Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 08, 2021 | Jun. 30, 2020 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | FlexShopper, Inc. | ||
Entity Central Index Key | 0001397047 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity File Number | 001-37945 | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation, State Country Code | DE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 23,966,000 | ||
Entity Common Stock, Shares Outstanding | 21,375,945 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash | $ 8,541,232 | $ 6,868,472 |
Accounts receivable, net | 10,032,714 | 8,272,332 |
Prepaid expenses | 869,081 | 672,242 |
Lease merchandise, net | 42,822,340 | 31,063,104 |
Total current assets | 62,265,367 | 46,876,150 |
PROPERTY AND EQUIPMENT, net | 5,911,696 | 5,260,407 |
OTHER ASSETS, net | 72,316 | 78,335 |
Total assets | 68,249,379 | 52,214,892 |
CURRENT LIABILITIES: | ||
Accounts payable | 7,907,619 | 4,567,889 |
Accrued payroll and related taxes | 352,102 | 513,267 |
Current portion of promissory notes to related parties, net of $8,276 at 2020 and $5,333 at 2019 of unamortized issuance costs, including accrued interest | 4,815,546 | 1,067,740 |
Current portion of promissory note - Paycheck Protection Program | 1,184,952 | |
Accrued expenses | 2,646,800 | 1,372,901 |
Lease liability - current portion | 160,726 | 27,726 |
Total current liabilities | 17,067,745 | 7,549,523 |
Loan payable under credit agreement to beneficial shareholder, net of $61,617 at 2020 and $281,138 at 2019 of unamortized issuance costs and current portion | 37,134,009 | 28,904,738 |
Promissory notes to related parties, net of $24,828 at 2019 of unamortized issuance costs and current portion | 3,725,172 | |
Promissory note - Paycheck Protection Program, net of current portion | 741,787 | |
Accrued payroll and related taxes net of current portion | 204,437 | |
Lease liabilities less current portion | 1,947,355 | 2,067,184 |
Total liabilities | 57,095,333 | 42,246,617 |
STOCKHOLDERS' EQUITY | ||
Series 1 Convertible Preferred Stock, $0.001 par value - designated 250,000 shares, issued and outstanding 170,332 shares at 2020 and 171,191 shares at 2019 at $5.00 stated value | 851,660 | 855,955 |
Series 2 Convertible Preferred Stock, $0.001 par value - designated 25,000 shares, issued and outstanding 21,952 shares at $1,000 stated value | 21,952,000 | 21,952,000 |
Common stock, $0.0001 par value- authorized 40,000,000 shares, issued and outstanding 21,359,945 shares at 2020 and 17,783,960 shares at 2019 | 2,136 | 1,779 |
Additional paid in capital | 36,843,326 | 35,313,721 |
Accumulated deficit | (48,495,076) | (48,155,180) |
Total stockholders' equity | 11,154,046 | 9,968,275 |
Total liabilities and stockholders' equity | $ 68,249,379 | $ 52,214,892 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Promissory notes to related parties net of unamortized issuance costs | $ 8,276 | $ 5,333 |
Loan payable unamortized issuance costs and current portion | 61,617 | 281,138 |
Promissory notes to related parties net unamortized issuance costs and current portion | $ 24,828 | |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 21,359,945 | 17,783,960 |
Common stock, shares outstanding | 21,359,945 | 17,783,960 |
Series 1 Convertible Preferred Stock | ||
Convertible preferred stock, stated value | $ 5 | $ 5 |
Convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Convertible preferred stock, shares authorized | 250,000 | 250,000 |
Convertible preferred stock, shares issued | 170,332 | 171,191 |
Convertible preferred stock, shares outstanding | 170,332 | 171,191 |
Series 2 Convertible Preferred Stock | ||
Convertible preferred stock, stated value | $ 1,000 | $ 1,000 |
Convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Convertible preferred stock, shares authorized | 25,000 | 25,000 |
Convertible preferred stock, shares issued | 21,952 | 21,952 |
Convertible preferred stock, shares outstanding | 21,952 | 21,952 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues: | ||
Lease revenues and fees, net | $ 96,939,767 | $ 85,331,360 |
Lease merchandise sold | 5,144,747 | 3,458,529 |
Total revenues | 102,084,514 | 88,789,889 |
Costs and expenses: | ||
Cost of lease revenues, consisting of depreciation and impairment of lease merchandise | 63,308,210 | 57,939,899 |
Cost of lease merchandise sold | 3,424,880 | 2,282,036 |
Marketing | 5,880,063 | 3,649,292 |
Salaries and benefits | 10,440,693 | 8,469,334 |
Operating expenses | 14,404,953 | 11,345,091 |
Total costs and expenses | 97,458,799 | 83,685,652 |
Operating income | 4,625,715 | 5,104,237 |
Interest expense including amortization of debt issuance costs | 4,302,561 | 4,310,422 |
Income before income taxes | 323,154 | 793,815 |
Provision for income taxes | 663,050 | 216,400 |
Net (loss) / income | (339,896) | 577,415 |
Deemed dividend from exchange offer of warrants | 713,212 | |
Dividends on Series 2 Convertible Preferred Shares | 2,438,988 | 2,437,884 |
Net loss attributable to common shareholders | $ (3,492,096) | $ (1,860,469) |
Basic and diluted (loss) per common share: | ||
Basic and diluted | $ (0.17) | $ (0.11) |
WEIGHTED AVERAGE COMMON SHARES: | ||
Basic and diluted | 20,995,349 | 17,672,156 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Series 1 Convertible Preferred Stock | Series 2 Convertible Preferred Stock | Common Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2018 | $ 1,197,025 | $ 21,952,000 | $ 1,758 | $ 30,074,488 | $ (48,732,595) | $ 8,492,676 |
Balance, shares at Dec. 31, 2018 | 239,405 | 21,952 | 17,294,870 | |||
Provision for compensation expense related to stock options | 595,833 | 595,833 | ||||
Refund of cost related to equity raise | 61,509 | 61,509 | ||||
Issuance of warrants in connection with consulting agreement | 127,561 | 127,561 | ||||
Issuance of warrants in connection with consulting agreement, shares | ||||||
Exercise of stock options into common stock | $ 8 | 69,398 | 69,406 | |||
Exercise of stock options into common stock, shares | 82,667 | |||||
Conversion of preferred stock to common stock | $ (341,070) | $ 9 | 341,061 | |||
Conversion of preferred stock to common stock, shares | (68,214) | 86,323 | ||||
Exercise of warrants into common stock | $ 4 | 43,871 | 43,875 | |||
Exercise of warrants into common stock, shares | 35,100 | |||||
Net income/ (loss) | 577,415 | 577,415 | ||||
Balance at Dec. 31, 2019 | $ 855,955 | $ 21,952,000 | $ 1,779 | 35,313,721 | (48,155,180) | 9,968,275 |
Balance, shares at Dec. 31, 2019 | 171,191 | 21,952 | 17,783,960 | |||
Provision for compensation expense related to stock options | 981,261 | 981,261 | ||||
Issuance of warrants in connection with consulting agreement | 407,494 | 407,494 | ||||
Exercise of stock options into common stock | $ 1 | 5,661 | 5,662 | |||
Exercise of stock options into common stock, shares | 7,166 | |||||
Conversion of preferred stock to common stock | $ (4,295) | 4,295 | ||||
Conversion of preferred stock to common stock, shares | (859) | 1,136 | ||||
Exercise of warrants into common stock | $ 10 | 131,240 | 131,250 | |||
Exercise of warrants into common stock, shares | 105,000 | |||||
Exchange offer of warrants | $ 346 | (346) | ||||
Exchange offer of warrants, shares | 3,462,683 | |||||
Net income/ (loss) | (339,896) | (339,896) | ||||
Balance at Dec. 31, 2020 | $ 851,660 | $ 21,952,000 | $ 2,136 | $ 36,843,326 | $ (48,495,076) | $ 11,154,046 |
Balance, shares at Dec. 31, 2020 | 170,332 | 21,952 | 21,359,945 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net (loss)/ income | $ (339,896) | $ 577,415 |
Adjustments to reconcile net (loss)/ income to net cash used in operating activities: | ||
Depreciation and impairment of lease merchandise | 63,308,210 | 58,253,095 |
Other depreciation and amortization | 2,577,084 | 2,524,422 |
Compensation expense related to issuance of stock options and warrants | 1,388,755 | 723,394 |
Provision for doubtful accounts | (31,930,714) | 34,838,046 |
Interest in kind added to promissory notes balance | 13,388 | |
Payment of interest in kind under promissory notes | 73,073 | |
Payment of interest in kind under credit agreement | 170,550 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 30,170,332 | (36,734,415) |
Prepaid expenses and other | (195,104) | (352,710) |
Lease merchandise | (75,067,446) | (56,951,502) |
Security deposits | 2,943 | 9,210 |
Accounts payable | 3,339,730 | (3,814,098) |
Lease liabilities | 198,528 | (124,319) |
Accrued payroll and related taxes | 43,271 | 120,172 |
Accrued expenses | 1,283,372 | 218,206 |
Net cash used in operating activities | (5,207,547) | (469,461) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment, including capitalized software costs | (3,098,194) | (2,241,172) |
Net cash used in investing activities | (3,098,194) | (2,241,172) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from loan payable under credit agreement | 15,033,000 | 12,396,078 |
Repayment of loan payable under credit agreement | (7,023,250) | (11,815,488) |
Proceeds from promissory notes to related parties, net of fees | 3,440,000 | |
Proceeds from promissory notes- Paycheck Protection Program, net of fees | 1,914,100 | |
Repayment of promissory note | (500,000) | |
Principal payment under finance lease obligation | (6,664) | (2,527) |
Refund of equity issuance related costs | 61,509 | |
Proceeds from exercise of warrants | 131,250 | 43,875 |
Proceeds from exercise of stock options | 69,406 | |
Proceeds from exercise of stock options | 5,662 | |
Repayment of installment loan | (11,207) | (11,208) |
Debt issuance related costs | (64,390) | (243,750) |
Net cash provided by financing activities | 9,978,501 | 3,437,895 |
INCREASE IN CASH | 1,672,760 | 727,262 |
CASH, beginning of period | 6,868,472 | 6,141,210 |
CASH, end of period | 8,541,232 | 6,868,472 |
Supplemental cash flow information: | ||
Interest paid | 3,973,374 | 3,606,328 |
Deemed dividend from exchange offer of warrants | 713,212 | |
Conversion of preferred stock to common stock | $ 4,295 | $ 341,070 |
Business
Business | 12 Months Ended |
Dec. 31, 2020 | |
Business [Abstract] | |
BUSINESS | 1. BUSINESS FlexShopper, Inc. (the "Company") is a corporation organized under the laws of the State of Delaware in 2006. The Company owns 100% of FlexShopper, LLC, a North Carolina limited liability company and owns 100% of FlexLending, LLC, a Delaware limited liability company. The Company is a holding corporation with no operations except for those conducted by FlexShopper LLC and FlexLending, LLC. In January 2015, in connection with the Credit Agreement entered in March 2015 (see Note 6), FlexShopper 1 LLC and FlexShopper 2 LLC were organized as wholly owned Delaware subsidiaries of FlexShopper LLC to conduct operations. FlexShopper LLC, together with its subsidiaries, are hereafter referred to as "FlexShopper." FlexShopper provides through e-commerce sites, certain types of durable goods to consumers on a lease-to-own basis ("LTO") including consumers of third-party retailers and e-tailers. We effect these transactions by first approving consumers through our proprietary, risk analytics-powered underwriting model. After receiving a signed consumer lease, we then fund the leased item by purchasing the item from our merchant partner and leasing it to our customer. We then collect payments from consumers under the consumer lease. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation - Estimates - Revenue Recognition Accounts Receivable and Allowance for Doubtful Accounts - December 31, December 31, Accounts receivable $ 32,171,255 $ 18,249,273 Allowance for doubtful accounts (22,138,541 ) (9,976,941 ) Accounts receivable, net $ 10,032,714 $ 8,272,332 The allowance is a significant percentage of the net accounts receivable balance because FlexShopper does not charge off any customer account until it has exhausted all collection efforts with respect to each account including attempts to repossess items. In addition, while collections are pursued, the same delinquent customers will continue to accrue weekly charges until they are charged off. During the years ended December 31, 2020 and 2019, $19,769,114 and $28,615,411 of accounts receivable balances, respectively, were charged off against the allowance. During the years ended December 31, 2020 and 2019, the provision for bad debts was $31,930,714 and $34,838,046, respectively. The following table shows the activity in the allowance for doubtful accounts: December 31, December 31, Beginning balance $ 9,976,941 $ 3,754,306 Provision 31,930,714 34,838,046 Accounts written off (19,769,114 ) (28,615,411 ) Ending balance $ 22,138,541 $ 9,976,941 Lease Merchandise - The net leased merchandise balances consisted of the following as of December 31, 2020 and December 31, 2019: December 31, December 31, Lease merchandise at cost $ 64,335,971 $ 46,807,570 Accumulated depreciation (19,162,357 ) (13,518,181 ) Impairment reserve (2,351,274 ) (2,226,285 ) Lease merchandise, net $ 42,822,340 $ 31,063,104 Cost of lease merchandise sold represents the undepreciated cost of rental merchandise at the time of sale. Deferred Debt Issuance Costs Debt issuance costs of $60,000 incurred in conjunction with the subordinated Promissory Notes entered on January 25, 2019 and February 19, 2019 (see Note 5) are offset against the outstanding balance of the loan payable and are amortized using the straight-line method over the remaining term of the related debt, which approximates the effective interest method. Amortization, which is included in interest expense, was $21,885 and 29,839 for the years ended December 31, 2020 and 2019, respectively. Software Costs - Operating Expenses - Marketing - Per Share Data - Diluted earnings per share is based on the more dilutive of the if-converted method (which assumes conversion of the participating Series 1 Convertible Preferred Stock as of the beginning of the period) or the two-class method (which assumes that the participating Series 1 Convertible Preferred Stock is not converted) plus the potential impact of dilutive non-participating Series 2 Convertible Preferred Stock, options and warrants. The dilutive effect of stock options and warrants is computed using the treasury stock method, which assumes the repurchase of common shares at the average market price during the period. Under the treasury stock method, options and warrants will have a dilutive effect when the average price of common stock during the period exceeds the exercise price of options or warrants. When there is a loss from continuing operations, potential common shares are not included in the computation of diluted loss per share, since they have an anti-dilutive effect. In computing diluted loss per share, no effect has been given to the issuance of common stock upon conversion or exercise of the following securities as their effect is anti-dilutive: Year ended 2020 2019 Series 1 Convertible Preferred Stock 225,231 218,104 Series 2 Convertible Preferred Stock 5,845,695 5,679,615 Series 2 Convertible Preferred Stock issuable upon exercise of warrants 116,903 113,582 Common Stock Options 2,595,700 2,004,318 Common Stock Warrants 2,112,488 7,347,388 10,896,017 15,363,007 The following table sets forth the computation of basic and diluted earnings per share as of December 31, 2020 and December 31, 2019: December 31, December 31, 2020 2019 Numerator Net (loss)/ income $ (339,896 ) $ 577,415 Convertible Series 2 Preferred Share dividends (2,438,988 ) (2,437,884 ) Deemed dividend from exchange offer of warrants (See Note 11) (713,212 ) - Numerator for basic and diluted EPS $ (3,492,096 ) $ (1,860,469 ) Denominator Denominator for basic and diluted EPS - weighted average shares 20,995,349 17,672,156 Basic EPS $ (0.17 ) $ (0.11 ) Diluted EPS $ (0.17 ) $ (0.11 ) Stock Based Compensation - Compensation expense is determined by reference to the fair value of an award on the date of grant and is amortized on a straight-line basis over the vesting period. The Company has elected to use the Black-Scholes-Merton (BSM) pricing model to determine the fair value of all stock option awards (see Note 8). Fair Value of Financial Instruments - Income Taxes The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of December 31, 2020, and 2019, the Company has not recorded any unrecognized tax benefits. Interest and penalties related to liabilities for uncertain tax positions will be charged to interest and operating expenses, respectively. Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update No. 2016-13, "Financial Instruments - Credit Losses (Topic 326)" ("ASU 2016-13"). ASU 2016-13 revises the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. Originally, ASU 2016-13 was effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. In November 2019, FASB issued ASU 2019-10, "Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)." This ASU defers the effective date of ASU 2016-13 for public companies that are considered smaller reporting companies as defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is planning to adopt this standard in the first quarter of fiscal 2023.The Company is currently evaluating the potential effects of adopting the provisions of ASU No. 2016-13 on its Consolidated Financial Statements, particularly its recognition of allowances for accounts receivable. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). ASU 2019-12 removes certain exceptions for performing intraperiod tax allocations, recognizing deferred taxes for investments, and calculating income taxes in interim periods. The guidance also simplifies the accounting for franchise taxes, transactions that result in a step-up in the tax basis of goodwill, and the effect of enacted changes in tax laws or rates in interim periods. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and early adoption is permitted. While the Company is continuing to assess the potential impacts of ASU 2019-12, it does not expect ASU 2019-12 to have a material effect, if any, on its financial statements. In March 2020, the FASB issued guidance codified in ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which provides optional expedients for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The standard is effective for the Company as of March 12, 2020 through December 31, 2022. An entity can elect to apply the amendments as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to that date that the financial statements are available to be issued. The Company is currently evaluating the optional expedients and exceptions provided by ASU 2020-04 to determine the impact on its consolidated financial statements. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
LEASES | 3. LEASES Lessor accounting In February 2016, the FASB issued ASU No. 2016-02, Leases as amended ("Topic 842"), which is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Under Topic 842, lessees are required to recognize for all leases at the commencement date a lease liability, which is a lessee's obligation to make lease payments arising from a lease measured on a discounted basis, and a right-to-use asset, which is an asset that represents the lessee's right to use or control the use of a specified asset for the lease term. The Company has determined that the new standard will not materially impact the timing of revenue recognition. The new standard resulted in the Company classifying bad debt expense incurred as a reduction of lease revenue and fees within the consolidated statement of operations including retrospective presentation of prior year financial information. As a result of the change in presentation, the breakout of lease revenues and fees, net of lessor bad debt expense, that ties the consolidated statements of operations is shown below: Year ended December 31, 2020 2019 Gross lease billings and fees $ 128,870,481 $ 120,169,406 Provision for doubtful accounts (31,930,714 ) 34,838,046 Lease revenues and fees, net $ 96,939,767 $ 85,331,360 The new standard also impacted the Company as a lessee by requiring all its operating leases to be recognized on the balance sheet as a right-to-use asset and lease liability. The Company has elected a package of optional practical expedients which includes the option to retain the current classification of leases entered prior to January 1, 2019. The Company adopted this new guidance on January 1, 2019. Lessor Information - Lease Commitments In August 2017, FlexShopper entered into a 12-month lease with two additional three-year options for retail store space in West Palm Beach, Florida. In April 2018, FlexShopper exercised its first option to extend the term of the lease to September 30, 2021. The monthly rent for this space is approximately $2,300 per month. In January 2019, FlexShopper entered into a 108-month lease with an option for one additional five-year term for 21,622 square feet of office space in Boca Raton, FL to accommodate FlexShopper's business and its employees (the "January 2019 Lease"). The monthly rent for this space is approximately $31,500 with annual three percent increases throughout the initial 108-month lease term beginning on the anniversary of the commencement date. The rental expense for the years ended December 31, 2020 and 2019 was approximately $688,400 and $520,700, respectively. At December 31, 2020, the future minimum annual lease payments are approximately as follows: 2021 $ 426,233 2022 416,627 2023 427,305 2024 434,916 2025 443,038 2026 and thereafter 1,229,924 $ 3,378,043 The Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are included in the Company's consolidated balance sheet beginning January 1, 2019. The breakout of operating lease assets, and current and non-current operating lease liabilities at December 31, 2020, is shown in the table below. Supplemental balance sheet information related to leases is as follows: Balance Sheet Classification December 30, December 31, Assets Operating Lease Asset Property and Equipment, net $ 1,673,432 $ 1,847,932 Finance Lease Asset Property and Equipment, net 27,106 31,299 Total Lease Assets $ 1,700,538 $ 1,879,231 Liabilities Operating Lease Liability - current portion Current Lease Liabilities $ 153,019 $ 22,088 Finance Lease Liability - current portion Current Lease Liabilities 7,707 5,638 Operating Lease Liability- net of current portion Long Term Lease Liabilities 1,925,498 2,040,576 Finance Lease Liability - net of current portion Long Term Lease Liabilities 21,857 26,608 Total Lease Liabilities $ 2,108,081 $ 2,094,910 Operating lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The Company uses its incremental borrowing rate as the discount rate for its leases, as the implicit rate in the lease is not readily determinable. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. Operating lease assets also include any prepaid lease payments and lease incentives. The lease terms include periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. The Company generally uses the base, non-cancelable, lease term when determining the lease assets and liabilities. Under the short-term lease exception provided within Topic 842, the Company does not record a lease liability or right-of-use asset for any leases that have a lease term of 12 months or less at commencement. Below is a summary of the weighted-average discount rate and weighted-average remaining lease term for the Company's operating leases: Weighted Weighted Operating Leases 13.06 % 8 Finance Leases 13.31 % 3 Upon adoption of Topic 842, discount rates for existing operating leases were established as of January 1, 2019. The discount rate for the new operating lease related to 901 Yamato Road, Boca Raton, FL was established as of the commencement date of the lease. Operating lease expense is recognized on a straight-line basis over the lease term within operating expenses in the Company's consolidated statements of operations. Finance lease expense is recognized over the lease term within interest expense in the Company's consolidated statements of operations. The Company's total operating and finance lease expense all relate to lease costs amounted to $433,654 and $395,455 for the years ended December 31, 2020 and December 31, 2019, respectively. Supplemental cash flow information related to operating leases is as follows: December 31, December 31, 2020 2019 Cash payments for operating leases $ 221,433 $ 164,664 Cash payments for finance leases 11,049 4,782 New operating lease asset obtained in exchange for lease liabilities - 2,060,288 New finance lease asset obtained in exchange for lease liabilities 4,033 34,772 Below is a summary of undiscounted operating lease liabilities as of December 31, 2020. The table also includes a reconciliation of the future undiscounted cash flows to the present value of the operating lease liabilities included in the consolidated balance sheet. Operating 2021 $ 415,050 2022 405,443 2023 417,606 2024 430,134 2025 443,038 2026 and thereafter 1,229,924 Total undiscounted cash flows 3,341,195 Less: interest (1,262,678 ) Present value of lease liabilities $ 2,078,517 The January 2019 Lease commenced in June 2019, at which time the Company recognized the operating lease asset and liability. The Company pays a base monthly rent of approximately $31,500 with payments increasing by 3% on each yearly anniversary of the commencement date. The initial lease term is for nine years with the Company having a one-time option to extend for five years. Below is a summary of undiscounted finance lease liabilities as of December 31, 2020. The table also includes a reconciliation of the future undiscounted cash flows to the present value of the finance lease liabilities included in the consolidated balance sheet. Finance 2021 $ 11,184 2022 11,184 2023 9,699 2024 4,782 Total undiscounted cash flows 36,849 Less: interest (7,284 ) Present value of lease liabilities $ 29,565 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT Property and equipment consist of the following: Estimated December 31, December 31, Furniture, fixtures and vehicle 2-5 years $ 303,285 $ 95,671 Website and internal use software 3 years 12,489,441 10,123,830 Computers and software 3-7 years 1,121,914 596,946 13,914,640 10,816,447 Less: accumulated depreciation and amortization (9,703,482 ) (7,435,271 ) Right of use assets, net 1,700,538 1,879,231 $ 5,911,696 $ 5,260,407 Depreciation and amortization expense were $2,268,211 and $2,196,661 for the years ended December 31, 2020 and 2019, respectively. |
Promissory Notes-Related Partie
Promissory Notes-Related Parties | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
PROMISSORY NOTES RELATED PARTIES | 5. PROMISSORY NOTES-RELATED PARTIES January 2018 Notes - Upon issuance of the Notes, FlexShopper, LLC borrowed $500,000 and a subsequent $500,000 on February 20, 2018 on the Note held by Mr. Heiser and $2,500,000 on the Note held by NRNS. On August 29, 2018, FlexShopper, LLC issued amended and restated Notes to Mr. Heiser and NRNS under which (1) the maturity date for such Notes was set at June 30, 2019 and (2) in connection with the completion of an Equity Financing (as defined in the Notes), the holders of such Notes were granted the option to convert up to 50% of the outstanding principal of the Notes plus accrued and unpaid interest thereon into the securities issued in the Equity Financing at a conversion price equal to the price paid to the Company by the underwriters for such securities, net of the underwriting discount. In connection with the offering of units in September 2018, Mr. Heiser and NRNS elected to convert the convertible portion of the Notes, resulting in the issuance by the Company of 602,974 shares of common stock and warrants to purchase 301,487 shares to Mr. Heiser, and 1,507,395 shares of common stock and warrants to purchase 753,697 shares to NRNS. Prior to Mr. Heiser's Note maturity date, the Company paid down the entire principal and interest balance on June 28, 2019 in the amount of $507,339. NRNS amended and restated the NRNS Note such that the maturity date of the revised Note was set at June 30, 2021. In addition, the Company borrowed $500,000 on the Note held by NRNS on June 28, 2019. As of December 31, 2020, $1,777,212 of principal and accrued, unpaid interest was outstanding on NRNS's Note. January 2019 Note - February 2019 Note - The Company is pursuing a refinancing of both related party subordinated notes with a non-related party note with a term that is similar to the Credit Agreement. Besides extending the maturity date, no material changes are expected in the terms of the interest rate of the new subordinated facility. If the Company is unsuccessful refinancing the related party notes, then the Company doesn't not foresee any difficulty in extending the maturity of the current related party subordinated notes. Amounts payable under the promissory notes are as follows: Debt Interest 2021 $ 4,750,000 $ 73,822 |
Loan Payable Under Credit Agree
Loan Payable Under Credit Agreement | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
LOAN PAYABLE UNDER CREDIT AGREEMENT | 6. LOAN PAYABLE UNDER CREDIT AGREEMENT On March 6, 2015, FlexShopper, through a wholly-owned subsidiary (the "Borrower"), entered into a credit agreement (as amended from time-to-time and including the Fee Letter (as defined therein), the "Credit Agreement") with Wells Fargo Bank, National Association as paying agent, various lenders from time to time party thereto and WE 2014-1, LLC, an affiliate of Waterfall Asset Management, LLC, as administrative agent and lender (the "Lender"). The Borrower is permitted to borrow funds under the Credit Agreement based on FlexShopper's cash on hand and the Amortized Order Value of its Eligible Leases (as such terms are defined in the Credit Agreement) less certain deductions described in the Credit Agreement. Under the terms of the Credit Agreement, subject to the satisfaction of certain conditions, the Borrower may borrow up to $47,500,000 from the Lender until the Commitment Termination Date and must repay all borrowed amounts one year thereafter, on the date that is 12 months following the Commitment Termination Date (unless such amounts become due or payable on an earlier date pursuant to the terms of the Credit Agreement). On April 1, 2019, the Commitment Termination Date was extended to February 28, 2021. The Lender was granted a security interest in certain leases as collateral under the Credit Agreement. The interest rate charged on amounts borrowed is LIBOR plus 11% per annum. At December 31, 2020, amounts borrowed bear interest at 11.16%. The Company had $9,217,592 available under the Credit Agreement as of December 31, 2020. The Credit Agreement provides that FlexShopper may not incur additional indebtedness (other than expressly permitted indebtedness) without the permission of the Lender and also prohibits dividends on common stock. Additionally, the Credit Agreement includes covenants requiring FlexShopper to maintain a minimum amount of Equity Book Value, maintain a minimum amount of Unrestricted Cash (including a reserve upon which the Lender may draw to satisfy unpaid amounts under the Credit Agreement) and maintain a certain ratio of Consolidated Total Debt to Equity Book Value (each capitalized term, as defined in the Credit Agreement). Upon a Permitted Change of Control (as defined in the Credit Agreement), FlexShopper must refinance the debt under the Credit Agreement, subject to the payment of an early termination fee. A summary of the covenant requirements, and FlexShopper's actual results at December 31, 2020, follows: December 31, Required Actual Position Equity Book Value not less than $ 8,000,000 $ 11,154,046 Unrestricted Cash greater than 1,500,000 8,541,232 Consolidated Total Debt to Equity Book Value ratio not to exceed 4.75 3.93 The Credit Agreement includes customary events of default, including, among others, failures to make payment of principal and interest, breaches or defaults under the terms of the Credit Agreement and related agreements entered into with the Lender, breaches of representations, warranties or certifications made by or on behalf of FlexShopper in the Credit Agreement and related documents (including certain financial and expense covenants), deficiencies in the borrowing base, certain judgments against FlexShopper and bankruptcy events. Availability under the Credit Agreement is subject to a borrowing base which is redetermined from time to time and based on specific advance rates on eligible current assets. Interest expense incurred under the Credit Agreement amounted to $ 3,192,019 for the year ended December 31, 2020, and $3,146,002 for the year ended December 31, 2019, respectively. As of December 31, 2020, the outstanding balance under the Credit Agreement was $37,195,626. Such amount is presented in the consolidated balance sheet net of unamortized issuance costs of $61,617. Interest is payable monthly on the outstanding balance of the amounts borrowed. No principal is expected to be repaid in the next twelve months due to the Commitment Termination Date having been extended to April 1, 2024 (See Note 14), or from reductions in the borrowing base. Accordingly, all principal is shown as a non-current liability at December 31, 2019. |
Capital Structure
Capital Structure | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
CAPITAL STRUCTURE | 7. CAPITAL STRUCTURE The Company's capital structure consists of preferred and common stock as described below: Preferred Stock The Company is authorized to issue 500,000 shares of $0.001 par value preferred stock. Of this number of shares, 250,000 shares have been designated as Series 1 Convertible Preferred Stock and 25,000 shares have been designated as Series 2 Convertible Preferred Stock. The Company's Board of Directors determines the rights and preferences of the Company's preferred stock. ● Series 1 Convertible Preferred Stock - As of December 31, 2020, each share of Series 1 Preferred Stock was convertible into 1.32230 shares of the Company's common stock, subject to certain anti-dilution rights. The holders of the Series 1 Preferred Stock have the option to convert the shares into common stock at any time. Upon conversion, all accumulated and unpaid dividends, if any, will be paid as additional shares of common stock. The holders of Series 1 Preferred Stock have the same dividend rights as holders of common stock, as if the Series 1 Preferred Stock had been converted to common stock. The Series 1 Preferred Stockholders vote with holders of common stock and are entitled to a number of votes equal to a fraction, the numerator is 7,700,000 and the denominator is the number of shares of Series 1 Preferred Stock issued. 859 shares of Series 1 Convertible Preferred Stock were converted into 1,136 shares of common stock during the year ended December 31, 2020. As of December 31, 2020, there were 170,332 shares of Series 1 Convertible Preferred Stock outstanding, which were convertible into 225,231 shares of common stock. ● Series 2 Convertible Preferred Stock - The shares of Series 2 Preferred Stock were sold for $1,000 per share (the "Stated Value") and accrue dividends on the Stated Value at an annual rate of 10% compounded annually. Cumulative accrued and unpaid dividends as of December 31, 2020 totaled approximately $10,832,073. As of December 31, 2020, each share of Series 2 Preferred Stock was convertible into approximately 266 shares of common stock; however, the conversion rate is subject to further increase pursuant to a weighted average anti-dilution provision. The holders of the Series 2 Preferred Stock have the option to convert such shares into shares of common stock and have the right to vote with holders of common stock on an as-converted basis. If the average closing price during any 45-day consecutive trading day period or change of control transaction values the common stock at a price equal to or greater than $23.00 per share, then conversion to common stock is automatic. Upon a Liquidation Event or Deemed Liquidation Event (each as defined), holders of Series 2 Preferred Stock will be entitled to receive out of the assets of the Company prior to and in preference to the common stock and Series 1 Convertible Preferred Stock an amount equal to the greater of (1) the Stated Value, plus any accrued, unpaid dividends thereon, and (2) the amount per share as would have been payable had all shares of Series 2 Preferred Stock been converted to common stock immediately before the Liquidation Event or Deemed Liquidation Event. Common Stock The Company is authorized to issue 40,000,000 shares of common stock, par value $0.0001 per share. Each share of common stock entitles the holder to one vote at all stockholder meetings. The common stock is traded on the Nasdaq Capital Market under the symbol "FPAY." Warrants In September 2018, the Company issued warrants exercisable for 5,750,000 shares of common stock at an exercise price of $1.25 per share (the "Public Warrants"). The warrants were immediately exercisable for five years from the date of issuance. The warrants were listed on the Nasdaq Capital Market under the symbol "FPAYW" (See Note 11). The Company also issued additional warrants exercisable for an aggregate of 1,055,184 shares of common stock at an exercise price of $1.25 per warrant to Mr. Heiser and NRNS in connection with partial conversions of their promissory notes. The warrants are exercisable at $1.25 per share of common stock and expire on September 28, 2023. In connection with the issuance of Series 2 Preferred Stock in June 2016, the Company issued to the placement agent in such offering warrants exercisable for 439 shares of Series 2 Preferred Stock at an initial exercise price of $1,250 per share, which expire seven years after the date of issuance. As part of a Consulting Agreement with XLR8 Capital Partners LLC (the "Consultant"), an entity of which the Company's Chairman is the manager, the Company agreed to issue 40,000 warrants to the Consultant monthly for 12 months beginning on March 1, 2019 at an exercise price of $1.25 per share or, if the closing share price on the last day of the month exceeds $1.25, then such exercise price will be 110% of the closing share price. The warrants are immediately exercisable and expire following the close of business on June 30, 2023. In February 2020, this agreement was extended for an additional six months through August 31, 2020. On August 30, 2020, the parties entered into an amendment to the Consulting Agreement to further extend the term for another six-month period through February 28, 2021. The Consulting Agreement was automatically renewed for one successive six-month period, therefore the new termination date is July 31, 2021. This amendment also changed the alternative minimum exercise price of the monthly warrant consideration issuable to the Consultant to $1.60 per share, and the expiration date of the warrants to the date that is four years following the last trading day of the calendar month relating to the applicable monthly warrant issuance. During the year ended December 31, 2020, the Company recorded an expense of $407,495 based on a weighted average valuation of $0.85 per warrant. Warrants Expense Valuation Grant Date Granted Recorded Per Warrant January 31, 2020 40,000 $ 16,503 $ 0.41 February 29, 2020 40,000 $ 18,727 $ 0.47 March 31, 2020 40,000 $ 8,769 $ 0.22 April 30, 2020 40,000 $ 25,412 $ 0.64 May 31, 2020 40,000 $ 33,388 $ 0.83 June 30, 2020 40,000 $ 36,681 $ 0.92 July 31, 2020 40,000 $ 29,587 $ 0.74 August 31, 2020 40,000 $ 46,744 $ 1.17 September 30, 2020 40,000 $ 43,229 $ 1.08 October 31,2020 40,000 $ 37,414 $ 0.94 November 30, 2020 40,000 $ 45,883 $ 1.15 December 31, 2020 40,000 $ 65,157 $ 1.63 480,000 $ 407,494 $ 0.85 The following table summarizes information about outstanding warrants as of December 31, 2020, all of which are exercisable: Common Series 2 Preferred Weighted Average Exercise Stock Warrants Stock Warrants Remaining Price Outstanding Outstanding Contractual Life $ 1.25 1,215,184 3 years $ 1.34 40,000 3 years $ 1.40 40,000 3 years $ 1.54 40,000 3 years $ 1.62 40,000 3 years $ 1.68 40,000 4 years $ 1.69 40,000 3 years $ 1.74 40,000 3 years $ 1.76 40,000 3 years $ 1.91 40,000 3 years $ 1.95 40,000 4 years $ 2.00 40,000 3 years $ 2.01 40,000 3 years $ 2.08 40,000 4 years $ 2.45 40,000 3 years $ 2.53 40,000 3 years $ 2.57 40,000 4 years $ 2.78 40,000 3 years $ 2.93 40,000 3 years $ 5.50 177,304 2 years $ 1,250 - 439 * 3 years 2,112,488 439 * At December 31, 2020, the above warrants were convertible into 116,903 shares of common stock |
Stock Options
Stock Options | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS | 8. STOCK OPTIONS On April 26, 2018 at the Company's annual meeting, the Company's stockholders approved the FlexShopper, Inc. 2018 Omnibus Equity Compensation Plan (the "2018 Plan"). Upon the 2018 Plan's approval, approximately 1,057,000 shares of Company common stock were available for issuance thereunder, consisting of 750,000 shares authorized for issuance under the 2018 Plan and an aggregate 307,000 shares then remaining available for issuance under the Company's 2007 Omnibus Equity Compensation Plan (the "2007 Plan") and 2015 Omnibus Equity Compensation Plan (the "2015 Plan", and together with the 2007 Plan, the "Prior Plans"). The 2018 Plan replaced the Prior Plans. No new awards will be granted under the Prior Plans; however, awards outstanding under the Prior Plans upon approval of the 2018 Plan remain subject to and will be paid under the applicable Prior Plan. On February 21, 2019, the Company's Board of Directors approved amendment No. 1 to the 2018 Plan, subject to stockholder approval. On May 2, 2019, the Company's stockholders approved the 2018 plan amendment that increased (a) the total number of shares available for issuance under the 2018 Plan by 1,000,000 shares and (b) the number of shares available for issuance as "incentive stock options" within the meaning of Internal Revenue Code Section 422 by 1,000,000 shares. On April 24, 2020, the Company's Board of Directors approved an Amendment to the 2018 Plan, subject to stockholder approval. On June 10, 2020, the Company's stockholders approved the 2018 Plan Amendment that increased (a) the total number of shares available for issuance under the 2018 Plan by 1,000,000 shares and (b) the number of shares available for issuance as "incentive stock options" within the meaning of Internal Revenue Code Section 422 by 1,000,000 shares. Grants under the 2018 Plan and the Prior Plans consist of incentive stock options, non-qualified stock options, stock appreciation rights, stock awards, stock unit awards, dividend equivalents and other stock-based awards. Employees, directors and consultants and other service providers are eligible to participate in the 2018 Plan and the Prior Plans. Options granted under the 2018 Plan and the Prior Plans vest over periods ranging from immediately upon grant to a three-year period and expire ten years from date of grant. Activity in stock options for the year ended December 31, 2020 and 2019 is as follows: Number of Weighted Weighted Aggregate Outstanding at January 1, 2020 2,004,318 $ 1.72 $ 2,542,361 Granted 860,465 2.38 Exercised (7,166 ) 0.79 6,523 Forfeited (261,917 ) 1.90 134,070 Outstanding at December 31, 2020 2,595,700 $ 1.92 7.60 2,491,026 Vested and exercisable at December 31, 2020 1,730,198 1.90 7.82 1.967,071 Outstanding at January 1, 2019 620,900 $ 3.75 Granted 1,694,851 1.00 Forfeited (203,766 ) 1.71 104,868 Expired (25,000 ) 6.20 Exercised (82,667 ) 0.84 67,911 Outstanding at December 31, 2019 2,004,318 $ 1.72 2,542,361 The weighted average grant date fair value of options granted during the twelve-month period ended December 31, 2020 and 2019 was $1.47 and $0.61 per share. The Company measured the fair value of each option award on the date of grant using the Black-Scholes-Merton pricing model with the following assumptions: 2020 2019 Exercise price 1.47 $0.83 to $1.80 Expected life 5.3 years 6.8 years Expected volatility 76.0 % 64 % Dividend yield 0 % 0 % Risk-free interest rate 0.28% to 1.72% 1.43% to 2.55% The expected dividend yield is based on the Company's historical dividend yield. The expected volatility is based on the historical volatility of the Company's common stock. The expected life is based on the simplified expected term calculation permitted by the Securities and Exchange Commission (the "SEC"), which defines the expected life as the average of the contractual term of the options and the weighted-average vesting period for all option tranches. The risk-free interest rate is based on the annual yield on the grant date of a zero-coupon U.S. Treasury bond the maturity of which equals the option's expected life. The value of stock options is recognized as compensation expense by the straight-line method over the vesting period. Compensation expense recorded was $981,261 and $595,833 for the year ended December 31, 2020 and December 31, 2019, respectively. Unrecognized compensation cost related to non-vested options at December 31, 2020 amounted to approximately $743,726, which is expected to be recognized over a weighted average period of 3.6 years. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 9. INCOME TAXES Reconciliation of the benefit for income taxes from continuing operations recorded in the consolidated statements of operations with the amounts computed at the statutory federal tax rates for each year: 2020 2019 Federal tax at statutory rate $ 67,862 $ 167,000 State tax, net of federal tax 29,866 65,000 Permanent differences 126,301 92,000 Change in statutory rate (69,835 ) (197,000 ) Change in valuation allowance 522,738 (10,000 ) Other (13,882 ) 99,000 Expense for income taxes $ 663,050 $ 216,000 Tax affected components of deferred tax assets and deferred tax liabilities at December 31, 2020 and 2019 were as follows: 2020 2019 Deferred tax assets (liabilities): Equity based compensation $ 368,000 $ 240,000 Allowance for doubtful accounts 5,527,000 2,478,000 Fixed assets 256,000 (6,476,000 ) Lease impairment 587,000 553,000 Lease Liability 526,000 520,000 Right of use asset (425,000 ) (466,000 ) Tax credit carryforward 32,000 32,000 Federal loss carry-forwards 4,779,000 14,047,000 State loss carry forward 161,000 353,000 Other (6,000 ) - Gross deferred tax assets 11,805,000 11,281,000 Valuation allowance (11,805,000 ) (11,281,000 ) Net deferred tax assets $ - $ - Based on consideration of the available evidence including historical losses a valuation allowance has been recognized to offset certain deferred tax assets, as management was unable to conclude that realization of deferred tax assets were more likely than not. As of December 31, 2020, the Company has federal net operating loss carryforwards of approximately $22,755,000 and state net operating loss carryforwards of approximately $2,857,000 available to offset future taxable income. Federal loss carryforwards incurred prior to January 1, 2018, expire in 2037. Federal loss carryforwards incurred after January 1, 2018 do not expire. State loss carryforwards expire in 2037 and 2038. Federal and state loss carryforwards are subject to an annual limitation on utilization under Section 382 of the Internal Revenue Code. Section 382 of the Internal Revenue Code imposes a limitation on a corporation's ability to utilize net operating loss carryforwards ("NOLs") if it experiences an "ownership change." In general, an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50 percentage points over a three-year period. If such a change were to occur, certain NOLs available to be used could be disallowed and an annual limitation on utilization of other NOLs would occur. The components of income tax expense (benefits) for the years ended December 31, 2020 and 2019 were as follows: 2020 2019 Current Income Tax: Federal $ - - State 663,050 216,400 Deferred Income Tax: Federal - - Sate - - $ 663,050 $ 216,400 The Company's effective tax rate for the year ended December 31, 2020 and 2019 differs from the statutory rate of 21% primarily due to a valuation allowance applied against the Company's net deferred tax assets. State taxes and permanent differences also impacted the effective tax rate. The Company accrued a $663,050 current state income tax expense for the year ended December 31, 2020 for certain states in which taxable income exceeded available net operating loss carryforwards. The Company files tax returns in the U.S. federal jurisdiction and various states. At December 31, 2020, federal tax returns remained open for Internal Revenue Service review for tax years after 2017, while state tax returns remain open for review by state taxing authorities for tax years after 2015. The IRS completed an examination of the Company's 2016 tax return during 2018, resulting in a reduction to the net operating loss carryforward of approximately $50,000. During 2020, the Company was notified that its 2017 federal income tax return was selected for examination, and that exam remains open as of December 31, 2020. There were no other federal or state income tax audits being conducted as of December 31, 2020. The Company completed its analysis and review of all tax positions taken through December 31, 2020 and does not believe that there are any unrecognized tax benefits related to tax positions taken on its income tax returns. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | 10. COMMITMENTS The Company does not have any commitments other than real property leases (see Note 3). |
Exchange Offer of Warrants
Exchange Offer of Warrants | 12 Months Ended |
Dec. 31, 2020 | |
Warrants [Abstract] | |
EXCHANGE OFFER OF WARRANTS | 11. EXCHANGE OFFER OF WARRANTS On February 4, 2020, the Company completed an exchange offer relating to its outstanding public warrants, in which the holders of the public warrants were offered 0.62 shares of common stock for each outstanding warrant tendered (the "Warrant Exchange Offer"). In total, 5,351,290 warrants were exchanged for 3,317,812 shares of common stock in accordance with the Warrant Exchange Offer. On February 19, 2020, the Company exchanged all remaining untendered public warrants for common stock at a rate of 0.56 shares per public warrant in accordance with the terms of the Warrant Agreement (the "Mandatory Conversion of Warrants"). In total 258,610 warrants were exchanged for 144,871 shares in this transaction. As a result of these transactions, the Company recognized a deemed dividend of $713,212 resulting from the excess of the fair value of the common stock over the intrinsic value of the warrants. |
Contingencies and Other Uncerta
Contingencies and Other Uncertainties | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES AND OTHER UNCERTAINTIES | 12. CONTINGENCIES AND OTHER UNCERTAINTIES Regulatory inquiries In the first quarter of 2021, FlexShopper, along with a number of other lease-to-own companies, received a subpoena from the California Department of Financial Protection and Innovation (the "DFPI") requesting the production of documents and information regarding the Company's compliance with state consumer protection laws. The Company is cooperatively engaging with the DFPI in response to its inquiry. Although the Company believes it is in compliance with all applicable consumer protection laws and regulations in California, this inquiry ultimately could lead to an enforcement action and/or a consent order, and substantial costs, including legal fees, fines, penalties, and remediation expenses. COVID-19 The extent of the impact and effects of the recent outbreak of the coronavirus (COVID-19) on the operation and financial performance of our business will depend on future developments, including the duration and spread of the outbreak, the recovery time of the disrupted supply chains, or the uncertainty with respect to the accessibility of additional liquidity or capital markets, all of which are highly uncertain and cannot be predicted. If the demand for the Company's leases are impacted by this outbreak for an extended period, our results of operations may be materially adversely affected. |
Promissory Note- Paycheck Prote
Promissory Note- Paycheck Protection Program | 12 Months Ended |
Dec. 31, 2020 | |
Paycheck Protection Program [Abstract] | |
PROMISSORY NOTE- PAYCHECK PROTECTION PROGRAM | 13. PROMISSORY NOTE- PAYCHECK PROTECTION PROGRAM FlexShopper, LLC (the "Borrower") applied for and received a loan (the "Loan") on May 4, 2020, from Customers Bank (the "PPP Lender") in the principal amount of $1,914,100, pursuant to the Paycheck Protection Program (the "PPP") under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), which was enacted March 27, 2020, and administered through the U.S. Small Business Administration (the "SBA"). The Loan is evidenced by a promissory note (the "Note"), dated April 30, 2020, issued by the Borrower to the PPP Lender. The Note matures on April 30, 2022, and bears interest at the rate of 1.00% per annum, payable monthly commencing the later of on November 30, 2020 or the SBA review of the forgiveness application. The Note may be prepaid by the Borrower at any time prior to maturity with no prepayment penalty. Proceeds from the Loan will be available to the Borrower to fund designated expenses, including certain payroll costs, group health care benefits and other permitted expenses, in accordance with the PPP. Under the terms of the PPP, up to the entire sum of the principal amount and accrued interest may be forgiven to the extent the Loan proceeds are used for qualifying expenses as described in the CARES Act and applicable implementing guidance issued by the U.S. Small Business Administration under the PPP. The Company believes that it used the entire Loan amount for designated qualifying expenses and has submitted a loan forgiveness application to the PPP Lender that is pending review. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 14. SUBSEQUENT EVENTS On January 29, 2021, the Company and the Lender signed an Omnibus Amendment to the Credit Agreement (See Note 6). This Amendment extended the Commitment Termination Date to April 1, 2024, improved other covenant requirements, partially removed indebtedness covenants and improved eligibility rules. The interest rate charged on amounts borrowed remains LIBOR plus 11% per annum. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation - |
Estimates | Estimates - |
Revenue Recognition | Revenue Recognition |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts - December 31, December 31, Accounts receivable $ 32,171,255 $ 18,249,273 Allowance for doubtful accounts (22,138,541 ) (9,976,941 ) Accounts receivable, net $ 10,032,714 $ 8,272,332 The allowance is a significant percentage of the net accounts receivable balance because FlexShopper does not charge off any customer account until it has exhausted all collection efforts with respect to each account including attempts to repossess items. In addition, while collections are pursued, the same delinquent customers will continue to accrue weekly charges until they are charged off. During the years ended December 31, 2020 and 2019, $19,769,114 and $28,615,411 of accounts receivable balances, respectively, were charged off against the allowance. During the years ended December 31, 2020 and 2019, the provision for bad debts was $31,930,714 and $34,838,046, respectively. The following table shows the activity in the allowance for doubtful accounts: December 31, December 31, Beginning balance $ 9,976,941 $ 3,754,306 Provision 31,930,714 34,838,046 Accounts written off (19,769,114 ) (28,615,411 ) Ending balance $ 22,138,541 $ 9,976,941 |
Lease Merchandise | Lease Merchandise - The net leased merchandise balances consisted of the following as of December 31, 2020 and December 31, 2019: December 31, December 31, Lease merchandise at cost $ 64,335,971 $ 46,807,570 Accumulated depreciation (19,162,357 ) (13,518,181 ) Impairment reserve (2,351,274 ) (2,226,285 ) Lease merchandise, net $ 42,822,340 $ 31,063,104 Cost of lease merchandise sold represents the undepreciated cost of rental merchandise at the time of sale. |
Deferred Debt Issuance Costs | Deferred Debt Issuance Costs Debt issuance costs of $60,000 incurred in conjunction with the subordinated Promissory Notes entered on January 25, 2019 and February 19, 2019 (see Note 5) are offset against the outstanding balance of the loan payable and are amortized using the straight-line method over the remaining term of the related debt, which approximates the effective interest method. Amortization, which is included in interest expense, was $21,885 and 29,839 for the years ended December 31, 2020 and 2019, respectively. |
Software Costs | Software Costs |
Operating Expenses | Operating Expenses |
Marketing | Marketing - |
Per Share Data | Per Share Data - Diluted earnings per share is based on the more dilutive of the if-converted method (which assumes conversion of the participating Series 1 Convertible Preferred Stock as of the beginning of the period) or the two-class method (which assumes that the participating Series 1 Convertible Preferred Stock is not converted) plus the potential impact of dilutive non-participating Series 2 Convertible Preferred Stock, options and warrants. The dilutive effect of stock options and warrants is computed using the treasury stock method, which assumes the repurchase of common shares at the average market price during the period. Under the treasury stock method, options and warrants will have a dilutive effect when the average price of common stock during the period exceeds the exercise price of options or warrants. When there is a loss from continuing operations, potential common shares are not included in the computation of diluted loss per share, since they have an anti-dilutive effect. In computing diluted loss per share, no effect has been given to the issuance of common stock upon conversion or exercise of the following securities as their effect is anti-dilutive: Year ended 2020 2019 Series 1 Convertible Preferred Stock 225,231 218,104 Series 2 Convertible Preferred Stock 5,845,695 5,679,615 Series 2 Convertible Preferred Stock issuable upon exercise of warrants 116,903 113,582 Common Stock Options 2,595,700 2,004,318 Common Stock Warrants 2,112,488 7,347,388 10,896,017 15,363,007 The following table sets forth the computation of basic and diluted earnings per share as of December 31, 2020 and December 31, 2019: December 31, December 31, 2020 2019 Numerator Net (loss)/ income $ (339,896 ) $ 577,415 Convertible Series 2 Preferred Share dividends (2,438,988 ) (2,437,884 ) Deemed dividend from exchange offer of warrants (See Note 11) (713,212 ) - Numerator for basic and diluted EPS $ (3,492,096 ) $ (1,860,469 ) Denominator Denominator for basic and diluted EPS - weighted average shares 20,995,349 17,672,156 Basic EPS $ (0.17 ) $ (0.11 ) Diluted EPS $ (0.17 ) $ (0.11 ) |
Stock-Based Compensation | Stock Based Compensation - Compensation expense is determined by reference to the fair value of an award on the date of grant and is amortized on a straight-line basis over the vesting period. The Company has elected to use the Black-Scholes-Merton (BSM) pricing model to determine the fair value of all stock option awards (see Note 8). |
Fair Value of Financial Instruments | Fair Value of Financial Instruments - |
Income Taxes | Income Taxes The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of December 31, 2020, and 2019, the Company has not recorded any unrecognized tax benefits. Interest and penalties related to liabilities for uncertain tax positions will be charged to interest and operating expenses, respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update No. 2016-13, "Financial Instruments - Credit Losses (Topic 326)" ("ASU 2016-13"). ASU 2016-13 revises the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. Originally, ASU 2016-13 was effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. In November 2019, FASB issued ASU 2019-10, "Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)." This ASU defers the effective date of ASU 2016-13 for public companies that are considered smaller reporting companies as defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is planning to adopt this standard in the first quarter of fiscal 2023.The Company is currently evaluating the potential effects of adopting the provisions of ASU No. 2016-13 on its Consolidated Financial Statements, particularly its recognition of allowances for accounts receivable. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). ASU 2019-12 removes certain exceptions for performing intraperiod tax allocations, recognizing deferred taxes for investments, and calculating income taxes in interim periods. The guidance also simplifies the accounting for franchise taxes, transactions that result in a step-up in the tax basis of goodwill, and the effect of enacted changes in tax laws or rates in interim periods. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and early adoption is permitted. While the Company is continuing to assess the potential impacts of ASU 2019-12, it does not expect ASU 2019-12 to have a material effect, if any, on its financial statements. In March 2020, the FASB issued guidance codified in ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which provides optional expedients for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The standard is effective for the Company as of March 12, 2020 through December 31, 2022. An entity can elect to apply the amendments as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to that date that the financial statements are available to be issued. The Company is currently evaluating the optional expedients and exceptions provided by ASU 2020-04 to determine the impact on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of accounts receivable | December 31, December 31, Accounts receivable $ 32,171,255 $ 18,249,273 Allowance for doubtful accounts (22,138,541 ) (9,976,941 ) Accounts receivable, net $ 10,032,714 $ 8,272,332 |
Schedule of allowance for doubtful accounts | December 31, December 31, Beginning balance $ 9,976,941 $ 3,754,306 Provision 31,930,714 34,838,046 Accounts written off (19,769,114 ) (28,615,411 ) Ending balance $ 22,138,541 $ 9,976,941 |
Schedule of net leased merchandise | December 31, December 31, Lease merchandise at cost $ 64,335,971 $ 46,807,570 Accumulated depreciation (19,162,357 ) (13,518,181 ) Impairment reserve (2,351,274 ) (2,226,285 ) Lease merchandise, net $ 42,822,340 $ 31,063,104 |
Schedule of anti-dilutive securities excluded from computation of earnings per share | Year ended 2020 2019 Series 1 Convertible Preferred Stock 225,231 218,104 Series 2 Convertible Preferred Stock 5,845,695 5,679,615 Series 2 Convertible Preferred Stock issuable upon exercise of warrants 116,903 113,582 Common Stock Options 2,595,700 2,004,318 Common Stock Warrants 2,112,488 7,347,388 10,896,017 15,363,007 |
Schedule of basic and diluted earnings per share | December 31, December 31, 2020 2019 Numerator Net (loss)/ income $ (339,896 ) $ 577,415 Convertible Series 2 Preferred Share dividends (2,438,988 ) (2,437,884 ) Deemed dividend from exchange offer of warrants (See Note 11) (713,212 ) - Numerator for basic and diluted EPS $ (3,492,096 ) $ (1,860,469 ) Denominator Denominator for basic and diluted EPS - weighted average shares 20,995,349 17,672,156 Basic EPS $ (0.17 ) $ (0.11 ) Diluted EPS $ (0.17 ) $ (0.11 ) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of lease revenues and fees | Year ended December 31, 2020 2019 Gross lease billings and fees $ 128,870,481 $ 120,169,406 Provision for doubtful accounts (31,930,714 ) 34,838,046 Lease revenues and fees, net $ 96,939,767 $ 85,331,360 |
Schedule of future minimum annual lease payments | 2021 $ 426,233 2022 416,627 2023 427,305 2024 434,916 2025 443,038 2026 and thereafter 1,229,924 $ 3,378,043 |
Schedule of balance sheet information related to leases | Balance Sheet Classification December 30, December 31, Assets Operating Lease Asset Property and Equipment, net $ 1,673,432 $ 1,847,932 Finance Lease Asset Property and Equipment, net 27,106 31,299 Total Lease Assets $ 1,700,538 $ 1,879,231 Liabilities Operating Lease Liability - current portion Current Lease Liabilities $ 153,019 $ 22,088 Finance Lease Liability - current portion Current Lease Liabilities 7,707 5,638 Operating Lease Liability- net of current portion Long Term Lease Liabilities 1,925,498 2,040,576 Finance Lease Liability - net of current portion Long Term Lease Liabilities 21,857 26,608 Total Lease Liabilities $ 2,108,081 $ 2,094,910 |
Schedule of weighted-average discount rate and weighted-average remaining lease term | Weighted Weighted Operating Leases 13.06 % 8 Finance Leases 13.31 % 3 |
Schedule of supplemental cash flow information | December 31, December 31, 2020 2019 Cash payments for operating leases $ 221,433 $ 164,664 Cash payments for finance leases 11,049 4,782 New operating lease asset obtained in exchange for lease liabilities - 2,060,288 New finance lease asset obtained in exchange for lease liabilities 4,033 34,772 |
Schedule of undiscounted operating lease liabilities | Operating 2021 $ 415,050 2022 405,443 2023 417,606 2024 430,134 2025 443,038 2026 and thereafter 1,229,924 Total undiscounted cash flows 3,341,195 Less: interest (1,262,678 ) Present value of lease liabilities $ 2,078,517 |
Schedule of undiscounted finance lease liabilities | Finance 2021 $ 11,184 2022 11,184 2023 9,699 2024 4,782 Total undiscounted cash flows 36,849 Less: interest (7,284 ) Present value of lease liabilities $ 29,565 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Estimated December 31, December 31, Furniture, fixtures and vehicle 2-5 years $ 303,285 $ 95,671 Website and internal use software 3 years 12,489,441 10,123,830 Computers and software 3-7 years 1,121,914 596,946 13,914,640 10,816,447 Less: accumulated depreciation and amortization (9,703,482 ) (7,435,271 ) Right of use assets, net 1,700,538 1,879,231 $ 5,911,696 $ 5,260,407 |
Promissory Notes-Related Part_2
Promissory Notes-Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of amounts payable under the promissory notes | Debt Interest 2021 $ 4,750,000 $ 73,822 |
Loan Payable Under Credit Agr_2
Loan Payable Under Credit Agreement (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of covenant requirements, and FlexShopper's actual results | December 31, Required Actual Position Equity Book Value not less than $ 8,000,000 $ 11,154,046 Unrestricted Cash greater than 1,500,000 8,541,232 Consolidated Total Debt to Equity Book Value ratio not to exceed 4.75 3.93 |
Capital Structure (Tables)
Capital Structure (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of weighted average valuation | Warrants Expense Valuation Grant Date Granted Recorded Per Warrant January 31, 2020 40,000 $ 16,503 $ 0.41 February 29, 2020 40,000 $ 18,727 $ 0.47 March 31, 2020 40,000 $ 8,769 $ 0.22 April 30, 2020 40,000 $ 25,412 $ 0.64 May 31, 2020 40,000 $ 33,388 $ 0.83 June 30, 2020 40,000 $ 36,681 $ 0.92 July 31, 2020 40,000 $ 29,587 $ 0.74 August 31, 2020 40,000 $ 46,744 $ 1.17 September 30, 2020 40,000 $ 43,229 $ 1.08 October 31,2020 40,000 $ 37,414 $ 0.94 November 30, 2020 40,000 $ 45,883 $ 1.15 December 31, 2020 40,000 $ 65,157 $ 1.63 480,000 $ 407,494 $ 0.85 |
Schedule of outstanding stock warrants | Common Series 2 Preferred Weighted Average Exercise Stock Warrants Stock Warrants Remaining Price Outstanding Outstanding Contractual Life $ 1.25 1,215,184 3 years $ 1.34 40,000 3 years $ 1.40 40,000 3 years $ 1.54 40,000 3 years $ 1.62 40,000 3 years $ 1.68 40,000 4 years $ 1.69 40,000 3 years $ 1.74 40,000 3 years $ 1.76 40,000 3 years $ 1.91 40,000 3 years $ 1.95 40,000 4 years $ 2.00 40,000 3 years $ 2.01 40,000 3 years $ 2.08 40,000 4 years $ 2.45 40,000 3 years $ 2.53 40,000 3 years $ 2.57 40,000 4 years $ 2.78 40,000 3 years $ 2.93 40,000 3 years $ 5.50 177,304 2 years $ 1,250 - 439 * 3 years 2,112,488 439 * At December 31, 2020, the above warrants were convertible into 116,903 shares of common stock |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of information about stock options | Number of Weighted Weighted Aggregate Outstanding at January 1, 2020 2,004,318 $ 1.72 $ 2,542,361 Granted 860,465 2.38 Exercised (7,166 ) 0.79 6,523 Forfeited (261,917 ) 1.90 134,070 Outstanding at December 31, 2020 2,595,700 $ 1.92 7.60 2,491,026 Vested and exercisable at December 31, 2020 1,730,198 1.90 7.82 1.967,071 Outstanding at January 1, 2019 620,900 $ 3.75 Granted 1,694,851 1.00 Forfeited (203,766 ) 1.71 104,868 Expired (25,000 ) 6.20 Exercised (82,667 ) 0.84 67,911 Outstanding at December 31, 2019 2,004,318 $ 1.72 2,542,361 |
Schedule of option input into a Black Scholes option pricing model | 2020 2019 Exercise price 1.47 $0.83 to $1.80 Expected life 5.3 years 6.8 years Expected volatility 76.0 % 64 % Dividend yield 0 % 0 % Risk-free interest rate 0.28% to 1.72% 1.43% to 2.55% |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of the benefit for income taxes from continuing operations | 2020 2019 Federal tax at statutory rate $ 67,862 $ 167,000 State tax, net of federal tax 29,866 65,000 Permanent differences 126,301 92,000 Change in statutory rate (69,835 ) (197,000 ) Change in valuation allowance 522,738 (10,000 ) Other (13,882 ) 99,000 Expense for income taxes $ 663,050 $ 216,000 |
Schedule of deferred tax assets and liabilities | 2020 2019 Deferred tax assets (liabilities): Equity based compensation $ 368,000 $ 240,000 Allowance for doubtful accounts 5,527,000 2,478,000 Fixed assets 256,000 (6,476,000 ) Lease impairment 587,000 553,000 Lease Liability 526,000 520,000 Right of use asset (425,000 ) (466,000 ) Tax credit carryforward 32,000 32,000 Federal loss carry-forwards 4,779,000 14,047,000 State loss carry forward 161,000 353,000 Other (6,000 ) - Gross deferred tax assets 11,805,000 11,281,000 Valuation allowance (11,805,000 ) (11,281,000 ) Net deferred tax assets $ - $ - |
Schedule of income tax expense benefits | 2020 2019 Current Income Tax: Federal $ - - State 663,050 216,400 Deferred Income Tax: Federal - - Sate - - $ 663,050 $ 216,400 |
Business (Details)
Business (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Business (Textual) | |
Ownership percentage | 100.00% |
FlexShopper, LLC [Member] | |
Business (Textual) | |
Limited liability percentage | 100.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Accounts receivable | $ 32,171,255 | $ 18,249,273 |
Allowance for doubtful accounts | (22,138,541) | (9,976,941) |
Accounts receivable, net | $ 10,032,714 | $ 8,272,332 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Beginning balance | $ 9,976,941 | $ 3,754,306 |
Provision | (31,930,714) | 34,838,046 |
Accounts written off | (19,769,114) | (28,615,411) |
Ending balance | $ 22,138,541 | $ 9,976,941 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Lease merchandise at cost | $ 64,335,971 | $ 46,807,570 |
Accumulated depreciation | (19,162,357) | (13,518,181) |
Impairment reserve | (2,351,274) | (2,226,285) |
Lease merchandise, net | $ 42,822,340 | $ 31,063,104 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 10,896,017 | 15,363,007 |
Common Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 2,595,700 | 2,004,318 |
Common Stock Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 2,112,488 | 7,347,388 |
Series 1 Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 225,231 | 218,104 |
Series 2 Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 5,845,695 | 5,679,615 |
Series 2 Convertible Preferred Stock issuable upon exercise of warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 116,903 | 113,582 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details 4) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator | ||
Net (loss)/ income | $ (339,896) | $ 577,415 |
Convertible Series 2 Preferred Share dividends | (2,438,988) | (2,437,884) |
Deemed dividend from exchange offer of warrants | (713,212) | |
Numerator for basic and diluted EPS | $ (3,492,096) | $ (1,860,469) |
Denominator | ||
Denominator for basic and diluted EPS - weighted average shares | 20,995,349 | 17,672,156 |
Basic EPS | $ (0.17) | $ (0.11) |
Diluted EPS | $ (0.17) | $ (0.11) |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Feb. 19, 2019 | Jan. 25, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies (Textual) | ||||
Amortization method | Straight-line method | |||
Accounts receivable charged off against allowance | $ 19,769,114 | $ 28,615,411 | ||
Provision for bad debts | 31,930,714 | 34,838,046 | ||
Capitalized software costs | 2,365,612 | 2,130,922 | ||
Capitalized software amortization expense | $ 2,102,983 | 2,126,343 | ||
Revenue recognition, description | Through a 90-day same as cash option, an early purchase option, or through payments of all required lease payments, generally 52 weeks, for ownership. | |||
Debt issuance costs | $ 60,000 | $ 60,000 | ||
Intangible assets, terms | 10 years | |||
Tax benefits, description | The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. | |||
Capitalized development costs | $ 105,575 | |||
Credit Agreement [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Amortization included in interest expense | 283,912 | 294,847 | ||
Promissory Notes [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Amortization included in interest expense | $ 21,885 | $ 29,839 |
Leases (Details)
Leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Gross lease billings and fees | $ 128,870,481 | $ 120,169,406 |
Provision for doubtful accounts | (31,930,714) | 34,838,046 |
Lease revenues and fees, net | $ 96,939,767 | $ 85,331,360 |
Leases (Details 1)
Leases (Details 1) | Dec. 31, 2020USD ($) |
Leases [Abstract] | |
2021 | $ 426,233 |
2022 | 416,627 |
2023 | 427,305 |
2024 | 434,916 |
2025 | 443,038 |
2026 and thereafter | 1,229,924 |
Total | $ 3,378,043 |
Leases (Details 2)
Leases (Details 2) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Operating Lease Asset | $ 1,673,432 | $ 1,847,932 |
Finance Lease Asset | 27,106 | 31,299 |
Total Lease Assets | 1,700,538 | 1,879,231 |
Liabilities | ||
Operating Lease Liability - current portion | 153,019 | 22,088 |
Finance Lease Liability - current portion | 7,707 | 5,638 |
Operating Lease Liability- net of current portion | 1,925,498 | 2,040,576 |
Finance Lease Liability - net of current portion | 21,857 | 26,608 |
Total Lease Liabilities | $ 2,108,081 | $ 2,094,910 |
Leases (Details 3)
Leases (Details 3) | Dec. 31, 2020 |
Operating Leases [Member] | |
Weighted Average Discount Rate | 13.06% |
Weighted Average Remaining Lease Term (in years) | 8 years |
Finance Leases [Member] | |
Weighted Average Discount Rate | 13.31% |
Weighted Average Remaining Lease Term (in years) | 3 years |
Leases (Details 4)
Leases (Details 4) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Cash payments for operating leases | $ 221,433 | $ 164,664 |
Cash payments for finance leases | 11,049 | 4,782 |
New operating lease asset obtained in exchange for lease liabilities | 2,060,288 | |
New finance lease asset obtained in exchange for lease liabilities | $ 4,033 | $ 34,772 |
Leases (Details 5)
Leases (Details 5) | Dec. 31, 2020USD ($) |
Finance Leases [Member] | |
2021 | $ 11,184 |
2022 | 11,184 |
2023 | 9,699 |
2024 | 4,782 |
Total undiscounted cash flows | 36,849 |
Less: interest | (7,284) |
Present value of lease liabilities | 29,565 |
Operating Leases [Member] | |
2021 | 415,050 |
2022 | 405,443 |
2023 | 417,606 |
2024 | 430,134 |
2025 | 443,038 |
2026 and thereafter | 1,229,924 |
Total undiscounted cash flows | 3,341,195 |
Less: interest | (1,262,678) |
Present value of lease liabilities | $ 2,078,517 |
Leases (Details Textual)
Leases (Details Textual) | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2019USD ($)ft² | Apr. 30, 2018 | Aug. 31, 2017 | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Leases (Textual) | |||||
Lease description | The Company pays a base monthly rent of approximately $31,500 with payments increasing by 3% on each yearly anniversary of the commencement date. The initial lease term is for nine years with the Company having a one-time option to extend for five years. | ||||
Operating lease costs | $ 433,654 | $ 395,455 | |||
Operating lease liability | $ 191,001 | ||||
Operating lease assets | 191,001 | ||||
Rental expense | 688,400 | $ 520,700 | |||
Description of leasing arrangements | FlexShopper exercised its first option to extend the term of the lease to September 30, 2021. | ||||
Monthly rent | $ 31,500 | $ 2,300 | |||
Term of lease | 108 months | 12 months | 12 months | ||
Area of land | ft² | 21,622 | ||||
Additional lease term | 5 years | 3 years | |||
Annual percentage | 3.00% |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 13,914,640 | $ 10,816,447 |
Less: accumulated depreciation and amortization | (9,703,482) | (7,435,271) |
Right of use assets, net | 1,700,538 | 1,879,231 |
Property and equipment, net | 5,911,696 | 5,260,407 |
Furniture, fixtures and vehicle [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 303,285 | 95,671 |
Website and internal use software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 12,489,441 | 10,123,830 |
Estimated Useful Lives | 3 years | |
Computers and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,121,914 | $ 596,946 |
Minimum [Member] | Furniture, fixtures and vehicle [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 2 years | |
Minimum [Member] | Computers and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 3 years | |
Maximum [Member] | Furniture, fixtures and vehicle [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 5 years | |
Maximum [Member] | Computers and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 7 years |
Property and Equipment (Detai_2
Property and Equipment (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property and Equipment (Textual) | ||
Depreciation and amortization expense | $ 2,268,211 | $ 2,196,661 |
Promissory Notes-Related Part_3
Promissory Notes-Related Parties (Details) - USD ($) | May 04, 2020 | Dec. 31, 2020 |
Debt Principal | $ 1,914,100 | |
2021 [Member] | ||
Debt Principal | $ 4,750,000 | |
Interest | $ (73,822) |
Promissory Notes-Related Part_4
Promissory Notes-Related Parties (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Apr. 30, 2020 | Feb. 19, 2019 | Jan. 25, 2019 | Sep. 30, 2018 | Aug. 29, 2018 | Jan. 31, 2018 | Dec. 31, 2020 | |
Promissory Notes (Textual) | |||||||
Description of credit facility | Upon 30 days' prior written notice from the applicable noteholder and the Company can prepay principal and interest at any time without penalty. | ||||||
Description of notes | The Company paid down the entire principal and interest balance on June 28, 2019 in the amount of $507,339. NRNS amended and restated the NRNS Note such that the maturity date of the revised Note was set at June 30, 2021. In addition, the Company borrowed $500,000 on the Note held by NRNS on June 28, 2019. As of September 30, 2020, $1,771,909 of principal and accrued, unpaid interest was outstanding on NRNS's Note. | ||||||
Debt instrument maturity date | Apr. 30, 2021 | ||||||
NRNS [Member] | |||||||
Promissory Notes (Textual) | |||||||
Description of credit facility | Payment of principal and accrued interest under the February 2019 Note is due and payable by FlexShopper, LLC on June 30, 2021 and FlexShopper, LLC can prepay principal and interest at any time without penalty. | ||||||
Interest rate | 0.1616% | 0.1616% | |||||
Description of notes | FlexShopper, LLC issued amended and restated Notes to Mr. Heiser and NRNS under which (1) the maturity date for such Notes was set at June 30, 2019 and (2) in connection with the completion of an Equity Financing (as defined in the Notes), the holders of such Notes were granted the option to convert up to 50% of the outstanding principal of the Notes plus accrued and unpaid interest thereon into the securities issued in the Equity Financing at a conversion price equal to the price paid to the Company by the underwriters for such securities, net of the underwriting discount. In connection with the offering of units in September 2018, Mr. Heiser and NRNS elected to convert the convertible portion of the Notes, resulting in the issuance by the Company of 602,974 shares of common stock and warrants to purchase 301,487 shares to Mr. Heiser, and 1,507,395 shares of common stock and warrants to purchase 753,697 shares to NRNS. | As of December 31, 2020, $2,031,100 of principal and accrued, unpaid interest was outstanding on the February 2019 Note. | |||||
Principal amount | $ 2,000,000 | ||||||
Commitment fee percentage | 2.00% | ||||||
Lender total value | $ 40,000 | ||||||
Issuance of common stock | 1,507,395 | ||||||
Issuance of warrants to purchase | 753,697 | ||||||
Bear interest rate | 5.00% | 5.00% | |||||
Heiser [Member] | |||||||
Promissory Notes (Textual) | |||||||
Description of notes | Upon issuance of the Notes, FlexShopper, LLC borrowed $500,000 and a subsequent $500,000 on February 20, 2018 on the Note held by Mr. Heiser and $2,500,000 on the Note held by NRNS. | ||||||
Issuance of common stock | 602,974 | ||||||
Issuance of warrants to purchase | 301,487 | ||||||
Bear interest rate | 50.00% | ||||||
122 Partners, LLC [Member] | |||||||
Promissory Notes (Textual) | |||||||
Description of notes | As of December 31, 2020, $1,015,510 of principal and accrued, unpaid interest was outstanding on the January 2019 Note. | ||||||
Chief Financial Officer [Member] | |||||||
Promissory Notes (Textual) | |||||||
Description of credit facility | Payment of the principal amount and accrued interest under the January 2019 Note was due and payable by FlexShopper, LLC on April 30, 2020 and FlexShopper, LLC can prepay principal and interest at any time without penalty. | ||||||
Interest rate | 0.1616% | 0.1616% | |||||
Description of notes | As of December 31, 2020, $1,777,212 of principal and accrued, unpaid interest was outstanding on NRNS’s Note. | ||||||
Principal amount | $ 1,000,000 | ||||||
Commitment fee percentage | 2.00% | ||||||
Lender total value | $ 20,000 | ||||||
Bear interest rate | 5.00% | ||||||
Minimum [Member] | |||||||
Promissory Notes (Textual) | |||||||
Principal amount | $ 1,000,000 | ||||||
Maximum [Member] | |||||||
Promissory Notes (Textual) | |||||||
Principal amount | $ 2,500,000 |
Loan Payable Under Credit Agr_3
Loan Payable Under Credit Agreement (Details) | Dec. 31, 2020USD ($) |
Required Covenant [Member] | |
Short-term Debt [Line Items] | |
Equity Book Value not less than | $ 8,000,000 |
Unrestricted Cash greater than | $ 1,500,000 |
Consolidated Total Debt to Equity Book Value ratio not to exceed | 4.75 |
Actual Position [Member] | |
Short-term Debt [Line Items] | |
Equity Book Value not less than | $ 11,154,046 |
Unrestricted Cash greater than | $ 8,541,232 |
Consolidated Total Debt to Equity Book Value ratio not to exceed | 3.93 |
Loan Payable Under Credit Agr_4
Loan Payable Under Credit Agreement (Details Textual) - USD ($) | Apr. 02, 2019 | Jan. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 06, 2015 |
Loan Payable Under Credit Agreement (Textual) | |||||
Description of credit facility | Upon 30 days' prior written notice from the applicable noteholder and the Company can prepay principal and interest at any time without penalty. | ||||
Outstanding balance credit agreement | $ 37,195,626 | ||||
Unamortized issuance costs | $ 61,617 | ||||
Percentage of borrowing | 100.00% | ||||
Credit Agreement [Member] | |||||
Loan Payable Under Credit Agreement (Textual) | |||||
Borrowed from lender | $ 42,500,000 | ||||
Interest expense | $ 3,192,019 | $ 3,146,002 | |||
Description of credit facility | The Commitment Termination Date was extended to February 28, 2021. | ||||
Interest rate | 11.16% | ||||
Outstanding balance credit agreement | $ 9,217,592 | ||||
Percentage of borrowing | 11.00% |
Capital Structure (Details)
Capital Structure (Details) | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Warrants Granted | shares | 480,000 |
Expense Recorded | $ | $ 407,494 |
Valuation Per Warrant | $ / shares | $ 0.85 |
January 31, 2020 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Grant Date | Jan. 31, 2020 |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 16,503 |
Valuation Per Warrant | $ / shares | $ 0.41 |
February 29, 2020 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Grant Date | Feb. 29, 2020 |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 18,727 |
Valuation Per Warrant | $ / shares | $ 0.47 |
March 31, 2020 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Grant Date | Mar. 31, 2020 |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 8,769 |
Valuation Per Warrant | $ / shares | $ 0.22 |
April 30, 2020 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Grant Date | Apr. 30, 2020 |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 25,412 |
Valuation Per Warrant | $ / shares | $ 0.64 |
May 31, 2020 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Grant Date | May 31, 2020 |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 33,388 |
Valuation Per Warrant | $ / shares | $ 0.83 |
June 30, 2020 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Grant Date | Jun. 30, 2020 |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 36,681 |
Valuation Per Warrant | $ / shares | $ 0.92 |
July 31, 2020 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Grant Date | Jul. 31, 2020 |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 29,587 |
Valuation Per Warrant | $ / shares | $ 0.74 |
August 31, 2020 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Grant Date | Aug. 31, 2020 |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 46,744 |
Valuation Per Warrant | $ / shares | $ 1.17 |
September 30, 2020 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Grant Date | Sep. 30, 2020 |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 43,229 |
Valuation Per Warrant | $ / shares | $ 1.08 |
October 31,2020 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Grant Date | Oct. 31, 2020 |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 37,414 |
Valuation Per Warrant | $ / shares | $ 0.94 |
December 31, 2020 | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 65,157 |
Valuation Per Warrant | $ / shares | $ 1.63 |
November 30, 2020 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 45,883 |
Valuation Per Warrant | $ / shares | $ 1.15 |
Capital Structure (Details 1)
Capital Structure (Details 1) - Warrant [Member] | 12 Months Ended | |
Dec. 31, 2020$ / sharesshares | ||
Class of Warrant or Right [Line Items] | ||
Common Stock Warrants Outstanding | 2,112,488 | |
Series 2 Preferred Stock Warrants Outstanding | 439 | |
Exercise Price 1.25 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 1.25 | |
Common Stock Warrants Outstanding | 1,215,184 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 1.34 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 1.34 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 1.40 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 1.40 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 1.54 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 1.54 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 1.62 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 1.62 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 1.68 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 1.68 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 4 years | |
Exercise Price 1.69 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 1.69 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 1.74 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 1.74 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 1.76 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 1.76 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 1.91 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 1.91 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 1.95 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 1.95 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 4 years | |
Exercise Price 2.00 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 2 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 2.01 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 2.01 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 2.08 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 2.08 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 4 years | |
Exercise Price 2.45 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 2.45 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 2.53 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 2.53 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 2.57 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 2.57 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 4 years | |
Exercise Price 2.78 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 2.78 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 2.93 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 2.93 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 5.50 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 5.50 | |
Common Stock Warrants Outstanding | 177,304 | |
Weighted Average Remaining Contractual Life | 2 years | |
Exercise Price 1,250 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ / shares | $ 1,250 | |
Common Stock Warrants Outstanding | ||
Series 2 Preferred Stock Warrants Outstanding | 439 | [1] |
Weighted Average Remaining Contractual Life | 3 years | |
[1] | At December 31, 2020, the above warrants were convertible into 116,903 shares of common stock |
Capital Structure (Details Text
Capital Structure (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Jun. 30, 2016 | Dec. 31, 2020 | Dec. 31, 2019 | |
Capital Structure (Textual) | ||||
Common stock, shares authorized | 40,000,000 | 40,000,000 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||
Issuance of warrants | $ 131,250 | $ 43,875 | ||
Warrants convertible into common stock | 116,903 | |||
Preferred Stock [Member] | ||||
Capital Structure (Textual) | ||||
Preferred stock, par value | $ 0.001 | |||
Preferred stock, shares authorized | 500,000 | |||
Common Stock [Member] | ||||
Capital Structure (Textual) | ||||
Common stock, shares authorized | 40,000,000 | |||
Common stock, par value | $ 0.0001 | |||
Convertible preferred stock, terms of conversion, description | The Company is authorized to issue 40,000,000 shares of common stock, par value $0.0001 per share. Each share of common stock entitles the holder to one vote at all stockholder meetings. | |||
Common stock price | $ 23 | |||
Consultant [Member] | ||||
Capital Structure (Textual) | ||||
Warrant exercise price | $ 1.60 | |||
Series Two Convertible Preferred Stock [Member] | ||||
Capital Structure (Textual) | ||||
Description of warrants expiration | The Company issued to the placement agent in such offering warrants exercisable for 439 shares of Series 2 Preferred Stock at an initial exercise price of $1,250 per share, which expire seven years after the date of issuance. | |||
Series 1 Convertible Preferred Stock [Member] | ||||
Capital Structure (Textual) | ||||
Preferred stock conversion into common stock, shares | 7,700,000 | |||
Common stock, par value | $ 5 | |||
Convertible preferred stock, terms of conversion, description | 859 shares of Series 1 Convertible Preferred Stock were converted into 1,136 shares of common stock during the year ended December 31, 2020. As of December 31, 2020, there were 170,332 shares of Series 1 Convertible Preferred Stock outstanding, which were convertible into 225,231 shares of common stock. | |||
Series 1 Convertible Preferred Stock [Member] | Preferred Stock [Member] | ||||
Capital Structure (Textual) | ||||
Preferred stock, shares authorized | 250,000 | |||
Series 2 Convertible Preferred Stock [Member] | ||||
Capital Structure (Textual) | ||||
Preferred stock, designated | 25,000 | |||
Preferred stock conversion into common stock, shares | 266 | |||
Proceeds from sale of stock | $ 20,000,000 | |||
Convertible preferred stock, shares issued upon conversion | 20,000 | |||
Convertible preferred stock, stated value | $ 1,000 | |||
Gross proceeds | $ 1,950,000 | |||
Additional sale of shares | 1,952 | |||
Cumulative accrued dividends | $ 10,832,073 | |||
Stated value, percentage | 10.00% | |||
Warrant [Member] | ||||
Capital Structure (Textual) | ||||
Common stock warrants outstanding | 2,112,488 | |||
Series 2 preferred stock warrants outstanding | 439 | |||
Warrants exercisable for shares of common stock | 5,750,000 | 1,055,184 | ||
Description of warrants expiration | The warrants were immediately exercisable for five years from the date of issuance. | The warrants are exercisable at $1.25 per share of common stock and expire on September 28, 2023. | ||
Warrant exercise price | $ 1.25 | $ 1.25 | ||
Valuation Expenses | $ 407,495 | |||
weighted average valuation | $ 0.72 | |||
Issuance of warrants | $ 40,000 | |||
Warrant [Member] | Consultant [Member] | ||||
Capital Structure (Textual) | ||||
Description of warrants expiration | The warrants are immediately exercisable and expire following the close of business on June 30, 2023. | |||
Warrant exercise price | $ 1.25 | |||
Warrant, description | If the closing share price on the last day of the month exceeds $1.25, then such exercise price will be 110% of the closing share price. |
Stock Options (Details)
Stock Options (Details) - Employee Stock Option [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of options | ||
Outstanding | 2,004,318 | 620,900 |
Granted | 860,465 | 1,694,851 |
Exercised | (7,166) | (82,667) |
Forfeited | (261,917) | (203,766) |
Expired | (25,000) | |
Outstanding | 2,595,700 | 2,004,318 |
Weighted average exercise price | ||
Outstanding | $ 1.72 | $ 3.75 |
Granted | 2.38 | 1 |
Exercise | 0.79 | 0.84 |
Forfeited | 1.90 | 1.71 |
Expired | 6.20 | |
Outstanding | $ 1.92 | $ 1.72 |
Weighted average contractual term (years) | ||
Outstanding | 7 years 7 months 6 days | |
Aggregate intrinsic value | ||
Outstanding | $ 2,542,361 | |
Exercise | 6,523 | $ 67,911 |
Forfeited | 134,070 | 104,868 |
Outstanding | $ 2,491,026 | $ 2,542,361 |
Stock Options (Details1)
Stock Options (Details1) - Employee Stock Option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price | $ 1.47 | |
Expected life | 5 years 3 months 19 days | 6 years 9 months 18 days |
Expected volatility | 76.00% | 64.00% |
Dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price | $ 0.83 | |
Risk-free interest rate | 0.28% | 1.43% |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price | $ 1.80 | |
Risk-free interest rate | 1.72% | 2.55% |
Stock Options (Details Textual)
Stock Options (Details Textual) - USD ($) | Jun. 10, 2020 | May 02, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 26, 2018 |
Stock Options (Textual) | |||||
Weighted average grant date fair value of options granted | $ 1.47 | $ 0.61 | |||
Unrecognized compensation cost related to non-vested options | $ 743,726 | ||||
Weighted average period | 3 years 7 months 6 days | ||||
Compensation expense | $ 981,261 | $ 595,833 | |||
Stock options granted period, description | Options granted under the 2018 Plan and the Prior Plans vest over periods ranging from immediately upon grant to a three-year period and expire ten years from date of grant. | ||||
Stock Options [Member] | |||||
Stock Options (Textual) | |||||
Stock options granted period, description | (a) the total number of shares available for issuance under the 2018 Plan by 1,000,000 shares and (b) the number of shares available for issuance as "incentive stock options" within the meaning of Internal Revenue Code Section 422 by 1,000,000 shares. | (a) the total number of shares available for issuance under the 2018 Plan by 1,000,000 shares and (b) the number of shares available for issuance as "incentive stock options" within the meaning of Internal Revenue Code Section 422 by 1,000,000 shares. | |||
2007 Omnibus Equity Compensation Plan [Member] | |||||
Stock Options (Textual) | |||||
Common shares authorized for issuance (in shares) | 307,000 | ||||
Omnibus Equity Compensation Plan [Member] | |||||
Stock Options (Textual) | |||||
Issuance of shares | 1,057,000 | ||||
Common shares authorized for issuance (in shares) | 750,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal tax at statutory rate | $ 67,862 | $ 167,000 |
State tax, net of federal tax | 29,866 | 65,000 |
Permanent differences | 126,301 | 92,000 |
Change in statutory rate | (69,835) | (197,000) |
Change in valuation allowance | 522,738 | (10,000) |
Other | (13,882) | 99,000 |
Expense for income taxes | $ 663,050 | $ 216,400 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets (liabilities): | ||
Equity based compensation | $ 368,000 | $ 240,000 |
Allowance for doubtful accounts | 5,527,000 | 2,478,000 |
Fixed assets | 256,000 | (6,476,000) |
Lease impairment | 586,958 | 553,000 |
Lease Liability | 526,000 | 520,000 |
Right of use asset | (425,000) | (466,000) |
Tax credit carryforward | 32,000 | 32,000 |
Federal loss carry-forwards | 4,779,000 | 14,047,000 |
State loss carry forward | 161,000 | 353,000 |
Other | (6,000) | |
Gross deferred tax assets | 11,805,000 | 11,281,000 |
Valuation allowance | (11,805,000) | (11,281,000) |
Net deferred tax assets |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Current Income Tax: | ||
Federal | ||
State | 663,050 | 216,400 |
Deferred Income Tax: | ||
Federal | ||
State | ||
Total | $ 663,050 | $ 216,400 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes (Textual) | ||
Operating loss carryforwards expiration period, description | Federal loss carryforwards incurred prior to January 1, 2018, expire in 2037. Federal loss carryforwards incurred after January 1, 2018 do not expire. State loss carryforwards expire in 2037 and 2038. | |
Federal net operating loss | $ 50,000 | |
Statutory rate, percent | 21.00% | 21.00% |
Current state income tax expense | $ 663,050 | |
State and Local Jurisdiction [Member] | ||
Income Taxes (Textual) | ||
Net operating loss carryforwards | 2,857,000 | |
Federal [Member] | ||
Income Taxes (Textual) | ||
Net operating loss carryforwards | $ 22,755,000 |
Exchange Offer of Warrants (Det
Exchange Offer of Warrants (Details) - USD ($) | Feb. 04, 2020 | Feb. 19, 2020 | Dec. 31, 2020 |
Exchange Offer of Warrants (Textual) | |||
Warrant offered | $ 0.62 | $ 0.56 | |
Exchange offer of warrants, description | In total, 5,351,290 warrants were exchanged for 3,317,812 shares of common stock in accordance with the Warrant Exchange Offer. | In total 258,610 warrants were exchanged for 144,871 shares in this transaction. | |
Deemed dividend | $ 713,212 |
Promissory Note- Paycheck Pro_2
Promissory Note- Paycheck Protection Program (Details) | May 04, 2020USD ($) |
Promissory Note- Paycheck Protection Program (Textual) | |
Principal amount | $ 1,914,100 |
Maturity date, description | The Note matures on April 30, 2022, and bears interest at the rate of 1.00% per annum, payable monthly commencing the later of on November 30, 2020 or the SBA review of the forgiveness application. |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | 1 Months Ended |
Jan. 29, 2021 | |
Subsequent Events (Textual) | |
Extended commitment termination date | Apr. 1, 2024 |
Interest rate for borrowed amounts | 11.00% |