Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 12, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | FlexShopper, Inc. | |
Trading Symbol | FPAY | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 21,399,778 | |
Amendment Flag | false | |
Entity Central Index Key | 0001397047 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-37945 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-5456087 | |
Entity Address, Address Line One | 901 Yamato Road | |
Entity Address, Address Line Two | Suite 260 | |
Entity Address, City or Town | Boca Raton | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33431 | |
City Area Code | 855 | |
Local Phone Number | 353-9289 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
CURRENT ASSETS: | ||
Cash | $ 3,147,926 | $ 8,541,232 |
Accounts receivable, net | 19,651,250 | 10,032,714 |
Prepaid expenses | 1,118,140 | 869,081 |
Lease merchandise, net | 33,332,854 | 42,822,340 |
Total current assets | 57,250,170 | 62,265,367 |
PROPERTY AND EQUIPMENT, net | 7,227,023 | 5,911,696 |
OTHER ASSETS, net | 78,347 | 72,316 |
Total assets | 64,555,540 | 68,249,379 |
CURRENT LIABILITIES: | ||
Accounts payable | 3,344,185 | 7,907,619 |
Accrued payroll and related taxes | 629,876 | 352,102 |
Promissory notes to related parties, net of $2,546 at 2021 and net of $8,276 at 2020 of unamortized issuance costs, including accrued interest | 4,802,650 | 4,815,546 |
Current portion of promissory note – Paycheck Protection Program, including accrued interest | 1,184,952 | |
Accrued expenses | 3,446,104 | 2,646,800 |
Lease liability - current portion | 164,274 | 160,726 |
Total current liabilities | 12,387,089 | 17,067,745 |
Loan payable under credit agreement to beneficial shareholder, net of $419,307 at 2021 and $61,617 at 2020 of unamortized issuance costs and current portion | 34,205,693 | 37,134,009 |
Promissory note – Paycheck Protection Program, net of current portion | 741,787 | |
Accrued payroll and related taxes net of current portion | 204,437 | 204,437 |
Deferred income tax liability | 700,199 | |
Lease liabilities net of current portion | 1,821,935 | 1,947,355 |
Total liabilities | 49,319,353 | 57,095,333 |
STOCKHOLDERS’ EQUITY | ||
Series 1 Convertible Preferred Stock, $0.001 par value - authorized 250,000 shares, issued and outstanding 170,332 shares at $5.00 stated value | 851,660 | 851,660 |
Series 2 Convertible Preferred Stock, $0.001 par value - authorized 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 21,390,944 shares at 2021 and 21,359,945 shares at 2020 | 2,139 | 2,136 |
Additional paid in capital | 38,286,010 | 36,843,326 |
Accumulated deficit | (45,855,622) | (48,495,076) |
Total stockholders’ equity | 15,236,187 | 11,154,046 |
Total liabilities and stockholders' equity | $ 64,555,540 | $ 68,249,379 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Promissory notes to related parties net unamortized issuance costs (in Dollars) | $ 2,546 | $ 8,276 |
Loan payable unamortized issuance costs and current portion (in Dollars) | $ 419,307 | $ 61,617 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 21,390,944 | 21,359,945 |
Common stock, shares outstanding | 21,390,944 | 21,359,945 |
Series 1 Convertible Preferred Stock | ||
Convertible preferred stock, stated value (in Dollars) | $ 5 | $ 5 |
Convertible preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Convertible preferred stock, shares authorized | 250,000 | 250,000 |
Convertible preferred stock, shares issued | 170,332 | 170,332 |
Convertible preferred stock, shares outstanding | 170,332 | 170,332 |
Series 2 Convertible Preferred Stock | ||
Convertible preferred stock, stated value (in Dollars) | $ 1,000 | $ 1,000 |
Convertible preferred stock, par value (in Dollars per share) | $ 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 (unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues: | ||||
Lease revenues and fees, net | $ 29,134,709 | $ 23,391,348 | $ 88,876,167 | $ 69,989,333 |
Lease merchandise sold | 1,726,226 | 1,178,716 | 5,456,991 | 3,953,608 |
Total revenues | 30,860,935 | 24,570,064 | 94,333,158 | 73,942,941 |
Costs and expenses: | ||||
Cost of lease revenues, consisting of depreciation and impairment of lease merchandise | 16,936,374 | 14,886,798 | 56,001,355 | 46,982,002 |
Cost of lease merchandise sold | 1,235,601 | 763,728 | 4,300,224 | 2,685,599 |
Marketing | 1,824,402 | 1,650,717 | 5,571,237 | 3,619,911 |
Salaries and benefits | 2,672,864 | 2,499,235 | 8,329,188 | 7,324,620 |
Operating expenses | 4,325,825 | 3,528,890 | 13,654,038 | 10,037,743 |
Total costs and expenses | 26,995,066 | 23,329,368 | 87,856,042 | 70,649,875 |
Operating income | 3,865,869 | 1,240,696 | 6,477,116 | 3,293,066 |
Gain on extinguishment of debt | 1,931,825 | |||
Interest expense including amortization of debt issuance costs | (1,233,617) | (951,336) | (3,855,014) | (3,214,083) |
Income before income taxes | 2,632,252 | 289,360 | 4,553,927 | 78,983 |
Provision for income taxes | (936,229) | (1,914,473) | ||
Net income | 1,696,023 | 289,360 | 2,639,454 | 78,983 |
Deemed dividend from exchange offer of warrants | 713,212 | |||
Dividends on Series 2 Convertible Preferred Shares | 609,777 | 609,772 | 1,829,322 | 1,829,217 |
Net income/(loss) attributable to common and Series 1 Convertible Preferred shareholders | $ 1,086,246 | $ (320,412) | $ 810,132 | $ (2,463,446) |
Basic and diluted income/(loss) per common share: | ||||
Basic (in Dollars per share) | $ 0.05 | $ (0.02) | $ 0.04 | $ (0.12) |
Diluted (in Dollars per share) | $ 0.05 | $ (0.02) | $ 0.03 | $ (0.12) |
WEIGHTED AVERAGE COMMON SHARES: | ||||
Basic (in Shares) | 21,608,878 | 21,358,141 | 21,603,209 | 20,872,940 |
Diluted (in Shares) | 23,577,179 | 21,358,141 | 23,682,265 | 20,872,940 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity (unaudited) - USD ($) | Series 1 Convertible Preferred Stock | Series 2 Convertible Preferred Stock | Common Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 855,955 | $ 21,952,000 | $ 1,779 | $ 35,313,721 | $ (48,155,180) | $ 9,968,275 |
Balance (in Shares) at Dec. 31, 2019 | 171,191 | 21,952 | 17,783,960 | |||
Provision for compensation expense related to stock options | 171,815 | 171,815 | ||||
Provision for compensation expense related to stock options (in Shares) | ||||||
Issuance of warrants in connection with consulting agreement | 43,999 | 43,999 | ||||
Issuance of warrants in connection with consulting agreement (in Shares) | ||||||
Exercise of warrants into common stock | $ 10 | 131,240 | 131,250 | |||
Exercise of warrants into common stock (in Shares) | 105,000 | |||||
Exchange offer of warrants | $ 346 | (346) | ||||
Exchange offer of warrants (in Shares) | 3,462,683 | |||||
Net income | (51,685) | (51,685) | ||||
Balance at Mar. 31, 2020 | $ 855,955 | $ 21,952,000 | $ 2,135 | 35,660,429 | (48,103,495) | 10,367,024 |
Balance (in Shares) at Mar. 31, 2020 | 171,191 | 21,952 | 21,351,643 | |||
Provision for compensation expense related to stock options | 452,033 | 452,033 | ||||
Provision for compensation expense related to stock options (in Shares) | ||||||
Issuance of warrants in connection with consulting agreement | 95,481 | 95,481 | ||||
Issuance of warrants in connection with consulting agreement (in Shares) | ||||||
Exercise of stock options into common stock | $ 1 | 2,633 | 2,634 | |||
Exercise of stock options into common stock (in Shares) | 3,333 | |||||
Conversion of preferred stock to common stock | $ (4,295) | 4,295 | ||||
Conversion of preferred stock to common stock (in Shares) | (859) | 1,136 | ||||
Net income | (262,062) | (262,062) | ||||
Balance at Jun. 30, 2020 | $ 851,660 | $ 21,952,000 | $ 2,136 | 36,214,871 | (48,365,557) | 10,655,110 |
Balance (in Shares) at Jun. 30, 2020 | 170,332 | 21,952 | 21,356,112 | |||
Provision for compensation expense related to stock options | 169,393 | 169,393 | ||||
Provision for compensation expense related to stock options (in Shares) | ||||||
Issuance of warrants in connection with consulting agreement | 119,560 | 119,560 | ||||
Issuance of warrants in connection with consulting agreement (in Shares) | ||||||
Exercise of stock options into common stock | 2,633 | 2,633 | ||||
Exercise of stock options into common stock (in Shares) | 3,333 | |||||
Net income | 289,360 | 289,360 | ||||
Balance at Sep. 30, 2020 | $ 851,660 | $ 21,952,000 | $ 2,136 | 36,506,457 | (48,076,197) | 11,236,056 |
Balance (in Shares) at Sep. 30, 2020 | 170,332 | 21,952 | 21,359,445 | |||
Balance at Dec. 31, 2020 | $ 851,660 | $ 21,952,000 | $ 2,136 | 36,843,326 | (48,495,076) | 11,154,046 |
Balance (in Shares) at Dec. 31, 2020 | 170,332 | 21,952 | 21,359,945 | |||
Provision for compensation expense related to stock options | 380,263 | 380,263 | ||||
Provision for compensation expense related to stock options (in Shares) | ||||||
Issuance of warrants in connection with consulting agreement | 212,923 | 212,923 | ||||
Issuance of warrants in connection with consulting agreement (in Shares) | ||||||
Exercise of stock options into common stock | $ 2 | 12,910 | 12,912 | |||
Exercise of stock options into common stock (in Shares) | 16,000 | |||||
Net income | 1,237 | 1,237 | ||||
Balance at Mar. 31, 2021 | $ 851,660 | $ 21,952,000 | $ 2,138 | 37,449,422 | (48,493,839) | 11,761,381 |
Balance (in Shares) at Mar. 31, 2021 | 170,332 | 21,952 | 21,375,945 | |||
Provision for compensation expense related to stock options | 249,222 | 249,222 | ||||
Issuance of warrants in connection with consulting agreement | 191,926 | 191,926 | ||||
Exercise of stock options into common stock | $ 0 | 4,214 | 4,214 | |||
Exercise of stock options into common stock (in Shares) | 5,333 | |||||
Net income | 942,194 | 942,194 | ||||
Balance at Jun. 30, 2021 | $ 851,660 | $ 21,952,000 | $ 2,138 | 37,894,784 | (47,551,645) | 13,148,937 |
Balance (in Shares) at Jun. 30, 2021 | 170,332 | 21,952 | 21,381,278 | |||
Provision for compensation expense related to stock options | 265,407 | 265,407 | ||||
Issuance of warrants in connection with consulting agreement | 117,958 | 117,958 | ||||
Exercise of stock options into common stock | $ 1 | 7,861 | ||||
Exercise of stock options into common stock (in Shares) | 9,666 | |||||
Net income | 1,696,023 | 1,696,023 | ||||
Balance at Sep. 30, 2021 | $ 851,660 | $ 21,952,000 | $ 2,139 | $ 38,286,010 | $ (45,855,622) | $ 15,236,187 |
Balance (in Shares) at Sep. 30, 2021 | 170,332 | 21,952 | 21,390,944 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 2,639,454 | $ 78,983 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and impairment of lease merchandise | 56,001,355 | 46,982,002 |
Other depreciation and amortization | 2,032,811 | 1,655,407 |
Amortization of debt issuance costs | 177,647 | 234,283 |
Compensation expense related to issuance of stock options and warrants | 1,417,699 | 1,052,281 |
Provision for doubtful accounts | 30,622,139 | 23,643,556 |
Interest in kind added to promissory notes balance | 9,460 | 7,814 |
Deferred income tax | 700,199 | |
Gain on debt extinguishment | (1,931,825) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (40,240,674) | (23,226,544) |
Prepaid expenses and other | (248,203) | (120,482) |
Lease merchandise | (46,511,869) | (46,577,002) |
Security deposits | (8,338) | 2,943 |
Lease Liabilities | (2,595) | |
Accounts payable | (4,563,434) | 485,878 |
Accrued payroll and related taxes | 277,774 | 62,108 |
Accrued expenses | 788,228 | 273,903 |
Net cash provided by operating activities | 1,159,828 | 4,555,130 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment, including capitalized software costs | (3,459,424) | (2,099,654) |
Net cash used in investing activities | (3,459,424) | (2,099,654) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from loan payable under credit agreement | 4,000,000 | 2,412,000 |
Repayment of loan payable under credit agreement | (6,575,000) | (7,023,250) |
Debt issuance related costs | (529,608) | |
Proceeds from exercise of warrants | 131,250 | |
Proceeds from exercise of stock options | 24,988 | 5,267 |
Proceeds from promissory notes, net of fees | 1,914,100 | |
Principal payment under finance lease obligation | (5,684) | (4,891) |
Repayment of instalment loan | (8,406) | (8,405) |
Net cash used in financing activities | (3,093,710) | (2,573,929) |
DECREASE IN CASH | (5,393,306) | (118,453) |
CASH, beginning of period | 8,541,232 | 6,868,472 |
CASH, end of period | 3,147,926 | 6,750,019 |
Supplemental cash flow information: | ||
Interest paid | 3,702,949 | 3,021,833 |
Deemed dividend from exchange offer of warrants | 713,212 | |
Conversion of preferred stock to common stock | $ 4,295 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION The interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X and in conformity with accounting principles generally accepted in the United States of America (“GAAP”) applicable to interim financial information. Accordingly, the information presented in the interim financial statements does not include all information and disclosures necessary for a fair presentation of FlexShopper, Inc.’s financial position, results of operations and cash flows in conformity with GAAP for annual financial statements. In the opinion of management, these financial statements reflect all adjustments consisting of normal recurring accruals, necessary for a fair statement of our financial position, results of operations and cash flows for such periods. The results of operations for any interim period are not necessarily indicative of the results for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto contained in FlexShopper, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 8, 2021. The consolidated balance sheet as of December 31, 2020 contained herein has been derived from audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. |
Business
Business | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
BUSINESS | 2. 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 its subsidiary FlexLending, LLC. In January 2015, in connection with the Credit Agreement entered in March 2015 (see Note 7), FlexShopper 1 LLC and FlexShopper 2 LLC were organized as wholly owned Delaware subsidiaries of FlexShopper LLC to conduct operations. FlexShopper Inc, 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. The Company effects these transactions by first approving consumers through its proprietary, risk analytics-powered underwriting model. After receiving a signed consumer lease, the Company then funds the leased item by purchasing the item from the Company’s merchant partner and leasing it to the consumer. The Company then collects payments from consumers under their consumer lease. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation - Estimates - Revenue Recognition Accounts Receivable and Allowance for Doubtful Accounts - September 30, December 31, Accounts receivable $ 44,902,037 $ 32,171,255 Allowance for doubtful accounts (25,250,787 ) (22,138,541 ) Accounts receivable, net $ 19,651,250 $ 10,032,714 The allowance is a significant percentage of the 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 continue to accrue weekly charges until they are charged off. As the customer ages, the greater the allowance attributable to that account to reflect the decreased likelihood of successful collection efforts. Accounts receivable balances charged off against the allowance were $18,467,220 and $27,509,893 for the three and nine months ended September 30, 2021 respectively and $4,813,162 and $16,830,382 for the three and nine months ended September 30, 2020, respectively. Nine Months Year Ended Beginning balance $ 22,138,541 $ 9,976,941 Provision 30,622,139 31,930,714 Accounts written off (27,509,893 ) (19,769,114 ) Ending balance $ 25,250,787 $ 22,138,541 Lease Merchandise - The net leased merchandise balances consisted of the following as of September 30, 2021 and December 31, 2020: September 30, December 31, Lease merchandise at cost $ 76,187,372 $ 64,335,971 Accumulated depreciation (38,655,591 ) (19,162,357 ) Impairment reserve (4,198,927 ) (2,351,274 ) Lease merchandise, net $ 33,332,854 $ 42,822,340 Cost of lease merchandise sold represents the undepreciated cost of rental merchandise at the time of sale. Lease accounting The Company accounts for leases in accordance with Accounting Standards Codification (ASC) Topic 842 Leases (Topic 842). Under Topic 842, lessees are required to recognize for all leases at the commencement date as 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. Under the same Topic, lessors are also required to classify leases. All the Company’s customer agreements are considered operating leases, and the Company currently does not have any sales-type or direct financing leases. An operating lease results in the recognition of lease income on a straight-line basis, while the underlying leased asset remains on the lessor’s balance sheet and continues to depreciate. The breakout of lease revenues and fees, net of lessor bad debt expense, that ties the consolidated statements of operations is shown below: Nine Months ended September 30, 2021 2020 Lease billings and accruals $ 119,498,306 $ 93,632,889 Provision for doubtful accounts (30,622,139 ) (23,643,556 ) Lease revenues and fees $ 88,876,167 $ 69,989,333 Deferred Debt Issuance Costs - Debt issuance costs incurred in conjunction with the subordinated Promissory Notes 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 $1,273 and $5,729 for the three and nine months ended September 30, 2021 and $4,138 and $17,747 for the three and nine months ended September 30, 2020, respectively. Intangible Assets - Software Costs - Data Costs Capitalized data costs amounted to $461,380 for the three and nine months ended September 30, 2021. Capitalized data costs amortization expense was $24,406 for the three and nine months ended September 30, 2021. Operating Expenses - Marketing Costs - 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 income/(loss) per share for the nine months ended September 30, 2021 and the nine months ended September 30, 2020, no effect has been given to the issuance of common stock upon conversion or exercise of the Series 2 Convertible Preferred Stock as their effect is anti-dilutive. The following table reflects a change in the conversion rates of the Series 1 Convertible Preferred Stock and Series 2 Convertible Preferred Stock due to anti-dilution adjustments as a result of FlexShopper’s induced conversion of warrants occurred in February 2020. Nine Months ended September 30, 2021 2020 Series 1 Convertible Preferred Stock 225,231 225,231 Series 2 Convertible Preferred Stock 5,845,695 5,845,695 Series 2 Convertible Preferred Stock issuable upon exercise of warrants 116,903 116,903 Common Stock Options 3,113,715 2,622,869 Common Stock Warrants 2,432,488 1,992,488 11,734,032 10,803,186 The following table sets forth the computation of basic and diluted earnings per common share for the nine months ended September 30, 2021 and 2020: Nine Months ended September 30, 2021 2020 Numerator Net income $ 2,639,454 78,983 Convertible Series 2 Preferred Share dividends (1,829,322 ) (1,829,217 ) Net income/(loss) attributable to common and Series 1 Convertible Preferred Stock 810,132 (1,750,234 ) Deemed dividend from exchange offer of warrants - (713,212 ) Convertible Series 2 Preferred Share dividends attributable to Series 1 Convertible Preferred Stock 19,072 - Net income attributable to Series 1 Convertible Preferred Stock (27,518 ) - Net income/(loss) attributable to common shares - Numerator for basic and diluted EPS $ 801,686 (2,463,446 ) Denominator Weighted average of common shares outstanding 21,377,978 20,872,940 Weighted average of common shares issuable upon conversion of outstanding Series 1 Convertible Preferred Stock 225,231 - Denominator for basic EPS- weighted average shares 21,603,209 20,872,940 Effect of dilutive securities: Common stock options 1,244,353 - Common stock warrants 834,703 - Denominator for diluted EPS – adjusted weighted average shares 23,682,265 20,872,940 Basic EPS $ 0.04 (0.12 ) Diluted EPS $ 0.03 (0.12 ) The following table sets forth the computation of basic and diluted earnings per common share for the three months ended September 30, 2021 and 2020: Three Months ended September 30, 2021 2020 Numerator Net income $ 1,696,023 289,360 Convertible Series 2 Preferred Share dividends (609,777 ) (609,772 ) Net income/(loss) attributable to common and Series 1 Convertible Preferred Stock 1,086,246 (320,412 ) Convertible Series 2 Preferred Share dividends attributable to Series 1 Convertible Preferred Stock 6,356 - Net income attributable to Series 1 Convertible Preferred Stock (17,678 ) - Net income/(loss) attributable to common shares - Numerator for basic and diluted EPS $ 1,074,924 (320,412 ) Denominator Weighted average of common shares outstanding 21,383,647 21,358,141 Weighted average of common shares issuable upon conversion of outstanding Series 1 Convertible Preferred Stock 225,231 - Denominator for basic EPS- weighted average shares 21,608,878 21,358,141 Effect of dilutive securities: Common stock options 1,112,537 - Common stock warrants 855,764 - Denominator for diluted EPS – adjusted weighted average shares 23,577,179 21,358,141 Basic EPS $ 0.05 (0.02 ) Diluted EPS $ 0.05 (0.02 ) 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. 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 September 30, 2021, and 2020, the Company had 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. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
LEASES | 4. LEASES Refer to Note 2 to these consolidated financial statements for further information about the Company’s revenue generating activities as a lessor. All the Company’s customer agreements are considered operating leases, and the Company currently does not have any sales-type or direct financing leases. 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 option to extend the term of the lease to September 30, 2021. In March 2021, FlexShopper and the lessor agreed on the early termination of the lease for this property. The monthly rent for this space was 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 nine months ended September 30, 2021 and 2020 was approximately $492,000 and $519,000 respectively. At September 30, 2021, the future minimum annual lease payments are approximately as follows: 2021 $ 103,000 2022 417,000 2023 427,000 2024 435,000 2025 443,000 Thereafter 1,230,000 $ 3,055,000 The Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are included in the Company’s consolidated balance sheets beginning January 1, 2019. Supplemental balance sheet information related to leases is as follows: Balance Sheet Classification September 30, December 31, Assets Operating Lease Asset Property and Equipment, net $ 1,566,055 $ 1,673,432 Finance Lease Asset Property and Equipment, net 20,890 27,106 Total Lease Assets $ 1,586,945 $ 1,700,538 Liabilities Operating Lease Liability - current portion Current Lease Liabilities $ 155,766 $ 153,019 Finance Lease Liability - current portion Current Lease Liabilities 8,508 7,707 Operating Lease Liability - net of current portion Long Term Lease Liabilities 1,806,562 1,925,498 Finance Lease Liability - net of current portion Long Term Lease Liabilities 15,373 21,857 Total Lease Liabilities $ 1,986,209 $ 2,108,081 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 ASC 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 leases: Weighted Weighted Operating Leases 13.03 % 7 Finance Leases 13.32 % 3 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 and amortization in the Company’s consolidated statements of operations. The Company’s total operating and finance lease expense all relate to lease costs and amounted to $97,063 and $110,021 for the three months ended September 30, 2021 and 2020, respectively and $303,871 and $329,094 for the nine months ended September 30, 2021 and 2020, respectively. Supplemental cash flow information related to operating leases is as follows: Nine Months ended September 30, 2021 2020 Cash payments for operating leases $ 300,415 $ 116,860 Cash payments for finance leases 8,388 8,253 New finance lease asset obtained in exchange for lease liabilities - 4,033 Below is a summary of undiscounted operating lease liabilities as of September 30, 2021. 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 $ 100,357 2022 405,443 2023 417,606 2024 430,134 2025 443,038 2026 and thereafter 1,229,925 Total undiscounted cash flows 3,026,503 Less: interest (1,064,175 ) Present value of lease liabilities $ 1,962,328 Below is a summary of undiscounted finance lease liabilities as of September 30, 2021. 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 $ 2,796 2022 11,184 2023 9,699 2024 4,782 Total undiscounted cash flows 28,461 Less: interest (4,580 ) Present value of lease liabilities $ 23,881 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 5. PROPERTY AND EQUIPMENT Property and equipment consist of the following: Estimated September 30, December 31, Furniture, fixtures and vehicle 2-5 years $ 391,669 $ 303,285 Website, internal use software and data cost 3 years 14,966,567 12,489,441 Computers and software 3-7 years 2,015,828 1,121,914 17,374,064 13,914,640 Less: accumulated depreciation and amortization (11,733,986 ) (9,703,482 ) 5,640,078 4,211,158 Right of use assets, net 1,586,945 1,700,538 $ 7,227,023 $ 5,911,696 Depreciation and amortization expense were $707,993 and $592,498 for the three months ended September 30, 2021 and 2020, respectively and 2,030,504 and $1,653,099 for the nine months ended September 30, 2021 and 2020, respectively. |
Promissory Notes-Related Partie
Promissory Notes-Related Parties | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
PROMISSORY NOTES-RELATED PARTIES | 6. PROMISSORY NOTES-RELATED PARTIES January 2018 Notes NRNS amended and restated the Note such that the maturity date of the revised Note was extended to April 1, 2022. As of September 30, 2021, $1,770,338 of principal and accrued and unpaid interest was outstanding on NRNS’s Note. January 2019 Note - February 2019 Note - Amounts payable under the promissory notes are as follows: Debt Interest 2021 $ - $ 55,196 2022 $ 4,750,000 $ - Interest expense recognized under these notes amounted to $173,540 and $186,882 for the three months ended September 30, 2021 and 2020, respectively and $521,242 and $593,738 for the nine months ended September 30, 2021 and 2020, respectively. |
Loan Payable Under Credit Agree
Loan Payable Under Credit Agreement | 9 Months Ended |
Sep. 30, 2021 | |
Loan Payable Disclosure [Abstract] | |
LOAN PAYABLE UNDER CREDIT AGREEMENT | 7. LOAN PAYABLE UNDER CREDIT AGREEMENT On March 6, 2015, FlexShopper, through a wholly-owned subsidiary (“Borrower”), entered into a credit agreement (as amended from time-to-time, 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 (“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). The Lender was granted a security interest in certain leases as collateral under this Agreement. On January 29, 2021, the Company and the Lender signed an Omnibus Amendment to the Credit Agreement. This Amendment extended the Commitment Termination Date to April 1, 2024, amended other covenant requirements, partially removed indebtedness covenants and amended eligibility rules. The interest rate charged on amounts borrowed is LIBOR plus 11% per annum. The Company paid the lender a fee of $237,000 in consideration of the execution of this Omnibus Amendment. At September 30, 2021, amounts borrowed bear interest at 11.25%. 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 payments of cash 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 liquidity and cash 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 September 30, 2021, follows: September 30, 2021 Required Actual Equity Book Value not less than $ 8,000,000 15,236,187 Liquidity greater than 1,500,000 3,147,926 Cash greater than 500,000 3,147,926 Consolidated Total Debt to Equity Book Value ratio not to exceed 5.25 2.56 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. As of September 30, 2021, the Company had $165,417 available under the Credit Agreement. Credit availability is subject to a borrowing base which is redetermined from time to time and based on specific advance rates on eligible current assets. As the Company continues to originate lease agreements, new leases will be eligible for the borrowing base and this will open more availability under the Credit Agreement. Interest expense incurred under the Credit Agreement amounted to $1,015,930 and $3,147,479 for the three and the nine months ended September 30, 2021, respectively, and $708,086 and $2,373,525 for the three and nine months ended September 30, 2020, respectively. As of September 30, 2021, the outstanding balance under the Credit Agreement was $34,625,000. Such amount is presented in the consolidated balance sheet net of unamortized issuance costs of $419,307. Interest is payable monthly on the outstanding balance of the amounts borrowed. |
Capital Structure
Capital Structure | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
CAPITAL STRUCTURE | 8. 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 amount, 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 September 30, 2021, each share of Series 1 Convertible 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 Convertible Preferred Stock have the option to convert the shares to 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 Convertible Preferred Stock have the same dividend rights as holders of common stock, as if the Series 1 Convertible Preferred Stock had been converted to common stock. As of September 30, 2021, 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 Series 2 Preferred Shares 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 dividends as of September 30, 2021 totaled approximately $12,661,394. As of September 30, 2021, each Series 2 Preferred Share 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 shall be automatic. Upon a Liquidation Event or Deemed Liquidation Event (each as defined), holders of Series 2 Preferred Stock shall 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 and 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 and expire 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 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 Convertible Preferred Stock in June 2016, the Company issued to the placement agent in such offering warrants exercisable for 439 shares of Series 2 Convertible 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 “Consulting Agreement”), an entity of which the Company’s Chairman is manager, the Company agreed to issue 40,000 warrants to XLR8 Capital Partners LLC 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 automatically renewed for one successive six-month period, therefore the new termination date is August 31, 2021. There are no additional automatic renewals. The Consulting Agreement and amendments were approved by the Company’s Compensation Committee. The August 2020 amendment also modified the alternative minimum exercise price of the monthly warrant consideration issuable to the Consultant to $1.60 per share going forward, 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 nine months ended September 30, 2021, the Company recorded an expense of $522,808 based on a weighted average grant date fair value of $1.63 per warrant. Warrants Expense Grant date fair value Grant Date Granted Recorded Per Warrant January 31, 2021 40,000 $ 73,595 $ 1.84 February 29, 2021 40,000 76,318 1.91 March 31, 2021 40,000 63,010 1.58 April 30, 2021 40,000 60,542 1.51 May 31, 2021 40,000 63,156 1.58 June 30, 2021 40,000 68,228 1.71 July 31, 2021 40,000 55,658 1.39 August 31, 2021 40,000 62,301 1.56 320,000 522,808 1.63 The following table summarizes information about outstanding stock warrants as of September 30, 2021, 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 2 years $ 1.34 40,000 2 years $ 1.40 40,000 2 years $ 1.54 40,000 2 years $ 1.62 40,000 2 years $ 1.68 40,000 3 years $ 1.69 40,000 2 years $ 1.74 40,000 2 years $ 1.76 40,000 2 years $ 1.91 40,000 2 years $ 1.95 40,000 3 years $ 2.00 40,000 2 years $ 2.01 40,000 2 years $ 2.08 40,000 3 years $ 2.45 40,000 2 years $ 2.53 40,000 2 years $ 2.57 40,000 3 years $ 2.70 40,000 4 years $ 2.78 40,000 2 years $ 2.79 40,000 4 years $ 2.89 40,000 3 years $ 2.93 40,000 2 years $ 2.97 40,000 4 years $ 3.09 40,000 4 years $ 3.17 40,000 4 years $ 3.19 40,000 4 years $ 3.27 40,000 4 years $ 5.50 177,304 0 years $ 1,250 439 * 2 years 2,432,488 439 (*) At September 30, 2021, these warrants were convertible into 116,903 shares of common stock |
Stock Options
Stock Options | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS | 9. 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. 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 settled with shares 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. On March 3, 2021, the Company’s Board of Directors approved an Amendment to the 2018 Plan, subject to stockholder approval. On June 9, 2021, 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 2,000,000 shares and (b) the number of shares available for issuance as “incentive stock options” within the meaning of Internal Revenue Code Section 422 by 2,000,000 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 nine months ended September 30, 2021 and September 30, 2020 is as follows: Number of Weighted Weighted Aggregate Outstanding at January 1, 2021 2,595,700 1.92 2,491,026 Granted 592,348 2.52 Exercise (30,999 ) 0.81 68,278 Forfeited (43,334 ) 2.13 53,952 Outstanding at September 30, 2021 3,113,715 2.04 6.94 3,855,698 Vested and exercisable at September 30, 2021 2,127,537 2.03 7.02 2,850,630 Outstanding at January 1, 2020 2,004,318 $ 1.72 $ 2,542,361 Granted 691,046 2.52 Forfeited (65,829 ) 0.91 20,048 Expired (6,666 ) 0.79 6,032 Outstanding at September 30, 2020 2,622,869 $ 1.95 7.73 $ 1,209,562 Vested and exercisable at September 30, 2020 1,676,871 $ 1.97 8.04 $ 1,000,844 The weighted average grant date fair value of options granted during the nine-month period ended September 30, 2021 and September 30, 2020 was $1.77 and $1.50 per share respectively. The Company measured the fair value of each option award on the date of grant using the Black-Scholes-Merton (BSM) pricing model with the following assumptions: Nine Months ended September 30, 2021 2020 Exercise price $ 2.38 to 3.09 $ 1.74 to 2.89 Expected life 5 years 5 years Expected volatility 92 % 73 % Dividend yield 0 % 0 % Risk-free interest rate 0.31% to 0.98 % 0.28% to 1.72 % 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 for options in the consolidated statements of operations was $265,407 and $894,892 for the three and nine months ended September 30, 2021, respectively, and $169,393 and $793,241 for the three and nine months ended September 30, 2020, respectively. Unrecognized compensation cost related to non-vested options at September 30, 2021 amounted to approximately $995,335 which is expected to be recognized over a weighted average period of 2.66 years. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 10. INCOME TAXES Effective income tax rates for interim periods are based on our estimate of the applicable annual income tax rate. The Company’s effective income tax rate varies based upon the estimate of our annual taxable earnings and the allocation of those taxable earnings across the various states in which we operate. Changes in the annual allocation of the Company’s activity among these jurisdictions results in changes to the effective tax rate utilized to measure the Company’s income tax provision and deferred tax assets and liabilities The Company’s effective income tax rate for the three and nine months ended September 30, 2021 was approximately 36% and 42%, respectively. This was different than the expected federal income tax rate of 21% primarily due to the impact of the valuation allowance provided against our deferred tax assets. Non-taxable income from the forgiveness of PPP loans, non-deductible equity compensation, and state income taxes also impacted the effective tax rate. Management believes that certain federal and state deferred tax assets as of September 30, 2021 do not satisfy the realization criteria and has recorded a valuation allowance to reduce the carrying value of the Company’s deferred tax assets to the extent that realization is not more likely than not. Deferred tax liabilities are recorded to the extent that reversing taxable temporary differences cannot be offset with existing deferred tax assets. Utilization of the Company’s NOL carryforwards may be subject to annual limitations under Internal Revenue Code Section 382. |
Exchange Offer of Warrants
Exchange Offer of Warrants | 9 Months Ended |
Sep. 30, 2021 | |
Exchange Offer Of Warrants [Abstract] | |
EXCHANGE OFFER OF WARRANTS | 11. EXCHANGE OFFER OF WARRANTS On February 4, 2020, the Company completed an exchange offer relating to 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 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 this transaction, 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 | 9 Months Ended |
Sep. 30, 2021 | |
Loss Contingency [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 is impacted by this outbreak for an extended period, our results of operations may be materially adversely affected. |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | 13. COMMITMENTS The Company does not have any commitments other than real property leases (Note 4). |
Promissory Note- Paycheck Prote
Promissory Note- Paycheck Protection Program | 9 Months Ended |
Sep. 30, 2021 | |
Paycheck Protection Program [Abstract] | |
PROMISSORY NOTE- PAYCHECK PROTECTION PROGRAM | 14. 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 “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 Loan was evidenced by a promissory note (the “Note”), dated April 30, 2020, issued by the Borrower to the Lender. The Note matured on April 30, 2022, and bore interest at the rate of 1.00% per annum, payable monthly commencing on November 30, 2020, following an initial deferral period as specified under the PPP. The Note might be prepaid by the Borrower at any time prior to maturity with no prepayment penalty. Proceeds from the Loan were 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 might be forgiven to the extent the Loan proceeds were 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. On June 21, 2021 we were notified that effective April 7, 2021, the U.S. Small Business Administration confirmed the waiver of FlexShopper’s repayment of a $1,914,000 Paycheck Protection Program promissory note issued to the Company on May 4, 2020. As a result of the PPP promissory note forgiveness, the Company recognized a gain from the extinguishment of the loan, including accrued interest, of $1,931,825. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
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 - September 30, December 31, Accounts receivable $ 44,902,037 $ 32,171,255 Allowance for doubtful accounts (25,250,787 ) (22,138,541 ) Accounts receivable, net $ 19,651,250 $ 10,032,714 The allowance is a significant percentage of the 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 continue to accrue weekly charges until they are charged off. As the customer ages, the greater the allowance attributable to that account to reflect the decreased likelihood of successful collection efforts. Accounts receivable balances charged off against the allowance were $18,467,220 and $27,509,893 for the three and nine months ended September 30, 2021 respectively and $4,813,162 and $16,830,382 for the three and nine months ended September 30, 2020, respectively. Nine Months Year Ended Beginning balance $ 22,138,541 $ 9,976,941 Provision 30,622,139 31,930,714 Accounts written off (27,509,893 ) (19,769,114 ) Ending balance $ 25,250,787 $ 22,138,541 |
Lease Merchandise | Lease Merchandise - The net leased merchandise balances consisted of the following as of September 30, 2021 and December 31, 2020: September 30, December 31, Lease merchandise at cost $ 76,187,372 $ 64,335,971 Accumulated depreciation (38,655,591 ) (19,162,357 ) Impairment reserve (4,198,927 ) (2,351,274 ) Lease merchandise, net $ 33,332,854 $ 42,822,340 Cost of lease merchandise sold represents the undepreciated cost of rental merchandise at the time of sale. |
Lessor accounting | Lease accounting The Company accounts for leases in accordance with Accounting Standards Codification (ASC) Topic 842 Leases (Topic 842). Under Topic 842, lessees are required to recognize for all leases at the commencement date as 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. Under the same Topic, lessors are also required to classify leases. All the Company’s customer agreements are considered operating leases, and the Company currently does not have any sales-type or direct financing leases. An operating lease results in the recognition of lease income on a straight-line basis, while the underlying leased asset remains on the lessor’s balance sheet and continues to depreciate. The breakout of lease revenues and fees, net of lessor bad debt expense, that ties the consolidated statements of operations is shown below: Nine Months ended September 30, 2021 2020 Lease billings and accruals $ 119,498,306 $ 93,632,889 Provision for doubtful accounts (30,622,139 ) (23,643,556 ) Lease revenues and fees $ 88,876,167 $ 69,989,333 |
Deferred Debt Issuance Costs | Deferred Debt Issuance Costs - Debt issuance costs incurred in conjunction with the subordinated Promissory Notes 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 $1,273 and $5,729 for the three and nine months ended September 30, 2021 and $4,138 and $17,747 for the three and nine months ended September 30, 2020, respectively. |
Intangible Assets | Intangible Assets - |
Software Costs | Software Costs - |
Data Costs | Data Costs Capitalized data costs amounted to $461,380 for the three and nine months ended September 30, 2021. Capitalized data costs amortization expense was $24,406 for the three and nine months ended September 30, 2021. |
Operating Expenses | Operating Expenses - |
Marketing Costs | Marketing Costs - |
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 income/(loss) per share for the nine months ended September 30, 2021 and the nine months ended September 30, 2020, no effect has been given to the issuance of common stock upon conversion or exercise of the Series 2 Convertible Preferred Stock as their effect is anti-dilutive. The following table reflects a change in the conversion rates of the Series 1 Convertible Preferred Stock and Series 2 Convertible Preferred Stock due to anti-dilution adjustments as a result of FlexShopper’s induced conversion of warrants occurred in February 2020. Nine Months ended September 30, 2021 2020 Series 1 Convertible Preferred Stock 225,231 225,231 Series 2 Convertible Preferred Stock 5,845,695 5,845,695 Series 2 Convertible Preferred Stock issuable upon exercise of warrants 116,903 116,903 Common Stock Options 3,113,715 2,622,869 Common Stock Warrants 2,432,488 1,992,488 11,734,032 10,803,186 The following table sets forth the computation of basic and diluted earnings per common share for the nine months ended September 30, 2021 and 2020: Nine Months ended September 30, 2021 2020 Numerator Net income $ 2,639,454 78,983 Convertible Series 2 Preferred Share dividends (1,829,322 ) (1,829,217 ) Net income/(loss) attributable to common and Series 1 Convertible Preferred Stock 810,132 (1,750,234 ) Deemed dividend from exchange offer of warrants - (713,212 ) Convertible Series 2 Preferred Share dividends attributable to Series 1 Convertible Preferred Stock 19,072 - Net income attributable to Series 1 Convertible Preferred Stock (27,518 ) - Net income/(loss) attributable to common shares - Numerator for basic and diluted EPS $ 801,686 (2,463,446 ) Denominator Weighted average of common shares outstanding 21,377,978 20,872,940 Weighted average of common shares issuable upon conversion of outstanding Series 1 Convertible Preferred Stock 225,231 - Denominator for basic EPS- weighted average shares 21,603,209 20,872,940 Effect of dilutive securities: Common stock options 1,244,353 - Common stock warrants 834,703 - Denominator for diluted EPS – adjusted weighted average shares 23,682,265 20,872,940 Basic EPS $ 0.04 (0.12 ) Diluted EPS $ 0.03 (0.12 ) The following table sets forth the computation of basic and diluted earnings per common share for the three months ended September 30, 2021 and 2020: Three Months ended September 30, 2021 2020 Numerator Net income $ 1,696,023 289,360 Convertible Series 2 Preferred Share dividends (609,777 ) (609,772 ) Net income/(loss) attributable to common and Series 1 Convertible Preferred Stock 1,086,246 (320,412 ) Convertible Series 2 Preferred Share dividends attributable to Series 1 Convertible Preferred Stock 6,356 - Net income attributable to Series 1 Convertible Preferred Stock (17,678 ) - Net income/(loss) attributable to common shares - Numerator for basic and diluted EPS $ 1,074,924 (320,412 ) Denominator Weighted average of common shares outstanding 21,383,647 21,358,141 Weighted average of common shares issuable upon conversion of outstanding Series 1 Convertible Preferred Stock 225,231 - Denominator for basic EPS- weighted average shares 21,608,878 21,358,141 Effect of dilutive securities: Common stock options 1,112,537 - Common stock warrants 855,764 - Denominator for diluted EPS – adjusted weighted average shares 23,577,179 21,358,141 Basic EPS $ 0.05 (0.02 ) Diluted EPS $ 0.05 (0.02 ) |
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. |
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 September 30, 2021, and 2020, the Company had 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of accounts receivable | September 30, December 31, Accounts receivable $ 44,902,037 $ 32,171,255 Allowance for doubtful accounts (25,250,787 ) (22,138,541 ) Accounts receivable, net $ 19,651,250 $ 10,032,714 |
Schedule of allowance for doubtful accounts | Nine Months Year Ended Beginning balance $ 22,138,541 $ 9,976,941 Provision 30,622,139 31,930,714 Accounts written off (27,509,893 ) (19,769,114 ) Ending balance $ 25,250,787 $ 22,138,541 |
Schedule of net leased merchandise | September 30, December 31, Lease merchandise at cost $ 76,187,372 $ 64,335,971 Accumulated depreciation (38,655,591 ) (19,162,357 ) Impairment reserve (4,198,927 ) (2,351,274 ) Lease merchandise, net $ 33,332,854 $ 42,822,340 |
Schedule of lease revenues and fees | Nine Months ended September 30, 2021 2020 Lease billings and accruals $ 119,498,306 $ 93,632,889 Provision for doubtful accounts (30,622,139 ) (23,643,556 ) Lease revenues and fees $ 88,876,167 $ 69,989,333 |
Schedule of anti-dilutive securities excluded from computation of earnings per share | Nine Months ended September 30, 2021 2020 Series 1 Convertible Preferred Stock 225,231 225,231 Series 2 Convertible Preferred Stock 5,845,695 5,845,695 Series 2 Convertible Preferred Stock issuable upon exercise of warrants 116,903 116,903 Common Stock Options 3,113,715 2,622,869 Common Stock Warrants 2,432,488 1,992,488 11,734,032 10,803,186 |
Schedule of basic and diluted earnings per share | Nine Months ended September 30, 2021 2020 Numerator Net income $ 2,639,454 78,983 Convertible Series 2 Preferred Share dividends (1,829,322 ) (1,829,217 ) Net income/(loss) attributable to common and Series 1 Convertible Preferred Stock 810,132 (1,750,234 ) Deemed dividend from exchange offer of warrants - (713,212 ) Convertible Series 2 Preferred Share dividends attributable to Series 1 Convertible Preferred Stock 19,072 - Net income attributable to Series 1 Convertible Preferred Stock (27,518 ) - Net income/(loss) attributable to common shares - Numerator for basic and diluted EPS $ 801,686 (2,463,446 ) Denominator Weighted average of common shares outstanding 21,377,978 20,872,940 Weighted average of common shares issuable upon conversion of outstanding Series 1 Convertible Preferred Stock 225,231 - Denominator for basic EPS- weighted average shares 21,603,209 20,872,940 Effect of dilutive securities: Common stock options 1,244,353 - Common stock warrants 834,703 - Denominator for diluted EPS – adjusted weighted average shares 23,682,265 20,872,940 Basic EPS $ 0.04 (0.12 ) Diluted EPS $ 0.03 (0.12 ) Three Months ended September 30, 2021 2020 Numerator Net income $ 1,696,023 289,360 Convertible Series 2 Preferred Share dividends (609,777 ) (609,772 ) Net income/(loss) attributable to common and Series 1 Convertible Preferred Stock 1,086,246 (320,412 ) Convertible Series 2 Preferred Share dividends attributable to Series 1 Convertible Preferred Stock 6,356 - Net income attributable to Series 1 Convertible Preferred Stock (17,678 ) - Net income/(loss) attributable to common shares - Numerator for basic and diluted EPS $ 1,074,924 (320,412 ) Denominator Weighted average of common shares outstanding 21,383,647 21,358,141 Weighted average of common shares issuable upon conversion of outstanding Series 1 Convertible Preferred Stock 225,231 - Denominator for basic EPS- weighted average shares 21,608,878 21,358,141 Effect of dilutive securities: Common stock options 1,112,537 - Common stock warrants 855,764 - Denominator for diluted EPS – adjusted weighted average shares 23,577,179 21,358,141 Basic EPS $ 0.05 (0.02 ) Diluted EPS $ 0.05 (0.02 ) |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Schedule of the future minimum annual lease payments | 2021 $ 103,000 2022 417,000 2023 427,000 2024 435,000 2025 443,000 Thereafter 1,230,000 $ 3,055,000 |
Schedule of balance sheet information related to leases | Balance Sheet Classification September 30, December 31, Assets Operating Lease Asset Property and Equipment, net $ 1,566,055 $ 1,673,432 Finance Lease Asset Property and Equipment, net 20,890 27,106 Total Lease Assets $ 1,586,945 $ 1,700,538 Liabilities Operating Lease Liability - current portion Current Lease Liabilities $ 155,766 $ 153,019 Finance Lease Liability - current portion Current Lease Liabilities 8,508 7,707 Operating Lease Liability - net of current portion Long Term Lease Liabilities 1,806,562 1,925,498 Finance Lease Liability - net of current portion Long Term Lease Liabilities 15,373 21,857 Total Lease Liabilities $ 1,986,209 $ 2,108,081 |
Schedule of weighted-average discount rate and weighted-average remaining lease term | Weighted Weighted Operating Leases 13.03 % 7 Finance Leases 13.32 % 3 |
Schedule of supplemental cash flow information related to operating leases | Nine Months ended September 30, 2021 2020 Cash payments for operating leases $ 300,415 $ 116,860 Cash payments for finance leases 8,388 8,253 New finance lease asset obtained in exchange for lease liabilities - 4,033 |
Schedule of undiscounted operating lease liabilities | Operating 2021 $ 100,357 2022 405,443 2023 417,606 2024 430,134 2025 443,038 2026 and thereafter 1,229,925 Total undiscounted cash flows 3,026,503 Less: interest (1,064,175 ) Present value of lease liabilities $ 1,962,328 |
Schedule of undiscounted finance lease liabilities | Finance 2021 $ 2,796 2022 11,184 2023 9,699 2024 4,782 Total undiscounted cash flows 28,461 Less: interest (4,580 ) Present value of lease liabilities $ 23,881 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Estimated September 30, December 31, Furniture, fixtures and vehicle 2-5 years $ 391,669 $ 303,285 Website, internal use software and data cost 3 years 14,966,567 12,489,441 Computers and software 3-7 years 2,015,828 1,121,914 17,374,064 13,914,640 Less: accumulated depreciation and amortization (11,733,986 ) (9,703,482 ) 5,640,078 4,211,158 Right of use assets, net 1,586,945 1,700,538 $ 7,227,023 $ 5,911,696 |
Promissory Notes-Related Part_2
Promissory Notes-Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of amounts payable under the promissory notes | Debt Interest 2021 $ - $ 55,196 2022 $ 4,750,000 $ - |
Loan Payable Under Credit Agr_2
Loan Payable Under Credit Agreement (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Loan Payable Disclosure [Abstract] | |
Schedule of covenant requirements, and flexshopper's actual results | September 30, 2021 Required Actual Equity Book Value not less than $ 8,000,000 15,236,187 Liquidity greater than 1,500,000 3,147,926 Cash greater than 500,000 3,147,926 Consolidated Total Debt to Equity Book Value ratio not to exceed 5.25 2.56 |
Capital Structure (Tables)
Capital Structure (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of weighted average valuation | Warrants Expense Grant date fair value Grant Date Granted Recorded Per Warrant January 31, 2021 40,000 $ 73,595 $ 1.84 February 29, 2021 40,000 76,318 1.91 March 31, 2021 40,000 63,010 1.58 April 30, 2021 40,000 60,542 1.51 May 31, 2021 40,000 63,156 1.58 June 30, 2021 40,000 68,228 1.71 July 31, 2021 40,000 55,658 1.39 August 31, 2021 40,000 62,301 1.56 320,000 522,808 1.63 |
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 2 years $ 1.34 40,000 2 years $ 1.40 40,000 2 years $ 1.54 40,000 2 years $ 1.62 40,000 2 years $ 1.68 40,000 3 years $ 1.69 40,000 2 years $ 1.74 40,000 2 years $ 1.76 40,000 2 years $ 1.91 40,000 2 years $ 1.95 40,000 3 years $ 2.00 40,000 2 years $ 2.01 40,000 2 years $ 2.08 40,000 3 years $ 2.45 40,000 2 years $ 2.53 40,000 2 years $ 2.57 40,000 3 years $ 2.70 40,000 4 years $ 2.78 40,000 2 years $ 2.79 40,000 4 years $ 2.89 40,000 3 years $ 2.93 40,000 2 years $ 2.97 40,000 4 years $ 3.09 40,000 4 years $ 3.17 40,000 4 years $ 3.19 40,000 4 years $ 3.27 40,000 4 years $ 5.50 177,304 0 years $ 1,250 439 * 2 years 2,432,488 439 |
Stock Options (Tables)
Stock Options (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock option | Number of Weighted Weighted Aggregate Outstanding at January 1, 2021 2,595,700 1.92 2,491,026 Granted 592,348 2.52 Exercise (30,999 ) 0.81 68,278 Forfeited (43,334 ) 2.13 53,952 Outstanding at September 30, 2021 3,113,715 2.04 6.94 3,855,698 Vested and exercisable at September 30, 2021 2,127,537 2.03 7.02 2,850,630 Outstanding at January 1, 2020 2,004,318 $ 1.72 $ 2,542,361 Granted 691,046 2.52 Forfeited (65,829 ) 0.91 20,048 Expired (6,666 ) 0.79 6,032 Outstanding at September 30, 2020 2,622,869 $ 1.95 7.73 $ 1,209,562 Vested and exercisable at September 30, 2020 1,676,871 $ 1.97 8.04 $ 1,000,844 |
Schedule of measured fair value of each option award grant using the black-scholes-merton (BSM) pricing model | Nine Months ended September 30, 2021 2020 Exercise price $ 2.38 to 3.09 $ 1.74 to 2.89 Expected life 5 years 5 years Expected volatility 92 % 73 % Dividend yield 0 % 0 % Risk-free interest rate 0.31% to 0.98 % 0.28% to 1.72 % |
Business (Details)
Business (Details) | Sep. 30, 2021 |
Business (Details) [Line Items] | |
Ownership percentage | 100.00% |
FlexLending, LLC [Member] | |
Business (Details) [Line Items] | |
Ownership percentage | 100.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Accounts receivable charged off against allowance | $ 18,467,220 | $ 4,813,162 | $ 27,509,893 | $ 16,830,382 |
Intangible assets, terms | 10 years | |||
Amortization of intangible assets | 769 | 769 | $ 2,307 | 2,307 |
Capitalized software costs | 900,031 | 606,500 | 2,015,746 | 1,804,858 |
Capitalized software amortization expense | 572,195 | 544,475 | 1,726,199 | 1,550,459 |
Capitalized data costs | 461,380 | 461,380 | ||
Capitalized data costs amortization expense | 24,406 | $ 24,406 | ||
Largest benefit percentage | 50.00% | |||
Credit Agreement [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Amortization included in interest expense | 41,794 | 45,912 | $ 171,918 | 216,536 |
Promissory Notes [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Amortization included in interest expense | $ 1,273 | $ 4,138 | $ 5,729 | $ 17,747 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of accounts receivable - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of accounts receivable [Abstract] | ||
Accounts receivable | $ 44,902,037 | $ 32,171,255 |
Allowance for doubtful accounts | (25,250,787) | (22,138,541) |
Accounts receivable, net | $ 19,651,250 | $ 10,032,714 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of allowance for doubtful accounts - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Schedule of allowance for doubtful accounts [Abstract] | ||
Beginning balance | $ 22,138,541 | $ 9,976,941 |
Provision | 30,622,139 | 31,930,714 |
Accounts written off | (27,509,893) | (19,769,114) |
Ending balance | $ 25,250,787 | $ 22,138,541 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of net leased merchandise - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of net leased merchandise [Abstract] | ||
Lease merchandise at cost | $ 76,187,372 | $ 64,335,971 |
Accumulated depreciation | (38,655,591) | (19,162,357) |
Impairment reserve | (4,198,927) | (2,351,274) |
Lease merchandise, net | $ 33,332,854 | $ 42,822,340 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of lease revenues and fees - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of lease revenues and fees [Abstract] | ||
Lease billings and accruals | $ 119,498,306 | $ 93,632,889 |
Provision for doubtful accounts | (30,622,139) | (23,643,556) |
Lease revenues and fees | $ 88,876,167 | $ 69,989,333 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details) - Schedule of anti-dilutive securities excluded from computation of earnings per share - shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 11,734,032 | 10,803,186 |
Common Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 3,113,715 | 2,622,869 |
Common Stock Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 2,432,488 | 1,992,488 |
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 | 225,231 |
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 | 5,845,695 |
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 | 116,903 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details) - Schedule of basic and diluted earnings per share - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator | ||||
Net income | $ 1,696,023 | $ 289,360 | $ 2,639,454 | $ 78,983 |
Convertible Series 2 Preferred Share dividends | (609,777) | (609,772) | (1,829,322) | (1,829,217) |
Net income/(loss) attributable to common and Series 1 Convertible Preferred Stock | 1,086,246 | (320,412) | 810,132 | (1,750,234) |
Deemed dividend from exchange offer of warrants | (713,212) | |||
Convertible Series 2 Preferred Share dividends attributable to Series 1 Convertible Preferred Stock | 6,356 | 19,072 | ||
Net income attributable to Series 1 Convertible Preferred Stock | (17,678) | (27,518) | ||
Net income/(loss) attributable to common shares - Numerator for basic and diluted EPS | $ 1,074,924 | $ (320,412) | $ 801,686 | $ (2,463,446) |
Denominator | ||||
Weighted average of common shares outstanding (in Shares) | 21,383,647 | 21,358,141 | 21,377,978 | 20,872,940 |
Weighted average of common shares issuable upon conversion of outstanding Series 1 Convertible Preferred Stock (in Shares) | 225,231 | 225,231 | ||
Denominator for basic EPS- weighted average shares (in Shares) | 21,608,878 | 21,358,141 | 21,603,209 | 20,872,940 |
Effect of dilutive securities: | ||||
Common stock options (in Shares) | 1,112,537 | 1,244,353 | ||
Common stock warrants (in Shares) | 855,764 | 834,703 | ||
Denominator for diluted EPS – adjusted weighted average shares (in Shares) | 23,577,179 | 21,358,141 | 23,682,265 | 20,872,940 |
Basic EPS (in Dollars per share) | $ 0.05 | $ (0.02) | $ 0.04 | $ (0.12) |
Diluted EPS (in Dollars per share) | $ 0.05 | $ (0.02) | $ 0.03 | $ (0.12) |
Leases (Details)
Leases (Details) | Jan. 31, 2019USD ($)m² | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) |
Disclosure Text Block [Abstract] | |||||
Monthly rent | $ 2,300 | ||||
Term of lease | 108 months | 12 months | |||
Area of land (in Square Meters) | m² | 21,622 | ||||
Exercise of stock options into common stock | $ 31,500 | ||||
Annual percentage | 3.00% | ||||
Rental expense | $ 492,000 | $ 519,000 | |||
Operating lease costs | $ 97,063 | $ 110,021 | $ 303,871 | $ 329,094 |
Leases (Details) - Schedule of
Leases (Details) - Schedule of the future minimum annual lease payments | Sep. 30, 2021USD ($) |
Schedule of the future minimum annual lease payments [Abstract] | |
2021 | $ 103,000 |
2022 | 417,000 |
2023 | 427,000 |
2024 | 435,000 |
2025 | 443,000 |
Thereafter | 1,230,000 |
Total | $ 3,055,000 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of balance sheet information related to leases - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Schedule of balance sheet information related to leases [Abstract] | ||
Balance Sheet Classification, Operating Lease Asset | Property and Equipment, net | |
Operating Lease Asset | $ 1,566,055 | $ 1,673,432 |
Balance Sheet Classification, Finance Lease Asset | Property and Equipment, net | |
Finance Lease Asset | $ 20,890 | 27,106 |
Total Lease Assets | $ 1,586,945 | 1,700,538 |
Balance Sheet Classification, Operating Lease Liability - current portion | Current Lease Liabilities | |
Operating Lease Liability - current portion | $ 155,766 | 153,019 |
Balance Sheet Classification, Finance Lease Liability - current portion | Current Lease Liabilities | |
Finance Lease Liability - current portion | $ 8,508 | 7,707 |
Balance Sheet Classification, Operating Lease Liability - net of current portion | Long Term Lease Liabilities | |
Operating Lease Liability - net of current portion | $ 1,806,562 | 1,925,498 |
Balance Sheet Classification, Finance Lease Liability - net of current portion | Long Term Lease Liabilities | |
Finance Lease Liability - net of current portion | $ 15,373 | 21,857 |
Total Lease Liabilities | $ 1,986,209 | $ 2,108,081 |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of weighted-average discount rate and weighted-average remaining lease term | Sep. 30, 2021 |
Operating Leases [Member] | |
Leases (Details) - Schedule of weighted-average discount rate and weighted-average remaining lease term [Line Items] | |
Weighted Average Discount Rate | 13.03% |
Weighted Average Remaining Lease Term (in years) | 7 years |
Finance Leases [Member] | |
Leases (Details) - Schedule of weighted-average discount rate and weighted-average remaining lease term [Line Items] | |
Weighted Average Discount Rate | 13.32% |
Weighted Average Remaining Lease Term (in years) | 3 years |
Leases (Details) - Schedule o_4
Leases (Details) - Schedule of supplemental cash flow information related to operating leases - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of supplemental cash flow information related to operating leases [Abstract] | ||
Cash payments for operating leases | $ 300,415 | $ 116,860 |
Cash payments for finance leases | 8,388 | 8,253 |
New finance lease asset obtained in exchange for lease liabilities | $ 4,033 |
Leases (Details) - Schedule o_5
Leases (Details) - Schedule of undiscounted operating lease liabilities | Sep. 30, 2021USD ($) |
Schedule of undiscounted operating lease liabilities [Abstract] | |
2021 | $ 100,357 |
2022 | 405,443 |
2023 | 417,606 |
2024 | 430,134 |
2025 | 443,038 |
2026 and thereafter | 1,229,925 |
Total undiscounted cash flows | 3,026,503 |
Less: interest | (1,064,175) |
Present value of lease liabilities | $ 1,962,328 |
Leases (Details) - Schedule o_6
Leases (Details) - Schedule of undiscounted finance lease liabilities - Finance Leases [Member] | Sep. 30, 2021USD ($) |
Leases (Details) - Schedule of undiscounted finance lease liabilities [Line Items] | |
2021 | $ 2,796 |
2022 | 11,184 |
2023 | 9,699 |
2024 | 4,782 |
Total undiscounted cash flows | 28,461 |
Less: interest | (4,580) |
Present value of lease liabilities | $ 23,881 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization expense | $ 707,993 | $ 592,498 | $ 2,030,504 | $ 1,653,099 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of property and equipment - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 17,374,064 | $ 13,914,640 |
Less: accumulated depreciation and amortization | (11,733,986) | (9,703,482) |
Property plant and equipment other accumulated depreciation | 5,640,078 | 4,211,158 |
Right of use assets, net | 1,586,945 | 1,700,538 |
Property and equipment, net | 7,227,023 | 5,911,696 |
Furniture, fixtures and vehicle [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 391,669 | 303,285 |
Website, internal use software and data cost [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 3 years | |
Property and equipment, gross | $ 14,966,567 | 12,489,441 |
Computers and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,015,828 | $ 1,121,914 |
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 |
Promissory Notes-Related Part_3
Promissory Notes-Related Parties (Details) - USD ($) | Mar. 22, 2021 | Jul. 30, 2020 | Feb. 19, 2019 | Jan. 25, 2019 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 06, 2015 |
Promissory Notes-Related Parties (Details) [Line Items] | ||||||||
Description of notes | On March 22, 2021, FlexShopper, LLC executed an amendment to the NRNS and February Note such that the maturity date was set at April 1, 2022. | NRNS amended and restated the Note such that the maturity date of the revised Note was extended to April 1, 2022. As of September 30, 2021, $1,770,338 of principal and accrued and unpaid interest was outstanding on NRNS’s Note. | ||||||
Interest rate | 16.25% | 16.25% | ||||||
Interest expense recognized | $ 186,882 | $ 173,540 | $ 521,242 | $ 593,738 | ||||
January 2019 Note [Member] | ||||||||
Promissory Notes-Related Parties (Details) [Line Items] | ||||||||
Principal and accrued and unpaid interest outstanding | $ 1,011,615 | |||||||
NRNS [Member] | ||||||||
Promissory Notes-Related Parties (Details) [Line Items] | ||||||||
Principal amount | $ 2,000,000 | |||||||
Bear interest rate | 5.00% | |||||||
Interest rate | 5.00% | |||||||
Commitment fee percentage | 2.00% | |||||||
Lender total value | $ 40,000 | |||||||
Credit Agreement [Member] | ||||||||
Promissory Notes-Related Parties (Details) [Line Items] | ||||||||
Bear interest rate | 11.25% | 11.25% | 5.00% | |||||
Interest rate | 16.25% | 16.25% | ||||||
January 2018 Note [Member] | ||||||||
Promissory Notes-Related Parties (Details) [Line Items] | ||||||||
Principal amount | $ 1,750,000 | $ 1,750,000 | ||||||
February 2019 Note [Member] | ||||||||
Promissory Notes-Related Parties (Details) [Line Items] | ||||||||
Principal and accrued and unpaid interest outstanding | $ 2,023,243 | |||||||
Chief Financial Officer [Member] | ||||||||
Promissory Notes-Related Parties (Details) [Line Items] | ||||||||
Principal amount | $ 1,000,000 | |||||||
Bear interest rate | 5.00% | 5.00% | ||||||
Interest rate | 16.25% | 16.25% | ||||||
Commitment fee percentage | 2.00% | |||||||
Lender total value | $ 20,000 |
Promissory Notes-Related Part_4
Promissory Notes-Related Parties (Details) - Schedule of amounts payable under the promissory notes | 9 Months Ended |
Sep. 30, 2021USD ($) | |
2021 [Member] | |
Promissory Notes-Related Parties (Details) - Schedule of amounts payable under the promissory notes [Line Items] | |
Debt Principal | |
Interest | 55,196 |
2022 [Member] | |
Promissory Notes-Related Parties (Details) - Schedule of amounts payable under the promissory notes [Line Items] | |
Debt Principal | 4,750,000 |
Interest |
Loan Payable Under Credit Agr_3
Loan Payable Under Credit Agreement (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jan. 29, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 06, 2015 | |
Loan Payable Under Credit Agreement (Details) [Line Items] | ||||||
Interest expense | $ 1,233,617 | $ 951,336 | $ 3,855,014 | $ 3,214,083 | ||
Outstanding balance credit agreement | 34,625,000 | 34,625,000 | ||||
Unamortized issuance costs | $ 419,307 | $ 419,307 | ||||
Credit Agreement [Member] | ||||||
Loan Payable Under Credit Agreement (Details) [Line Items] | ||||||
Borrow from lender | $ 47,500,000 | |||||
Description of credit facility | This Amendment extended the Commitment Termination Date to April 1, 2024, amended other covenant requirements, partially removed indebtedness covenants and amended eligibility rules. | |||||
Interest rate | 11.00% | |||||
Lender fee | $237,000 | |||||
Bear interest rate | 11.25% | 11.25% | 5.00% | |||
Credity availability | $ 165,417 | |||||
Interest expense | $ 1,015,930 | $ 708,086 | $ 3,147,479 | $ 2,373,525 |
Loan Payable Under Credit Agr_4
Loan Payable Under Credit Agreement (Details) - Schedule of covenant requirements, and flexshopper's actual results | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Required Covenant [Member] | |
Loan Payable Under Credit Agreement (Details) - Schedule of covenant requirements, and flexshopper's actual results [Line Items] | |
Equity Book Value not less than | $ 8,000,000 |
Liquidity greater than | 1,500,000 |
Cash greater than | $ 500,000 |
Consolidated Total Debt to Equity Book Value ratio not to exceed | 5.25 |
Actual Position [Member] | |
Loan Payable Under Credit Agreement (Details) - Schedule of covenant requirements, and flexshopper's actual results [Line Items] | |
Equity Book Value not less than | $ 15,236,187 |
Liquidity greater than | 3,147,926 |
Cash greater than | $ 3,147,926 |
Consolidated Total Debt to Equity Book Value ratio not to exceed | 2.56 |
Capital Structure (Details)
Capital Structure (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Jun. 30, 2016 | Sep. 30, 2021 | |
Capital Structure (Details) [Line Items] | |||
Warrant convertible into common stock | 116,903 | ||
Consulting Agreement [Member] | |||
Capital Structure (Details) [Line Items] | |||
Warrant exercise price (in Dollars per share) | $ 1.6 | ||
Warrants expiration period | 4 years | ||
Warrant [Member] | |||
Capital Structure (Details) [Line Items] | |||
Warrants exercisable for shares of common stock | 5,750,000 | 1,055,184 | |
Warrant exercise price (in Dollars per share) | $ 1.25 | $ 1.25 | |
Description of warrants expiration | The warrants were immediately exercisable and expire 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. | |
Issuance of warrants | 40,000 | ||
Valuation expenses (in Dollars) | $ 522,808 | ||
Weighted average grant date fair value (in Dollars per share) | $ 1.63 | ||
Warrant [Member] | Consulting Agreement [Member] | |||
Capital Structure (Details) [Line Items] | |||
Warrant exercise price (in Dollars per share) | $ 1.25 | ||
Description of warrants expiration | The warrants are immediately exercisable and expire following the close of business on June 30, 2023. | ||
Warrant, description | As part of a consulting agreement with XLR8 Capital Partners LLC (the “Consulting Agreement”), an entity of which the Company’s Chairman is manager, the Company agreed to issue 40,000 warrants to XLR8 Capital Partners LLC 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. | ||
Preferred Stock [Member] | |||
Capital Structure (Details) [Line Items] | |||
Preferred stock, shares authorized | 500,000 | ||
Preferred stock, par value (in Dollars per share) | $ 0.001 | ||
Common Stock [Member] | |||
Capital Structure (Details) [Line Items] | |||
Common stock price (in Dollars per share) | $ 23 | ||
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, share authorized | 40,000,000 | ||
Common stock par or stated per share value (in Dollars per share) | $ 0.0001 | ||
Series 1 Convertible Preferred Stock [Member] | |||
Capital Structure (Details) [Line Items] | |||
Preferred stock conversion basis, description | As of September 30, 2021, each share of Series 1 Convertible Preferred Stock was convertible into 1.32230 shares of the Company’s common stock, subject to certain anti-dilution rights. | ||
Convertible preferred stock, terms of conversion, description | As of September 30, 2021, 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 (Details) [Line Items] | |||
Preferred stock, shares authorized | 250,000 | ||
Series 2 Convertible Preferred Stock [Member] | |||
Capital Structure (Details) [Line Items] | |||
Preferred stock, designated | 25,000 | ||
Convertible preferred stock, shares issued upon conversion | 20,000 | ||
Proceeds from sale of stock (in Dollars) | $ 20,000,000 | ||
Additional sale of shares | 1,952 | ||
Gross proceeds (in Dollars) | $ 1,950,000 | ||
Preferred shares sold per share (in Dollars per share) | $ 1,000 | ||
Stated value, percentage | 10.00% | ||
Cumulative accrued dividends (in Dollars) | $ 12,661,394 | ||
Preferred stock conversion into common stock, shares | 266 | ||
Description of warrants expiration | In connection with the issuance of Series 2 Convertible Preferred Stock in June 2016, the Company issued to the placement agent in such offering warrants exercisable for 439 shares of Series 2 Convertible Preferred Stock at an initial exercise price of $1,250 per share, which expire seven years after the date of issuance. |
Capital Structure (Details) - S
Capital Structure (Details) - Schedule of weighted average valuation | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Capital Structure (Details) - Schedule of weighted average valuation [Line Items] | |
Warrants Granted | shares | 320,000 |
Expense Recorded | $ | $ 522,808 |
Grant date fair value Per Warrant | $ / shares | $ 1.63 |
Warrant [Member] | January 31, 2021 [Member] | |
Capital Structure (Details) - Schedule of weighted average valuation [Line Items] | |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 73,595 |
Grant date fair value Per Warrant | $ / shares | $ 1.84 |
Warrant [Member] | February 29, 2021 [Member] | |
Capital Structure (Details) - Schedule of weighted average valuation [Line Items] | |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 76,318 |
Grant date fair value Per Warrant | $ / shares | $ 1.91 |
Warrant [Member] | March 31, 2021 [Member] | |
Capital Structure (Details) - Schedule of weighted average valuation [Line Items] | |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 63,010 |
Grant date fair value Per Warrant | $ / shares | $ 1.58 |
Warrant [Member] | April 30, 2021 [Member] | |
Capital Structure (Details) - Schedule of weighted average valuation [Line Items] | |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 60,542 |
Grant date fair value Per Warrant | $ / shares | $ 1.51 |
Warrant [Member] | May 31, 2021 [Member] | |
Capital Structure (Details) - Schedule of weighted average valuation [Line Items] | |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 63,156 |
Grant date fair value Per Warrant | $ / shares | $ 1.58 |
Warrant [Member] | June 30, 2021 {Member] | |
Capital Structure (Details) - Schedule of weighted average valuation [Line Items] | |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 68,228 |
Grant date fair value Per Warrant | $ / shares | $ 1.71 |
Warrant [Member] | July 31, 2021 [Member] | |
Capital Structure (Details) - Schedule of weighted average valuation [Line Items] | |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 55,658 |
Grant date fair value Per Warrant | $ / shares | $ 1.39 |
Warrant [Member] | August 31, 2021 [Member] | |
Capital Structure (Details) - Schedule of weighted average valuation [Line Items] | |
Warrants Granted | shares | 40,000 |
Expense Recorded | $ | $ 62,301 |
Grant date fair value Per Warrant | $ / shares | $ 1.56 |
Capital Structure (Details) -_2
Capital Structure (Details) - Schedule of outstanding stock warrants - Warrant [Member] | 9 Months Ended | |
Sep. 30, 2021$ / sharesshares | ||
Class of Warrant or Right [Line Items] | ||
Common Stock Warrants Outstanding | 2,432,488 | |
Series 2 Preferred Stock Warrants Outstanding | 439 | |
Exercise Price 1.25 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 1.25 | |
Common Stock Warrants Outstanding | 1,215,184 | |
Weighted Average Remaining Contractual Life | 2 years | |
Exercise Price 1.34 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 1.34 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | |
Exercise Price 1.40 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 1.4 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | |
Exercise Price 1.54 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 1.54 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | |
Exercise Price 1.62 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 1.62 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | |
Exercise Price 1.68 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 1.68 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 1.69 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 1.69 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | |
Exercise Price 1.74 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 1.74 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | |
Exercise Price 1.76 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 1.76 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | |
Exercise Price 1.91 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 1.91 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | |
Exercise Price 1.95 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 1.95 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 2.00 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 2 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | |
Exercise Price 2.01 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 2.01 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | |
Exercise Price 2.08 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 2.08 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 2.45 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 2.45 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | |
Exercise Price 2.53 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 2.53 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | |
Exercise Price 2.57 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 2.57 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | |
Exercise Price 2.70 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 2.7 | |
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 (in Dollars per share) | $ / shares | $ 2.78 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | |
Exercise Price 2.79 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 2.79 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 4 years | |
Exercise Price 2.89 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 2.89 | |
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 (in Dollars per share) | $ / shares | $ 2.93 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | |
Exercise Price 2.97 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 2.97 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 4 years | |
Exercise Price 3.09 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 3.09 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 4 years | |
Exercise Price 3.17 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 3.17 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 4 years | |
Exercise Price 3.89 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 3.19 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 4 years | |
Exercise Price 3.27 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 3.27 | |
Common Stock Warrants Outstanding | 40,000 | |
Weighted Average Remaining Contractual Life | 4 years | |
Exercise Price 5.50 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 5.5 | |
Common Stock Warrants Outstanding | 177,304 | |
Weighted Average Remaining Contractual Life | 0 years | |
Exercise Price 1,250 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price (in Dollars per share) | $ / shares | $ 1,250 | |
Series 2 Preferred Stock Warrants Outstanding | 439 | [1] |
Weighted Average Remaining Contractual Life | 2 years | |
[1] | At September 30, 2021, these warrants were convertible into 116,903 shares of common stock |
Stock Options (Details)
Stock Options (Details) - USD ($) | Jun. 09, 2021 | Jun. 10, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Apr. 26, 2018 |
Stock Options (Details) [Line Items] | |||||||
Stock options granted period, description | On June 9, 2021, 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 2,000,000 shares and (b) the number of shares available for issuance as “incentive stock options” within the meaning of Internal Revenue Code Section 422 by 2,000,000 shares. | 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. | |||||
Plan vest over 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. | ||||||
Weighted average grant date fair value of options granted (in Dollars per share) | $ 1.77 | $ 1.5 | |||||
Compensation expense | $ 265,407 | $ 169,393 | $ 894,892 | $ 793,241 | |||
Unrecognized compensation cost related to non-vested options | $ 995,335 | $ 995,335 | |||||
Weighted average period | 2 years 7 months 28 days | ||||||
2018 Omnibus Equity Compensation Plan [Member] | |||||||
Stock Options (Details) [Line Items] | |||||||
Number of common stock available for issuance (in Shares) | 1,057,000 |
Stock Options (Details) - Sched
Stock Options (Details) - Schedule of stock option - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of stock option [Abstract] | ||
Number of options Outstanding beginning | 2,595,700 | 2,004,318 |
Weighted average exercise price Outstanding beginning | $ 1.92 | $ 1.72 |
Weighted average contractual term (years) Outstanding beginning | ||
Aggregate intrinsic value Outstanding beginning | $ 2,491,026 | $ 2,542,361 |
Number of options Granted | 592,348 | 691,046 |
Weighted average exercise price Granted | $ 2.52 | $ 2.52 |
Aggregate intrinsic value Granted | ||
Number of options Exercise | (30,999) | |
Weighted average exercise price Exercise | $ 0.81 | |
Aggregate intrinsic value Exercise | $ 68,278 | |
Number of options Forfeited | (43,334) | (65,829) |
Weighted average exercise price Forfeited | $ 2.13 | $ 0.91 |
Aggregate intrinsic value Forfeited | $ 53,952 | $ 20,048 |
Number of options Expired | (6,666) | |
Weighted average exercise price Expired | $ 0.79 | |
Aggregate intrinsic value Expired | $ 6,032 | |
Number of options Outstanding ending | 3,113,715 | 2,622,869 |
Weighted average exercise price Outstanding ending | $ 2.04 | $ 1.95 |
Weighted average contractual term (years) Outstanding ending | 6 years 11 months 8 days | 7 years 8 months 23 days |
Aggregate intrinsic value Outstanding ending | $ 3,855,698 | $ 1,209,562 |
Number of options Vested and exercisable | 2,127,537 | 1,676,871 |
Weighted average exercise price Vested and exercisable | $ 2.03 | $ 1.97 |
Weighted average contractual term (years) Vested and exercisable | 7 years 7 days | 8 years 14 days |
Aggregate intrinsic value Vested and exercisable | $ 2,850,630 | $ 1,000,844 |
Stock Options (Details) - Sch_2
Stock Options (Details) - Schedule of measured fair value of each option award grant using the black-scholes-merton (BSM) pricing model - $ / shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Stock Options (Details) - Schedule of measured fair value of each option award grant using the black-scholes-merton (BSM) pricing model [Line Items] | ||
Expected life | 5 years | 5 years |
Expected volatility | 92.00% | 73.00% |
Dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Stock Options (Details) - Schedule of measured fair value of each option award grant using the black-scholes-merton (BSM) pricing model [Line Items] | ||
Exercise price (in Dollars per share) | $ 2.38 | $ 1.74 |
Risk-free interest rate | 0.31% | 0.28% |
Maximum [Member] | ||
Stock Options (Details) - Schedule of measured fair value of each option award grant using the black-scholes-merton (BSM) pricing model [Line Items] | ||
Exercise price (in Dollars per share) | $ 3.09 | $ 2.89 |
Risk-free interest rate | 0.98% | 1.72% |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax rate | 36.00% | 42.00% |
Federal income tax rate | 21.00% |
Exchange Offer of Warrants (Det
Exchange Offer of Warrants (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Feb. 19, 2020 | Sep. 30, 2021 | Feb. 04, 2020 | |
Exchange Offer Of Warrants [Abstract] | |||
Warrant offered per share | $ 0.56 | $ 0.62 | |
Exchange offer of warrants, description | In total 258,610 warrants were exchanged for 144,871 shares in this transaction. | In total, 5,351,290 warrants were exchanged for 3,317,812 shares in accordance with the Warrant Exchange Offer. | |
Deemed dividend | $ 713,212 |
Promissory Note- Paycheck Pro_2
Promissory Note- Paycheck Protection Program (Details) - USD ($) | May 04, 2020 | Sep. 30, 2021 |
Promissory Note- Paycheck Protection Program (Details) [Line Items] | ||
Principal amount | $ 1,914,100 | |
Maturity date, description | The Note matured on April 30, 2022, and bore interest at the rate of 1.00% per annum, payable monthly commencing on November 30, 2020, following an initial deferral period as specified under the PPP. | |
Promissory Notes [Member] | ||
Promissory Note- Paycheck Protection Program (Details) [Line Items] | ||
Promissory note issued | $ 1,914,000 | |
Promissory note forgiveness | $ 1,931,825 |