PAID INC 8-K

What Happened

• PAID Inc. (PAYD) announced it acquired an approximately 80% shareholder interest in Warehowz, Inc., effective January 30, 2026. Warehowz provides on‑demand warehousing solutions across the U.S.
• As part of the deal PAID will: repay about $102,000 of Warehowz indebtedness in restricted PAID common stock on or about February 28, 2026 (using the 30‑day prior average share price), and pay off a $75,000 convertible note within 120 days of closing.
• Sellers will also receive earnout cash payments after subtracting certain costs and debts: payments equal to 8.5% of net revenue plus 40% of net income for each of the 12‑month periods ended December 31, 2026 and December 31, 2027, payable April 15, 2027 and April 15, 2028. Payments may be offset by indemnity claims or liabilities not expressly assumed by PAID.
• Warehowz reported roughly $428,000 in revenue and a $79,800 net loss in 2025.

Key Details

• Acquisition effective date: January 30, 2026; PAID acquired ~80% of Warehowz.
• Debt and consideration: ~$102,000 repaid in restricted PAID stock (around Feb 28, 2026); $75,000 convertible note to be paid within 120 days.
• Earnout structure: 8.5% of net revenue + 40% of net income for each 12‑month period ending Dec 31, 2026 and 2027; cash payments due 4/15/2027 and 4/15/2028; subject to offsets for indemnities/non‑assumed liabilities.
• Warehowz 2025 results: ~$428K revenue, ~$79.8K net loss.

Why It Matters

• This acquisition adds an on‑demand warehousing business to PAID’s operations and could contribute revenue growth, but the target had modest 2025 revenue and a net loss.
• The deal uses restricted stock and delayed earnouts, reducing near‑term cash outflow but potentially diluting shareholders and creating contingent future payments tied to Warehowz’s revenue and net income.
• Investors should watch for integration progress, Warehowz’s upcoming revenue and profit trends (which determine earnouts), and any indemnity or liability offsets that could reduce the stated payments.