Paysign, Inc. — FY 2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. Paysign provides prepaid-card programs and payment processing for plasma donation, pharmaceutical, corporate, consumer, and government applications. It reported approximately 4.3 million cardholders across 440 programs at year-end.
Financial performance
| Metric | FY 2021 | FY 2020 |
|---|---|---|
| Revenue | $29.46 million | $24.12 million |
| Gross profit / margin | $14.71 million / 49.9% | $9.30 million / 38.6% |
| Operating loss | $2.74 million | $8.34 million |
| Net loss | $2.72 million; $0.05 per share | $9.14 million; $0.19 per share |
| Adjusted EBITDA (non-GAAP) | $2.04 million | $(2.82) million |
| Cash from operating activities | $15.23 million | $13.78 million |
Revenue increased 22.2%. Plasma revenue rose 10.8% to $25.92 million; Pharma revenue rose to $3.36 million from $0.33 million; Other revenue declined 52.9% to $0.18 million. Gross margin improved as revenue grew faster than costs, including from greater contribution of higher-margin Pharma settlement income and operating leverage in Plasma.
At December 31, 2021, unrestricted cash was $7.39 million, down from $7.83 million. Restricted cash was $61.28 million, matched by an equal customer-card-funding liability and not freely available for general use. Total liabilities were $71.06 million, chiefly customer funding and operating lease obligations; the filing reports no debt borrowings. Accounts receivable increased to $3.39 million from $0.51 million, and accounts payable and accrued liabilities to $5.77 million from $2.16 million, largely reflecting new Pharma programs and reimbursement timing.
Changes, outlook, and notable items
- Losses narrowed substantially year over year, while operating cash flow remained positive. Gross dollar volume loaded on cards increased to $1.066 billion from $968 million.
- Pharma revenue’s sharp increase partly reflects comparison with 2020, when a change in settlement-income estimates reduced Pharma revenue by $6.29 million. Under the revised approach, unspent balances are recognized at card and program expiration. Management cited program expirations, new launches, and greater patient access to medical services as additional 2021 revenue drivers.
- COVID-19 continued to weigh on results through plasma-center disruptions, labor shortages, border closures, and reduced donor incentives from government stimulus. Management reported improvement during 2021 but could not estimate the pandemic’s further financial impact.
- For 2022, Paysign plans further investment in technology, sales and marketing, customer service, and regulatory compliance. It gave no quantified revenue or earnings guidance. Management said unrestricted cash, anticipated 2022 revenues and operating profits, and its receivable/payable process should fund operations for the next 12 months; it also said expansion could be funded internally, while periodically evaluating additional capital.
- The company recorded an $876,456 employee retention credit as a reduction of payroll expense and a receivable in 2021. It maintains a full valuation allowance against deferred tax assets.
- Two securities class-action cases and a related derivative action remained unresolved. The company said it could not meaningfully estimate outcomes or damages. The auditor gave an unqualified opinion on the financial statements; management concluded internal control over financial reporting was effective, but the auditor did not attest to that conclusion.
Key investor verification points
- Assess whether Plasma recovery and new Pharma programs can sustain revenue and margin improvements, and whether Pharma settlement income is repeatable as programs expire.
- Review unrestricted liquidity separately from restricted customer funds, and monitor receivable/payable growth, customer funding, and operating cash generation.
- Track the unresolved litigation, concentration of year-end receivables in two Pharma programs, and reliance on issuing-bank and network relationships.
- Evaluate continuing COVID-19 effects, regulatory and data-security exposure, and execution of planned investment without quantified guidance.