     612,006   2026     640,604   2027     640,604   2028     640,604   Thereafter     907,523   Total lease payments     3,727,325   Less: Imputed interest     (604,526 ) Present value of future lease payments     3,122,799   Less: current portion of lease liability     (401,075 ) Long-term portion of lease liability   $ 2,721,724

v3.24.2.u1

CUSTOMER CARD FUNDING LIABILITY	6 Months Ended
	Jun. 30, 2024
Revenue from Contract with Customer [Abstract]
CUSTOMER CARD FUNDING LIABILITY	5.     CUSTOMER CARD FUNDING LIABILITY   The Company issues prepaid cards with various provisions for cardholder fees or expiration. Revenue generated from cardholder transactions and interchange fees are recognized when the Company’s performance obligation is fulfilled. Unspent balances left on pharma cards are recognized as settlement income at the expiration of the cards and the card program. Contract liabilities related to prepaid cards represent funds on card and client funds held to be loaded to card before the amounts are ultimately spent by the cardholders or recognized as revenue by the Company. Contract liabilities related to prepaid cards are reported as customer card funding liability on the condensed consolidated balance sheet.    The opening and closing balances of the Company's liabilities are as follows: Schedule of contract liabilities                 Six Months Ended June,       2024     2023   Beginning balance   $ 92,282,124     $ 80,189,113   Increase (decrease), net     9,797,702       (1,823,268 ) Ending balance   $ 102,079,826     $ 78,365,845     The amount of revenue recognized during the six months ended June 30, 2024 and 2023 that was included in the opening contract liability for prepaid cards was $2,319,630 and $2,020,224, respectively.

v3.24.2.u1

COMMON STOCK	6 Months Ended
	Jun. 30, 2024
Equity [Abstract]
COMMON STOCK	6.     COMMON STOCK   At June 30, 2024, the Company's authorized capital stock was 150,000,000 shares of common stock, par value $0.001 per share, and 25,000,000 shares of preferred stock, par value $0.001 per share. On that date, the Company had 53,782,382 shares of common stock issued and 53,084,374 shares of common stock outstanding, and no shares of preferred stock outstanding.   Stock-based compensation expense related to Company grants for the three and six months ended June 30, 2024 was $670,138 and $1,334,089, respectively. Stock-based compensation expense related to Company grants for the three and six months ended June 30, 2023 was $830,426 and $1,448,670, respectively.   2024 Transactions – During the three and six months ended June 30, 2024, the Company issued 116,000 and 330,000 shares of common stock for vested stock awards and the exercise of stock options. The Company received proceeds of $24,000 for the exercise of stock options.   The Company granted 180,000 restricted stock awards during the three months ended June 30, 2024; the weighted average grant date fair value was $4.44. The Company granted 480,000 restricted stock awards during the six months ended June 30, 2024; the weighted average grant date fair value was $3.53. The restricted stock awards granted vest over a period of five years.   2023 Transactions – During the three and six months ended June 30, 2023 the Company issued 74,000 and 192,000 shares of common stock for vested stock awards and the exercise of stock options. The Company received proceeds of $9,600 for the exercise of stock options.   During the three and six months ended June 30, 2023 the Company repurchased 119,558 and 319,558 shares of its common stock at a cost of $311,649 or weighted average price of $2.61 and $977,667 or weighted average price of $3.06 per share, respectively.   The Company granted 80,000 restricted stock awards during the three months ended June 30, 2023; the weighted average grant date fair value was $3.40. The Company granted 350,000 restricted stock awards during the six months ended June 30, 2023; the weighted average grant date fair value was $2.96. The restricted stock awards granted vest over a period of two months to five years.

v3.24.2.u1

BASIC AND FULLY DILUTED NET INCOME (LOSS) PER COMMON SHARE	6 Months Ended
	Jun. 30, 2024
Net income (loss) per share
BASIC AND FULLY DILUTED NET INCOME (LOSS) PER COMMON SHARE	7.     BASIC AND FULLY DILUTED NET INCOME (LOSS) PER COMMON SHARE   The following table sets forth the computation of basic and fully diluted net income (loss) per common share for the three and six months ended June 30, 2024 and 2023: Schedule of computation of earning per share                             Three Months Ended June 30,     Six Months Ended June 30,       2024     2023     2024     2023   Numerator:                         Net income (loss)   $ 697,102     $ (104,156 )   $ 1,006,198     $ (264,286 ) Denominator:                                 Weighted average common shares:                                 Denominator for basic calculation     53,008,286       52,259,002       52,926,462       52,330,829   Weighted average effects of potentially diluted common stock:                                 Stock options (calculated using the treasury method)     1,068,682       –       941,642       –   Unvested restricted stock grants     1,784,818       –       1,506,232       –   Denominator for fully diluted calculation     55,861,786       52,259,002       55,374,336       52,330,829   Net income (loss) per common share:                                 Basic   $ 0.01     $ (0.00 )   $ 0.02     $ (0.01 ) Fully diluted   $ 0.01     $ (0.00 )   $ 0.02     $ (0.01 )                                   Anti-dilutive shares:                                 Stock options     –       1,815,000       –       1,815,000   Unvested restricted stock options     –       3,652,000       –       3,652,000     The potential common share equivalents are not added to the denominator for three and six months ended June 30, 2023 because the inclusion was anti-dilutive, and therefore, all such shares were excluded from the computation of diluted weighted average shares outstanding for both periods.

v3.24.2.u1

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	8.     COMMITMENTS AND CONTINGENCIES   From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.   The Company has been named as a defendant in three securities class action complaints filed in the United States District Court for the District of Nevada: Yilan Shi v. Paysign, Inc. et al., filed on March 19, 2020 (“Shi”), Lorna Chase v. Paysign, Inc. et al., filed on March 25, 2020 (“Chase”), and Smith & Duvall v. Paysign, Inc. et al., filed on April 2, 2020 (collectively, the “Complaints” or “Securities Class Action”). Smith & Duvall v. Paysign, Inc. et al. was voluntarily dismissed on May 21, 2020. On May 18, 2020, the Shi plaintiffs and another entity called the Paysign Investor Group each filed a motion to consolidate the remaining Shi and Chase actions and to be appointed lead plaintiff. The Complaints are putative class actions filed on behalf of a class of persons who acquired the Company’s common stock from March 19, 2019 through March 31, 2020, inclusive. The Complaints generally allege that the Company, Mark R. Newcomer, and Mark Attinger violated Section 10(b) of the Exchange Act, and that Messrs. Newcomer and Attinger violated Section 20(a) of the Exchange Act, by making materially false or misleading statements, or failing to disclose material facts, regarding the Company’s internal control over financial reporting and its financial statements. The Complaints seek class action certification, compensatory damages, and attorney’s fees and costs. On December 2, 2020, the Court consolidated Shi and Chase as In re Paysign, Inc. Securities Litigation and appointed the Paysign Investor Group as lead plaintiff. On January 12, 2021, Plaintiffs filed an Amended Complaint in the consolidated action. Defendants filed a Motion to Dismiss the Amended Complaint on March 15, 2021. On February 9, 2023, the Court granted in part and denied in part Defendants’ Motion to Dismiss. On May 22, 2023, Defendants filed an Answer to the Amended Complaint. On December 15, 2023, the parties agreed in principle to a proposed settlement of the Securities Class Action and Plaintiffs filed a Consented Motion for Preliminary Approval of Settlement. On January 4, 2024, the Court preliminarily approved a settlement in the amount of $3,750,000, the entirety of which came from the Company’s directors-and-officers insurance policy, for the referenced class of purchasers, and scheduled a final approval hearing for April 17, 2024. On April 17, 2024, the Court conducted the final approval hearing and approved the settlement and, on April 18, 2024, issued an order and final judgment thereon.   The Company has also been named as a nominal defendant in four stockholder derivative actions currently pending in the United States District Court for the District of Nevada. The first-filed derivative action is entitled Andrzej Toczek, derivatively on behalf of Paysign, Inc. v. Mark R. Newcomer, et al. and was filed on September 17, 2020. This action alleges violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, and waste, largely in connection with the failure to correct information technology controls over financial reporting alleged in the Securities Class Action, thereby causing the Company to face exposure in the Securities Class Action. The complaint also alleges insider trading violations against certain individual defendants. The second-filed derivative action is entitled John K. Gray, derivatively on behalf of Paysign, Inc. v. Mark Attinger, et al. and was filed on May 9, 2022. This action involves the same alleged conduct raised in the Toczek action and asserts claims for breach of fiduciary duty in connection with financial reporting, breach of fiduciary duty in connection with alleged insider trading against certain individual defendants, and unjust enrichment. On June 3, 2022, the Court approved a stipulation staying the action until the Court in the consolidated Securities Class Action issued a ruling on the Motion to Dismiss. On May 10, 2023, the Toczek and Gray actions were consolidated.   The Company has also been named as a nominal defendant in a third stockholder derivative action initially filed in state court in Clark County, Nevada, on October 2, 2023, entitled Simone Blanchette, derivatively on behalf of Paysign, Inc. v. Mark Newcomer, et al, which the defendants subsequently removed to federal district court in Nevada pursuant to a Notice of Removal filed on October 10, 2023. That complaint makes substantially the same allegations as made in the consolidated Toczek and Gray actions, and also contains a claim that the individual defendants violated Section 10(b) and Rule 10b-5 promulgated thereunder. On December 7, 2023, the parties requested that the action be stayed for sixty days due to the settlement negotiations in the consolidated Toczek and Gray actions, and the Court granted the sixty-day stay on December 11, 2023. Subsequently, the Court extended that deadline to March 29, 2024 and then to May 29, 2024 based upon the parties’ stipulations.   The Company has also been named as a nominal defendant in a fourth stockholder derivative action in the United States District Court for the District of Nevada, filed on December 27, 2023, entitled Mo Jeewa, derivatively on behalf of Paysign, Inc. v. Mark R. Newcomer, et al. That complaint makes substantially the same allegations as made in the consolidated Toczek and Gray actions and the Blanchette action discussed above, and alleges breach of fiduciary duty and unjust enrichment.   If the derivative cases do not settle, it is the Company’s intention to file motions to dismiss. As of the date of this filing, the Company cannot give any meaningful estimate of likely outcome or damages.

v3.24.2.u1

INCOME TAX	6 Months Ended
	Jun. 30, 2024
Income Tax Disclosure [Abstract]
INCOME TAX	9.    INCOME TAX   The effective tax rates for the three months and six months ended June 30, 2024 and 2023 were based on the Company’s forecasted annualized effective tax rates and were adjusted for discrete items that occurred within the periods presented. The effective tax rate for the three months and six months ended June 30, 2024 varies from the three months and six months ended June 30, 2023 primarily as a result of tax benefits related to our stock-based compensation and changes to the Company’s valuation allowance recorded on its net deferred tax assets.   Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law in 2020 and the subsequent extension of the CARES Act through September 30, 2021, the Company was eligible for a refundable employee retention credit subject to certain criteria. The Company has elected an accounting policy to recognize the government assistance when it is probable that the Company is eligible to receive the assistance and present the credit as a reduction of the related expense. As of June 30, 2024 and December 31, 2023, the Company recorded $1,129,164 in other receivables on the condensed consolidated balance sheet related to U.S. Federal Government refunds.

v3.24.2.u1

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Policies)	6 Months Ended
	Jun. 30, 2024
Accounting Policies [Abstract]
About Paysign, Inc.	About Paysign, Inc.   Paysign, Inc. (the “Company,” “Paysign,” “we” or “our”) was incorporated on August 24, 1995, and trades under the symbol PAYS on The Nasdaq Stock Market LLC. Paysign is a provider of prepaid card programs, comprehensive patient affordability offerings, digital banking services and integrated payment processing designed for businesses, consumers and government institutions. Headquartered in Nevada, the company creates customized, innovative payment solutions for clients across all industries, including pharmaceutical, healthcare, hospitality and retail.
Principles of Consolidation	Principles of Consolidation – The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated.
Use of Estimates	Use of Estimates – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and (iii) the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents	Cash and Cash Equivalents – The Company considers all highly liquid investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents for the purposes of the statement of cash flows. The Company had no cash equivalents at June 30, 2024 and December 31, 2023.
Restricted Cash	Restricted Cash – At June 30, 2024 and December 31, 2023, restricted cash consisted of funds held specifically for our card product and pharma programs that are regulatory required or contractually restricted to use. The Company includes changes in restricted cash balances with cash and cash equivalents when reconciling the beginning and ending total amounts in our condensed consolidated statements of cash flows.
Concentrations of Credit Risk	Concentrations of Credit Risk – Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and restricted cash. The Company maintains its cash and cash equivalents and restricted cash in various bank accounts primarily with one financial institution in the United States which at times, may exceed federally insured limits. If this financial institution were to be placed into receivership, we may be unable to access the cash we have on deposit. If we are unable to access our cash and cash equivalents as needed, our financial position and ability to operate our business could be adversely affected. The Company has not experienced, nor does it anticipate any losses with respect to such accounts. At June 30, 2024 and December 31, 2023, the Company had approximately $179,881 and $59,958,918 in excess of federally insured bank account limits, respectively. In February of 2024, the Company initiated a program with one of our financial institution called deposit swapping, where the financial institution utilizes a third-party who is participating in reciprocal deposit networks. This program is an alternative way for our financial institution to offer us full Federal Deposit Insurance Corporation (“FDIC”) insurance on deposits over $250,000. Under this program, deposit networks divide uninsured deposits into smaller units and distribute these monies among participating banks in the network, where the monies are fully FDIC insured.   As of June 30, 2024, the Company also had a concentration of accounts receivable risk. Three pharma program customers associated with our pharma patient affordability programs each individually represented 23%, 14%, and 11% of our accounts receivable balance. Two pharma program customers each individually represented 30% and 12% of our accounts receivable balance on December 31, 2023. These accounts receivable balances relate to passthrough claim reimbursements that have been paid on behalf of the pharma program customers.
Fixed Assets	Fixed Assets – Fixed assets are stated at cost less accumulated depreciation. Depreciation is principally recorded using the straight-line method over the estimated useful life of the asset, which is generally 3 to 10 years. The cost of repairs and maintenance is charged to expense as incurred. Leasehold improvements are capitalized and depreciated over the shorter of the remaining lease term or the estimated useful life of the improvements. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).   The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.
Intangible Assets	Intangible Assets – For intangible assets, the Company recognizes an impairment loss if the carrying amount of the intangible asset is not recoverable and exceeds its fair value. The carrying amount of the intangible asset is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset.   Intangible assets with a finite life are amortized on a straight-line basis over its estimated useful life, which is generally 3 to 15 years.   Internally Developed Software Costs – Computer software development costs are expensed as incurred, except for internal use software or website development costs that qualify for capitalization as described below, and include compensation and related expenses, costs of hardware and software, and costs incurred in developing features and functionality.   For computer software developed or obtained for internal use, costs that are incurred in the preliminary project and post implementation stages of software development are expensed as incurred. Costs incurred during the application and development stage are capitalized. Capitalized costs are amortized using the straight-line method over a three year estimated useful life, beginning in the period in which the software is available for use.   Contract Assets – Incremental costs to obtain or fulfill a contract with a customer are capitalized. The Company determines the costs that are incremental by confirming the costs (i) are directly related to a customer’s contract, (ii) generate or enhance resources to fulfill contract performance obligations in the future, and (iii) are recoverable. Amortization is on a straight-line basis generally over three to five years, beginning when goods and services are transferred to the customer or group of customers.   Hosting Implementation – Costs to implement the cloud computing arrangements (the “hosting site”) are accounted for by following the same model as internally developed software costs. Costs that are incurred in the preliminary project and post implementation stages of hosting development are expensed when they are incurred. Costs incurred during the application and development stage are capitalized. Capitalized costs are amortized using the straight-line method over a three-year estimated useful life, beginning in the period when the hosting site is available for use.
Customer Card Funding	Customer Card Funding – As of June 30, 2024 and December 31, 2023, customer card funding represents funds loaded or available to be loaded on cards for the Company’s card product programs.
Earnings Per Share	Earnings Per Share – Basic earnings per share exclude any dilutive effects of options, warrants, and convertible securities. Basic earnings per share is computed using the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is computed using the weighted-average number of common and common stock equivalent shares outstanding during the period using the treasury stock method. Common stock equivalent shares are excluded from the computation if their effect on the diluted earnings per share calculation is anti-dilutive.
Revenue and Expense Recognition	Revenue and Expense Recognition – In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contracts with customers; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.   The Company generates revenues from plasma card programs through fees generated from cardholder fees and interchange fees. Revenues from pharma card programs are generated through card program management fees, transaction claims processing fees, interchange fees, and settlement income. Other revenues are generated through cardholder fees, interchange fees, program management fees, load fees and breakage.   Plasma and pharma card program revenues include both fixed and variable components. Cardholder fees represent an obligation to the cardholder based on a per transaction basis and are recognized at a point in time when the performance obligation is fulfilled. Card program management fees and transaction claims processing fees include an obligation to our card program sponsors and are generally recognized when earned on a monthly basis and are typically due within 30 days pursuant to the contract terms which are generally multi-year contracts. The Company uses the output method to recognize card program management fee revenue at the amount of consideration to which an entity has a right to invoice. The performance obligation is satisfied when the services are transferred to the customer which the Company determined to be monthly, as the customer simultaneously receives and consumes the benefit from the Company’s performance. Interchange fees are earned when customer-issued cards are processed through card payment networks as the nature of our promise to the customer is that we stand ready to process transactions at the customer’s requests on a daily basis over the contract term. Since the timing and quantity of transactions to be processed by us are not determinable, we view interchange fees to comprise an obligation to stand ready to process as many transactions as the customer requests. Accordingly, the promise to stand ready is accounted for as a single series performance obligation. The Company uses the right to invoice practical expedient and recognizes interchange fee revenue concurrent with the processing of card transactions. Interchange fees are settled in accordance with the card payment network terms and conditions, which is typically within a few days.   The portion of the dollar value of prepaid-stored value cards that consumers do not ultimately redeem are referred to as breakage. In certain card programs where we hold the cardholder funds and expect to be entitled to a breakage amount, we recognize revenue using estimated breakage rates ratably over the estimated card life; provided that a significant reversal of the amount of breakage revenue recognized is not probable, and record adjustments to such estimates when redemption is remote or we are legally defeased of the obligation, if applicable. For each program, we utilize a third party to estimate breakage rates based on historical redemption patterns, market-specific trends, escheatment rules and existing economic conditions. The Company accounts for breakage in accordance with Accounting Standards Update (“ASU”) 2016-04, Liabilities—Extinguishment of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Cards for the recognition of such revenue. Breakage revenue is recorded in other revenue on the consolidated statements of operations and was $33,995 and $86,786 for the three and six months ended June 30, 2024, respectively. Breakage revenue was $0 for the three and six months ended June 30, 2023.   The Company utilizes the remote method of revenue recognition for settlement income whereby the unspent balances will be recognized as revenue at the expiration of the cards or the respective card program. This has primarily been associated with the pharma prepaid business which ended in 2022. The Company records all revenue on a gross basis since it is the primary obligor and establishes the price in the contract arrangement with its customers. The Company is currently under no obligation to refund any fees, and the Company does not currently have any obligations for disputed claim settlements. Given the nature of the Company’s services and contracts, generally it has no contract assets. Settlement income was $0 for the three and six months ended June 30, 2024 and $211 for the three and six months ended June 30, 2023.   Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, fraud charges, and sales and commission expense.
Operating Leases	Operating Leases – The Company determines if a contract is or contains a leasing element at contract inception or the date in which a modification of an existing contract occurs. In order for a contract to be considered a lease, the contract must transfer the right to control the use of an identified asset for a period of time in exchange for consideration. Control is determined to have occurred if the lessee has the right to (i) obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use and (ii) direct the use of the identified asset.    In determining the present value of lease payments at lease commencement date, the Company utilizes its incremental borrowing rate based on the information available, unless the rate implicit in the lease is readily determinable. The liability for operating leases is based on the present value of future lease payments. Operating lease expenses are recorded as rent expense, which is included within selling, general and administrative expenses within the consolidated statements of operations and presented as operating cash outflows within the consolidated statements of cash flows.   Leases with an initial term of 12 months or less are not recorded on the balance sheet, with lease expense for these leases recognized on a straight-line basis over the lease term.
Stock-Based Compensation	Stock-Based Compensation – The Company recognizes compensation expense for all restricted stock awards and stock options. The fair value of restricted stock awards is measured using the grant date trading price of our stock. The fair value of stock options is estimated at the grant date using the Black-Scholes option-pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. We have elected to recognize compensation expense for all options with graded vesting on a straight-line basis over the vesting period of the entire option. The determination of fair value using the Black-Scholes pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility and the risk-free interest rate.
Recently Issued Accounting Pronouncement	Recently Issued Accounting Pronouncement – In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, “Income Taxes – Improvements to Income Tax Disclosures”, requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. We are currently evaluating the impact of the adoption of this standard.   In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures”, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in the ASU require, among other things, disclosure of significant segment expenses that are regularly provided to an entity's chief operating decision maker (“CODM”) and a description of other segment items by reportable segment, as well as disclosure of the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Annual disclosures are required for fiscal years beginning after December 15, 2023 and interim disclosures are required for periods within fiscal years beginning after December 15, 2024. Retrospective application is required, and early adoption is permitted. These requirements had no material impact on our financial statements.

v3.24.2.u1

FIXED ASSETS, NET (Tables)	6 Months Ended
	Jun. 30, 2024
Property, Plant and Equipment [Abstract]
Schedule of fixed assets	Schedule of fixed assets                 June 30, 2024     December 31, 2023   Equipment   $ 2,504,196     $ 2,399,243   Software     433,004       345,057   Furniture and fixtures     762,144       757,662   Website costs     69,881       69,881   Leasehold improvements     236,904       236,904         4,006,129       3,808,747   Less: accumulated depreciation     (2,898,277 )     (2,719,098 ) Fixed assets, net   $ 1,107,852     $ 1,089,649

v3.24.2.u1

INTANGIBLE ASSETS, NET (Tables)	6 Months Ended
	Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of intangible assets	Schedule of intangible assets                 June 30, 2024     December 31, 2023   Patents and trademarks   $ 38,186     $ 38,186   Platform     24,712,437       20,391,118   Customer lists and contracts     1,177,200       1,177,200   Licenses     216,901       216,901   Hosting implementation     43,400       43,400   Contract assets     272,600       150,000         26,460,724       22,016,805   Less: accumulated amortization     (15,750,582 )     (13,202,478 ) Intangible assets, net   $ 10,710,142     $ 8,814,327

v3.24.2.u1

LEASE (Tables)	6 Months Ended
	Jun. 30, 2024
Lease
Schedule of lease maturity	Schedule of lease maturity       2024 (excluding the six months ended June 30, 2024)   $ 285,984   2025     612,006   2026     640,604   2027     640,604   2028     640,604   Thereafter     907,523   Total lease payments     3,727,325   Less: Imputed interest     (604,526 ) Present value of future lease payments     3,122,799   Less: current portion of lease liability     (401,075 ) Long-term portion of lease liability   $ 2,721,724

v3.24.2.u1

CUSTOMER CARD FUNDING LIABILITY (Tables)	6 Months Ended
	Jun. 30, 2024
Revenue from Contract with Customer [Abstract]
Schedule of contract liabilities	Schedule of contract liabilities                 Six Months Ended June,       2024     2023   Beginning balance   $ 92,282,124     $ 80,189,113   Increase (decrease), net     9,797,702       (1,823,268 ) Ending balance   $ 102,079,826     $ 78,365,845

v3.24.2.u1

BASIC AND FULLY DILUTED NET INCOME (LOSS) PER COMMON SHARE (Tables)	6 Months Ended
	Jun. 30, 2024
Net income (loss) per share
Schedule of computation of earning per share	Schedule of computation of earning per share                             Three Months Ended June 30,     Six Months Ended June 30,       2024     2023     2024     2023   Numerator:                         Net income (loss)   $ 697,102     $ (104,156 )   $ 1,006,198     $ (264,286 ) Denominator:                                 Weighted average common shares:                                 Denominator for basic calculation     53,008,286       52,259,002       52,926,462       52,330,829   Weighted average effects of potentially diluted common stock:                                 Stock options (calculated using the treasury method)     1,068,682       –       941,642       –   Unvested restricted stock grants     1,784,818       –       1,506,232       –   Denominator for fully diluted calculation     55,861,786       52,259,002       55,374,336       52,330,829   Net income (loss) per common share:                                 Basic   $ 0.01     $ (0.00 )   $ 0.02     $ (0.01 ) Fully diluted   $ 0.01     $ (0.00 )   $ 0.02     $ (0.01 )                                   Anti-dilutive shares:                                 Stock options     –       1,815,000       –       1,815,000   Unvested restricted stock options     –       3,652,000       –       3,652,000

v3.24.2.u1

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Product Information [Line Items]
Cash equivalents	$ 0		$ 0		$ 0
Cash in excess of federally insured limits	179,881		$ 179,881		$ 59,958,918
Property plant and equipment estimated useful lives			3 to 10 years
Revenues	14,331,599	$ 11,041,051	$ 27,521,673	$ 21,184,341
Other Income [Member] | Breakage Revenue [Member]
Product Information [Line Items]
Revenues	33,995	0	86,786	0
Other Income [Member] | Settlement Revenue [Member]
Product Information [Line Items]
Revenues	$ 0	$ 211	$ 0	$ 211
Intangible Assets [Member]
Product Information [Line Items]
Finite lived intangible asset useful life			3 to 15 years
Contract Assets [Member]
Product Information [Line Items]
Finite lived intangible asset useful life			three to five years
Hosting Implementation [Member]
Product Information [Line Items]
Finite lived intangible asset useful life			three-year
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Pharma Program Customer One [Member]
Product Information [Line Items]
Concentration risk, percentage			23.00%		30.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Pharma Program Customer Two [Member]
Product Information [Line Items]
Concentration risk, percentage			14.00%		12.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Pharma Program Customer Three [Member]
Product Information [Line Items]
Concentration risk, percentage			11.00%

v3.24.2.u1

FIXED ASSETS, NET (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Fixed assets, gross	$ 4,006,129	$ 3,808,747
Less: accumulated depreciation	(2,898,277)	(2,719,098)
Fixed assets, net	1,107,852	1,089,649
Equipment [Member]
Property, Plant and Equipment [Line Items]
Fixed assets, gross	2,504,196	2,399,243
Software Development [Member]
Property, Plant and Equipment [Line Items]
Fixed assets, gross	433,004	345,057
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Fixed assets, gross	762,144	757,662
Website Costs [Member]
Property, Plant and Equipment [Line Items]
Fixed assets, gross	69,881	69,881
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Fixed assets, gross	$ 236,904	$ 236,904

v3.24.2.u1

FIXED ASSETS, NET (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 86,823	$ 107,615	$ 177,923	$ 215,961

v3.24.2.u1

INTANGIBLE ASSETS, NET (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 26,460,724	$ 22,016,805
Less: accumulated amortization	(15,750,582)	(13,202,478)
Intangible assets, net	10,710,142	8,814,327
Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	38,186	38,186
Platform [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	24,712,437	20,391,118
Customer Lists And Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	1,177,200	1,177,200
Licenses [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	216,901	216,901
Hosting Implementation [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	43,400	43,400
Contract Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 272,600	$ 150,000

v3.24.2.u1

INTANGIBLE ASSETS, NET (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 1,352,799	$ 850,386	$ 2,548,104	$ 1,587,056
Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset useful life			3 to 15 years

v3.24.2.u1

LEASE (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Lease
2024 (excluding the six months ended June 30, 2024)	$ 285,984
2025	612,006
2026	640,604
2027	640,604
2028	640,604
Thereafter	907,523
Total lease payments	3,727,325
Less: Imputed interest	(604,526)
Present value of future lease payments	3,122,799
Less: current portion of lease liability	(401,075)	$ (383,699)
Long-term portion of lease liability	$ 2,721,724	$ 2,928,078

v3.24.2.u1

LEASE (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Lease
Lease term	10 years		10 years
Lease term option to extend			two optional extensions of five years each
Remaining lease term	5 years 10 months 24 days		5 years 10 months 24 days
Discount rate	6.00%		6.00%
Operating lease cost	$ 189,020	$ 196,214	$ 378,039	$ 379,435

v3.24.2.u1

CUSTOMER CARD FUNDING LIABILITY (Details) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Revenue from Contract with Customer [Abstract]
Beginning balance	$ 92,282,124	$ 80,189,113
Increase (decrease), net	9,797,702	(1,823,268)
Ending balance	$ 102,079,826	$ 78,365,845

v3.24.2.u1

CUSTOMER CARD FUNDING LIABILITY (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Revenue from Contract with Customer [Abstract]
Revenue recognized, included in contract liability	$ 2,319,630	$ 2,020,224

v3.24.2.u1

COMMON STOCK (Details Narrative) - USD ($)	3 Months Ended			6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Class of Stock [Line Items]
Common stock, shares authorized	150,000,000			150,000,000		150,000,000
Common stock, par value	$ 0.001			$ 0.001		$ 0.001
Preferred stock, shares authorized	25,000,000			25,000,000		25,000,000
Preferred stock, par value	$ 0.001			$ 0.001		$ 0.001
Common stock, shares issued	53,782,382			53,782,382		53,452,382
Common stock, shares outstanding	53,084,374			53,084,374
Preferred stock, shares outstanding	0			0		0
Stock-based compensation expense	$ 670,138	$ 830,426		$ 1,334,089	$ 1,448,670
Proceeds from exercise of stock options				$ 24,000	$ 9,600
Repurchase of common stock, value		$ 311,649	$ 666,018
Treasury Stock, Common [Member]
Class of Stock [Line Items]
Repurchase of common stock, shares		119,558			319,558
Repurchase of common stock, value		$ 311,649			$ 977,667
Weighted average price		$ 2.61			$ 3.06
Vested Stock Awards And Stock Options Exercised [Member]
Class of Stock [Line Items]
Exercise of stock options, shares	116,000	74,000		330,000	192,000
Restricted Stock [Member]
Class of Stock [Line Items]
Restricted stock granted	180,000	80,000		480,000	350,000
Weighted average grant date fair value	$ 4.44	$ 3.40		$ 3.53	$ 2.96
Restricted stock awards granted vest over a period	five years	two months to five years		five years	two months to five years

v3.24.2.u1

BASIC AND FULLY DILUTED NET INCOME (LOSS) PER COMMON SHARE (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Numerator:
Net income (loss)	$ 697,102	$ (104,156)	$ 1,006,198	$ (264,286)
Weighted average common shares:
Denominator for basic calculation	53,008,286	52,259,002	52,926,462	52,330,829
Weighted average effects of potentially diluted common stock:
Stock options (calculated using the treasury method)	1,068,682	0	941,642	0
Unvested restricted stock grants	1,784,818	0	1,506,232	0
Denominator for fully diluted calculation	55,861,786	52,259,002	55,374,336	52,330,829
Net income (loss) per common share:
Basic	$ 0.01	$ (0.00)	$ 0.02	$ (0.01)
Fully diluted	$ 0.01	$ (0.00)	$ 0.02	$ (0.01)
Anti-dilutive shares:
Stock options	0	1,815,000	0	1,815,000
Unvested restricted stock options	0	3,652,000	0	3,652,000

v3.24.2.u1

BASIC AND FULLY DILUTED NET INCOME (LOSS) PER COMMON SHARE (Details Narrative) - shares	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023
Potential Common Share Equivalents [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares	0	0

v3.24.2.u1

COMMITMENTS AND CONTINGENCIES (Details Narrative)	Jan. 04, 2024 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Settlement amount	$ 3,750,000

v3.24.2.u1

INCOME TAX (Details Narrative) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Other receivables	$ 1,650,201	$ 1,585,983
US Federal Government [Member]
Other receivables	$ 1,129,164	$ 1,129,164

---