Paysign (PAYS) advances no-fault settlement of stockholder derivative actions

Rhea-AI Filing Summary

Paysign, Inc. has moved toward resolving several previously reported stockholder derivative lawsuits by entering into a Stipulation and Agreement of Settlement as a nominal defendant. The cases, all in the U.S. District Court for the District of Nevada, alleged securities law violations and related fiduciary claims, and are collectively referred to as the Derivative Actions.

On August 28, 2025, the Court set a final approval hearing for November 14, 2025 at 1:00 p.m. to decide whether the proposed settlement is fair, reasonable, and adequate and to consider any objections. If the Court grants final approval, the settlement will release all claims arising from the Derivative Actions, dismiss the cases with prejudice, and require Paysign to adopt and maintain specified corporate governance reforms. The settlement does not include any admission of fault or wrongdoing, and Paysign states that resolving the claims now is in the best interests of the company and its stockholders given the costs and risks of continued litigation.

Insights

Equity litigation and governance analyst

Paysign advances a no-fault settlement of derivative suits with governance reforms pending court approval.

Paysign, Inc. has agreed to a Stipulation and Agreement of Settlement to resolve multiple stockholder derivative actions in the District of Nevada. These suits, which alleged securities law and fiduciary duty violations, targeted conduct surrounding the company but were brought with Paysign named as a nominal defendant, meaning claims were technically asserted on the company’s behalf.

The Court has scheduled a final approval hearing for November 14, 2025. If the settlement is approved, all claims arising from the Derivative Actions will be released and the cases dismissed with prejudice, reducing ongoing legal uncertainty and expenses. The settlement also requires adoption and maintenance of specified corporate governance reforms, which can formalize oversight and compliance structures without Paysign admitting fault or wrongdoing.

From an investor perspective, the key milestone is the Court’s approval decision at the November 14, 2025 hearing. Actual impact will depend on the scope of mandated governance changes and the extent to which final dismissal of the Derivative Actions lowers legal overhang and associated costs, as reflected in future company disclosures.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 15, 2025

PAYSIGN, INC.

(Exact name of registrant as specified in its charter)

Nevada	001-38623	95-4550154
(State or other jurisdiction of incorporation)	(Commission file number)	(I.R.S. Employer Identification Number)

2615 St. Rose Parkway

Henderson, Nevada 89052

(Address of principal executive offices) (Zip Code)

(702) 453-2221

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c))

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

Title of each class	Trading Symbol(s)	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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

Item 7.01 Regulation FD Disclosure.

On November 25, 2024, Paysign, in its capacity as a nominal defendant, entered into a Stipulation and Agreement of Settlement (the “Stipulation”) to resolve previously-reported stockholder derivative actions (the “Derivative Actions”) pending in the United States District Court for the District of Nevada (the “Court”). The derivative actions consist of the actions entitled Toczek v. Newcomer, et al., D. Nev. Case No. 2:20-cv-01722-JCM-NJK; Gray v. Attinger, et al., D. Nev. Case No. 2:22-cv-00735-GMN-VCF; Blanchette v. Paysign, Inc., et al., D. Nev. Case No. 2:23-cv-01632-JCM-BNW; and Jeewa v. Newcomer, et al., D. Nev. Case No. 2:23-cv-02129-RFB-EJY. Collectively, the derivative actions alleged violations of Sections 10(b) and 14(a) of the Exchange Act, breaches of fiduciary duty, unjust enrichment, and waste. A complete description of the litigation and the proposed settlement is set forth in the Notice of Pendency and Proposed Settlement of Stockholder Derivative Actions, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.

On December 6, 2024, plaintiffs in the aforesaid actions filed a Motion for Preliminary Approval of Derivative Settlement. On August 28, 2025, the Court scheduled a final approval hearing for the settlement, which will take place on November 14, 2025 at 1:00 p.m., at which time the Court will determine, among other things, whether the terms of the Stipulation should be approved as fair, reasonable, and adequate and consider any objections to the settlement.

Upon final approval by the Court, the Stipulation will provide a release of all claims arising out of the allegations in the Derivative Actions and will result in the dismissal of the Derivative Actions with prejudice upon the terms and subject to the conditions set forth in the Stipulation. The proposed settlement also requires the Company to adopt and maintain certain corporate governance reforms and procedures, as further outlined in the Stipulation, a copy of which is attached hereto as Exhibit 99.2 and incorporated herein by reference. The settlement is not an admission of fault or wrongdoing by the Company; however, the Company believes that a resolution of these claims at this time is in the best interest of the Company and its stockholders given the costs and risks inherent in litigation.

On September 15, 2025, we issued a press release containing a Summary Notice of Pendency and Proposed Settlement of Stockholder Derivative Actions. A copy of the press release is furnished herewith as Exhibit 99.3 to this Current Report on Form 8-K and is incorporated herein by reference.

As provided in General Instruction B-2 of SEC Form 8-K, the information set forth in this Item 7.01, including Exhibits 99.1, 99.2 and 99.3, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

	Exhibit No.	Description
	99.1	Notice of Pendency and Proposed Settlement of Stockholder Derivative Actions
	99.2	Stipulation and Agreement of Settlement
	99.3	Press Release entitled “Paysign, Inc. Announces Summary Notice of Pendency and Proposed Settlement of Stockholder Derivative Actions”
	104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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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 hereunto duly authorized.

	PAYSIGN, INC.
Date: September 15, 2025	By:  /s/ Mark Newcomer
	Mark Newcomer, President and Chief Executive Officer

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FAQ

What litigation is Paysign (PAYS) seeking to settle?

Paysign is seeking to resolve several stockholder derivative actions in the U.S. District Court for the District of Nevada, including cases titled Toczek v. Newcomer, Gray v. Attinger, Blanchette v. Paysign, Inc., and Jeewa v. Newcomer. These actions collectively alleged securities law violations and related fiduciary claims but are being addressed through a proposed global settlement.

What are the key terms of the proposed Paysign derivative settlement?

Under the Stipulation and Agreement of Settlement, if finally approved, all claims arising out of the allegations in the Derivative Actions will be released, and the cases will be dismissed with prejudice. The settlement also requires Paysign to adopt and maintain certain corporate governance reforms and procedures described in the Stipulation.

When is the court hearing to approve the Paysign derivative settlement?

The United States District Court for the District of Nevada has scheduled a final approval hearing for the proposed settlement on November 14, 2025 at 1:00 p.m.. At this hearing, the Court will consider whether the settlement terms are fair, reasonable, and adequate and will hear any objections from stockholders.

Does the Paysign derivative settlement include an admission of wrongdoing?

No. The settlement explicitly states that it is not an admission of fault or wrongdoing by Paysign. The company indicates that resolving the claims at this time is in the best interests of Paysign and its stockholders because of the costs and risks that continued litigation would entail.

What governance changes are required by the Paysign settlement?

The proposed settlement requires Paysign to adopt and maintain corporate governance reforms and procedures. The specific reforms are detailed in the Stipulation and Agreement of Settlement, which is attached as Exhibit 99.2, and are intended to address oversight and governance issues raised in the Derivative Actions.

How is Paysign notifying stockholders about the derivative settlement?

Paysign has provided a Notice of Pendency and Proposed Settlement of Stockholder Derivative Actions, attached as Exhibit 99.1, and issued a press release containing a summary notice on September 15, 2025, furnished as Exhibit 99.3. These materials describe the litigation background and key settlement terms for stockholders.