Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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 September 30, 2023

☐ 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: 52,754,374 shares as of November 3, 2023.

PAYSIGN, INC.

FORM 10-Q REPORT

INDEX

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements	3

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3. Quantitative and Qualitative Disclosures About Market Risk	23

Item 4. Controls and Procedures	23

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	24

Item 1A. Risk Factors	25

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	25

Item 5. Other Information	25

Item 6. Exhibits	26

SIGNATURES	27

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PAYSIGN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30, 2023 (Unaudited)			December 31, 2022 (Audited)
ASSETS
Current assets
Cash	$	9,936,627		$	9,708,238
Restricted cash		78,022,518			80,189,113
Accounts receivable, net		7,278,098			4,680,991
Other receivables		1,372,655			1,439,251
Prepaid expenses and other current assets		2,245,751			1,699,808
Total current assets		98,855,649			97,717,401

Fixed assets, net		1,149,497			1,255,292
Intangible assets, net		7,884,171			5,656,722
Operating lease right-of-use asset		3,317,016			3,614,838

Total assets	$	111,206,333		$	108,244,253

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	11,609,898		$	8,088,660
Operating lease liability, current portion		378,001			361,408
Customer card funding		78,022,518			80,189,113
Total current liabilities		90,010,417			88,639,181

Operating lease liability, long term portion		3,026,167			3,311,777

Total liabilities		93,036,584			91,950,958

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; 53,382,382 and 52,650,382 issued at September 30, 2023 and December 31, 2022, respectively		53,382			52,650
Additional paid-in capital		21,304,569			19,137,281
Treasury stock, at cost; 698,008 and 303,450 shares, respectively		(1,277,884	)		(150,000	)
Accumulated deficit		(1,910,318	)		(2,746,636	)
Total stockholders' equity		18,169,749			16,293,295

Total liabilities and stockholders' equity	$	111,206,333		$	108,244,253

See accompanying notes to unaudited condensed consolidated financial statements.

PAYSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023			2022
Revenues
Plasma industry	$	11,061,712	$	9,829,811	$	30,436,240		$	25,030,376
Pharma industry		1,026,270		693,353		2,345,068			2,273,232
Other		312,343		73,264		803,358			112,235
Total revenues		12,400,325		10,596,428		33,584,666			27,415,843

Cost of revenues		6,068,207		4,847,780		16,589,139			11,971,135

Gross profit		6,332,118		5,748,648		16,995,527			15,444,708

Operating expenses
Selling, general and administrative		4,696,509		4,386,757		14,946,584			13,283,645
Depreciation and amortization		1,045,177		738,883		2,848,194			2,131,234
Total operating expenses		5,741,686		5,125,640		17,794,778			15,414,879

Income (loss) from operations		590,432		623,008		(799,251	)		29,829

Other income
Interest income, net		615,324		265,284		1,800,388			349,847

Income before income tax provision		1,205,756		888,292		1,001,137			379,676
Income tax provision		105,152		36,183		164,819			64,996

Net income	$	1,100,604	$	852,109	$	836,318		$	314,680

Net income per share
Basic	$	0.02	$	0.02	$	0.02		$	0.01
Diluted	$	0.02	$	0.02	$	0.02		$	0.01

Weighted average common shares
Basic		52,548,101		52,142,225		52,404,049			51,968,496
Diluted		53,484,674		53,365,025		54,286,492			52,676,707

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						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

Stock issued upon vesting of restricted stock		540,000		540		(540	)		–			–			–			–
Stock-based compensation		–		–		709,750			–			–			–			709,750
Repurchase of common stock		–		–		–			(75,000	)		(150,217	)		–			(150,217	)
Net income		–		–		–			–			–			1,100,604			1,100,604

Balance, September 30, 2023		53,382,382	$	53,382	$	21,304,569			(698,008	)	$	(1,277,884	)	$	(1,910,318	)	$	18,169,749

	Common Stock				Additional Paid-in			Treasury Stock						Accumulated			Total Stockholders’
	Shares		Amount		Capital			Shares			Amount			Deficit			Equity
Balance, December 31, 2021		52,095,382	$	52,095	$	16,860,119			(303,450	)	$	(150,000	)	$	(3,774,411	)	$	12,987,803

Stock issued upon vesting of restricted stock		123,000		123		(123	)		–			–			–			–
Stock-based compensation		–		–		569,502			–			–			–			569,502
Net loss		–		–		–			–			–			(309,395	)		(309,395	)

Balance, March 31, 2022		52,218,382		52,218		17,429,498			(303,450	)		(150,000	)		(4,083,806	)		13,247,910

Stock issued upon vesting of restricted stock		105,000		105		(105	)		–			–			–			–
Stock-based compensation		–		–		488,287			–			–			–			488,287
Net loss		–		–		–			–			–			(228,034	)		(228,034	)

Balance, June 30, 2022		52,323,382	$	52,323	$	17,917,680			(303,450	)	$	(150,000	)	$	(4,311,840	)	$	13,508,163

Stock issued upon vesting of restricted stock		138,000		138		(138	)		–			–			–			–
Stock-based compensation		–		–		566,205			–			–			–			566,205
Net income		–		–		–			–			–			852,109			852,109

Balance, September 30, 2022		52,461,382	$	52,461	$	18,483,747			(303,450	)	$	(150,000	)	$	(3,459,731	)	$	14,926,477

See accompanying notes to unaudited condensed consolidated financial statements.

PAYSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities:
Net income	$	836,318		$	314,680
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on disposal assets		(4,862	)		–
Stock-based compensation expense		2,158,420			1,623,994
Depreciation and amortization		2,848,194			2,131,234
Noncash lease expense		297,822			282,193
Changes in operating assets and liabilities:
Accounts receivable		(2,597,107	)		(639,045	)
Other receivables		66,596			(420,033	)
Prepaid expenses and other current assets		(545,943	)		(711,185	)
Accounts payable and accrued liabilities		3,556,238			850,358
Operating lease liability		(269,017	)		(253,390	)
Customer card funding		(2,166,595	)		27,775,501
Net cash provided by operating activities		4,180,064			30,954,307

Cash flows from investing activities:
Purchase of fixed assets		(218,133	)		(75,661	)
Capitalization of internally developed software		(4,781,853	)		(2,508,348	)
Net cash used in investing activities		(4,999,986	)		(2,584,009	)

Cash flows from financing activities:
Proceeds from exercise of options		9,600			–
Repurchase of common stock		(1,127,884	)		–
Net cash used in financing activities		(1,118,284	)		–

Net change in cash and restricted cash		(1,938,206	)		28,370,298
Cash and restricted cash, beginning of period		89,897,351			68,671,070

Cash and restricted cash, end of period	$	87,959,145		$	97,041,368

Cash and restricted cash reconciliation:
Cash	$	9,936,627		$	7,981,953
Restricted cash		78,022,518			89,059,415
Total cash and restricted cash	$	87,959,145		$	97,041,368

Supplemental cash flow information:
Non-cash financing activities
Cash paid for taxes	$	185,310		$	27,374
Interest paid	$	–		$	221

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, 2022. 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 nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

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 September 30, 2023 and December 31, 2022.

Restricted Cash – At September 30, 2023 and December 31, 2022, restricted cash consisted of funds held specifically for our card product and pharma programs that are contractually restricted to use. The Company includes changes in restricted cash balances with cash and cash equivalents when reconciling the beginning and ending total amounts in our condensed consolidated statements of cash flows.

Concentrations of Credit Risk – Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and restricted cash. 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. As of September 30, 2023 and December 31, 2022, the Company had approximately $40,208,706 and $43,516,155 in excess of federally insured bank account limits, respectively.

As of September 30, 2023, the Company also has a concentration of accounts receivable risk, as two pharma program customers associated with our pharma patient affordability programs each individually represent 20% and 19% of our accounts receivable balance. Two pharma program customers each individually represented 35% and 24% of our accounts receivable balance on December 31, 2022.

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 September 30, 2023 and December 31, 2022, 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.

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 Company utilizes the remote method of revenue recognition for settlement income whereby the unspent balances will be recognized as revenue at the expiration of the cards and the respective program. This has historically 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.

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

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

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

Leases with an initial term of 12 months or less are not recorded on the balance sheet, with lease expenses 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 option 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 Adopted Accounting Pronouncements – In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which provides updated guidance on how an entity should measure credit losses on all financial instruments carried at amortized cost (including loans held for investment and held-to-maturity debt securities, as well as trade receivables, reinsurance recoverables, and receivables that relate to repurchase agreements and securities lending agreements), a lessor’s net investments in leases, and off-balance sheet credit exposures not accounted for as insurance or as derivatives, including loan commitments, standby letters of credit, and financial guarantees. Subsequently, in November 2018 the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments–Credit Losses, which clarified that receivables arising from operating leases are not within the scope of Subtopic 326-20, but instead should be accounted for in accordance with Topic 842, Leases. In March 2022 the FASB issued ASU No. 2022-02, Financial Instruments—Credit Losses: Troubled Debt Restructurings and Vintage Disclosures which clarified accounting treatment required for trouble debt restructurings by creditors and enhanced disclosures for write-offs. The new standard and related amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We adopted this guidance; however, there was no material impact of this adoption on the Company’s consolidated financial position, results of operations, or cash flows.

2. FIXED ASSETS, NET

Fixed assets consist of the following:

Schedule of fixed assets
	September 30, 2023		December 31, 2022
Equipment	$	2,375,156	$	2,161,424
Software		331,852		327,452
Furniture and fixtures		757,662		757,661
Website costs		69,881		69,881
Leasehold improvements		229,772		229,772
		3,764,323		3,546,190
Less: accumulated depreciation		2,614,826		2,290,898
Fixed assets, net	$	1,149,497	$	1,255,292

Depreciation expense for the three months ended September 30, 2023 and 2022 was $107,967 and $113,758, respectively. Depreciation expense for the nine months ended September 30, 2023 and 2022 was $323,928 and $383,980, respectively.

3. INTANGIBLE ASSETS, NET

Intangible assets consist of the following:

Schedule of intangible assets
	September 30, 2023		December 31, 2022
Patents and trademarks	$	38,186	$	38,186
Platform		18,394,468		13,656,014
Customer lists and contracts		1,177,200		1,177,200
Licenses		209,282		209,282
Hosting implementation		43,400		–
Contract assets		150,000		185,000
		20,012,536		15,265,682
Less: accumulated amortization		12,128,365		9,608,960
Intangible assets, net	$	7,884,171	$	5,656,722

Intangible assets are amortized over their useful lives ranging from periods of 3 to 15 years. Amortization expense for the three months ended September 30, 2023 and 2022 was $937,210 and $625,125, respectively. Amortization expense for the nine months ended September 30, 2023 and 2022 was $2,524,266 and $1,747,254, respectively.

4. LEASE

The Company entered into an operating lease for office space which became effective in June 2020. The lease term is 10 years from the effective date and allows for two optional extensions of five years each. The two optional extensions are not recognized as part of the right-of-use asset or lease liability since it is not reasonably certain that the Company will extend this lease. As of September 30, 2023, the remaining lease term was 6.67 years and the discount rate was 6%.

Operating lease cost included in selling, general and administrative expenses was $186,470 and $565,905 for the three and nine months ended September 30, 2023, respectively. Operating lease cost included in selling, general and administrative expenses was $184,214 and $551,764 for the three and nine months ended September 30, 2022, respectively.

The following is the lease maturity analysis of our operating lease as of September 30, 2023:

Year ending December 31,

Schedule of operating lease maturities
2023 (excluding the nine months ended September 30, 2023)	$	142,993
2024		571,968
2025		612,006
2026		640,604
2027		640,604
Thereafter		1,548,127
Total lease payments		4,156,302
Less: Imputed interest		(752,134	)
Present value of future lease payments		3,404,168
Less: current portion of lease liability		(378,001	)
Long-term portion of lease liability	$	3,026,167

5. CUSTOMER CARD FUNDING LIABILITY

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

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

Schedule of contract liabilities
	Nine Months Ended September 30,
	2023			2022
Beginning balance	$	80,189,113		$	61,283,914
Increase (decrease), net		(2,166,595	)		27,775,501
Ending balance	$	78,022,518		$	89,059,415

The amount of revenue recognized during the nine months ended September 30, 2023 and 2022 that was included in the opening contract liability for prepaid cards was $2,020,224 and $1,485,005 respectively.

6. COMMON STOCK

At September 30, 2023, 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 53,382,382 shares of common stock issued and 52,684,374 shares of common stock outstanding, and no shares of preferred stock outstanding.

Stock-based compensation expense related to Company grants for the three and nine months ended September 30, 2023 was $709,750 and $2,158,420, respectively. Stock-based compensation expense for the three and nine months ended September 30, 2022 was $566,205 and $1,623,994, respectively.

2023 Transactions - During the three and nine months ended September 30, 2023 the Company issued 540,000 and 732,000 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 nine months ended September 30, 2023 the Company repurchased 75,000 and 394,558 shares of its common stock at a cost of $150,217 or weighted average price of $2.00 and $1,127,884 or weighted average price of $2.86 per share, respectively.

The Company also granted 0 and 350,000 restricted stock awards, respectively during the three and nine months ended September 30, 2023. For the stock awards granted, the weighted average grant date fair value was $2.96 and vest over a period of two months to five years.

2022 Transactions - During the three and nine months ended September 30, 2022 the Company issued 138,000 and 366,000 shares, respectively, of common stock for vested stock awards. No stock options were exercised.

The Company also granted 2,430,000 and 2,530,000 restricted stock awards, respectively during the three and nine months ended September 30, 2022. For the stock awards granted, the weighted average grant date fair value was $1.81 and vest over a period of one to five years.

7. BASIC AND FULLY DILUTED NET INCOME PER COMMON SHARE

The following table sets forth the computation of basic and fully diluted net income per common share for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net income	$	1,100,604	$	852,109	$	836,318	$	314,680
Denominator:
Weighted average common shares:
Denominator for basic calculation		52,548,101		52,142,225		52,404,049		51,968,496
Weighted average effects of potentially diluted common stock:
Stock options (calculated using the treasury method)		472,791		594,553		745,193		457,256
Unvested restricted stock grants		463,782		628,247		1,137,250		250,955
Denominator for fully diluted calculation		53,484,674		53,365,025		54,286,492		52,676,707
Net income per common share:
Basic	$	0.02	$	0.02	$	0.02	$	0.01
Fully diluted	$	0.02	$	0.02	$	0.02	$	0.01

8. COMMITMENTS AND CONTINGENCIES

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

The Company has been named as a defendant in three complaints filed in the United States District Court for the District of Nevada: Yilan Shi v. Paysign, Inc. et. al., filed on March 19, 2020 (“Shi”), Lorna Chase v. Paysign, Inc. et. al., filed on March 25, 2020 (“Chase”), and Smith & Duvall v. Paysign, Inc. et. al., filed on April 2, 2020 (collectively, the “Complaints” or “Securities Class Action”). Smith & Duvall v. Paysign, Inc. et. al. was voluntarily dismissed on May 21, 2020. On May 18, 2020, the Shi plaintiffs and another entity called the Paysign Investor Group each filed a motion to consolidate the remaining Shi and Chase actions and to be appointed lead plaintiff. The Complaints are putative class actions filed on behalf of a class of persons who acquired the Company’s common stock from March 19, 2019 through March 31, 2020, inclusive. The Complaints generally allege that the Company, Mark R. Newcomer, and Mark Attinger violated Section 10(b) of the Exchange Act, and that Messrs. Newcomer and Attinger violated Section 20(a) of the Exchange Act, by making materially false or misleading statements, or failing to disclose material facts, regarding the Company’s internal control over financial reporting and its financial statements. The Complaints seek class action certification, compensatory damages, and attorney’s fees and costs. On December 2, 2020, the Court consolidated Shi and Chase as In re Paysign, Inc. Securities Litigation and appointed the Paysign Investor Group as lead plaintiff. On January 12, 2021, Plaintiffs filed an Amended Complaint in the consolidated action. Defendants filed a Motion to Dismiss the Amended Complaint on March 15, 2021, which Plaintiffs opposed via an opposition brief filed on April 29, 2021, to which Defendants replied on June 1, 2021. On February 9, 2023, the Court granted in part and denied in part Defendants’ Motion to Dismiss. As of the date of this filing, the Company cannot give any meaningful estimate of likely outcome or damages.

The Company has also been named as a nominal defendant in two stockholder derivative actions in the United States District Court for the District of Nevada. The first derivative action is entitled Andrzej Toczek, derivatively on behalf of Paysign, Inc. v. Mark R. Newcomer, et al. and was filed on September 17, 2020. This action alleges violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, and waste, largely in connection with the failure to correct information technology controls over financial reporting alleged in the Securities Class Action, thereby causing the Company to face exposure in the Securities Class Action. The complaint also alleges insider trading violations against certain individual defendants. On December 16, 2020, the Court approved a stipulation staying the action until the Court in the consolidated Securities Class Action issues a ruling on the Motion to Dismiss. The second derivative action is entitled John K. Gray, derivatively on behalf of Paysign, Inc. v. Mark Attinger, et al. and was filed on May 9, 2022. This action involves the same alleged conduct raised in the Toczek action and asserts claims for breach of fiduciary duty in connection with financial reporting, breach of fiduciary duty in connection with alleged insider trading against certain individual defendants, and unjust enrichment. On June 3, 2022, the Court approved a stipulation staying the action until the Court in the consolidated Securities Class Action issues a ruling on the Motion to Dismiss. On May 10, 2023, the Toczek and Gray actions were consolidated. The Company anticipates filing motions to dismiss given the ruling on the Motion to Dismiss in the consolidated cases. As of the date of this filing, the Company cannot give any meaningful estimate of likely outcome or damages.

The Company has also been named as a nominal defendant in a stockholder derivative action in state court in Clark County, Nevada, filed on October 2, 2023, entitled Simone Blanchette, derivatively on behalf of Paysign, Inc. v. Mark Newcomer, et al. That complaint makes substantially the same allegations as made in the consolidated Toczek and Gray actions discussed above, and also contains a claim that the individual defendants violated Section 10(b) and Rule 10b-5 promulgated thereunder. On that basis, on October 10, 2023, the defendants filed a Notice of Removal of the case to federal court. As of the date of this filing, the Company cannot give any meaningful estimate of likely outcome or damages.

9. RELATED PARTY

A former member of our Board of Directors who served through December 31, 2022 is also a partner in a law firm that the Company engages for services to review regulatory filings and for various other legal matters. During the three and nine months ended September 30, 2022, the Company incurred legal expenses of $27,561 and $109,314, respectively, with the related party law firm.

10. INCOME TAX

The effective tax rate (income tax provision as a percentage of income before income tax provision) was 8.7% for the three months ended September 30, 2023, as compared to 4.1% for the three months ended September 30, 2022. The effective tax rate was 16.5% and 17.1% for the nine months ended September 30, 2023 and 2022, respectively. The effective tax rates vary, primarily as a result of the full valuation on our deferred tax assets in both the current and prior period and the tax benefit related to our stock-based compensation. As of September 30, 2023, management believes that it is more-likely-than-not that the Company’s net deferred tax assets would not be realized in the near future and the Company would continue to record a full valuation allowance on its 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 September 30, 2023 and December 31, 2022, the Company recorded $836,734 and $1,296,488, respectively in other receivables on the condensed consolidated balance sheet related to U.S. Federal Government refunds.

11. SUBSEQUENT EVENTS

The Company discloses subsequent events that provide evidence about conditions that did not change the consolidated financial statements at the balance sheet date but have a significant effect on the financial statements at the time of occurrence or on future operations of the company.

On September 30, 2023, the Company had uninsured deposits at our financial institution in the amount of $40,208,706. We have since initiated a program called deposit swapping with our financial institution, whereby the financial institution utilizes a third party who is participating in reciprocal deposit networks as an alternative way 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, whereby the monies are fully FDIC insured.

We have evaluated subsequent events from the balance sheet date through November 8, 2023, the date at which the condensed financial statements were issued and determined that there were no additional items that require adjustment to or disclosure in the condensed financial statement.

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 shareholders and the public informed about our operations, may from time-to-time issue certain statements, either in writing or orally, that contain, or may contain, Forward-Looking Statements. Although we believe that the expectations reflected in such Forward-Looking Statements are reasonable, we can give no assurance that such expectations will prove to have been correct. In addition, any statements that refer to expectations, projections, estimates, forecasts, or other characterizations of future events or circumstances are Forward-Looking Statements. These Forward-Looking Statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the Forward-Looking Statements. Such important factors (“Important Factors”) and other factors are disclosed in this report, including those factors discussed in “Part II - Item 1A. Risk Factors.” All prior and subsequent written and oral Forward-Looking Statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the Important Factors described below that could cause actual results to differ materially from our expectations as set forth in any Forward-Looking Statement made by or on behalf of us. You are cautioned not to place undue reliance on these Forward-Looking Statements, which relate only to events as of the date on which the statements are made. We undertake no obligation to publicly revise these Forward-Looking Statements to reflect events or circumstances that arise after the date hereof. You should refer to and carefully review the information in future documents we file with the Securities and Exchange Commission.

Overview

Paysign, Inc. (the “Company,” “Paysign,” “we” or “our”), headquartered in Nevada, was incorporated on August 24, 1995, and trades under the symbol PAYS on The Nasdaq Stock Market LLC. 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, 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. Settlement income is recorded at the expiration of the card program and relates solely 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 deploy 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.

For the remainder of 2023, we plan to continue to invest additional funds in technology improvements, sales and marketing, customer service, and regulatory compliance. From time to time, we evaluate raising capital to enable us to diversify into new market verticals. If we do not raise new capital, we believe that we will still be able to support our existing business and expand into new vertical markets using internally generated funds.

Results of Operations

Comparison of the Three Months Ended September 30, 2023 to the Three Months Ended September 30, 2022

The following table summarizes our consolidated financial results for the three months ended September 30, 2023 in comparison to the three months ended September 30, 2022:

	Three Months Ended September 30, (Unaudited)				Variance
	2023		2022		$			%
Revenues
Plasma industry	$	11,061,712	$	9,829,811	$	1,231,901			12.5%
Pharma industry		1,026,270		693,353		332,917			48.0%
Other		312,343		73,264		239,079			326.3%
Total revenues		12,400,325		10,596,428		1,803,897			17.0%
Cost of revenues		6,068,207		4,847,780		1,220,427			25.2%
Gross profit		6,332,118		5,748,648		583,470			10.1%
Gross margin %		51.1%		54.3%

Operating expenses
Selling, general and administrative		4,696,509		4,386,757		309,752			7.1%
Depreciation and amortization		1,045,177		738,883		306,294			41.5%
Total operating expenses		5,741,686		5,125,640		616,046			12.0%
Income from operations	$	590,432	$	623,008	$	(32,576	)		(5.2%	)

Other income	$	615,324	$	265,284	$	350,040			131.9%

Net Income	$	1,100,604	$	852,109	$	248,495			29.2%
Net margin %		8.9%		8.0%

The increase in total revenues of $1,803,897 for the three months ended September 30, 2023 compared to the same period in the prior year consisted primarily of a $1,231,901 increase in Plasma revenue, a $332,917 increase in Pharma revenue, and a $239,079 increase in Other revenue. The increase in Plasma revenue was primarily due to an increase in the number of plasma centers and donations, 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 of plasma protein therapies. The increase in Pharma revenue was primarily due to the launch of new pharma patient affordability programs. The increase in Other revenue was primarily due to the growth of our payroll program and launch of new retail and other prepaid card disbursement programs.

Cost of revenues for the three months ended September 30, 2023 increased $1,220,427 compared to the same period in the prior year. Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, and sales and commission expense. Cost of revenues increased during the third quarter of 2023 primarily due to an increase in cardholder usage activity and associated network expenses such as interchange and ATM costs, an increase in plastics and collateral related to an increase in the number of unique card loads, an increase in network expenses and sales commissions related to the growth in our pharma patient affordability business, and an increase in customer service expenses associated with wage inflation pressures and the overall growth in our business, offset by a decline in postage.

Gross profit for the three months ended September 30, 2023 increased $583,470 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 which are provided by third parties who charge us based on the number of active cards outstanding and the number of 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 the termination of our pharma prepaid business in 2022, price increases by many of our third party service providers, and an increase in customer service expenses mentioned above. The decrease in gross margin resulted from the aforementioned factors.

Selling, general and administrative expenses (“SG&A”) for the three months ended September 30, 2023 increased $309,752 compared to the same period in the prior year and consisted primarily of an increase in compensation and benefits of approximately $385,000 due to continued hiring to support the Company’s growth, a tight labor market and increased benefit costs, an increase in stock based compensation expense of approximately $144,000, an increase in technologies and telecom of approximately $79,000, an increase in non-IT professional services of approximately $54,000, and an increase in travel and entertainment of approximately $42,000. This increase was offset by a $391,000 increase in the amount of capitalized platform development costs and a decrease in all other operating expenses of approximately $4,000.

Depreciation and amortization expense for the three months ended September 30, 2023 increased $306,294 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 the continued enhancements to our processing platform.

For the three months ended September 30, 2023, we recorded income from operations of $590,432 representing a decline of $32,576 compared to income from operations of $623,008 during the same period last year related to the aforementioned factors.

Other income for the three months ended September 30, 2023, increased $350,040 primarily related to an increase in interest rates and the associated interest income received on higher average bank account balances at our sponsor bank.

We recorded an income tax expense of $105,152 for the three months ended September 30, 2023, which equates to an effective tax rate of 8.7% primarily as a result of the full valuation on our deferred tax assets in both the current and prior period and the tax benefit related to our stock-based compensation. We recorded an income tax expense of $36,183 for the three months ended September 30, 2022, which equates to an effective tax rate of 4.1% primarily as a result of the full valuation on our deferred tax asset, the tax benefit related to our stock-based compensation expense and the pretax loss during the period.

The net income for the three months ended September 30, 2023 was $1,100,604, an improvement of $248,495 compared to the net income of $852,109 for the three months ended September 30, 2022. The overall change in net income relates to the aforementioned factors.

Comparison of the Nine Months Ended September 30, 2023 to the Nine Months Ended September 30, 2022

The following table summarizes our consolidated financial results for the nine months ended September 30, 2023 in comparison to the nine months ended September 30, 2022:

	Nine Months Ended September 30, (unaudited)					Variance
	2023			2022		$			%
Revenues
Plasma industry	$	30,436,240		$	25,030,376	$	5,405,864			21.6%
Pharma industry		2,345,068			2,273,232		71,836			3.2%
Other		803,358			112,235		691,123			615.8%
Total revenues		33,584,666			27,415,843		6,168,823			22.5%
Cost of revenues		16,589,139			11,971,135		4,618,004			38.6%
Gross profit		16,995,527			15,444,708		1,550,819			10.0%
Gross margin %		50.6%			56.3%

Operating expenses
Selling, general and administrative		14,946,584			13,283,645		1,662,939			12.5%
Depreciation and amortization		2,848,194			2,131,234		716,960			33.6%
Total operating expenses		17,794,778			15,414,879		2,379,899			15.4%
Income (loss) from operations	$	(799,251	)	$	29,829	$	(829,080	)		(2779.4%	)

Other income	$	1,800,388		$	349,847	$	1,450,541			414.6%

Net income	$	836,318		$	314,680	$	521,638			165.8%
Net margin %		2.5%			1.1%

The increase in total revenues of $6,168,823 for the nine months ended September 30, 2023 compared to the same period in the prior year consisted primarily of a $5,405,864 increase in Plasma revenue, a $71,836 increase in Pharma revenue and a $691,123 increase in Other revenue. The increase in Plasma revenue was primarily due to an increase in the number of plasma centers and donations, and, consequently, dollars loaded to cards, cardholder fees, and interchange, as COVID-19 restrictions such as donation center closures, mobility restrictions and Federal government stimulus measures were relaxed compared to the prior year period. The increase in Pharma revenue was due to the launch of new pharma patient affordability programs and growth of existing pharma patient affordability programs. The increase in Other revenue was primarily driven by the launch of new payroll, retail, and other prepaid card disbursement programs.

Cost of revenues for the nine months ended September 30, 2023 increased $4,618,004 compared to the same period in the prior year. Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, and sales and commission expense. Cost of revenues increased during the nine months of 2023 primarily due to the increase in cardholder usage activity and associated network expenses such as interchange and ATM costs, an increase in plastics, collateral and postage expenses related to new plasma donations and changes to collateral materials, the increase in network expenses related to our pharma patient affordability business, and the increase in customer service expenses associated with wage inflation pressures and the overall growth in our business, offset by a decline in sales commissions related to the restructuring of an agreement in the first quarter of 2022.

Gross profit for the nine months ended September 30, 2023 increased $1,550,819 compared to the same period in the prior year resulting from the increase in Plasma revenue, the restructuring of an agreement mentioned above, and the beneficial impact of a variable cost structure as many of the plasma transaction costs are provided by third parties who charge us based on the number of transactions that occurred during the period. The increase in gross profit was offset by the termination of our pharma prepaid business in 2022, price increases by many of our third party service providers, a new direct network connection with Mastercard, and an increase in customer service expenses mentioned above. The decrease in gross margin resulted from the aforementioned factors.

SG&A for the nine months ended September 30, 2023 increased $1,662,939 compared to the same period in the prior year and consisted primarily of an increase in compensation and benefits of approximately $2,072,000 due to continued hiring to support the Company’s growth, a tight labor market and increased benefit costs, an increase in stock based compensation expense of approximately $534,000, an increase in technologies and telecom of approximately $206,000, and an increase in non-IT outside professional services of approximately $171,000. This increase was offset by an increase of approximately $1,247,000 in capitalized platform development costs, a decrease in all other operating expenses of approximately $20,000, and an increase in the reclass of customer care expenses of approximately $53,000 into cost of revenues.

Depreciation and amortization expense for the nine months ended September 30, 2023 increased $716,960 compared to the same period in the prior year. The increase in depreciation and amortization expense was primarily due to continued capitalization of development costs and equipment purchases related to the continued enhancements to our processing platform.

For the nine months ended September 30, 2023 we recorded a loss from operations of $799,251 representing a decrease of $829,080 compared to the same period last year related to the aforementioned factors.

Other income for the nine months ended September 30, 2023 increased $1,450,541 related to an increase in interest rates and the associated interest income received on higher average bank account balances at our sponsor bank.

We recorded an income tax expense of $164,819 for the nine months ended September 30, 2023 which equates to an effective tax rate of 16.5% primarily as a result of the full valuation on our deferred tax assets in both the current and prior period and the tax benefit related to our stock-based compensation. We recorded an income tax expense of $64,996 for the nine months ended September 30, 2022, which equates to an effective tax rate of 17.1% primarily as a result of the full valuation on our deferred tax asset, the tax benefit related to our stock-based compensation expense and the pretax loss during the period.

The net income for the nine months ended September 30, 2023 was $836,318, an improvement of $521,638 compared to the net income of $314,680 for the nine months ended September 30, 2022. 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 $448 million and $462 million for the three months ended September 30, 2023 and 2022, 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: Equals revenues, gross profit or net income conversion rates of gross dollar volume loaded on cards which are calculated by taking our total revenues, gross profit or net income, respectively, as a numerator and dividing by the gross dollar volume loaded on cards as a denominator. As we derive a number of our financial results from cardholder fees, we utilize these metrics as an indication of the amount of money that is added to cards and will eventually be converted to revenues, gross profit and net income. Our total revenue conversion rates for the three months ended September 30, 2023 and 2022 were 2.77% or 277 basis points (“bps”), and 2.29% or 229 bps, respectively, of gross dollar volume loaded on cards. Our total gross profit conversion rates for the three months ended September 30, 2023 and 2022 were 1.41% or 141 bps, and 1.24% or 124 bps, respectively, of gross dollar volume loaded on cards. Our net income conversion rates for the three months ended September 30, 2023 and 2022 were 0.25% or 25 bps, and 0.18% or 18 bps, respectively, of gross dollar volume loaded on cards.

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

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Reconciliation of Adjusted EBITDA to net income:
Net income	$	1,100,604		$	852,109		$	836,318		$	314,680
Income tax provision		105,152			36,183			164,819			64,996
Interest income, net		(615,324	)		(265,284	)		(1,800,388	)		(349,847	)
Depreciation and amortization		1,045,177			738,883			2,848,194			2,131,234
EBITDA		1,635,609			1,361,891			2,048,943			2,161,063
Stock-based compensation		709,750			566,205			2,158,420			1,623,994
Adjusted EBITDA	$	2,345,359		$	1,928,096		$	4,207,363		$	3,785,057

Liquidity and Capital Resources

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

	Nine Months Ended September 30, (Unaudited)
	2023			2022
Net cash provided by operating activities	$	4,180,064		$	30,954,307
Net cash used in investing activities		(4,999,986	)		(2,584,009	)
Net cash used in financing activities		(1,118,284	)		–
Net increase in cash and restricted cash	$	(1,938,206	)	$	28,370,298

Comparison of Nine months Ended September 30, 2023 and 2022

During the nine months ended September 30, 2023 and 2022, we financed our operations through internally generated funds.

Cash provided by operating activities decreased $26,774,243 for the nine months ended September 30, 2023, as compared to the same period in the prior year. The decrease is primarily due to changes in cash flows from operating assets and liabilities, particularly decreases in customer card funding of $29,942,096 related to the termination of our plasma prepaid business and timing of customer deposits for plasma and pharma patient affordability programs and an increase in accounts receivable of $1,958,062. These cash flow decreases were partially offset by cash flow increases of $486,629 primarily related to the collection of employee retention credits in the current year, increase in accounts payable and accrued liabilities of $2,705,880, an improvement in net income from operations of $521,638, an increase in stock-based compensation of $534,426, and an increase in depreciation and amortization of $716,690. The changes in accounts receivable and accounts payable are primarily related to the growth in our pharma patient affordability business 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 amounts due at the end of the period.

Cash used in investing activities increased $2,415,977 for the nine months ended September 30, 2023 as compared to the same period in the prior year. The change between periods was primarily attributed to an increase in the capitalization of internally developed software as we continue to invest in our technology platform.

Cash used in financing activities increased $1,118,284 for the nine months ended September 30, 2023 as compared to the same period in the prior year. The change between periods was primarily attributed to the repurchase of 394,558 shares of the company’s common stock at a weighted average price of $2.86 per share.

Our significant contractual cash requirements also include ongoing payments for lease liabilities. For additional information regarding our cash commitments and contractual obligations, see "Note 4 – LEASE” in the notes to the accompanying consolidated financial statements.

Sources of Liquidity

We believe that our available cash on hand, excluding restricted cash, at September 30, 2023 of $9,936,627, along with our forecast for revenues and cash flows for the remainder of 2023 and through the first quarter of 2025, will be sufficient to sustain our operations for the next eighteen months. In light of the recent bank failures, 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 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, 2022.

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 September 30, 2023. Based on that evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures were effective as of September 30, 2023, 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 September 30, 2023, 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.

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 September 30, 2023, we issued, pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, a total of 540,000 shares of common stock for restricted stock awards previously earned and vested to certain directors, consultants and employees.

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 September 30, 2023.

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

July 1, 2023 - July 31, 2023		–	$	–		–	$	4,022,333
August 1, 2023 - August 31, 2023		75,000		2.00		75,000		3,872,116
September 1, 2023 - September 30, 2023		–		–		–		3,872,116
Total		75,000	$	2.00		75,000	$	3,872,116

____________________

(1) On March 21, 2023, our board of directors 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.

Item 5. Other Information

During the quarter ended September 30, 2023, 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: November 8, 2023	/s/ Mark Newcomer
	By: Mark Newcomer, Chief Executive Officer (principal executive officer)


Date: November 8, 2023	/s/ Jeff Baker
	By: Jeff Baker, Chief Financial Officer (principal financial and accounting officer)

Exhibit 31.1

CERTIFICATION

I, Mark Newcomer, certify that:

(1) I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2023 (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: November 8, 2023

/s/ Mark Newcomer

Mark Newcomer

Chief Executive Officer

(principal executive officer)

Exhibit 31.2

CERTIFICATION

I, Jeff Baker, certify that:

(1) I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2023 (the “report”) of Paysign, Inc.;

(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: November 8, 2023

/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 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 September 30, 2023 (the "Report") of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

/s/ Mark Newcomer

Mark Newcomer

Chief Executive Officer

(principal executive officer)

Date: November 8, 2023

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:

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: November 8, 2023

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2023	Nov. 03, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-38623
Entity Registrant Name	PAYSIGN, INC.
Entity Central Index Key	0001496443
Entity Tax Identification Number	95-4550154
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	2615 St. Rose Parkway
Entity Address, City or Town	Henderson
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89052
City Area Code	(702)
Local Phone Number	453-2221
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	PAYS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		52,754,374

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Current assets
Cash	$ 9,936,627	$ 9,708,238
Restricted cash	78,022,518	80,189,113
Accounts receivable, net	7,278,098	4,680,991
Other receivables	1,372,655	1,439,251
Prepaid expenses and other current assets	2,245,751	1,699,808
Total current assets	98,855,649	97,717,401
Fixed assets, net	1,149,497	1,255,292
Intangible assets, net	7,884,171	5,656,722
Operating lease right-of-use asset	3,317,016	3,614,838
Total assets	111,206,333	108,244,253
Current liabilities
Accounts payable and accrued liabilities	11,609,898	8,088,660
Operating lease liability, current portion	378,001	361,408
Customer card funding	78,022,518	80,189,113
Total current liabilities	90,010,417	88,639,181
Operating lease liability, long term portion	3,026,167	3,311,777
Total liabilities	93,036,584	91,950,958
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; 53,382,382 and 52,650,382 issued at September 30, 2023 and December 31, 2022, respectively	53,382	52,650
Additional paid-in capital	21,304,569	19,137,281
Treasury stock, at cost; 698,008 and 303,450 shares, respectively	(1,277,884)	(150,000)
Accumulated deficit	(1,910,318)	(2,746,636)
Total stockholders' equity	18,169,749	16,293,295
Total liabilities and stockholders' equity	$ 111,206,333	$ 108,244,253

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
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	53,382,382	52,650,382
Treasury stock shares	698,008	303,450

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues
Total revenues	$ 12,400,325	$ 10,596,428	$ 33,584,666	$ 27,415,843
Cost of revenues	6,068,207	4,847,780	16,589,139	11,971,135
Gross profit	6,332,118	5,748,648	16,995,527	15,444,708
Operating expenses
Selling, general and administrative	4,696,509	4,386,757	14,946,584	13,283,645
Depreciation and amortization	1,045,177	738,883	2,848,194	2,131,234
Total operating expenses	5,741,686	5,125,640	17,794,778	15,414,879
Income (loss) from operations	590,432	623,008	(799,251)	29,829
Other income
Interest income, net	615,324	265,284	1,800,388	349,847
Income before income tax provision	1,205,756	888,292	1,001,137	379,676
Income tax provision	105,152	36,183	164,819	64,996
Net income	$ 1,100,604	$ 852,109	$ 836,318	$ 314,680
Net income per share
Basic	$ 0.02	$ 0.02	$ 0.02	$ 0.01
Diluted	$ 0.02	$ 0.02	$ 0.02	$ 0.01
Weighted average common shares
Basic	52,548,101	52,142,225	52,404,049	51,968,496
Diluted	53,484,674	53,365,025	54,286,492	52,676,707
Plasma Industry [Member]
Revenues
Total revenues	$ 11,061,712	$ 9,829,811	$ 30,436,240	$ 25,030,376
Pharmaceutical Industry [Member]
Revenues
Total revenues	1,026,270	693,353	2,345,068	2,273,232
Other Revenue [Member]
Revenues
Total revenues	$ 312,343	$ 73,264	$ 803,358	$ 112,235

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, 2021	$ 52,095	$ 16,860,119	$ (150,000)	$ (3,774,411)	$ 12,987,803
Beginning balance, shares at Dec. 31, 2021	52,095,382		(303,450)
Stock-based compensation		569,502			569,502
Net income				(309,395)	(309,395)
Ending balance, value at Mar. 31, 2022	$ 52,218	17,429,498	$ (150,000)	(4,083,806)	13,247,910
Ending balance, shares at Mar. 31, 2022	52,218,382		(303,450)
Beginning balance, value at Dec. 31, 2021	$ 52,095	16,860,119	$ (150,000)	(3,774,411)	12,987,803
Beginning balance, shares at Dec. 31, 2021	52,095,382		(303,450)
Net income					314,680
Ending balance, value at Sep. 30, 2022	$ 52,461	18,483,747	$ (150,000)	(3,459,731)	$ 14,926,477
Exercise of stock options, shares					0
Ending balance, shares at Sep. 30, 2022	52,461,382		(303,450)
Beginning balance, value at Mar. 31, 2022	$ 52,218	17,429,498	$ (150,000)	(4,083,806)	$ 13,247,910
Beginning balance, shares at Mar. 31, 2022	52,218,382		(303,450)
Stock-based compensation		488,287			488,287
Net income				(228,034)	(228,034)
Ending balance, value at Jun. 30, 2022	$ 52,323	17,917,680	$ (150,000)	(4,311,840)	13,508,163
Ending balance, shares at Jun. 30, 2022	52,323,382		(303,450)
Stock-based compensation		566,205			566,205
Net income				852,109	852,109
Ending balance, value at Sep. 30, 2022	$ 52,461	18,483,747	$ (150,000)	(3,459,731)	14,926,477
Ending balance, shares at Sep. 30, 2022	52,461,382		(303,450)
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)
Stock-based compensation		618,244			618,244
Repurchase of common stock			$ (666,018)		(666,018)
Repurchase of common stock, shares			(200,000)
Net income				(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 income					836,318
Ending balance, value at Sep. 30, 2023	$ 53,382	21,304,569	$ (1,277,884)	(1,910,318)	18,169,749
Ending balance, shares at Sep. 30, 2023	53,382,382		(698,008)
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-based compensation		830,426			830,426
Repurchase of common stock			$ (311,649)		(311,649)
Repurchase of common stock, shares			(119,558)
Net income				(104,156)	(104,156)
Stock Issued During Period, Value, Stock Options Exercised	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
Exercise of stock options, shares	4,000
Ending balance, shares at Jun. 30, 2023	52,842,382		(623,008)
Stock-based compensation		709,750			709,750
Repurchase of common stock			$ (150,217)		(150,217)
Repurchase of common stock, shares			(75,000)
Net income				1,100,604	1,100,604
Ending balance, value at Sep. 30, 2023	$ 53,382	$ 21,304,569	$ (1,277,884)	$ (1,910,318)	$ 18,169,749
Ending balance, shares at Sep. 30, 2023	53,382,382		(698,008)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net income	$ 836,318	$ 314,680
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on disposal assets	(4,862)	0
Stock-based compensation expense	2,158,420	1,623,994
Depreciation and amortization	2,848,194	2,131,234
Noncash lease expense	297,822	282,193
Changes in operating assets and liabilities:
Accounts receivable	(2,597,107)	(639,045)
Other receivables	66,596	(420,033)
Prepaid expenses and other current assets	(545,943)	(711,185)
Accounts payable and accrued liabilities	3,556,238	850,358
Operating lease liability	(269,017)	(253,390)
Customer card funding	(2,166,595)	27,775,501
Net cash provided by operating activities	4,180,064	30,954,307
Cash flows from investing activities:
Purchase of fixed assets	(218,133)	(75,661)
Capitalization of internally developed software	(4,781,853)	(2,508,348)
Net cash used in investing activities	(4,999,986)	(2,584,009)
Cash flows from financing activities:
Proceeds from exercise of options	9,600	0
Repurchase of common stock	(1,127,884)	0
Net cash used in financing activities	(1,118,284)	0
Net change in cash and restricted cash	(1,938,206)	28,370,298
Cash and restricted cash, beginning of period	89,897,351	68,671,070
Cash and restricted cash, end of period	87,959,145	97,041,368
Cash and restricted cash reconciliation:
Cash	9,936,627	7,981,953
Restricted cash	78,022,518	89,059,415
Total cash and restricted cash	87,959,145	97,041,368
Non-cash financing activities
Cash paid for taxes	185,310	27,374
Interest paid	$ 0	$ 221

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES

Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

About Paysign, Inc.

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.

Customer Card Funding – As of September 30, 2023 and December 31, 2022, customer card funding represents funds loaded or available to be loaded on cards for the Company’s card product programs.

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

FIXED ASSETS, NET

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

FIXED ASSETS, NET

2. FIXED ASSETS, NET

Fixed assets consist of the following:

Schedule of fixed assets
	September 30, 2023		December 31, 2022
Equipment	$	2,375,156	$	2,161,424
Software		331,852		327,452
Furniture and fixtures		757,662		757,661
Website costs		69,881		69,881
Leasehold improvements		229,772		229,772
		3,764,323		3,546,190
Less: accumulated depreciation		2,614,826		2,290,898
Fixed assets, net	$	1,149,497	$	1,255,292

INTANGIBLE ASSETS, NET

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS, NET

3. INTANGIBLE ASSETS, NET

Intangible assets consist of the following:

Schedule of intangible assets
	September 30, 2023		December 31, 2022
Patents and trademarks	$	38,186	$	38,186
Platform		18,394,468		13,656,014
Customer lists and contracts		1,177,200		1,177,200
Licenses		209,282		209,282
Hosting implementation		43,400		–
Contract assets		150,000		185,000
		20,012,536		15,265,682
Less: accumulated amortization		12,128,365		9,608,960
Intangible assets, net	$	7,884,171	$	5,656,722

LEASE

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

LEASE

4. LEASE

The following is the lease maturity analysis of our operating lease as of September 30, 2023:

Year ending December 31,

Schedule of operating lease maturities
2023 (excluding the nine months ended September 30, 2023)	$	142,993
2024		571,968
2025		612,006
2026		640,604
2027		640,604
Thereafter		1,548,127
Total lease payments		4,156,302
Less: Imputed interest		(752,134	)
Present value of future lease payments		3,404,168
Less: current portion of lease liability		(378,001	)
Long-term portion of lease liability	$	3,026,167

CUSTOMER CARD FUNDING LIABILITY

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

CUSTOMER CARD FUNDING LIABILITY

5. CUSTOMER CARD FUNDING LIABILITY

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

Schedule of contract liabilities
	Nine Months Ended September 30,
	2023			2022
Beginning balance	$	80,189,113		$	61,283,914
Increase (decrease), net		(2,166,595	)		27,775,501
Ending balance	$	78,022,518		$	89,059,415

COMMON STOCK

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

COMMON STOCK

6. COMMON STOCK

BASIC AND FULLY DILUTED NET INCOME PER COMMON SHARE

9 Months Ended

Sep. 30, 2023

Net income per share

BASIC AND FULLY DILUTED NET INCOME PER COMMON SHARE

7. BASIC AND FULLY DILUTED NET INCOME PER COMMON SHARE

The following table sets forth the computation of basic and fully diluted net income per common share for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net income	$	1,100,604	$	852,109	$	836,318	$	314,680
Denominator:
Weighted average common shares:
Denominator for basic calculation		52,548,101		52,142,225		52,404,049		51,968,496
Weighted average effects of potentially diluted common stock:
Stock options (calculated using the treasury method)		472,791		594,553		745,193		457,256
Unvested restricted stock grants		463,782		628,247		1,137,250		250,955
Denominator for fully diluted calculation		53,484,674		53,365,025		54,286,492		52,676,707
Net income per common share:
Basic	$	0.02	$	0.02	$	0.02	$	0.01
Fully diluted	$	0.02	$	0.02	$	0.02	$	0.01

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

8. COMMITMENTS AND CONTINGENCIES

RELATED PARTY

9 Months Ended

Sep. 30, 2023

RELATED PARTY

9. RELATED PARTY

INCOME TAX

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAX

10. INCOME TAX

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

11. SUBSEQUENT EVENTS

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Policies)	9 Months Ended
	Sep. 30, 2023
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 September 30, 2023 and December 31, 2022.
Restricted Cash	Restricted Cash – At September 30, 2023 and December 31, 2022, restricted cash consisted of funds held specifically for our card product and pharma programs that are contractually restricted to use. The Company includes changes in restricted cash balances with cash and cash equivalents when reconciling the beginning and ending total amounts in our condensed consolidated statements of cash flows.
Concentrations of Credit Risk	Concentrations of Credit Risk – Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and restricted cash. 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. As of September 30, 2023 and December 31, 2022, the Company had approximately $40,208,706 and $43,516,155 in excess of federally insured bank account limits, respectively. As of September 30, 2023, the Company also has a concentration of accounts receivable risk, as two pharma program customers associated with our pharma patient affordability programs each individually represent 20% and 19% of our accounts receivable balance. Two pharma program customers each individually represented 35% and 24% of our accounts receivable balance on December 31, 2022.
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.
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. 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 Company utilizes the remote method of revenue recognition for settlement income whereby the unspent balances will be recognized as revenue at the expiration of the cards and the respective program. This has historically 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. Cost of revenues is comprised of transaction processing fees, data connectivity and data center expenses, network fees, bank fees, card production and postage costs, customer service, program management, application integration setup, and sales and commission expense.
Operating Leases	Operating Leases – The Company determines if a contract is or contains a leasing element at contract inception or the date in which a modification of an existing contract occurs. In order for a contract to be considered a lease, the contract must transfer the right to control the use of an identified asset for a period of time in exchange for consideration. Control is determined to have occurred if the lessee has the right to (i) obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use and (ii) direct the use of the identified asset. In determining the present value of lease payments at lease commencement date, the Company utilizes its incremental borrowing rate based on the information available, unless the rate implicit in the lease is readily determinable. The liability for operating leases is based on the present value of future lease payments. Operating lease expenses are recorded as rent expense, which is included within selling, general and administrative expenses within the consolidated statements of operations and presented as operating cash outflows within the consolidated statements of cash flows. Leases with an initial term of 12 months or less are not recorded on the balance sheet, with lease expenses 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 option 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 Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements – In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which provides updated guidance on how an entity should measure credit losses on all financial instruments carried at amortized cost (including loans held for investment and held-to-maturity debt securities, as well as trade receivables, reinsurance recoverables, and receivables that relate to repurchase agreements and securities lending agreements), a lessor’s net investments in leases, and off-balance sheet credit exposures not accounted for as insurance or as derivatives, including loan commitments, standby letters of credit, and financial guarantees. Subsequently, in November 2018 the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments–Credit Losses, which clarified that receivables arising from operating leases are not within the scope of Subtopic 326-20, but instead should be accounted for in accordance with Topic 842, Leases. In March 2022 the FASB issued ASU No. 2022-02, Financial Instruments—Credit Losses: Troubled Debt Restructurings and Vintage Disclosures which clarified accounting treatment required for trouble debt restructurings by creditors and enhanced disclosures for write-offs. The new standard and related amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We adopted this guidance; however, there was no material impact of this adoption on the Company’s consolidated financial position, results of operations, or cash flows.

FIXED ASSETS, NET (Tables)

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of fixed assets

Schedule of fixed assets
	September 30, 2023		December 31, 2022
Equipment	$	2,375,156	$	2,161,424
Software		331,852		327,452
Furniture and fixtures		757,662		757,661
Website costs		69,881		69,881
Leasehold improvements		229,772		229,772
		3,764,323		3,546,190
Less: accumulated depreciation		2,614,826		2,290,898
Fixed assets, net	$	1,149,497	$	1,255,292

INTANGIBLE ASSETS, NET (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

Schedule of intangible assets
	September 30, 2023		December 31, 2022
Patents and trademarks	$	38,186	$	38,186
Platform		18,394,468		13,656,014
Customer lists and contracts		1,177,200		1,177,200
Licenses		209,282		209,282
Hosting implementation		43,400		–
Contract assets		150,000		185,000
		20,012,536		15,265,682
Less: accumulated amortization		12,128,365		9,608,960
Intangible assets, net	$	7,884,171	$	5,656,722

LEASE (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of operating lease maturities

Schedule of operating lease maturities
2023 (excluding the nine months ended September 30, 2023)	$	142,993
2024		571,968
2025		612,006
2026		640,604
2027		640,604
Thereafter		1,548,127
Total lease payments		4,156,302
Less: Imputed interest		(752,134	)
Present value of future lease payments		3,404,168
Less: current portion of lease liability		(378,001	)
Long-term portion of lease liability	$	3,026,167

CUSTOMER CARD FUNDING LIABILITY (Tables)

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule of contract liabilities

Schedule of contract liabilities
	Nine Months Ended September 30,
	2023			2022
Beginning balance	$	80,189,113		$	61,283,914
Increase (decrease), net		(2,166,595	)		27,775,501
Ending balance	$	78,022,518		$	89,059,415

BASIC AND FULLY DILUTED NET INCOME PER COMMON SHARE (Tables)

9 Months Ended

Sep. 30, 2023

Net income per share

Schedule of computation of earnings per share


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net income	$	1,100,604	$	852,109	$	836,318	$	314,680
Denominator:
Weighted average common shares:
Denominator for basic calculation		52,548,101		52,142,225		52,404,049		51,968,496
Weighted average effects of potentially diluted common stock:
Stock options (calculated using the treasury method)		472,791		594,553		745,193		457,256
Unvested restricted stock grants		463,782		628,247		1,137,250		250,955
Denominator for fully diluted calculation		53,484,674		53,365,025		54,286,492		52,676,707
Net income per common share:
Basic	$	0.02	$	0.02	$	0.02	$	0.01
Fully diluted	$	0.02	$	0.02	$	0.02	$	0.01

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Details Narrative) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Product Information [Line Items]
Cash equivalents	$ 0	$ 0
Uninsured cash	$ 40,208,706	$ 43,516,155
One Customer [Member] \| Accounts Receivable [Member] \| Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk percentage	20.00%	35.00%
Another Customer [Member] \| Accounts Receivable [Member] \| Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk percentage	19.00%	24.00%

FIXED ASSETS, NET (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property plant and equipment, gross	$ 3,764,323	$ 3,546,190
Less: accumulated depreciation	2,614,826	2,290,898
Fixed assets, net	1,149,497	1,255,292
Equipment [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment, gross	2,375,156	2,161,424
Software Development [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment, gross	331,852	327,452
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment, gross	757,662	757,661
Website Costs [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment, gross	69,881	69,881
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment, gross	$ 229,772	$ 229,772

FIXED ASSETS, NET (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
FIXED ASSETS, NET (Details Narrative) - USD ($)	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 107,967	$ 113,758	$ 323,928	$ 383,980

INTANGIBLE ASSETS, NET (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	$ 20,012,536	$ 15,265,682
Less: accumulated amortization	12,128,365	9,608,960
Intangible assets, net	7,884,171	5,656,722
Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	38,186	38,186
Platform [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	18,394,468	13,656,014
Customer Lists And Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	1,177,200	1,177,200
Licenses [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	209,282	209,282
Hosting Implementation [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	43,400	0
Contract Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	$ 150,000	$ 185,000

INTANGIBLE ASSETS, NET (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
INTANGIBLE ASSETS, NET (Details Narrative) - USD ($)	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Finite-Lived Intangible Assets [Line Items]
Amortization	$ 937,210	$ 625,125	$ 2,524,266	$ 1,747,254

LEASE (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Leases [Abstract]
2023 (excluding the nine months ended September 30, 2023)	$ 142,993
2024	571,968
2025	612,006
2026	640,604
2027	640,604
Total lease payments	4,156,302
Present value of future lease payments	3,404,168
Less: current portion of lease liability	(378,001)	$ (361,408)
Long-term portion of lease liability	$ 3,026,167	$ 3,311,777

LEASE (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
LEASE (Details Narrative) - USD ($)	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Lease term	10 years		10 years
Lease term option to extend			two optional extensions of five years each
Remaining lease term	6 years 8 months 1 day		6 years 8 months 1 day
Discount rate	6.00%		6.00%
Operating lease cost	$ 186,470	$ 184,214	$ 565,905	$ 551,764

CUSTOMER CARD FUNDING LIABILITY (Details) - USD ($)	9 Months Ended
CUSTOMER CARD FUNDING LIABILITY (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Revenue from Contract with Customer [Abstract]
Beginning balance	$ 80,189,113	$ 61,283,914
Increase (decrease), net	(2,166,595)	27,775,501
Ending balance	$ 78,022,518	$ 89,059,415

CUSTOMER CARD FUNDING LIABILITY (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Revenue from Contract with Customer [Abstract]
Revenue recognized in current year previously included in contract liabilities	$ 2,020,224	$ 1,485,005

COMMON STOCK (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
COMMON STOCK (Details Narrative) - USD ($)	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
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	53,382,382		53,382,382		52,650,382
Common stock, shares outstanding	52,684,374		52,684,374
Preferred stock, shares outstanding	0		0		0
Stock-based compensation expense	$ 709,750	$ 566,205	$ 2,158,420	$ 1,623,994
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period				0
Proceeds from Stock Options Exercised			9,600	$ 0
Number of shares repurchased cost			$ 1,127,884	$ (0)
Common Stock [Member]
Class of Stock [Line Items]
Number of shares repurchased	75,000		394,558
Number of shares repurchased cost	$ 150,217		$ 1,127,884
Vested Stock Awards And Stock Options Exercised [Member]
Class of Stock [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period	540,000		732,000
Stock Options [Member]
Class of Stock [Line Items]
Proceeds from Stock Options Exercised			$ 9,600
Restricted Stock [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, Restricted Stock Award, Gross	0	2,430,000	350,000	2,530,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value		$ 1.81		$ 1.81

BASIC AND FULLY DILUTED NET INCOME PER COMMON SHARE (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Numerator:
Net income	$ 1,100,604	$ 852,109	$ 836,318	$ 314,680
Weighted average common shares:
Denominator for basic calculation	52,548,101	52,142,225	52,404,049	51,968,496
Weighted average effects of potentially diluted common stock:
Stock options (calculated using the treasury method)	472,791	594,553	745,193	457,256
Unvested restricted stock grants	463,782	628,247	1,137,250	250,955
Denominator for fully diluted calculation	53,484,674	53,365,025	54,286,492	52,676,707
Basic	$ 0.02	$ 0.02	$ 0.02	$ 0.01
Fully diluted	$ 0.02	$ 0.02	$ 0.02	$ 0.01

RELATED PARTY (Details Narrative) - USD ($)	3 Months Ended	9 Months Ended
RELATED PARTY (Details Narrative) - USD ($)	Sep. 30, 2022	Sep. 30, 2022
Related Party Law Firm [Member]
Related Party Transaction [Line Items]
Legal fees	$ 27,561	$ 109,314

INCOME TAX (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
INCOME TAX (Details Narrative) - USD ($)	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Effective income tax rate	8.70%	4.10%	16.50%	17.10%
Other receivables	$ 1,372,655		$ 1,372,655		$ 1,439,251
U S Federal Government [Member]
Other receivables	$ 836,734		$ 836,734		$ 1,296,488