New Members Not Being Registered. Debug says FAILURE

Hello

I am having an issue and I hope you can help me.

Here’s where am I so far:
1. I have everything setup and testing this in the Sandbox.
2. Members are not getting registered or receiving an activation email after a one-time membership purchase.
3. Debug turned on.
4. Verified IPN in paypal is Enabled and points to my domain:www.test.com(example)
5. Log files say:
FAILURE :Funds have not been cleared yet. Transaction will be processed when the funds clear!
FAILURE :IPN product validation failed.
6. I am using paypal sandbox and using paypal balance to make the purchase.
7. Checked spam folder to see if emails were going to spam.
8. Checked transactions in Simple Member(none are pending or reported)
9. Double checked the documentation and went step-by-step to make sure I did not missing anything else.

I’ve triple checked everything else and still no matter what I do it still does not work.

Any ideas what could be the problem?